Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains statements about future events and expectations, or forward-looking statements, relating to our goals, beliefs, strategies, plans or current expectations and other statements that are not of historical facts. For example, when we use words such as “project,” “plan,” “believe,” “anticipate,” “expect,” “forecast,” “estimate,” “intend,” “should,” “would,” “could,” “may” or other words that convey uncertainty of future events or outcomes, we are making forward-looking statements. Certain important factors may cause actual results to differ materially from those indicated by our forward-looking statements, including those set forth under the caption “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”). Forward-looking statements represent management’s current expectations, beliefs and assumptions, and are inherently uncertain. We do not undertake any obligation to update forward-looking statements made by us.

The discussion and analysis of our financial condition and results of operations that follow are based upon our consolidated and condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates and such differences could be material to the financial statements. This discussion should be read in conjunction with our consolidated and condensed consolidated financial statements herein and the accompanying notes, information set forth under the caption “Critical Accounting Policies and Estimates” in the 2022 Form 10-K, and in particular, the information set forth therein under Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Overview

We are one of the largest global real estate investment trusts and a leading independent owner, operator and developer of multitenant communications real estate. Our primary business is the leasing of space on communications sites to wireless service providers, radio and television broadcast companies, wireless data providers, government agencies and municipalities and tenants in a number of other industries. In addition to the communications sites in our portfolio, we manage rooftop and tower sites for property owners under various contractual arrangements. We also hold other telecommunications infrastructure, fiber and property interests that we lease primarily to communications service providers and third-party tower operators, and, as discussed further below, we hold a portfolio of highly interconnected data center facilities and related assets in the United States. Our customers include our tenants, licensees and other payers. We refer to the business encompassing the above as our property operations, which accounted for 98% of our total revenues for the three months ended March 31, 2023 and includes our U.S. & Canada property, Asia-Pacific property, Africa property, Europe property and Latin America property segments and Data Centers segment.

We also offer tower-related services in the United States, including site application, zoning and permitting, structural analysis and construction management, which primarily support our site leasing business, including the addition of new tenants and equipment on our sites.

The following table details the number of communications sites, excluding managed sites, that we owned or operated as of March 31, 2023:


	Number of Owned Towers	Number of Operated Towers (1)	Number of Owned DAS Sites
U.S. & Canada:
Canada	220	—	—
United States	27,385	15,168	456
U.S. & Canada total	27,605	15,168	456
Asia-Pacific: (2)
Bangladesh	487	—	—
India	77,472	—	820
Philippines	346	—	—
Asia-Pacific total	78,305	—	820
Africa:
Burkina Faso	726	—	—
Ghana	3,503	657	36
Kenya	3,536	—	9
Niger	902	—	—
Nigeria	7,698	—	—
South Africa	2,861	—	—
Uganda	4,100	—	12
Africa total	23,326	657	57
Europe:
France	3,952	303	8
Germany	14,818	—	—
Poland	62	—	—
Spain	11,662	—	1
Europe total	30,494	303	9
Latin America:
Argentina	498	—	11
Brazil	20,635	2,040	122
Chile	3,721	—	138
Colombia	4,973	—	6
Costa Rica	700	—	2
Mexico	9,566	186	92
Paraguay	1,447	—	—
Peru	3,949	450	1
Latin America total	45,489	2,676	372

(1)Approximately 95% of the operated towers are held pursuant to long-term finance leases, including those subject to purchase options.

(2)We also control land under carrier or other third-party communications sites in Australia and New Zealand, which provide recurring cash flows through tenant leasing arrangements.

As of March 31, 2023, our property portfolio included 28 operating data center facilities across ten markets in the United States that collectively comprise approximately 3.1 million net rentable square feet (“NRSF”) of data center space, as detailed below:


	Number of Data Centers	Total NRSF (1)
		(in thousands)
San Francisco Bay, CA	8	940
Los Angeles, CA	3	670
Northern Virginia, VA	5	586
New York, NY	2	250
Chicago, IL	2	216
Boston, MA	1	143
Denver, CO	2	35
Miami, FL	2	50
Orlando, FL	1	126
Atlanta, GA	2	95
Total	28	3,111

(1)Excludes approximately 0.4 million of office and light industrial NRSF.

We operate in seven reportable segments: U.S. & Canada property, Asia-Pacific property, Africa property, Europe property, Latin America property, Data Centers and Services. In evaluating operating performance in each business segment, management uses, among other factors, segment gross margin and segment operating profit (see note 15 to our consolidated and condensed consolidated financial statements included in this Quarterly Report).

Sale of Mexico Fiber— On March 29, 2023, we completed the sale of one of our subsidiaries in Mexico that held fiber assets (“Mexico Fiber”). Prior to the divestiture, Mexico Fiber’s operating results were included within the Latin America property segment.

The 2022 Form 10-K contains information regarding management’s expectations of long-term drivers of demand for our communications sites, as well as key trends, which management believes provide valuable insight into our operating and financial resource allocation decisions. The discussion below should be read in conjunction with the 2022 Form 10-K and, in particular, the information set forth therein under Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Overview.”

In most of our markets, our tenant leases for our communications sites with wireless carriers generally have initial non-cancellable terms of five to ten years with multiple renewal terms. Accordingly, the vast majority of the revenue generated by our property operations during the three months ended March 31, 2023 was recurring revenue that we should continue to receive in future periods. Most of our tenant leases for our communications sites have provisions that periodically increase the rent due under the lease, typically based on an annual fixed escalation (averaging approximately 3% in the United States) or an inflationary index in most of our international markets, or a combination of both. In addition, certain of our tenant leases provide for additional revenue primarily to cover costs (pass-through revenue), such as ground rent or power and fuel costs.

Based upon existing customer leases and foreign currency exchange rates as of March 31, 2023, we expect to generate nearly $63 billion of non-cancellable customer lease revenue over future periods, before the impact of straight-line lease accounting.

Following the rulings by the Supreme Court of India regarding carriers’ obligations for the adjusted gross revenue (“AGR”) fees and charges prescribed by the court, we continue to experience variability and a level of uncertainty in collections in India. As further discussed in Item 1A of the 2022 Form 10-K under the caption “Risk Factors—A substantial portion of our current and projected future revenue is derived from a small number of customers, and we are sensitive to adverse changes in the creditworthiness and financial strength of our customers,” in the third quarter of 2022, our largest customer in India, Vodafone Idea Limited (“VIL”), communicated that it would make partial payments of its contractual amounts owed to us and indicated that it would continue to make partial payments for the remainder of 2022. In late 2022, VIL had communicated its intent to resume payments in full under its contractual obligations owed to us beginning on January 1, 2023. However, in early 2023, VIL communicated that it would not be able to resume payments in full of its contractual obligations owed to us, and that it would instead continue to make partial payments (the “VIL Shortfall”).

We considered these recent developments and the uncertainty with respect to amounts owed under our tenant leases when conducting our 2022 annual impairment assessments for long-lived assets and goodwill in India. As a result, we determined that certain fixed and intangible assets had been impaired during the year ended December 31, 2022. We expect to periodically evaluate the carrying value of our Indian assets, which may result in the realization of additional impairment expense or other similar charges. For more information, please see our discussion below under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” included in this Quarterly Report.

In February 2023, VIL issued optionally convertible debentures (the “VIL OCDs”) to our subsidiary, ATC Telecom Infrastructure Private Limited (“ATC TIPL”), in exchange for VIL’s payment of certain amounts towards accounts receivables. The convertible debentures are to be repaid by VIL with interest and ATC TIPL has the option to convert the debentures into equity of VIL. The VIL OCDs were issued for an aggregate face value of 16.0 billion Indian Rupees (“INR”) (approximately $193.2 million on the date of issuance). The fair value of the VIL OCDs at issuance was approximately $116.5 million.

As a result of the challenging business environment in India, we are exploring various strategic alternatives aimed at potentially reducing our exposure there, including the sale of equity interests in our India operations to one or more private investors. Any such completed transaction could have a material impact on our financial statements and on our results of operations in the period in which any such transaction occurred. There can be no assurance that any such

strategic alternative will be implemented and, if so implemented, as to the timing thereof, and any such proposed transaction would be subject to conditions, including regulatory approvals in India.

The revenues generated by our property operations may be affected by cancellations of existing tenant leases. As discussed above, most of our tenant leases with wireless carriers and broadcasters are multiyear contracts, which typically are non-cancellable; however, in some instances, a lease may be cancelled upon the payment of a termination fee. Revenue lost from either tenant lease cancellations or the non-renewal of leases or rent renegotiations, which we refer to as churn, has historically not had a material adverse effect on the revenues generated by our consolidated property operations. During the three months ended March 31, 2023, churn was approximately 3% of our tenant billings, primarily driven by churn in our U.S. & Canada property segment, as discussed below.

We expect that our churn rate in our U.S. & Canada property segment will remain elevated for a period of several years through 2025 due to contractual lease cancellations and non-renewals by T-Mobile, including legacy Sprint Corporation leases, pursuant to the terms of our master lease agreement with T-Mobile US, Inc. (the “T-Mobile MLA”) entered into in September 2020.

We will continue to actively monitor the ongoing coronavirus pandemic and may take further actions as may be required by governmental authorities or that we determine are in the best interests of our employees, customers and business partners.

Non-GAAP Financial Measures

Included in our analysis of our results of operations are discussions regarding earnings before interest, taxes, depreciation, amortization and accretion, as adjusted (“Adjusted EBITDA”), Funds From Operations, as defined by the National Association of Real Estate Investment Trusts (“Nareit FFO”) attributable to American Tower Corporation common stockholders, Consolidated Adjusted Funds From Operations (“Consolidated AFFO”) and AFFO attributable to American Tower Corporation common stockholders.

We define Adjusted EBITDA as Net income before Income (loss) from equity method investments; Income tax benefit (provision); Other income (expense); Gain (loss) on retirement of long-term obligations; Interest expense; Interest income; Other operating income (expense); Depreciation, amortization and accretion; and stock-based compensation expense.

Nareit FFO attributable to American Tower Corporation common stockholders is defined as net income before gains or losses from the sale or disposal of real estate, real estate related impairment charges, and real estate related depreciation, amortization and accretion less dividends to noncontrolling interests, and including adjustments for (i) unconsolidated affiliates and (ii) noncontrolling interests. In this section, we refer to Nareit FFO attributable to American Tower Corporation common stockholders as “Nareit FFO (common stockholders).”

We define Consolidated AFFO as Nareit FFO (common stockholders) before (i) straight-line revenue and expense; (ii) stock-based compensation expense; (iii) the deferred portion of income tax and other income tax adjustments; (iv) non-real estate related depreciation, amortization and accretion; (v) amortization of deferred financing costs, debt discounts and premiums and long-term deferred interest charges; (vi) other income (expense); (vii) gain (loss) on retirement of long-term obligations; (viii) other operating income (expense); and adjustments for (ix) unconsolidated affiliates and (x) noncontrolling interests, less cash payments related to capital improvements and cash payments related to corporate capital expenditures.

We define AFFO attributable to American Tower Corporation common stockholders as Consolidated AFFO, excluding the impact of noncontrolling interests on both Nareit FFO (common stockholders) and the other adjustments included in the calculation of Consolidated AFFO. In this section, we refer to AFFO attributable to American Tower Corporation common stockholders as “AFFO (common stockholders).”

Adjusted EBITDA, Nareit FFO (common stockholders), Consolidated AFFO and AFFO (common stockholders) are not intended to replace net income or any other performance measures determined in accordance with GAAP. None of Adjusted EBITDA, Nareit FFO (common stockholders), Consolidated AFFO or AFFO (common stockholders) represents cash flows from operating activities in accordance with GAAP and, therefore, these measures should not be considered indicative of cash flows from operating activities, as a measure of liquidity or a measure of funds available to fund our cash needs, including our ability to make cash distributions. Rather, Adjusted EBITDA, Nareit FFO (common stockholders), Consolidated AFFO and AFFO (common stockholders) are presented as we believe each is a useful indicator of our current operating performance. We believe that these metrics are useful to an investor in evaluating our operating performance because (1) each is a key measure used by our management team for decision making purposes and for evaluating our operating segments’ performance; (2) Adjusted EBITDA is a component underlying our credit ratings; (3) Adjusted EBITDA is widely used in the telecommunications real estate sector to measure operating performance as depreciation, amortization and accretion may vary significantly among companies depending upon accounting methods and useful lives, particularly where acquisitions and non-operating factors are involved; (4) Consolidated AFFO and AFFO (common stockholders) are widely used in the telecommunications real estate sector to adjust Nareit FFO (common stockholders) for items that may otherwise cause material fluctuations in Nareit FFO (common stockholders) growth from period to period that would not be representative of the underlying performance of property assets in those periods; (5) each provides investors with a meaningful measure for evaluating our period-to-period operating performance by eliminating items that are not operational in nature; and (6) each provides investors with a measure for comparing our results of operations to those of other companies, particularly those in our industry.

Our measurement of Adjusted EBITDA, Nareit FFO (common stockholders), Consolidated AFFO and AFFO (common stockholders) may not, however, be fully comparable to similarly titled measures used by other companies. Reconciliations of Adjusted EBITDA, Nareit FFO (common stockholders), Consolidated AFFO and AFFO (common stockholders) to net income, the most directly comparable GAAP measure, have been included below.

Results of Operations

Three Months Ended March 31, 2023 and 2022

(in millions, except percentages)

Revenue


	Three Months Ended March 31,				Percent Increase (Decrease)
	2023		2022
Property
U.S. & Canada	$	1,287.6	$	1,232.4	4	%
Asia-Pacific	251.1		298.5		(16)
Africa	317.0		267.8		18
Europe	191.7		198.5		(3)
Latin America	464.1		419.3		11
Data Centers	203.0		184.3		10
Total property	2,714.5		2,600.8		4
Services	52.7		59.5		(11)
Total revenues	$	2,767.2	$	2,660.3	4	%

Three Months Ended March 31, 2023

U.S. & Canada property segment revenue growth of $55.2 million was attributable to:

Tenant billings growth of $60.0 million, which was driven by:
$59.9 million due to leasing additional space on our sites (“colocations”) and amendments; and
$4.2 million from contractual escalations, net of churn;
Partially offset by:
A decrease of $2.2 million from other tenant billings; and
A decrease of $1.9 million generated from newly acquired or constructed sites, which includes the impact of the disposition of certain operations acquired in connection with our acquisition of InSite Wireless Group, LLC;
Partially offset by a decrease of $4.6 million in other revenue, which included a $6.0 million decrease due to straight-line accounting.

Segment revenue growth included a decrease of $0.2 million attributable to the negative impact of foreign currency translation related to fluctuations in Canadian Dollar.

Asia-Pacific property segment revenue decrease of $47.4 million was attributable to:

A decrease of $22.0 million in other revenue, primarily due to revenue reserves of $20.8 million related to the VIL Shortfall (as discussed above), as compared to the prior-year period, which included net recoveries of reserves; and
A decrease of $13.1 million in pass-through revenue, primarily due to revenue reserves of $14.1 million related to the VIL Shortfall;
Partially offset by tenant billings growth of $11.6 million, which was driven by:
$9.8 million due to colocations and amendments;
$6.0 million generated from newly acquired or constructed sites; and
$0.1 million from other tenant billings;
Partially offset by a decrease of $4.3 million resulting from churn in excess of contractual escalations.

Segment revenue decline included a decrease of $23.9 million attributable to the negative impact of foreign currency translation related to fluctuations in INR.

Africa property segment revenue growth of $49.2 million was attributable to:

An increase of $59.8 million in pass-through revenue, primarily due to an increase in fuel prices;
Tenant billings growth of $33.1 million, which was driven by:
$13.2 million due to colocations and amendments;
$9.9 million resulting from contractual escalations, net of churn;
$9.6 million generated from newly acquired or constructed sites; and
$0.4 million from other tenant billings; and
An increase of $2.2 million in other revenue.

Segment revenue growth included a decrease of $45.9 million, attributable to the impact of foreign currency translation, which included, among others, negative impacts of $23.9 million related to fluctuations in Ghanaian Cedi, $9.9 million related to fluctuations in Nigerian Naira, $5.9 million related to fluctuations in South African Rand and $3.0 million related to fluctuations in Kenyan Shilling.

Europe property segment revenue decrease of $6.8 million was attributable to:

• A decrease of $16.8 million in pass-through revenue, primarily due to a decrease in energy costs;

Partially offset by an increase of $6.3 million in other revenue, primarily attributable to our Spain fiber business acquired in the second quarter of 2022, and tenant billings growth of $12.7 million, which was driven by:
$6.9 million resulting from contractual escalations, net of churn;
$3.4 million due to colocations and amendments; and

• $2.6 million generated from newly acquired or constructed sites;

Partially offset by a decrease of $0.2 million from other tenant billings.

Segment revenue growth included a decrease of $9.0 million primarily attributable to the negative impact of foreign currency translation related to fluctuations in Euro (“EUR”).

Latin America property segment revenue growth of $44.8 million was attributable to:

Tenant billings growth of $16.8 million, which was driven by:
$8.4 million due to colocations and amendments;
$7.7 million from contractual escalations, net of churn; and

• $0.7 million generated from newly acquired or constructed sites;

An increase of $8.6 million in other revenue, primarily due to a decrease in revenue reserves; and

• An increase of $6.9 million in pass-through revenue, primarily attributable to increased pass-through ground rent costs in Brazil.

Segment revenue growth included an increase of $12.5 million, attributable to the impact of foreign currency translation, which included, among others, positive impacts of $15.3 million related to fluctuations in Mexican Peso and $3.1 million related to fluctuations in Brazilian Real, partially offset by negative impacts of $5.6 million related to fluctuations in Colombian Peso.

Data Centers segment revenue growth of $18.7 million was attributable to:

An increase of $8.9 million in rental, related and other revenue primarily due to new lease commencements, customer expansions and rent increases upon customer renewals;
An increase of $6.3 million in power revenue from new lease commencements, increased power consumption and pricing increases from existing customers;
An increase of $2.3 million in interconnection revenue; and
An increase of $1.2 million in straight-line revenue.

Services segment revenue decrease of $6.8 million was primarily attributable to a decrease in site application, zoning and permitting and structural analysis services, partially offset by an increase in construction management services.

Gross Margin


	Three Months Ended March 31,				Percent Increase (Decrease)
	2023		2022
Property
U.S. & Canada	$	1,082.3	$	1,032.6	5	%
Asia-Pacific	82.7		123.4		(33)
Africa	198.5		170.1		17
Europe	118.6		106.2		12
Latin America	326.2		289.3		13
Data Centers	119.2		107.7		11
Total property	1,927.5		1,829.3		5
Services	33.6		31.6		6	%

Three Months Ended March 31, 2023

The increase in U.S. & Canada property segment gross margin was primarily attributable to the increase in revenue described above, partially offset by an increase in direct expenses of $5.5 million.
The decrease in Asia-Pacific property segment gross margin was primarily attributable to the decrease in revenue described above and an increase in direct expenses of $9.3 million, primarily due to an increase in costs associated with pass-through revenue, including fuel costs. Direct expenses also benefited by $16.0 million from the impact of foreign currency translation.
The increase in Africa property segment gross margin was primarily attributable to the increase in revenue described above, partially offset by an increase in direct expenses of $40.9 million, primarily due to an increase in costs associated with pass-through revenue, including fuel costs. Direct expenses also benefited by $20.1 million from the impact of foreign currency translation.
The increase in Europe property segment gross margin was primarily attributable to a decrease in direct expenses of $15.8 million, primarily due to a decrease in energy costs associated with pass-through revenue, partially offset by the decrease in revenue described above. Direct expenses also benefited by $3.4 million from the impact of foreign currency translation.
The increase in Latin America property segment gross margin was primarily attributable to the increase in revenue described above, partially offset by an increase in direct expenses of $6.6 million, primarily due to an increase in costs associated with pass-through revenue, including land rent costs. Direct expenses were also negatively impacted by $1.3 million from the impact of foreign currency translation.
The increase in Data Centers segment gross margin was primarily attributable to the increase in revenue described above, partially offset by an increase in direct expenses of $7.2 million.

*•*The increase in Services segment gross margin was primarily due to a decrease in direct expenses of $8.8 million, partially offset by the decrease in revenue described above.

Selling, General, Administrative and Development Expense (“SG&A”)


	Three Months Ended March 31,				Percent Increase (Decrease)
	2023		2022
Property
U.S. & Canada	$	40.8	$	42.8	(5)	%
Asia-Pacific	8.8		47.9		(82)
Africa	21.4		22.5		(5)
Europe	14.6		14.9		(2)
Latin America	29.7		28.8		3
Data Centers	17.5		16.4		7
Total property	132.8		173.3		(23)
Services	5.7		6.0		(5)
Other	125.4		114.6		9
Total selling, general, administrative and development expense	$	263.9	$	293.9	(10)	%

Three Months Ended March 31, 2023

*•*The decrease in our U.S. & Canada property segment SG&A was primarily driven by decreased personnel costs to support our business.

The decrease in our Asia-Pacific property segment SG&A was primarily driven by a net decrease in bad debt expense of $35.3 million. For the three months ended March 31, 2023, the impact of the VIL Shortfall is reflected in revenue reserves as described above.
The decrease in our Africa property segment SG&A was primarily driven by lower canceled construction costs and a benefit from the impact of foreign currency translation, partially offset by an increase in bad debt expense.

*•*Our Europe and Latin America property segment SG&A and Services segment SG&A were relatively consistent as compared to the prior-year period.

*•*The increase in our Data Centers segment SG&A was primarily driven by increased personnel costs to support our business.

The increase in other SG&A was primarily attributable to an increase in stock-based compensation expense of $8.8 million.

Operating Profit


	Three Months Ended March 31,				Percent Increase (Decrease)
	2023		2022
Property
U.S. & Canada	$	1,041.5	$	989.8	5	%
Asia-Pacific	73.9		75.5		(2)
Africa	177.1		147.6		20
Europe	104.0		91.3		14
Latin America	296.5		260.5		14
Data Centers	101.7		91.3		11
Total property	1,794.7		1,656.0		8
Services	27.9		25.6		9	%

Three Months Ended March 31, 2023

The increases in operating profit for the three months ended March 31, 2023 for our U.S. & Canada, Africa and Europe property segments and our Services segment were primarily attributable to increases in our segment gross margin and decreases in our segment SG&A.
The decrease in operating profit for the three months ended March 31, 2023 for our Asia-Pacific property segment was primarily attributable to a decrease in our segment gross margin, partially offset by a decrease in our segment SG&A.
The increases in operating profit for the three months ended March 31, 2023 for our Latin America property segment and our Data Centers segment were primarily attributable to increases in our segment gross margin, partially offset by increases in our segment SG&A.

Depreciation, Amortization and Accretion


	Three Months Ended March 31,				Percent Increase (Decrease)
	2023		2022
Depreciation, amortization and accretion	$	794.1	$	815.8	(3)	%

The decrease in depreciation, amortization and accretion expense for the three months ended March 31, 2023 was primarily attributable to a decrease in property and equipment and intangible assets subject to amortization as a result of impairments taken since the beginning of the prior-year period.

Other Operating Expenses


	Three Months Ended March 31,				Percent Increase (Decrease)
	2023		2022
Other operating expenses	$	127.5	$	26.1	389	%

The increase in other operating expenses during the three months ended March 31, 2023 was primarily attributable to a loss on the sale of Mexico Fiber of $80.0 million and an increase in impairment charges of $24.0 million, partially offset by a decrease in integration and acquisition related costs, including pre-acquisition contingencies and settlements, of $6.5 million.

Total Other Expense (Income)


	Three Months Ended March 31,				Percent Increase (Decrease)
	2023		2022
Total other expense (income)	$	407.2	$	(0.1)	(407,300)	%

Total other expense (income) consists primarily of interest expense and realized and unrealized foreign currency gains or losses as a result of foreign currency exchange rate fluctuations primarily associated with our intercompany notes and similar unaffiliated balances denominated in a currency other than the subsidiaries’ functional currencies.

The change in total other expense (income) during the three months ended March 31, 2023 was primarily due to foreign currency losses of $84.1 million in the current period, as compared to foreign currency gains of $242.1 million in the prior-year period and an increase in net interest expense of $56.9 million, primarily due to an increase in our weighted average interest rate. Total other expense (income) for the three months ended March 31, 2023 also includes an unrealized loss of $15.7 million related to the VIL OCDs held as of March 31, 2023.

Income Tax Provision


	Three Months Ended March 31,						Percent Increase (Decrease)
	2023			2022
Income tax provision	$	53.4		$	22.5		137	%
Effective tax rate	14.5		%	3.1		%

As a real estate investment trust for U.S. federal income tax purposes (“REIT”), we may deduct earnings distributed to stockholders against the income generated by our REIT operations. Consequently, the effective tax rate on income from continuing operations for the three months ended March 31, 2023 and 2022 differs from the federal statutory rate.

The increase in the income tax provision during the three months ended March 31, 2023 was primarily attributable to the reversal of valuation allowances in certain foreign jurisdictions during the three months ended March 31, 2022. The increase in the income tax provision during the three months ended March 31, 2023 was also attributable to increased earnings in certain foreign jurisdictions, offset by fewer additions to reserves for our existing tax positions during the three months ended March 31, 2023.

Net Income / Adjusted EBITDA and Net Income / Nareit FFO attributable to American Tower Corporation common stockholders / Consolidated AFFO / AFFO attributable to American Tower Corporation common stockholders


	Three Months Ended March 31,				Percent Increase (Decrease)
	2023		2022
Net income	$	315.0	$	702.7	(55)	%
Income tax provision	53.4		22.5		137
Other expense (income)	97.8		(252.6)		(139)

Interest expense	340.2		262.4		30
Interest income	(30.8)		(9.9)		211
Other operating expenses	127.5		26.1		389
Depreciation, amortization and accretion	794.1		815.8		(3)
Stock-based compensation expense	65.5		56.7		16
Adjusted EBITDA	$	1,762.7	$	1,623.7	9	%


	Three Months Ended March 31,				Percent Increase (Decrease)
	2023		2022
Net income	$	315.0	$	702.7	(55)	%
Real estate related depreciation, amortization and accretion	728.8		725.1		1
Losses from sale or disposal of real estate and real estate related impairment charges (1)	118.7		13.8		760
Dividends to noncontrolling interests (2)	(11.4)		—		100
Adjustments for unconsolidated affiliates and noncontrolling interests	(68.2)		(41.5)		64
Nareit FFO attributable to American Tower Corporation common stockholders	$	1,082.9	$	1,400.1	(23)	%
Straight-line revenue	(112.0)		(109.4)		2
Straight-line expense	7.9		10.6		(25)
Stock-based compensation expense	65.5		56.7		16
Deferred portion of income tax and other income tax adjustments	(8.9)		(77.3)		(88)
GTP one-time cash tax settlement (3)	—		45.8		(100)
Non-real estate related depreciation, amortization and accretion	65.3		90.7		(28)
Amortization of deferred financing costs, capitalized interest, debt discounts and premiums and long-term deferred interest charges	11.7		12.1		(3)

Other expense (income) (4)	97.8		(252.6)		(139)

Other operating expense (5)	8.8		12.3		(28)
Capital improvement capital expenditures	(35.7)		(27.7)		29
Corporate capital expenditures	(3.0)		(1.3)		131
Adjustments for unconsolidated affiliates and noncontrolling interests	68.2		41.5		64
Consolidated AFFO	$	1,248.5	$	1,201.5	4	%
Adjustments for unconsolidated affiliates and noncontrolling interests (6)	(63.5)		(34.4)		85	%
AFFO attributable to American Tower Corporation common stockholders	$	1,185.0	$	1,167.1	2	%

(1)Included in these amounts are impairment charges of $29.8 million and $5.8 million, respectively. For the three months ended March 31, 2023, includes a loss on the sale of Mexico Fiber of $80.0 million.

(2)For the three months ended March 31, 2023, includes $11.4 million of distributions related to the outstanding mandatorily convertible preferred equity in connection with our agreements with certain investment vehicles affiliated with Stonepeak Partners LP (such investment vehicles, collectively, “Stonepeak”).

(3)In 2015, we incurred charges in connection with certain tax elections wherein MIP Tower Holdings LLC, parent company to Global Tower Partners (“GTP”), would no longer operate as a separate REIT for federal and state income tax purposes. We finalized a settlement related to this tax election in the three month period ended March 31, 2022. We believe that these related transactions are nonrecurring, and do not believe it is an indication of our operating performance. Accordingly, we believe it is more meaningful to present Consolidated AFFO excluding these amounts.

(4)Includes losses (gains) on foreign currency exchange rate fluctuations of $84.1 million and $(242.1) million, respectively.

(5)Primarily includes acquisition-related costs and integration costs.

(6)Includes adjustments for the impact on both Nareit FFO attributable to American Tower Corporation common stockholders as well as the other line items included in the calculation of Consolidated AFFO.

The decrease in net income for the three months ended March 31, 2023 was primarily due to (i) changes in other expense (income), (ii) an increase in other operating expense, (iii) an increase in interest expense and (iv) an increase in the income tax provision, partially offset by (a) an increase in segment operating profit and (b) a decrease in depreciation, amortization and accretion expense.

The increase in Adjusted EBITDA for the three months ended March 31, 2023 was primarily attributable to the increase in our gross margin and a decrease in SG&A, excluding the impact of stock-based compensation expense of $38.8 million.

The increase in Consolidated AFFO and AFFO attributable to American Tower Corporation common stockholders for the three months ended March 31, 2023 was primarily attributable to an increase in our operating profit, excluding the impact of straight-line accounting, partially offset by (i) an increase in cash paid for interest, (ii) an increase in dividends to noncontrolling interests, including $11.4 million of distributions related to the outstanding Stonepeak mandatorily convertible preferred equity, and (iii) an increase in capital improvement capital expenditures. The increase in AFFO attributable to American Tower Corporation common stockholders was also impacted by changes in noncontrolling interests held in Data Centers since the beginning of the prior-year period.

Liquidity and Capital Resources

The information in this section updates as of March 31, 2023 the “Liquidity and Capital Resources” section of the 2022 Form 10-K and should be read in conjunction with that report.

Overview

During the three months ended March 31, 2023, our significant financing transactions included:

Redemption of our 3.50% senior unsecured notes due 2023 (the “3.50% Notes”) upon their maturity.
Registered public offering in an aggregate amount of $1.5 billion of senior unsecured notes with maturities in 2028 and 2033.

*•*Securitization transactions, including the repayment of $1.3 billion aggregate principal amount outstanding under our Secured Tower Revenue Securities, Series 2013-2A due 2023 (the “Series 2013-2A Securities”) and the issuance of $1.3 billion aggregate principal amount of the Series 2023-1A Securities (as defined below).

As a holding company, our cash flows are derived primarily from the operations of, and distributions from, our operating subsidiaries or funds raised through borrowings under our credit facilities and debt or equity offerings.

The following table summarizes the significant components of our liquidity (in millions):


	As of March 31, 2023
Available under the 2021 Multicurrency Credit Facility	$	3,117.3
Available under the 2021 Credit Facility	2,835.0
Letters of credit	(34.0)
Total available under credit facilities, net	$	5,918.3
Cash and cash equivalents	1,803.0
Total liquidity	$	7,721.3

Subsequent to March 31, 2023, we made additional net borrowings of $585.0 million under the 2021 Credit Facility (as defined below).

Summary cash flow information is set forth below (in millions):


	Three Months Ended March 31,
	2023		2022
Net cash provided by (used for):
Operating activities	$	1,070.5	$	663.6
Investing activities	(276.8)		(513.1)
Financing activities	(1,012.6)		(250.9)
Net effect of changes in foreign currency exchange rates on cash and cash equivalents, and restricted cash	3.6		28.5
Net decrease in cash and cash equivalents, and restricted cash	$	(215.3)	$	(71.9)

We use our cash flows to fund our operations and investments in our business, including maintenance and improvements, communications site construction, managed network installations and acquisitions. Additionally, we use our cash flows to make distributions, including distributions of our REIT taxable income to maintain our qualification for taxation as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). We may also periodically repay or repurchase our existing indebtedness or equity. We typically fund our international expansion efforts primarily through a combination of cash on hand, intercompany debt and equity contributions.

As of March 31, 2023, we had total outstanding indebtedness of $38.8 billion, with a current portion of $3.9 billion. During the three months ended March 31, 2023, we generated sufficient cash flow from operations, together with borrowings under our credit facilities, proceeds from our debt issuances and cash on hand, to fund our acquisitions, capital expenditures and debt service obligations, as well as our required distributions. We believe the cash generated by operating activities during the year ending December 31, 2023, together with our borrowing capacity under our credit facilities, will suffice to fund our required distributions, capital expenditures, debt service obligations (interest and principal repayments) and signed acquisitions.

Material Cash Requirements— There were no material changes to the Material Cash Requirements section of the 2022 Form 10-K.

As of March 31, 2023, we had $1.5 billion of cash and cash equivalents held by our foreign subsidiaries. As of March 31, 2023, we had $286.9 million of cash and cash equivalents held by our joint ventures, of which $236.1 million was held by our foreign joint ventures. While certain subsidiaries may pay us interest or principal on intercompany debt, it has not been our practice to repatriate earnings from our foreign subsidiaries primarily due to our ongoing expansion efforts and related capital needs. However, in the event that we do repatriate any funds, we may be required to accrue and pay certain taxes.

Cash Flows from Operating Activities

The increase in cash provided by operating activities for the three months ended March 31, 2023 was primarily attributable to (i) changes in unearned revenue, (ii) an increase in the operating profits of our U.S & Canada, Africa, Europe and Latin America property segments and our Data Centers and Services segments and (iii) a decrease in cash paid for taxes, partially offset by an increase in cash paid for interest.

Cash Flows from Investing Activities

Our significant investing activities during the three months ended March 31, 2023 are highlighted below:

We received $252.5 million from the sale of Mexico Fiber.
We spent $60.9 million for acquisitions, including payments made for acquisitions completed in 2022.
We spent $473.0 million for capital expenditures, as follows (in millions):


Discretionary capital projects (1)	$	265.8
Ground lease purchases (2)	34.9
Capital improvements and corporate expenditures (3)	38.7
Redevelopment	108.8
Start-up capital projects	24.8
Total capital expenditures (4)	$	473.0

(1)Includes the construction of 1,333 communications sites globally.

(2)Includes $11.7 million of perpetual land easement payments reported in Deferred financing costs and other financing activities in the cash flows from financing activities in our condensed consolidated statements of cash flows.

(3)Includes $2.1 million of finance lease payments reported in Repayments of notes payable, credit facilities, senior notes, secured debt, term loan and finance leases in the cash flows from financing activities in our condensed consolidated statements of cash flows.

(4)Net of purchase credits of $2.7 million on certain assets, which are recorded in investing activities in our condensed consolidated statements of cash flows.

We plan to continue to allocate our available capital, after satisfying our distribution requirements, among investment alternatives that meet our return on investment criteria, while maintaining our commitment to our long-term financial policies. Accordingly, we expect to continue to deploy capital through our annual capital expenditure program, including land purchases and new site and data center facility construction, and through acquisitions. We also regularly review our portfolios as to capital expenditures required to upgrade our infrastructure to our structural standards or address capacity, structural or permitting issues.

We expect that our 2023 total capital expenditures will be as follows (in millions):


Discretionary capital projects (1)	$	785	to	$	815
Ground lease purchases	85		to	105
Capital improvements and corporate expenditures	175		to	185
Redevelopment	485		to	515
Start-up capital projects	120		to	140
Total capital expenditures	$	1,650	to	$	1,760

(1)Includes the construction of approximately 3,450 to 4,550 communications sites globally and approximately $360 million of anticipated spend related to data center assets.

Cash Flows from Financing Activities

Our significant financing activities were as follows (in millions):


	Three Months Ended March 31,
	2023		2022
Proceeds from issuance of senior notes, net	$	1,494.2	$	—
(Repayments) proceeds from credit facilities, net	(835.0)		1,990.0






Proceeds from issuance of securities in securitization transaction	1,300.0		—
Repayment of securitized debt	(1,300.0)		—
Repayments of senior notes (1)	(1,000.0)		(1,551.1)


Distributions to noncontrolling interest holders	(11.2)		(0.1)

Distributions paid on common stock	(733.6)		(641.2)

(1)For the three months ended March 31, 2022, included payment in full of $875.0 million aggregate principal amount and a fair value adjustment of $80.1 million of debt assumed in connection with the acquisition of CoreSite Realty Corporation.

Securitizations

Repayment of Series 2013-2A Securities—On the March 2023 repayment date, we repaid the entire $1.3 billion aggregate principal amount outstanding under the Series 2013-2A Securities, pursuant to the terms of the agreements governing those securities. The repayment was funded with proceeds from the 2023 Securitization (as defined below).

Secured Tower Revenue Securities, Series 2023-1, Subclass A and Series 2023-1, Subclass R— On March 13, 2023, we completed a securitization transaction (the “2023 Securitization”), in which American Tower Trust I (the “Trust”) issued $1.3 billion aggregate principal amount of Secured Tower Revenue Securities, Series 2023-1, Subclass A (the “Series 2023-1A Securities”). To satisfy the applicable risk retention requirements of Regulation RR promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act” and, such requirements, the “Risk Retention Rules”), the Trust issued, and one of our affiliates purchased, $68.5 million aggregate principal amount of Secured Tower Revenue Securities, Series 2023-1, Subclass R (the “Series 2023-1R Securities” and, together with the Series 2023-1A Securities, the “2023 Securities”) to retain an “eligible horizontal residual interest” (as defined in the Risk Retention Rules) in an amount equal to at least 5% of the fair value of the 2023 Securities.

The assets of the Trust consist of a nonrecourse componentized loan, which also secures each of (i) the Secured Tower Revenue Securities, Series 2018-1, Subclass A (the “Series 2018-1A Securities”) and (ii) the Secured Tower Revenue Securities, Series 2018-1, Subclass R (the “Series 2018-1R Securities” and, together with the Series 2018-1A Securities, the “2018 Securities”) issued in a securitization transaction in March 2018 (the “2018 Securitization” and, together with the 2023 Securitization, the “Trust Securitizations”) (the “Loan”) made by the Trust to American Tower Asset Sub, LLC and American Tower Asset Sub II, LLC (together, the “AMT Asset Subs”). The AMT Asset Subs are jointly and severally liable under the Loan, which is secured primarily by mortgages on the AMT Asset Subs’ interests in 5,036 broadcast and wireless communications towers and related assets (the “Trust Sites”).

The 2023 Securities correspond to components of the Loan made to the AMT Asset Subs pursuant to the Second Supplement and Amendment dated as of March 13, 2023 (the “2023 Supplement”) to the Second Amended and Restated Loan and Security Agreement dated as of March 29, 2018 (the “Loan Agreement,” which continues to govern the 2018 Securities, and collectively, the “Trust Loan Agreement”).

The 2023 Securities represent a pass-through interest in the components of the Loan corresponding to the 2023 Securities. The Series 2023-1A Securities have an interest rate of 5.490% and the Series 2023-1R Securities have an interest rate of 5.735%. The 2023 Securities have an expected life of approximately five years with a final repayment date in March 2053.

The debt service on the Loan will be paid solely from the cash flows generated from the operation of the Trust Sites held by the AMT Asset Subs. The AMT Asset Subs are required to make monthly payments of interest on the Loan. Subject to certain limited exceptions described below, no payments of principal will be required to be made on the components of the Loan corresponding to the 2023 Securities prior to the monthly payment date in March 2028, which is the anticipated repayment date for such components.

The AMT Asset Subs may prepay the Loan at any time, provided it is accompanied by applicable prepayment consideration. If the prepayment occurs within twelve months of the anticipated repayment date for the 2023 Securities, no prepayment consideration is due. The entire unpaid principal balance of the components of the Loan corresponding to the 2023 Securities will be due in March 2053.

Repayment of 3.50% Senior Notes—On January 31, 2023, we repaid $1.0 billion aggregate principal amount of the 3.50% Notes upon their maturity. The 3.50% Notes were repaid using borrowings under the 2021 Credit Facility. Upon completion of the repayment, none of the 3.50% Notes remained outstanding.

Offering of Senior Notes

*5.500% Senior Notes and 5.650% Senior Notes Offering—*On March 3, 2023, we completed a registered public offering of $700.0 million aggregate principal amount of 5.500% senior unsecured notes due 2028 (the “5.500% Notes”) and $800.0 million aggregate principal amount of 5.650% senior unsecured notes due 2033 (the “5.650% Notes” and, together with the 5.500% Notes, the “Notes”). The net proceeds from this offering were approximately $1,480.9 million, after deducting commissions and estimated expenses, which we used to repay existing indebtedness under the 2021 Multicurrency Credit Facility (as defined below) and the 2021 Credit Facility.

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)
5.500% Notes	$	700.0	March 3, 2023	March 15, 2028	5.500%	September 15, 2023	March 15 and September 15	February 15, 2028
5.650% Notes	$	800.0	March 3, 2023	March 15, 2033	5.650%	September 15, 2023	March 15 and September 15	December 15, 2032

(1)Accrued and unpaid interest on U.S. Dollar (“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.

(2)We 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 we redeem the Notes on or after the par call date, we will not be required to pay a make-whole premium.

If we undergo a change of control and corresponding ratings decline, each as defined in the supplemental indenture for the Notes, we 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 our other senior unsecured debt and are structurally subordinated to all existing and future indebtedness and other obligations of our subsidiaries.

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

*2021 Multicurrency Credit Facility—*During the three months ended March 31, 2023, we borrowed an aggregate of $725.0 million and repaid an aggregate of $1.6 billion of revolving indebtedness under our $6.0 billion senior unsecured multicurrency revolving credit facility, as amended and restated in December 2021 (the “2021 Multicurrency Credit Facility”). We used the borrowings for general corporate purposes. We currently have $3.5 million of undrawn letters of credit and maintain the ability to draw down and repay amounts under the 2021 Multicurrency Credit Facility in the ordinary course.

*2021 Credit Facility—*During the three months ended March 31, 2023, we borrowed an aggregate of $1.0 billion and repaid an aggregate of $935.0 million of revolving indebtedness under our $4.0 billion senior unsecured revolving credit facility, as amended and restated in December 2021 (the “2021 Credit Facility”). We used the borrowings to repay outstanding indebtedness, including the 3.50% Notes. We currently have $30.5 million of undrawn letters of credit and maintain the ability to draw down and repay amounts under the 2021 Credit Facility in the ordinary course.

As of March 31, 2023, the key terms under the 2021 Multicurrency Credit Facility, the 2021 Credit Facility, our $1.0 billion unsecured term loan, as amended and restated in December 2021 (the “2021 Term Loan”), our 825.0 million

EUR unsecured term loan, as amended and restated in December 2021 (the “2021 EUR Three Year Delayed Draw Term Loan”) and our $1.5 billion unsecured term loan entered into in December 2021 (the “2021 USD Two Year Delayed Draw Term Loan”) were as follows:


Bank Facility		Outstanding Principal Balance ($ in millions)		Maturity Date		LIBOR or EURIBOR borrowing interest rate range (1)	Base rate borrowing interest rate range (1)	Current margin over LIBOR or EURIBOR and the base rate, respectively
2021 Multicurrency Credit Facility	(2)	$	2,882.7	June 30, 2025	(3)	0.875% - 1.750%	0.000% - 0.750%	1.125% and 0.125%
2021 Credit Facility	(4)	1,165.0		January 31, 2027	(3)	0.875% - 1.750%	0.000% - 0.750%	1.125% and 0.125%
2021 Term Loan	(4)	1,000.0		January 31, 2027		0.875% - 1.750%	0.000% - 0.750%	1.125% and 0.125%
2021 EUR Three Year Delayed Draw Term Loan	(5)	894.2		May 28, 2024		0.875% - 1.625%	0.000% - 0.625%	1.125% and 0.125%

2021 USD Two Year Delayed Draw Term Loan	(4)	1,500.0		December 28, 2023		0.875% - 1.750%	0.000% - 0.750%	1.125% and 0.125%

(1)Represents interest rate above: (a) the London Interbank Offered Rate (“LIBOR”) for LIBOR based borrowings, (b) Euro Interbank Offer Rate (“EURIBOR”) for EURIBOR based borrowings and (c) the defined base rate for base rate borrowings, in each case based on our debt ratings.

(2)Currently borrowed at LIBOR for USD denominated borrowings and at EURIBOR for EUR denominated borrowings.

(3)Subject to two optional renewal periods.

(4)Currently borrowed at LIBOR.

(5)Currently borrowed at EURIBOR.

We must pay a quarterly commitment fee on the undrawn portion of each of the 2021 Multicurrency Credit Facility and the 2021 Credit Facility. The commitment fee for the 2021 Multicurrency Credit Facility and the 2021 Credit Facility ranges from 0.080% to 0.300% per annum, based upon our debt ratings, and is currently 0.110%.

The 2021 Multicurrency Credit Facility, the 2021 Credit Facility, the 2021 Term Loan, the 2021 EUR Three Year Delayed Draw Term Loan and the 2021 USD Two Year Delayed Draw Term Loan do not require amortization of principal and may be paid prior to maturity in whole or in part at our option without penalty or premium. We have the option of choosing either a defined base rate, LIBOR or EURIBOR as the applicable base rate for borrowings under these bank facilities.

The loan agreements for each of the 2021 Multicurrency Credit Facility, the 2021 Credit Facility, the 2021 Term Loan, the 2021 EUR Three Year Delayed Draw Term Loan and the 2021 USD Two Year Delayed Draw Term Loan contain certain reporting, information, financial and operating covenants and other restrictions (including limitations on additional debt, guaranties, sales of assets and liens) with which we must comply. Failure to comply with the financial and operating covenants of the loan agreements could not only prevent us from being able to borrow additional funds under the revolving credit facilities, but may constitute a default, which could result in, among other things, the amounts outstanding under the applicable agreement, including all accrued interest and unpaid fees, becoming immediately due and payable.

India Term Loan—On February 16, 2023, we entered into a 12.0 billion INR (approximately $145.1 million at the date of signing) unsecured term loan with a maturity date that is one year from the date of the first draw thereunder (the “India Term Loan”). On February 17, 2023, we borrowed 10.0 billion INR (approximately $120.7 million at the date of borrowing) under the India Term Loan. The India Term Loan bears interest at the three month treasury bill rate as announced by the Financial Benchmarks India Private Limited plus a margin of 1.95%. Any outstanding principal and accrued but unpaid interest will be due and payable in full at maturity. The India Term Loan does not require amortization of principal and may be paid prior to maturity in whole or in part at our option without penalty or premium.

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

During the three months ended March 31, 2023, there were no repurchases under either Buyback Program.

We expect to continue managing the pacing of the remaining approximately $2.0 billion under the Buyback Programs in response to general market conditions and other relevant factors. We expect to fund any further repurchases of our common stock through a combination of cash on hand, cash generated by operations and borrowings under our credit facilities. Repurchases under the Buyback Programs are subject to, among other things, us having available cash to fund the repurchases.

*Sales of Equity Securities—*We receive proceeds from sales of our equity securities pursuant to our employee stock purchase plan and upon exercise of stock options granted under our equity incentive plan. During the three months ended March 31, 2023, we received an aggregate of $1.8 million in proceeds upon exercises of stock options.

2020 “At the Market” Stock Offering Program—In August 2020, we established an “at the market” stock offering program through which we may issue and sell shares of our 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 our specific instructions, at negotiated prices. We intend 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 March 31, 2023, we have not sold any shares of common stock under the 2020 ATM Program.

Future Financing Transactions—We regularly consider various options to obtain financing and access the capital markets, subject to market conditions, to meet our funding needs. Such capital raising alternatives, in addition to those noted above including the 2020 ATM Program, may include amendments and extensions of our bank facilities, entry into new bank facilities, transactions with private equity funds or partnerships, additional senior note offerings and securitization transactions. No assurance can be given as to whether any such financing transactions will be completed or as to the timing or terms thereof.

*Distributions—*As a REIT, we must annually distribute to our stockholders an amount equal to at least 90% of our REIT taxable income (determined before the deduction for distributed earnings and excluding any net capital gain). Generally, we have distributed, and expect to continue to distribute, all or substantially all of our REIT taxable income after taking into consideration our utilization of net operating losses (“NOLs”). We have distributed an aggregate of approximately $15.2 billion to our common stockholders, including the dividend to be paid in April 2023, primarily classified as ordinary income that may be treated as qualified REIT dividends under Section 199A of the Code for taxable years ending before 2026.

During the three months ended March 31, 2023, we paid $1.56 per share, or $726.3 million, to our common stockholders of record. In addition, we declared a distribution of $1.56 per share, or $727.0 million, to be paid on April 28, 2023 to our common stockholders of record at the close of business on April 14, 2023.

The amount, timing and frequency of future distributions will be at the sole discretion of our Board of Directors and will depend on various factors, a number of which may be beyond our control, including our financial condition and operating cash flows, the amount required to maintain our qualification for taxation as a REIT and reduce any income and excise taxes that we otherwise would be required to pay, limitations on distributions in our existing and future debt and preferred equity instruments, our ability to utilize NOLs to offset our distribution requirements, limitations on our ability to fund distributions using cash generated through our taxable REIT subsidiaries and other factors that our Board of Directors may deem relevant.

We accrue distributions on unvested restricted stock units, which are payable upon vesting. As of March 31, 2023, the amount accrued for distributions payable related to unvested restricted stock units was $13.0 million. During the three months ended March 31, 2023, we paid $6.6 million of distributions upon the vesting of restricted stock units.

Factors Affecting Sources of Liquidity

As discussed in the “Liquidity and Capital Resources” section of the 2022 Form 10-K, our liquidity depends on our ability to generate cash flow from operating activities, borrow funds under our credit facilities and maintain compliance with the contractual agreements governing our indebtedness. We believe that the debt agreements discussed below represent our material debt agreements that contain covenants, our compliance with which would be material to an investor’s understanding of our financial results and the impact of those results on our liquidity.

*Restrictions Under Loan Agreements Relating to Our Credit Facilities—*The loan agreements for the 2021 Multicurrency Credit Facility, the 2021 Credit Facility, the 2021 Term Loan, the 2021 EUR Three Year Delayed Draw Term Loan and

the 2021 USD Two Year Delayed Draw Term Loan contain certain financial and operating covenants and other restrictions applicable to us and our subsidiaries that are not designated as unrestricted subsidiaries on a consolidated basis. These restrictions include limitations on additional debt, distributions and dividends, guaranties, sales of assets and liens. The loan agreements also contain covenants that establish financial tests with which we and our restricted subsidiaries must comply related to total leverage and senior secured leverage, as set forth in the table below. As of March 31, 2023, we were in compliance with each of these covenants.


		Compliance Tests For The 12 Months Ended March 31, 2023 ($ in billions)
	Ratio (1)	Additional Debt Capacity Under Covenants (2)	Capacity for Adjusted EBITDA Decrease Under Covenants (3)
Consolidated Total Leverage Ratio	Total Debt to Adjusted EBITDA ≤ 6.00:1.00	~ 2.5	~ 0.4
Consolidated Senior Secured Leverage Ratio	Senior Secured Debt to Adjusted EBITDA ≤ 3.00:1.00	~ 18.0 (4)	~ 6.0

(1)Each component of the ratio as defined in the applicable loan agreement.

(2)Assumes no change to Adjusted EBITDA.

(3)Assumes no change to our debt levels.

(4)Effectively, however, additional Senior Secured Debt under this ratio would be limited to the capacity under the Consolidated Total Leverage Ratio.

The loan agreements for our credit facilities also contain reporting and information covenants that require us to provide financial and operating information to the lenders within certain time periods. If we are unable to provide the required information on a timely basis, we would be in breach of these covenants.

Failure to comply with the financial maintenance tests and certain other covenants of the loan agreements for our credit facilities could not only prevent us from being able to borrow additional funds under these credit facilities, but may also constitute a default under these credit facilities, which could result in, among other things, the amounts outstanding, including all accrued interest and unpaid fees, becoming immediately due and payable. If this were to occur, we may not have sufficient cash on hand to repay such indebtedness. The key factors affecting our ability to comply with the debt covenants described above are our financial performance relative to the financial maintenance tests defined in the loan agreements for these credit facilities and our ability to fund our debt service obligations. Based upon our current expectations, we believe our operating results during the next 12 months will be sufficient to comply with these covenants.

*Restrictions Under Agreements Relating to the 2015 Securitization and the Trust Securitizations—*The indenture and related supplemental indenture governing the American Tower Secured Revenue Notes, Series 2015-2, Class A (the “Series 2015-2 Notes”) issued by GTP Acquisition Partners I, LLC (“GTP Acquisition Partners”) in a private securitization transaction in May 2015 (the “2015 Securitization”) and the Trust Loan Agreement (collectively, the “Securitization Loan Agreements”) include certain financial ratios and operating covenants and other restrictions customary for transactions subject to rated securitizations. Among other things, GTP Acquisition Partners and the AMT Asset Subs are prohibited from incurring other indebtedness for borrowed money or further encumbering their assets, subject to customary carve-outs for ordinary course trade payables and permitted encumbrances (as defined in the applicable agreements).

Under the Securitization Loan Agreements, amounts due will be paid from the cash flows generated by the assets securing the Series 2015-2 Notes or the assets securing the Loan, as applicable, which must be deposited into certain reserve accounts, and thereafter distributed, solely pursuant to the terms of the applicable agreement. On a monthly basis, after payment of all required amounts under the applicable agreement, subject to the conditions described in the table below, the excess cash flows generated from the operation of such assets are released to GTP Acquisition Partners or the AMT Asset Subs, as applicable, which can then be distributed to us for use. As of March 31, 2023, $87.9 million held in such reserve accounts was classified as restricted cash.

Certain information with respect to the 2015 Securitization and the Trust Securitizations is set forth below. The debt service coverage ratio (“DSCR”) is generally calculated as the ratio of the net cash flow (as defined in the applicable agreement) to the amount of interest, servicing fees and trustee fees required to be paid over the succeeding 12 months on the principal amount of the Series 2015-2 Notes or the Loan, as applicable, that will be outstanding on the payment date following such date of determination.


	Issuer or Borrower	Notes/Securities Issued	Conditions Limiting Distributions of Excess Cash		Excess Cash Distributed During the Three Months Ended March 31, 2023	DSCR as of March 31, 2023	Capacity for Decrease in Net Cash Flow Before Triggering Cash Trap DSCR (1)	Capacity for Decrease in Net Cash Flow Before Triggering Minimum DSCR (1)
Cash Trap DSCR	Amortization Period
					(in millions)		(in millions)	(in millions)
2015 Securitization	GTP Acquisition Partners	American Tower Secured Revenue Notes, Series 2015-2	1.30x, Tested Quarterly (2)	(3)(4)	$93.0	17.81x	$303.8	$306.5
Trust Securitizations	AMT Asset Subs	Secured Tower Revenue Securities, Series 2023-1, Subclass A, Secured Tower Revenue Securities, Series 2023-1, Subclass R, Secured Tower Revenue Securities, Series 2018-1, Subclass A and Secured Tower Revenue Securities, Series 2018-1, Subclass R	1.30x, Tested Quarterly (2)	(3)(5)	$135.7	7.20x	$531.9	$545.4

(1)Based on the net cash flow of the applicable issuer or borrower as of March 31, 2023 and the expenses payable over the next 12 months on the Series 2015-2 Notes or the Loan, as applicable.

(2)If the DSCR were equal to or below 1.30x (the “Cash Trap DSCR”) for any quarter, all cash flow in excess of amounts required to make debt service payments, fund required reserves, pay management fees and budgeted operating expenses and make other payments required under the applicable transaction documents, referred to as excess cash flow, will be deposited into a reserve account (the “Cash Trap Reserve Account”) instead of being released to the applicable issuer or borrower. Once triggered, a Cash Trap DSCR condition continues to exist until the DSCR exceeds the Cash Trap DSCR for two consecutive calendar quarters. Additionally, if the borrower under the 2023 Securitization does not meet certain title insurance policy requirements within the specified time period under the agreements, excess cash flow will also be deposited into the Cash Trap Reserve Account.

(3)An amortization period commences if the DSCR is equal to or below 1.15x (the “Minimum DSCR”) at the end of any calendar quarter and continues to exist until the DSCR exceeds the Minimum DSCR for two consecutive calendar quarters.

(4)No amortization period is triggered if the outstanding principal amount of a series has not been repaid in full on the applicable anticipated repayment date. However, in such event, additional interest will accrue on the unpaid principal balance of the applicable series, and such series will begin to amortize on a monthly basis from excess cash flow.

(5)An amortization period exists if the outstanding principal amount has not been paid in full on the applicable anticipated repayment date and continues to exist until such principal has been repaid in full.

A failure to meet the noted DSCR tests could prevent GTP Acquisition Partners or the AMT Asset Subs from distributing excess cash flow to us, which could affect our ability to fund our capital expenditures, including tower construction and acquisitions, and to meet REIT distribution requirements. During an “amortization period,” all excess cash flow and any amounts then in the applicable Cash Trap Reserve Account would be applied to pay the principal of the Series 2015-2 Notes or the Loan, as applicable, on each monthly payment date, and so would not be available for distribution to us. Further, additional interest will begin to accrue with respect to the Series 2015-2 Notes or the Loan from and after the anticipated repayment date at a per annum rate determined in accordance with the applicable agreement. With respect to the Series 2015-2 Notes, upon the occurrence of, and during, an event of default, the applicable trustee may, in its discretion or at the direction of holders of more than 50% of the aggregate outstanding principal of the Series 2015-2 Notes, declare the Series 2015-2 Notes immediately due and payable, in which case any excess cash flow would need to be used to pay holders of those notes. Furthermore, if GTP Acquisition Partners or the AMT Asset Subs were to default on the Series 2015-2 Notes or the Loan, the applicable trustee may seek to foreclose upon or otherwise convert the ownership of all or any portion of the 3,516 communications sites that secure the Series 2015-2 Notes or the 5,036 broadcast and wireless communications towers and related assets that secure the Loan, respectively, in which case we could lose those sites and their associated revenue.

As discussed above, we use our available liquidity and seek new sources of liquidity to fund capital expenditures, future growth and expansion initiatives, satisfy our distribution requirements and repay or repurchase our debt. If we determine that it is desirable or necessary to raise additional capital, we may be unable to do so, or such additional financing may be prohibitively expensive or restricted by the terms of our outstanding indebtedness. Additionally, as further discussed

under the caption “Risk Factors” in Item 1A of the 2022 Form 10-K, market volatility and disruption caused by inflation, rising interest rates and supply chain disruptions may impact our ability to raise additional capital through debt financing activities or our ability to repay or refinance maturing liabilities, or impact the terms of any new obligations. If we are unable to raise capital when our needs arise, we may not be able to fund capital expenditures, future growth and expansion initiatives, satisfy our REIT distribution requirements and debt service obligations, or refinance our existing indebtedness.

In addition, our liquidity depends on our ability to generate cash flow from operating activities. As set forth under the caption “Risk Factors” in Item 1A of the 2022 Form 10-K, we derive a substantial portion of our revenues from a small number of customers and, consequently, a failure by a significant customer to perform its contractual obligations to us could adversely affect our cash flow and liquidity.

For more information regarding the terms of our outstanding indebtedness, please see note 8 to our consolidated financial statements included in the 2022 Form 10-K.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of financial condition and results of operations are based upon our consolidated and condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as related disclosures of contingent assets and liabilities. We evaluate our policies and estimates on an ongoing basis, including those related to impairment of long-lived assets, revenue recognition, rent expense, income taxes and accounting for business combinations and acquisitions of assets, as further discussed in the 2022 Form 10-K. Management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We have reviewed our policies and estimates to determine our critical accounting policies for the three months ended March 31, 2023. We have made no material changes to the critical accounting policies described in the 2022 Form 10-K.

In October 2019, the Supreme Court of India issued a ruling regarding the definition of AGR and associated fees and charges, which was reaffirmed in March 2020, and again in July 2021 with respect to the total charges, that may have a material financial impact on certain of our customers and could affect their ability to perform their obligations under agreements with us. In September 2020, the Supreme Court of India defined the expected timeline of ten years for payments owed under the ruling. In September 2021, the government of India approved a relief package that, among other things, included (i) a four-year moratorium on the payment of AGR fees owed and (ii) a change in the definition of AGR on a prospective basis. In the third quarter of 2022, our largest customer in India, VIL, communicated that it would make partial payments of its contractual amounts owed to us and indicated that it would continue to make partial payments for the remainder of 2022. In late 2022, VIL had communicated its intent to resume payments in full under its contractual obligations owed to us beginning on January 1, 2023. However, in early 2023, VIL communicated that it would not be able to resume payments in full of its contractual obligations owed to us, and that it would instead continue to make partial payments. As a result, we determined that certain fixed and intangible assets had been impaired during the year ended December 31, 2022. During the year ended December 31, 2022, an impairment of $97.0 million was taken on tower and network location intangible assets in India. We also impaired the tenant-related intangible assets for VIL, which resulted in an impairment of $411.6 million during the year ended December 31, 2022.

We will continue to monitor the status of these developments, as it is possible that the estimated future cash flows may differ from current estimates and changes in estimated cash flows from customers in India could have further negative effects on previously recorded tangible and intangible assets, including amounts originally recorded as tenant-related intangibles, resulting in additional impairments. Events that could negatively affect our India reporting unit’s financial results include increased tenant attrition exceeding our forecast, additional VIL payment shortfalls, carrier tenant bankruptcies and other factors set forth in Item 1A of the 2022 Form 10-K under the caption “Risk Factors.”

The carrying value of tenant-related intangibles in India was $373.9 million as of March 31, 2023, which represents 3% of our consolidated balance of $12.9 billion. Additionally, a significant reduction in customer related cash flows in India could also impact our tower portfolio and network location intangibles. The carrying values of our tower portfolio and network location intangibles in India were $0.9 billion and $263.4 million, respectively, as of March 31, 2023, which represent 11% and 8% of our consolidated balances of $8.9 billion and $3.5 billion, respectively. The carrying value of

goodwill in India was $0.9 billion as of March 31, 2023, which represents 7% of our consolidated balance of $13.0 billion.

During the three months ended March 31, 2023, no potential goodwill impairment was identified as the fair value of each of our reporting units was in excess of its carrying amount.

Accounting Standards Update

For a discussion of recent accounting standards updates, see note 1 to our consolidated and condensed consolidated financial statements included in this Quarterly Report.

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