AMERICAN TOWER CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions, except share count and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
ASSETS
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,192.2
|
|
|
$
|
1,208.7
|
|
Restricted cash
|
|
93.8
|
|
|
96.2
|
|
Accounts receivable, net
|
|
459.5
|
|
|
459.0
|
|
Prepaid and other current assets
|
|
486.9
|
|
|
621.2
|
|
Total current assets
|
|
2,232.4
|
|
|
2,385.1
|
|
PROPERTY AND EQUIPMENT, net
|
|
11,268.6
|
|
|
11,247.1
|
|
GOODWILL
|
|
5,557.8
|
|
|
5,501.9
|
|
OTHER INTANGIBLE ASSETS, net
|
|
10,895.2
|
|
|
11,174.3
|
|
DEFERRED TAX ASSET
|
|
147.8
|
|
|
157.7
|
|
DEFERRED RENT ASSET
|
|
1,597.1
|
|
|
1,581.7
|
|
RIGHT-OF-USE ASSET
|
|
7,110.0
|
|
|
—
|
|
NOTES RECEIVABLE AND OTHER NON-CURRENT ASSETS
|
|
263.8
|
|
|
962.6
|
|
TOTAL
|
|
$
|
39,072.7
|
|
|
$
|
33,010.4
|
|
LIABILITIES
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
Accounts payable
|
|
$
|
144.9
|
|
|
$
|
130.8
|
|
Accrued expenses
|
|
835.6
|
|
|
948.3
|
|
Distributions payable
|
|
413.0
|
|
|
377.4
|
|
Accrued interest
|
|
154.2
|
|
|
174.5
|
|
Current portion of operating lease liability
|
|
496.9
|
|
|
—
|
|
Current portion of long-term obligations
|
|
2,442.2
|
|
|
2,754.8
|
|
Unearned revenue
|
|
334.8
|
|
|
304.1
|
|
Total current liabilities
|
|
4,821.6
|
|
|
4,689.9
|
|
LONG-TERM OBLIGATIONS
|
|
18,615.9
|
|
|
18,405.1
|
|
OPERATING LEASE LIABILITY
|
|
6,335.4
|
|
|
—
|
|
ASSET RETIREMENT OBLIGATIONS
|
|
1,252.3
|
|
|
1,210.0
|
|
DEFERRED TAX LIABILITY
|
|
546.2
|
|
|
535.9
|
|
OTHER NON-CURRENT LIABILITIES
|
|
868.0
|
|
|
1,265.1
|
|
Total liabilities
|
|
32,439.4
|
|
|
26,106.0
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
REDEEMABLE NONCONTROLLING INTERESTS
|
|
590.2
|
|
|
1,004.8
|
|
EQUITY (shares in thousands):
|
|
|
|
|
Common stock: $.01 par value; 1,000,000 shares authorized; 452,943 and 451,617 shares issued; and 442,386 and 441,060 shares outstanding, respectively
|
|
4.5
|
|
|
4.5
|
|
Additional paid-in capital
|
|
10,492.7
|
|
|
10,380.8
|
|
Distributions in excess of earnings
|
|
(1,206.2
|
)
|
|
(1,199.5
|
)
|
Accumulated other comprehensive loss
|
|
(2,606.7
|
)
|
|
(2,642.9
|
)
|
Treasury stock (10,557 shares at cost)
|
|
(1,206.8
|
)
|
|
(1,206.8
|
)
|
Total American Tower Corporation equity
|
|
5,477.5
|
|
|
5,336.1
|
|
Noncontrolling interests
|
|
565.6
|
|
|
563.5
|
|
Total equity
|
|
6,043.1
|
|
|
5,899.6
|
|
TOTAL
|
|
$
|
39,072.7
|
|
|
$
|
33,010.4
|
|
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 June 30,
|
|
Six Months Ended June 30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
REVENUES:
|
|
|
|
|
|
|
|
|
Property
|
|
$
|
1,848.9
|
|
|
$
|
1,749.4
|
|
|
$
|
3,634.9
|
|
|
$
|
3,459.8
|
|
Services
|
|
40.7
|
|
|
31.5
|
|
|
68.1
|
|
|
62.9
|
|
Total operating revenues
|
|
1,889.6
|
|
|
1,780.9
|
|
|
3,703.0
|
|
|
3,522.7
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
Costs of operations (exclusive of items shown separately below):
|
|
|
|
|
|
|
|
|
Property
|
|
549.4
|
|
|
547.2
|
|
|
1,082.4
|
|
|
1,054.6
|
|
Services
|
|
13.9
|
|
|
13.1
|
|
|
24.3
|
|
|
25.6
|
|
Depreciation, amortization and accretion
|
|
448.9
|
|
|
449.7
|
|
|
885.8
|
|
|
896.0
|
|
Selling, general, administrative and development expense
|
|
164.8
|
|
|
157.9
|
|
|
362.9
|
|
|
362.8
|
|
Other operating expenses
|
|
28.7
|
|
|
67.0
|
|
|
48.8
|
|
|
234.8
|
|
Total operating expenses
|
|
1,205.7
|
|
|
1,234.9
|
|
|
2,404.2
|
|
|
2,573.8
|
|
OPERATING INCOME
|
|
683.9
|
|
|
546.0
|
|
|
1,298.8
|
|
|
948.9
|
|
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
|
Interest expense, TV Azteca
|
|
—
|
|
|
(3.4
|
)
|
|
—
|
|
|
(0.7
|
)
|
Interest income
|
|
11.7
|
|
|
18.4
|
|
|
24.1
|
|
|
33.8
|
|
Interest expense
|
|
(204.5
|
)
|
|
(207.9
|
)
|
|
(412.0
|
)
|
|
(407.5
|
)
|
Loss on retirement of long-term obligations
|
|
(22.1
|
)
|
|
—
|
|
|
(22.2
|
)
|
|
—
|
|
Other (expense) income (including foreign currency (losses) gains of $(5.3), $(40.4), $14.8 and $(17.1), respectively)
|
|
(5.1
|
)
|
|
(34.8
|
)
|
|
16.8
|
|
|
(7.0
|
)
|
Total other expense
|
|
(220.0
|
)
|
|
(227.7
|
)
|
|
(393.3
|
)
|
|
(381.4
|
)
|
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
|
463.9
|
|
|
318.3
|
|
|
905.5
|
|
|
567.5
|
|
Income tax (provision) benefit
|
|
(29.6
|
)
|
|
(3.9
|
)
|
|
(63.6
|
)
|
|
27.2
|
|
NET INCOME
|
|
434.3
|
|
|
314.4
|
|
|
841.9
|
|
|
594.7
|
|
Net income attributable to noncontrolling interests
|
|
(5.2
|
)
|
|
(7.7
|
)
|
|
(15.4
|
)
|
|
(2.8
|
)
|
NET INCOME ATTRIBUTABLE TO AMERICAN TOWER CORPORATION STOCKHOLDERS
|
|
429.1
|
|
|
306.7
|
|
|
826.5
|
|
|
591.9
|
|
Dividends on preferred stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.4
|
)
|
NET INCOME ATTRIBUTABLE TO AMERICAN TOWER CORPORATION COMMON STOCKHOLDERS
|
|
$
|
429.1
|
|
|
$
|
306.7
|
|
|
$
|
826.5
|
|
|
$
|
582.5
|
|
NET INCOME PER COMMON SHARE AMOUNTS:
|
|
|
|
|
|
|
|
|
Basic net income attributable to American Tower Corporation common stockholders
|
|
$
|
0.97
|
|
|
$
|
0.69
|
|
|
$
|
1.87
|
|
|
$
|
1.33
|
|
Diluted net income attributable to American Tower Corporation common stockholders
|
|
$
|
0.96
|
|
|
$
|
0.69
|
|
|
$
|
1.86
|
|
|
$
|
1.32
|
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (in thousands):
|
|
|
|
|
|
|
|
|
BASIC
|
|
442,203
|
|
|
441,497
|
|
|
441,778
|
|
|
438,328
|
|
DILUTED
|
|
445,337
|
|
|
444,362
|
|
|
445,040
|
|
|
441,513
|
|
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 June 30,
|
|
Six Months Ended June 30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net income
|
|
$
|
434.3
|
|
|
$
|
314.4
|
|
|
$
|
841.9
|
|
|
$
|
594.7
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
Changes in fair value of cash flow hedges, each net of tax expense of $0
|
|
0.0
|
|
|
0.0
|
|
|
(0.1
|
)
|
|
0.0
|
|
Reclassification of unrealized losses on cash flow hedges to net income, each net of tax expense of $0
|
|
0.0
|
|
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
Adjustment to redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
78.8
|
|
Purchase of noncontrolling interest
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
Foreign currency translation adjustments, net of tax expense (benefit) of ($0.5), ($5.4), $0.5 and ($3.8), respectively
|
|
74.1
|
|
|
(766.2
|
)
|
|
87.0
|
|
|
(708.6
|
)
|
Other comprehensive income (loss)
|
|
74.1
|
|
|
(765.6
|
)
|
|
87.0
|
|
|
(629.1
|
)
|
Comprehensive income (loss)
|
|
508.4
|
|
|
(451.2
|
)
|
|
928.9
|
|
|
(34.4
|
)
|
Allocation of accumulated other comprehensive income resulting from purchase of redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
(52.4
|
)
|
|
—
|
|
Comprehensive (income) loss attributable to noncontrolling interests
|
|
(13.8
|
)
|
|
82.4
|
|
|
(13.8
|
)
|
|
94.5
|
|
Comprehensive income (loss) attributable to American Tower Corporation stockholders
|
|
$
|
494.6
|
|
|
$
|
(368.8
|
)
|
|
$
|
862.7
|
|
|
$
|
60.1
|
|
See accompanying notes to unaudited consolidated and condensed consolidated financial statements.
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
2019
|
|
2018
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
Net income
|
|
$
|
841.9
|
|
|
$
|
594.7
|
|
Adjustments to reconcile net income to cash provided by operating activities
|
|
|
|
|
Depreciation, amortization and accretion
|
|
885.8
|
|
|
896.0
|
|
Amortization of operating leases
|
|
298.8
|
|
|
—
|
|
Stock-based compensation expense
|
|
64.4
|
|
|
67.5
|
|
Loss on early retirement of long-term obligations
|
|
22.2
|
|
|
—
|
|
Other non-cash items reflected in statements of operations
|
|
86.5
|
|
|
206.0
|
|
Increase in net deferred rent balances
|
|
(11.0
|
)
|
|
(10.7
|
)
|
Reduction in operating lease liability
|
|
(259.3
|
)
|
|
—
|
|
Increase in assets
|
|
(52.4
|
)
|
|
(68.9
|
)
|
(Decrease) increase in liabilities
|
|
(55.2
|
)
|
|
47.2
|
|
Cash provided by operating activities
|
|
1,821.7
|
|
|
1,731.8
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
Payments for purchase of property and equipment and construction activities
|
|
(464.3
|
)
|
|
(424.9
|
)
|
Payments for acquisitions, net of cash acquired
|
|
(134.5
|
)
|
|
(1,336.5
|
)
|
Proceeds from sale of short-term investments and other non-current assets
|
|
368.7
|
|
|
894.5
|
|
Payments for short-term investments
|
|
(355.9
|
)
|
|
(952.8
|
)
|
Deposits and other
|
|
(4.7
|
)
|
|
(23.3
|
)
|
Cash used for investing activities
|
|
(590.7
|
)
|
|
(1,843.0
|
)
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
Borrowings under credit facilities
|
|
2,620.0
|
|
|
2,663.3
|
|
Proceeds from issuance of senior notes, net
|
|
3,529.7
|
|
|
584.9
|
|
Proceeds from term loan
|
|
1,300.0
|
|
|
1,500.0
|
|
Proceeds from issuance of securities in securitization transaction
|
|
—
|
|
|
500.0
|
|
Repayments of notes payable, credit facilities, senior notes, secured debt, term loan, finance leases and capital leases
|
|
(7,413.2
|
)
|
|
(4,257.4
|
)
|
Distributions to noncontrolling interest holders, net
|
|
(14.0
|
)
|
|
(13.9
|
)
|
Purchases of common stock
|
|
—
|
|
|
(98.6
|
)
|
Proceeds from stock options and employee stock purchase plan
|
|
56.6
|
|
|
40.2
|
|
Distributions paid on common stock
|
|
(775.1
|
)
|
|
(635.6
|
)
|
Distributions paid on preferred stock
|
|
—
|
|
|
(18.9
|
)
|
Payment for early retirement of long-term obligations
|
|
(21.0
|
)
|
|
—
|
|
Deferred financing costs and other financing activities
|
|
(104.7
|
)
|
|
(55.1
|
)
|
Purchase of redeemable noncontrolling interest
|
|
(425.7
|
)
|
|
—
|
|
Purchase of noncontrolling interest
|
|
—
|
|
|
(20.5
|
)
|
Cash (used for) provided by financing activities
|
|
(1,247.4
|
)
|
|
188.4
|
|
Net effect of changes in foreign currency exchange rates on cash and cash equivalents, and restricted cash
|
|
(2.5
|
)
|
|
(62.0
|
)
|
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH
|
|
(18.9
|
)
|
|
15.2
|
|
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD
|
|
1,304.9
|
|
|
954.9
|
|
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD
|
|
$
|
1,286.0
|
|
|
$
|
970.1
|
|
CASH PAID FOR INCOME TAXES (NET OF REFUNDS OF $6.2 AND $23.7, RESPECTIVELY)
|
|
$
|
77.9
|
|
|
$
|
44.6
|
|
CASH PAID FOR INTEREST
|
|
$
|
419.3
|
|
|
$
|
382.5
|
|
NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
|
Decrease in accounts payable and accrued expenses for purchases of property and equipment and construction activities
|
|
$
|
(73.8
|
)
|
|
$
|
(44.2
|
)
|
Purchases of property and equipment under finance leases, perpetual easements and capital leases
|
|
$
|
34.0
|
|
|
$
|
26.5
|
|
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 June 30, 2018 and 2019
|
|
Issued
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
BALANCE, APRIL 1, 2018
|
|
450,505
|
|
|
$
|
4.5
|
|
|
(8,909
|
)
|
|
$
|
(974.0
|
)
|
|
$
|
10,224.0
|
|
|
$
|
(1,834.6
|
)
|
|
$
|
(1,085.7
|
)
|
|
$
|
607.1
|
|
|
$
|
6,941.3
|
|
Stock-based compensation related activity
|
|
267
|
|
|
0.0
|
|
|
—
|
|
|
—
|
|
|
39.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39.1
|
|
Issuance of common stock- stock purchase plan
|
|
45
|
|
|
0.0
|
|
|
—
|
|
|
—
|
|
|
5.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.3
|
|
Treasury stock activity
|
|
—
|
|
|
—
|
|
|
(722
|
)
|
|
(100.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(100.0
|
)
|
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
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(676.1
|
)
|
|
—
|
|
|
(38.9
|
)
|
|
(715.0
|
)
|
Distributions to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
Purchase of noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.5
|
)
|
|
0.5
|
|
|
—
|
|
|
(4.5
|
)
|
|
(20.5
|
)
|
Common stock distributions declared
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(342.6
|
)
|
|
—
|
|
|
(342.6
|
)
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
306.7
|
|
|
12.4
|
|
|
319.1
|
|
BALANCE, JUNE 30, 2018
|
|
450,817
|
|
|
$
|
4.5
|
|
|
(9,631
|
)
|
|
$
|
(1,074.0
|
)
|
|
$
|
10,251.9
|
|
|
$
|
(2,510.1
|
)
|
|
$
|
(1,121.6
|
)
|
|
$
|
575.9
|
|
|
$
|
6,126.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE, APRIL 1, 2019
|
|
452,525
|
|
|
$
|
4.5
|
|
|
(10,557
|
)
|
|
$
|
(1,206.8
|
)
|
|
$
|
10,447.9
|
|
|
$
|
(2,672.2
|
)
|
|
$
|
(1,226.4
|
)
|
|
$
|
553.3
|
|
|
$
|
5,900.3
|
|
Stock-based compensation related activity
|
|
377
|
|
|
0.0
|
|
|
—
|
|
|
—
|
|
|
39.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39.1
|
|
Issuance of common stock- stock purchase plan
|
|
41
|
|
|
0.0
|
|
|
—
|
|
|
—
|
|
|
5.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.7
|
|
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
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.0
|
|
|
—
|
|
|
—
|
|
|
0.0
|
|
Foreign currency translation adjustment, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
65.5
|
|
|
—
|
|
|
7.4
|
|
|
72.9
|
|
Distributions to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
(0.3
|
)
|
Common stock distributions declared
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(408.9
|
)
|
|
—
|
|
|
(408.9
|
)
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
429.1
|
|
|
5.2
|
|
|
434.3
|
|
BALANCE, JUNE 30, 2019
|
|
452,943
|
|
|
$
|
4.5
|
|
|
(10,557
|
)
|
|
$
|
(1,206.8
|
)
|
|
$
|
10,492.7
|
|
|
$
|
(2,606.7
|
)
|
|
$
|
(1,206.2
|
)
|
|
$
|
565.6
|
|
|
$
|
6,043.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock - Series B
|
|
Common Stock
|
|
Treasury Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated Other
Comprehensive
Loss
|
|
Distributions
in Excess of
Earnings
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
Six Months Ended June 30, 2018 and 2019
|
|
Issued Shares
|
|
Amount
|
|
Issued
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
BALANCE, JANUARY 1, 2018
|
|
1,375
|
|
|
$
|
0.0
|
|
|
437,729
|
|
|
$
|
4.4
|
|
|
(8,909
|
)
|
|
$
|
(974.0
|
)
|
|
$
|
10,247.5
|
|
|
$
|
(1,978.3
|
)
|
|
$
|
(1,058.1
|
)
|
|
$
|
586.6
|
|
|
$
|
6,828.1
|
|
Stock-based compensation related activity
|
|
—
|
|
|
—
|
|
|
1,023
|
|
|
0.0
|
|
|
—
|
|
|
—
|
|
|
66.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
66.4
|
|
Issuance of common stock- stock purchase plan
|
|
—
|
|
|
—
|
|
|
45
|
|
|
0.0
|
|
|
—
|
|
|
—
|
|
|
5.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.3
|
|
Conversion of preferred stock
|
|
(1,375
|
)
|
|
(0.0
|
)
|
|
12,020
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Treasury stock activity
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(722
|
)
|
|
(100.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(100.0
|
)
|
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
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
Foreign currency translation adjustment, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(611.3
|
)
|
|
—
|
|
|
(23.8
|
)
|
|
(635.1
|
)
|
Adjustment to redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50.7
|
)
|
|
78.8
|
|
|
—
|
|
|
—
|
|
|
28.1
|
|
Distributions to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
(0.5
|
)
|
Purchase of noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.5
|
)
|
|
0.5
|
|
|
—
|
|
|
(4.5
|
)
|
|
(20.5
|
)
|
Impact of revenue recognition standard adoption
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38.4
|
|
|
—
|
|
|
38.4
|
|
Common stock distributions declared
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(674.9
|
)
|
|
—
|
|
|
(674.9
|
)
|
Preferred stock dividends declared
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18.9
|
)
|
|
—
|
|
|
(18.9
|
)
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
591.9
|
|
|
18.1
|
|
|
610.0
|
|
BALANCE, JUNE 30, 2018
|
|
—
|
|
|
$
|
—
|
|
|
450,817
|
|
|
$
|
4.5
|
|
|
(9,631
|
)
|
|
$
|
(1,074.0
|
)
|
|
$
|
10,251.9
|
|
|
$
|
(2,510.1
|
)
|
|
$
|
(1,121.6
|
)
|
|
$
|
575.9
|
|
|
$
|
6,126.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE, JANUARY 1, 2019
|
|
—
|
|
|
$
|
—
|
|
|
451,617
|
|
|
$
|
4.5
|
|
|
(10,557
|
)
|
|
$
|
(1,206.8
|
)
|
|
$
|
10,380.8
|
|
|
$
|
(2,642.9
|
)
|
|
$
|
(1,199.5
|
)
|
|
$
|
563.5
|
|
|
$
|
5,899.6
|
|
Stock-based compensation related activity
|
|
—
|
|
|
—
|
|
|
1,285
|
|
|
0.0
|
|
|
—
|
|
|
—
|
|
|
53.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53.8
|
|
Issuance of common stock- stock purchase plan
|
|
—
|
|
|
—
|
|
|
41
|
|
|
0.0
|
|
|
—
|
|
|
—
|
|
|
5.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.7
|
|
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
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
88.6
|
|
|
—
|
|
|
(12.7
|
)
|
|
75.9
|
|
Distributions to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
(0.6
|
)
|
Purchase of redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
52.4
|
|
|
(52.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
Impact of lease accounting standard adoption
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24.7
|
)
|
|
—
|
|
|
(24.7
|
)
|
Common stock distributions declared
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(808.5
|
)
|
|
—
|
|
|
(808.5
|
)
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
826.5
|
|
|
15.4
|
|
|
841.9
|
|
BALANCE, JUNE 30, 2019
|
|
—
|
|
|
$
|
—
|
|
|
452,943
|
|
|
$
|
4.5
|
|
|
(10,557
|
)
|
|
$
|
(1,206.8
|
)
|
|
$
|
10,492.7
|
|
|
$
|
(2,606.7
|
)
|
|
$
|
(1,206.2
|
)
|
|
$
|
565.6
|
|
|
$
|
6,043.1
|
|
See accompanying notes to unaudited consolidated and condensed consolidated financial statements.
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, 2018
(the “
2018
Form 10-K”). The results of operations for the three and
six months ended June 30, 2019
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 or cost method, depending upon the Company’s ability to exercise significant influence over operating and financial policies. All intercompany accounts and transactions have been eliminated. As of
June 30, 2019
, the Company holds (i) a
51%
controlling interest in each of
two
joint ventures,
one
in Ghana and
one
in Uganda (MTN Group Limited holds a
49%
noncontrolling interest), (ii) a
51%
controlling interest in a joint venture that primarily consists of the Company’s operations in Germany and France (PGGM holds a
49%
noncontrolling interest), (iii) an approximate
81%
controlling interest in a subsidiary of the Company in South Africa (South African investors hold an approximate
19%
noncontrolling interest) and (iv) a
79%
controlling interest in ATC Telecom Infrastructure Private Limited (“ATC TIPL”), formerly Viom Networks Limited (“Viom”), in India.
Significant Accounting Policies
—The Company’s significant accounting policies are described in note 1 to the Company’s consolidated financial statements included in the 2018 Form 10-K. There have been no material changes to the Company’s significant accounting policies during the
six months ended June 30, 2019
, except the adoption of new lease accounting guidance, as discussed below.
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:
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
2019
|
|
2018
|
Cash and cash equivalents
|
$
|
1,192.2
|
|
|
$
|
834.5
|
|
Restricted cash
|
93.8
|
|
|
135.6
|
|
Total cash and cash equivalents and restricted cash
|
$
|
1,286.0
|
|
|
$
|
970.1
|
|
Lease
—The new lease standard requires leases to be accounted for using a right-of-use model, which recognizes that, at the date of commencement, a lessee has a financial obligation to make lease payments to the lessor for the right to use the underlying asset during the lease term. The lessee recognizes a corresponding right-of-use asset related to this right.
On January 1, 2019, the Company elected to adopt the new lease standard using the modified retrospective method applied to lease arrangements that were in place on the transition date. Results for reporting periods beginning January 1, 2019 are presented under the new standard, while prior-period amounts are not adjusted and continue to be reported in accordance with accounting under the previously applicable guidance.
The Company elected certain available practical expedients which permit the adopter to not reassess certain items upon adoption, including: (i) whether any existing contracts are or contain leases, (ii) the classification of existing leases and (iii) initial direct costs for existing leases. The Company also elected the practical expedient related to easements, which permits carryforward accounting treatment for land easements on existing agreements.
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)
The Company recorded a net increase to opening Distributions in excess of earnings in its consolidated balance sheet of
$24.7 million
as of January 1, 2019 due to the cumulative impact of adopting the new lease standard. This adjustment related to right-of-use asset impairments. The Company also recorded a lease liability of
$6.9 billion
and a corresponding right-of-use asset of
$7.1 billion
upon adoption of the new lease standard. Those rights and obligations are primarily related to operating leases for ground space underneath the Company’s communications sites. The right-of-use assets recorded include, among other items, amounts previously classified as prepaid rent, deferred lease acquisition costs, fair value adjustments on acquired leases and long-term deferred rent obligations. Finance leases, which primarily relate to towers, equipment and vehicles, were largely unchanged. There was no significant change to the Company’s consolidated statements of operations resulting from the adoption of this standard.
The Company did not elect the practical expedient for short-term leases, which permits an adopter to not apply the lease standard to leases with a remaining maturity of one year or less, and applied the new lease accounting standard to all leases, including short-term leases.
In conjunction with the adoption of the new lease accounting guidance, the Company applied the lessor and lessee practical expedient and no longer separates lease and non-lease components within a lease agreement when the timing and pattern of revenue recognition for the components are the same and the combined single lease component is classified as an operating lease. Certain amounts, such as power and fuel and common area maintenance, which were previously reported as non-lease revenue, are now accounted for as lease revenue. Accordingly, the Company has reclassified certain prior-period amounts within its disclosures.
Revenue
—Most of the Company’s revenue is derived from leasing arrangements and is accounted for as lease revenue unless the timing and pattern of revenue recognition differs from the lease components. Revenue related to distributed antenna system (“DAS”) networks and fiber results from agreements with tenants that are not 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 require that the Company provide the tenant the right to use 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.
Services revenue
—The Company offers tower-related services in the United States. These services include site acquisition, 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 June 30, 2019
|
|
U.S.
|
|
Asia
|
|
EMEA
|
|
Latin
America
|
|
Total
|
Non-lease property revenue
|
|
$
|
60.8
|
|
|
$
|
2.1
|
|
|
$
|
1.9
|
|
|
$
|
34.8
|
|
|
$
|
99.6
|
|
Services revenue
|
|
40.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40.7
|
|
Total non-lease revenue
|
|
$
|
101.5
|
|
|
$
|
2.1
|
|
|
$
|
1.9
|
|
|
$
|
34.8
|
|
|
$
|
140.3
|
|
Property lease revenue
|
|
946.4
|
|
|
319.0
|
|
|
173.1
|
|
|
310.8
|
|
|
1,749.3
|
|
Total revenue
|
|
$
|
1,047.9
|
|
|
$
|
321.1
|
|
|
$
|
175.0
|
|
|
$
|
345.6
|
|
|
$
|
1,889.6
|
|
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2018 (1)
|
|
U.S.
|
|
Asia
|
|
EMEA
|
|
Latin
America
|
|
Total
|
Non-lease property revenue
|
|
$
|
64.8
|
|
|
$
|
1.5
|
|
|
$
|
0.1
|
|
|
$
|
24.6
|
|
|
$
|
91.0
|
|
Services revenue
|
|
31.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31.5
|
|
Total non-lease revenue
|
|
$
|
96.3
|
|
|
$
|
1.5
|
|
|
$
|
0.1
|
|
|
$
|
24.6
|
|
|
$
|
122.5
|
|
Property lease revenue
|
|
892.2
|
|
|
306.4
|
|
|
166.6
|
|
|
293.2
|
|
|
1,658.4
|
|
Total revenue
|
|
$
|
988.5
|
|
|
$
|
307.9
|
|
|
$
|
166.7
|
|
|
$
|
317.8
|
|
|
$
|
1,780.9
|
|
_______________
|
|
(1)
|
Prior-period amounts adjusted with the adoption of the new lease accounting guidance, as applicable.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2019
|
|
U.S.
|
|
Asia
|
|
EMEA
|
|
Latin
America
|
|
Total
|
Non-lease property revenue
|
|
$
|
119.6
|
|
|
$
|
4.5
|
|
|
$
|
3.5
|
|
|
$
|
69.8
|
|
|
$
|
197.4
|
|
Services revenue
|
|
68.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68.1
|
|
Total non-lease revenue
|
|
$
|
187.7
|
|
|
$
|
4.5
|
|
|
$
|
3.5
|
|
|
$
|
69.8
|
|
|
$
|
265.5
|
|
Property lease revenue
|
|
1,873.9
|
|
|
605.5
|
|
|
349.0
|
|
|
609.1
|
|
|
3,437.5
|
|
Total revenue
|
|
$
|
2,061.6
|
|
|
$
|
610.0
|
|
|
$
|
352.5
|
|
|
$
|
678.9
|
|
|
$
|
3,703.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2018 (1)
|
|
U.S.
|
|
Asia
|
|
EMEA
|
|
Latin
America
|
|
Total
|
Non-lease property revenue
|
|
$
|
127.9
|
|
|
$
|
3.4
|
|
|
$
|
0.7
|
|
|
$
|
48.3
|
|
|
$
|
180.3
|
|
Services revenue
|
|
62.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62.9
|
|
Total non-lease revenue
|
|
$
|
190.8
|
|
|
$
|
3.4
|
|
|
$
|
0.7
|
|
|
$
|
48.3
|
|
|
$
|
243.2
|
|
Property lease revenue
|
|
1,760.5
|
|
|
577.5
|
|
|
340.2
|
|
|
601.3
|
|
|
3,279.5
|
|
Total revenue
|
|
$
|
1,951.3
|
|
|
$
|
580.9
|
|
|
$
|
340.9
|
|
|
$
|
649.6
|
|
|
$
|
3,522.7
|
|
_______________
|
|
(1)
|
Prior-period amounts adjusted with the adoption of the new lease accounting guidance, as applicable.
|
Information about receivables, contract assets and contract liabilities from contracts with tenants is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2019
|
|
December 31, 2018 (1)
|
Accounts receivable
|
|
$
|
91.8
|
|
|
$
|
92.6
|
|
Prepaids and other current assets
|
|
10.2
|
|
|
7.7
|
|
Notes receivable and other non-current assets
|
|
21.0
|
|
|
22.2
|
|
Unearned revenue (2)
|
|
39.8
|
|
|
35.0
|
|
Other non-current liabilities (3)
|
|
60.5
|
|
|
54.1
|
|
_______________
|
|
(1)
|
Prior-period amounts adjusted with the adoption of the new lease accounting guidance, as applicable.
|
|
|
(2)
|
Excludes
$56.0 million
and
$55.0 million
of capital contributions related to DAS networks as of June 30, 2019 and December 31, 2018, respectively.
|
|
|
(3)
|
Excludes
$301.1 million
and
$313.6 million
of capital contributions related to DAS networks as of June 30, 2019 and December 31, 2018, respectively.
|
The Company records unearned revenue when payments are received from tenants in advance of the completion of the Company’s performance obligations. Long-term unearned revenue is included in Other non-current liabilities. During the three and
six months ended June 30, 2019
, the Company recognized
$16.0 million
and
$30.1 million
, respectively, of revenue that was included in the Unearned revenue balance as of December 31, 2018. During the three and
six months ended June 30, 2018
, the Company recognized
$12.1 million
and
$22.5 million
, respectively, of revenue from the Unearned revenue balance as of January 1, 2018. The Company also recognized revenues of
$14.9 million
and
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)
$29.4 million
during the three and
six months ended June 30, 2019
, respectively, and
$13.6 million
and
$27.4 million
during the three and six months ended June 30, 2018, respectively, for capital contributions related to DAS networks. There was
$0.1 million
and
$0.2 million
during each of the three and six months ended June 30, 2018 and 2019, respectively, of revenue recognized from Other non-current liabilities.
The Company records unbilled receivables, which are included in Prepaids and other current assets, when it has completed a performance obligation prior to its ability to bill under the customer arrangement. Other contract assets are included in Notes receivable and other non-current assets. The Company did not record any change in unbilled receivables attributable to revenue recognized during each of the three and
six months ended June 30, 2019
and 2018. The change in contract assets attributable to revenue recognized was insignificant during each of the three and
six months ended June 30, 2019
and 2018.
Accounting Standards Updates
In January 2017, the FASB issued guidance on accounting for goodwill impairments. The guidance eliminates Step 2 from the goodwill impairment test and requires, among other things, recognition of an impairment loss when the carrying value of a reporting unit exceeds its fair value. The loss recognized is limited to the total amount of goodwill allocated to that reporting unit. The guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect the adoption of this guidance to have a material impact on the Company’s financial statements.
2. PREPAID AND OTHER CURRENT ASSETS
Prepaid and other current assets consisted of the following:
|
|
|
|
|
|
|
|
|
|
As of
|
|
June 30, 2019
|
|
December 31, 2018
|
Unbilled receivables
|
$
|
119.9
|
|
|
$
|
126.1
|
|
Prepaid income tax
|
127.7
|
|
|
125.1
|
|
Value added tax and other consumption tax receivables
|
77.5
|
|
|
86.3
|
|
Prepaid assets
|
80.5
|
|
|
40.5
|
|
Prepaid operating ground leases
|
—
|
|
|
165.0
|
|
Other miscellaneous current assets
|
81.3
|
|
|
78.2
|
|
Prepaids and other current assets
|
$
|
486.9
|
|
|
$
|
621.2
|
|
The reduction in Prepaid operating ground leases is a result of the reclassification of assets to the Right-of-use asset in connection with the Company’s adoption of the new lease accounting standard.
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)
3. PROPERTY AND EQUIPMENT
Property and equipment (including assets held under financing leases) consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Useful Lives (years) (1)
|
|
As of
|
|
|
June 30, 2019
|
|
December 31, 2018
|
Towers
|
Up to 20
|
|
$
|
13,012.7
|
|
|
$
|
12,777.9
|
|
Equipment (2)
|
2 - 20
|
|
1,760.3
|
|
|
1,667.3
|
|
Buildings and improvements
|
3 - 32
|
|
635.7
|
|
|
628.5
|
|
Land and improvements (3)
|
Up to 20
|
|
2,360.3
|
|
|
2,285.4
|
|
Construction-in-progress
|
|
|
390.2
|
|
|
358.1
|
|
Total
|
|
|
18,159.2
|
|
|
17,717.2
|
|
Less accumulated depreciation
|
|
|
(6,890.6
|
)
|
|
(6,470.1
|
)
|
Property and equipment, net
|
|
|
$
|
11,268.6
|
|
|
$
|
11,247.1
|
|
_______________
|
|
(1)
|
Assets on leased land are depreciated over the shorter of the estimated useful life of the asset or the term of the corresponding ground lease taking into consideration lease renewal options and residual value.
|
|
|
(2)
|
Includes fiber and DAS assets.
|
|
|
(3)
|
Estimated useful lives apply to improvements only.
|
Total depreciation expense was
$229.1 million
and
$452.8 million
for the three and
six months ended June 30, 2019
, respectively, and
$223.4 million
and
$445.9 million
for the three and six months ended June 30, 2018, respectively. Depreciation expense includes amounts related to finance lease assets for the three and
six months ended June 30, 2019
of
$42.6 million
and
$85.0 million
, respectively.
As of December 31, 2018, property and equipment included
$4,369.5 million
of capital lease assets with related equipment and improvements and
$1,016.2 million
of accumulated depreciation.
Information about finance lease-related balances is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
Finance leases:
|
|
Classification
|
|
June 30, 2019
|
Property and equipment
|
|
Towers
|
|
$
|
2,782.5
|
|
Accumulated depreciation
|
|
|
|
(1,074.2
|
)
|
Property and equipment, net
|
|
|
|
$
|
1,708.3
|
|
|
|
|
|
|
Property and equipment
|
|
Buildings and improvements
|
|
$
|
172.3
|
|
Accumulated depreciation
|
|
|
|
(62.8
|
)
|
Property and equipment, net
|
|
|
|
$
|
109.5
|
|
|
|
|
|
|
Property and equipment
|
|
Land
|
|
$
|
133.5
|
|
|
|
|
|
|
Property and equipment
|
|
Equipment
|
|
$
|
39.7
|
|
Accumulated depreciation
|
|
|
|
(10.9
|
)
|
Property and equipment, net
|
|
|
|
$
|
28.8
|
|
As of June 30, 2019, the Company had
$1,496.1 million
of perpetual land easements which are not depreciable.
4. LEASES
The Company determines if an arrangement is a lease at the inception of the agreement. The Company considers an arrangement to be a lease if it conveys the right to control the use of the communications site or ground space underneath a communications site for a period of time in exchange for consideration. The Company is both a lessor and a lessee.
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)
Lessor
—The Company is a lessor in most of its revenue arrangements, as property revenue is derived from tenant leases of specifically-identified, physically distinct space on the Company’s communications real estate assets. The Company’s lease arrangements with its tenants vary depending upon the region and the industry of the tenant and generally have initial non-cancellable terms of
five
to
ten years
with multiple renewal terms. The leases also contain provisions that periodically increase the rent due, typically annually, based on a fixed escalation percentage or an inflationary index, or a combination of both. The Company structures its leases to include financial penalties if a tenant terminates the lease, which serve to disincentivize tenants from terminating the lease prior to the expiration of the lease term.
The Company’s leasing arrangements outside of the U.S. may require that the Company provide power to the communications site through an electrical grid connection, diesel fuel generators or other sources and permit the Company to pass through the costs of, or otherwise charge for, these services. Many arrangements require that the communications site has power for a specified percentage of time. In most cases, if delivery of power falls below the specified service level, a corresponding reduction in revenue is recorded. The Company has determined that this performance obligation is satisfied over time for the duration of the lease.
The Company typically has more than
one
tenant on a site and, by performing ordinary course repair and maintenance work, can often lease a site, either through renewing existing agreements or leasing to new tenants, for periods beyond the existing tenant lease term. Accordingly, the Company has minimal risk with respect to the residual value of its leased assets. Communications sites are depreciated over their estimated useful lives, which generally do not exceed
twenty years
.
As of
June 30, 2019
, the Company does not have any material related party leases as a lessor. The Company generally does not enter into sales-type leases or direct financing leases. The Company’s leases generally do not include any incentives for the lessee and do not include any lessee purchase options.
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
June 30, 2019
were as follows:
|
|
|
|
|
|
Fiscal Year
|
|
Amount (1)
|
Remainder of 2019
|
|
$
|
2,701.4
|
|
2020
|
|
5,243.1
|
|
2021
|
|
4,832.0
|
|
2022
|
|
3,903.4
|
|
2023
|
|
3,589.4
|
|
Thereafter
|
|
13,688.9
|
|
Total
|
|
$
|
33,958.2
|
|
_______________
|
|
(1)
|
Balances are translated at the applicable period-end exchange rate, which may impact comparability between periods.
|
Future minimum rental receipts expected under non-cancellable operating lease agreements in effect at
December 31, 2018
were as follows:
|
|
|
|
|
|
Year Ended December 31,
|
|
Amount (1)
|
2019
|
|
$
|
5,251.2
|
|
2020
|
|
5,062.2
|
|
2021
|
|
4,676.1
|
|
2022
|
|
3,754.6
|
|
2023
|
|
3,457.3
|
|
Thereafter
|
|
12,641.1
|
|
Total
|
|
$
|
34,842.5
|
|
_______________
|
|
(1)
|
Balances are translated at the applicable period-end exchange rate, which may impact comparability between periods.
|
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)
Lessee
—The Company enters into arrangements as a lessee primarily for ground space underneath its communications sites. These arrangements are typically long-term lease agreements with initial non-cancellable terms of approximately
five
to
ten years
with
one
or more automatic or exercisable renewal periods and specified increases in lease payments upon exercise of the renewal options. The Company typically exercises its ground lease renewal options in order to provide ongoing tenant space on its communications sites through the end of the tenant lease term. Escalation clauses present in operating leases, excluding those tied to a consumer price index (“CPI”) or other inflation-based indices, are recognized on a straight-line basis over the estimated lease term of the applicable lease. Additionally, the escalations tied to CPI or another inflation-based index are considered variable lease payments. In certain circumstances, the Company enters into revenue sharing arrangements with the ground space owner, which results in variability in lease payments. In most markets outside of the U.S., in the event there are no tenants on the communications site, the Company generally has unilateral termination rights and in certain situations, the lease is structured to allow for termination by the Company with minimal or no penalties. Ground lease arrangements usually include annual escalations and do not contain any residual value guarantees or restrictions on dividends, other financial obligations or other similar terms. The Company has entered into certain transactions whereby at the end of a lease, sublease or similar arrangement, the Company has the option to purchase the corresponding communications sites. These transactions are further described in note
15
.
The Company’s lease liability is the present value of the remaining minimum rental payments to be made over the remaining lease term, including renewal options reasonably certain to be exercised. The Company also considers termination options and factors those into the determination of lease payments when appropriate. To determine the lease term, the Company considers all renewal periods that are reasonably certain to be exercised, taking into consideration all economic factors, including the communications site’s estimated economic life (generally
20
years) and the respective lease terms of the Company’s tenants under the existing lease arrangements on such site.
As of the adoption date and new lease inception, the Company’s right-of-use asset is equal to its lease liability, plus payments made prior to the commencement date and initial direct costs, net of any impairment losses, lease incentives, fair value adjustments on acquired leases and deferred rent amount recorded under the prior lease accounting guidance. The Company assesses its right-of-use asset and other lease-related assets for impairment, as described in note 1 to the Company’s consolidated financial statements included in the
2018
Form 10-K. As of
June 30, 2019
, there was
no
impairment recorded related to these assets.
As of
June 30, 2019
, the Company does not have any material related party leases as a lessee. The Company does not have any sale-leaseback arrangements as lessee and typically does not enter into leveraged leases.
The Company leases certain land and office space under operating leases and land and improvements, towers and vehicles under finance leases. As of
June 30, 2019
, operating lease assets were included in Right-of-use asset and finance lease assets were included in Property and equipment, net in the consolidated balance sheet.
Information about other lease-related balances as of
June 30, 2019
is as follows:
|
|
|
|
|
|
Operating leases:
|
|
|
Right-of-use asset
|
|
$
|
7,110.0
|
|
|
|
|
Current portion of lease liability
|
|
$
|
496.9
|
|
Lease liability
|
|
6,335.4
|
|
Total operating lease liability
|
|
$
|
6,832.3
|
|
|
|
|
Finance leases:
|
|
|
Current portion of lease liability
|
|
$
|
5.4
|
|
Lease liability
|
|
22.3
|
|
Total finance lease liability
|
|
$
|
27.7
|
|
As most of the Company’s leases do not specifically state an implicit rate, the Company uses a market-specific incremental borrowing rate consistent with the lease term as of the lease commencement date when calculating the present value of remaining lease payments. The incremental borrowing rate reflects the cost to borrow on a securitized basis in each market. The remaining lease term does not reflect all renewal options available to the Company, only those renewal options that the Company has assessed as reasonably certain of being exercised taking into consideration the economic factors noted above.
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)
The weighted-average remaining lease terms and incremental borrowing rates as of
June 30, 2019
are as follows:
|
|
|
|
|
Operating leases:
|
|
|
Weighted-average remaining lease term (years)
|
|
13.0
|
|
Weighted-average incremental borrowing rate
|
|
6.3
|
%
|
|
|
|
Finance leases:
|
|
|
Weighted-average remaining lease term (years)
|
|
10.4
|
|
Weighted-average incremental borrowing rate
|
|
5.9
|
%
|
The following table sets forth the components of lease cost for the three and
six months ended June 30, 2019
:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2019
|
|
Six Months Ended June 30, 2019
|
Operating lease cost
|
|
$
|
255.8
|
|
|
$
|
510.8
|
|
Variable lease costs not included in lease liability (1)
|
|
70.8
|
|
|
123.1
|
|
_______________
|
|
(1)
|
Includes property tax paid on behalf of the landlord.
|
The interest expense on finance lease liabilities was
$0.3 million
and
$0.7 million
for the three and six months ended
June 30, 2019
, respectively. Assets held under finance leases are recorded in property and equipment and are depreciated over the lesser of the remaining lease term or the remaining useful life.
Supplemental cash flow information for the six months ended
June 30, 2019
is as follows:
|
|
|
|
|
|
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
Operating cash flows from operating leases
|
|
$
|
(466.3
|
)
|
Operating cash flows from finance leases
|
|
$
|
(0.7
|
)
|
Financing cash flows from finance leases
|
|
$
|
(4.5
|
)
|
|
|
|
Non-cash items:
|
|
|
New operating leases
|
|
$
|
114.1
|
|
Operating lease modifications and reassessments
|
|
$
|
95.7
|
|
As of
June 30, 2019
, the Company does not have material operating or financing leases that have not yet commenced.
Maturities of operating and finance lease liabilities as of
June 30, 2019
were as follows:
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
Operating Lease (1)
|
|
Finance Lease (1)
|
Remainder of 2019
|
|
$
|
445.7
|
|
|
$
|
4.1
|
|
2020
|
|
887.8
|
|
|
7.3
|
|
2021
|
|
870.0
|
|
|
4.5
|
|
2022
|
|
830.2
|
|
|
3.6
|
|
2023
|
|
791.1
|
|
|
2.2
|
|
Thereafter
|
|
6,312.4
|
|
|
25.2
|
|
Total lease payments
|
|
10,137.2
|
|
|
46.9
|
|
Less amounts representing interest
|
|
(3,304.9
|
)
|
|
(19.2
|
)
|
Total lease liability
|
|
6,832.3
|
|
|
27.7
|
|
Less current portion of lease liability
|
|
(496.9
|
)
|
|
(5.4
|
)
|
Non-current lease liability
|
|
$
|
6,335.4
|
|
|
$
|
22.3
|
|
_______________
|
|
(1)
|
Balances are translated at the applicable period-end exchange rate, which may impact comparability between periods.
|
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)
Future minimum rental payments under non-cancellable operating leases as of December 31, 2018 is as follows:
|
|
|
|
|
|
Year Ended December 31,
|
|
Amount (1)
|
2019
|
|
$
|
926.0
|
|
2020
|
|
904.2
|
|
2021
|
|
879.8
|
|
2022
|
|
834.2
|
|
2023
|
|
792.6
|
|
Thereafter
|
|
6,173.1
|
|
Total
|
|
$
|
10,509.9
|
|
_______________
|
|
(1)
|
Balances are translated at the applicable period-end exchange rate, which may impact comparability between periods.
|
Future minimum rental payments under capital leases in effect as of December 31, 2018 were as follows:
|
|
|
|
|
|
Year Ended December 31,
|
|
Amount (1)
|
2019
|
|
$
|
40.7
|
|
2020
|
|
32.7
|
|
2021
|
|
27.8
|
|
2022
|
|
23.7
|
|
2023
|
|
19.2
|
|
Thereafter
|
|
117.5
|
|
Total
|
|
261.6
|
|
Less amounts representing interest
|
|
(82.1
|
)
|
Present value of capital lease obligations
|
|
$
|
179.5
|
|
_______________
|
|
(1)
|
Balances are translated at the applicable period-end exchange rate, which may impact comparability between periods.
|
Included in the future minimum rental payments under capital leases and amounts representing interest as of December 31, 2018 were
$220.3 million
and
$69.3 million
, respectively, related to perpetual land easements, which are not accounted for as finance leases under the new lease accounting standard.
5. GOODWILL AND OTHER INTANGIBLE ASSETS
The changes in the carrying value of goodwill for each of the Company’s business segments were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
|
|
Services
|
|
Total
|
|
|
U.S.
|
|
Asia
|
|
EMEA
|
|
Latin America
|
|
Balance as of January 1, 2019
|
|
$
|
3,382.5
|
|
|
$
|
1,045.5
|
|
|
$
|
381.3
|
|
|
$
|
690.6
|
|
|
$
|
2.0
|
|
|
$
|
5,501.9
|
|
Additions and adjustments (1)
|
|
33.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33.5
|
|
Effect of foreign currency translation
|
|
—
|
|
|
11.2
|
|
|
(1.3
|
)
|
|
12.5
|
|
|
—
|
|
|
22.4
|
|
Balance as of June 30, 2019
|
|
$
|
3,416.0
|
|
|
$
|
1,056.7
|
|
|
$
|
380.0
|
|
|
$
|
703.1
|
|
|
$
|
2.0
|
|
|
$
|
5,557.8
|
|
_______________
|
|
(1)
|
Additions consist of
$34.3 million
resulting from 2019 acquisitions offset by
$0.8 million
from revisions to prior-year acquisitions due to measurement period adjustments.
|
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 June 30, 2019
|
|
As of December 31, 2018
|
|
Estimated Useful
Lives (years)
|
|
Gross
Carrying
Value
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
|
Gross
Carrying
Value
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
Acquired network location intangibles (1)
|
Up to 20
|
|
$
|
4,792.8
|
|
|
$
|
(1,824.0
|
)
|
|
$
|
2,968.8
|
|
|
$
|
4,780.3
|
|
|
$
|
(1,704.9
|
)
|
|
$
|
3,075.4
|
|
Acquired tenant-related intangibles
|
15-20
|
|
11,257.1
|
|
|
(3,419.7
|
)
|
|
7,837.4
|
|
|
11,156.5
|
|
|
(3,147.2
|
)
|
|
8,009.3
|
|
Acquired licenses and other intangibles
|
3-20
|
|
107.1
|
|
|
(18.1
|
)
|
|
89.0
|
|
|
104.1
|
|
|
(14.5
|
)
|
|
89.6
|
|
Total other intangible assets
|
|
|
$
|
16,157.0
|
|
|
$
|
(5,261.8
|
)
|
|
$
|
10,895.2
|
|
|
$
|
16,040.9
|
|
|
$
|
(4,866.6
|
)
|
|
$
|
11,174.3
|
|
_______________
|
|
(1)
|
Acquired network location intangibles are amortized over the shorter of the term of the corresponding ground lease, taking into consideration lease renewal options and residual value, or up to
20
years, as the Company considers these intangibles to be directly related to the tower assets.
|
The acquired network location intangibles represent the value to the Company of the incremental revenue growth that could potentially be obtained from leasing the excess capacity on acquired communications sites. The acquired tenant-related intangibles typically represent the value to the Company of tenant contracts and relationships in place at the time of an acquisition or similar transaction, including assumptions regarding estimated renewals.
The Company amortizes its acquired network location intangibles and tenant-related intangibles on a straight-line basis over their estimated useful lives. As of
June 30, 2019
, the remaining weighted average amortization period of the Company’s intangible assets was
14
years. Amortization of intangible assets for the three and
six months ended June 30, 2019
was
$199.6
million and
$392.3
million, respectively, and amortization of intangible assets for the three and six months ended June 30, 2018 was
$205.2
million and
$407.6
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 2019
|
|
$
|
394.1
|
|
2020
|
|
770.5
|
|
2021
|
|
754.0
|
|
2022
|
|
749.9
|
|
2023
|
|
745.7
|
|
2024
|
|
742.5
|
|
6. NOTES RECEIVABLE AND OTHER NON-CURRENT ASSETS
Notes receivable and other non-current assets consisted of the following:
|
|
|
|
|
|
|
|
|
|
As of
|
|
June 30, 2019
|
|
December 31, 2018
|
Long-term prepaid ground rent
|
$
|
—
|
|
|
$
|
607.5
|
|
Notes receivable
|
1.1
|
|
|
1.0
|
|
Other miscellaneous assets
|
262.7
|
|
|
354.1
|
|
Notes receivable and other non-current assets
|
$
|
263.8
|
|
|
$
|
962.6
|
|
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)
The reduction in Long-term prepaid ground rent is a result of the reclassification of assets to the Right-of-use asset in connection with the Company’s adoption of the new lease accounting standard.
7. ACCRUED EXPENSES
Accrued expenses consisted of the following:
|
|
|
|
|
|
|
|
|
|
As of
|
|
June 30, 2019
|
|
December 31, 2018
|
Accrued property and real estate taxes
|
$
|
189.7
|
|
|
$
|
169.7
|
|
Accrued pass-through costs
|
76.1
|
|
|
71.2
|
|
Amounts payable to tenants
|
80.6
|
|
|
93.5
|
|
Accrued rent
|
71.5
|
|
|
61.4
|
|
Payroll and related withholdings
|
66.1
|
|
|
90.4
|
|
Accrued construction costs
|
32.8
|
|
|
41.5
|
|
Accrued income tax payable
|
15.2
|
|
|
57.9
|
|
Accrued pass-through taxes
|
2.3
|
|
|
2.2
|
|
Other accrued expenses
|
301.3
|
|
|
360.5
|
|
Total accrued expenses
|
$
|
835.6
|
|
|
$
|
948.3
|
|
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)
8
. LONG-TERM OBLIGATIONS
Outstanding amounts under the Company’s long-term obligations, reflecting discounts, premiums, debt issuance costs and fair value adjustments due to interest rate swaps consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
|
Maturity Date
|
2018 Term Loan (1) (2)
|
$
|
—
|
|
|
$
|
1,499.8
|
|
|
March 29, 2019
|
2019 Term Loan (1)
|
1,299.4
|
|
|
—
|
|
|
February 13, 2020
|
2013 Credit Facility (1)
|
642.0
|
|
|
1,875.0
|
|
|
June 28, 2022
|
2013 Term Loan (1)
|
995.3
|
|
|
994.8
|
|
|
January 31, 2024
|
2014 Credit Facility (1)
|
—
|
|
|
—
|
|
|
January 31, 2024
|
3.40% senior notes (3)
|
—
|
|
|
1,000.0
|
|
|
February 15, 2019
|
2.800% senior notes
|
748.6
|
|
|
747.8
|
|
|
June 1, 2020
|
5.050% senior notes (4)
|
—
|
|
|
698.7
|
|
|
September 1, 2020
|
3.300% senior notes
|
747.8
|
|
|
747.2
|
|
|
February 15, 2021
|
3.450% senior notes
|
647.0
|
|
|
646.3
|
|
|
September 15, 2021
|
5.900% senior notes
|
498.6
|
|
|
498.4
|
|
|
November 1, 2021
|
2.250% senior notes
|
589.0
|
|
|
572.7
|
|
|
January 15, 2022
|
4.70% senior notes
|
697.8
|
|
|
697.4
|
|
|
March 15, 2022
|
3.50% senior notes
|
993.4
|
|
|
992.6
|
|
|
January 31, 2023
|
3.000% senior notes
|
704.6
|
|
|
687.5
|
|
|
June 15, 2023
|
5.00% senior notes
|
1,001.9
|
|
|
1,002.1
|
|
|
February 15, 2024
|
3.375% senior notes
|
643.8
|
|
|
—
|
|
|
May 15, 2024
|
2.950% senior notes
|
640.5
|
|
|
—
|
|
|
January 15, 2025
|
1.375% senior notes
|
560.2
|
|
|
564.0
|
|
|
April 4, 2025
|
4.000% senior notes
|
742.6
|
|
|
742.1
|
|
|
June 1, 2025
|
4.400% senior notes
|
496.3
|
|
|
496.1
|
|
|
February 15, 2026
|
1.950% senior notes
|
561.9
|
|
|
566.0
|
|
|
May 22, 2026
|
3.375% senior notes
|
987.1
|
|
|
986.3
|
|
|
October 15, 2026
|
3.125% senior notes
|
397.5
|
|
|
397.3
|
|
|
January 15, 2027
|
3.55% senior notes
|
743.8
|
|
|
743.5
|
|
|
July 15, 2027
|
3.600% senior notes
|
692.2
|
|
|
691.9
|
|
|
January 15, 2028
|
3.950% senior notes
|
589.1
|
|
|
—
|
|
|
March 15, 2029
|
3.800% senior notes
|
1,630.9
|
|
|
—
|
|
|
August 15, 2029
|
Total American Tower Corporation debt
|
18,251.3
|
|
|
17,847.5
|
|
|
|
|
|
|
|
|
|
Series 2013-2A securities (5)
|
1,294.2
|
|
|
1,293.4
|
|
|
March 15, 2023
|
Series 2018-1A securities (5)
|
493.9
|
|
|
493.5
|
|
|
March 15, 2028
|
Series 2015-1 notes (6)
|
349.2
|
|
|
348.8
|
|
|
June 15, 2020
|
Series 2015-2 notes (7)
|
521.1
|
|
|
520.8
|
|
|
June 16, 2025
|
India indebtedness (8)
|
—
|
|
|
240.1
|
|
|
Various
|
India preference shares (9)
|
—
|
|
|
23.9
|
|
|
March 2, 2020
|
Shareholder loan (10)
|
—
|
|
|
59.9
|
|
|
December 31, 2019
|
Other subsidiary debt (11)
|
120.7
|
|
|
152.5
|
|
|
Various
|
Total American Tower subsidiary debt
|
2,779.1
|
|
|
3,132.9
|
|
|
|
Finance and capital lease obligations
|
27.7
|
|
|
179.5
|
|
|
|
Total
|
21,058.1
|
|
|
21,159.9
|
|
|
|
Less current portion of long-term obligations
|
(2,442.2
|
)
|
|
(2,754.8
|
)
|
|
|
Long-term obligations
|
$
|
18,615.9
|
|
|
$
|
18,405.1
|
|
|
|
_______________
|
|
(1)
|
Accrues interest at a variable rate.
|
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)
|
|
(2)
|
Repaid in full on February 14, 2019 using proceeds from the 2019 Term Loan (as defined below) and cash on hand.
|
|
|
(3)
|
Repaid in full on the maturity date in February 2019 with borrowings from the 2013 Credit Facility and the 2014 Credit Facility (each as defined below).
|
|
|
(4)
|
Repaid in full on April 22, 2019 with borrowings from the 2014 Credit Facility and cash on hand.
|
|
|
(5)
|
Maturity date reflects the anticipated repayment date; final legal maturity is March 15, 2048.
|
|
|
(6)
|
Maturity date reflects the anticipated repayment date; final legal maturity is June 15, 2045.
|
|
|
(7)
|
Maturity date reflects the anticipated repayment date; final legal maturity is June 15, 2050.
|
|
|
(8)
|
Denominated in Indian Rupees (“INR”). Included India working capital facilities, remaining debt assumed by the Company in connection with the Viom Acquisition (as defined in note 12) and debt that had been entered into by ATC TIPL. During the three months ended March 31, 2019, the Company repaid all remaining debt assumed in connection with the Viom Acquisition and debt entered into by ATC TIPL.
|
|
|
(9)
|
Mandatorily redeemable preference shares (the “Preference Shares”) denominated in INR and classified as debt. The Preference Shares were redeemed on March 2, 2019.
|
|
|
(10)
|
Reflects balance owed to the Company’s joint venture partner in Ghana. The Ghana loan is denominated in Ghanaian Cedi (“GHS”). On June 14, 2019, the Company purchased the remaining
294.4 million
GHS (
$56.8 million
) of principal outstanding under the Ghana loan, plus unpaid interest. Amounts under the loan are now owed to one of the Company’s subsidiaries and, as a result, are eliminated in consolidation as of the purchase date.
|
|
|
(11)
|
Includes the South African credit facility, which is denominated in South African Rand and amortizes through December 17, 2020, the Colombian credit facility, which is denominated in Colombian Pesos and amortizes through April 24, 2021, the Brazil credit facility, which is denominated in Brazilian Reais and amortizes through January 15, 2022, the Kenya debt, which is denominated in U.S. Dollars (“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 U.S. subsidiary debt related to a seller-financed acquisition.
|
Current portion of long-term obligations—
The Company’s current portion of long-term obligations primarily includes (i)
$1.3 billion
under its unsecured term loan entered into on February 14, 2019 (the “2019 Term Loan”), (ii)
$750.0 million
aggregate principal amount of
2.800%
senior unsecured notes due 2020 and (iii)
$350.0 million
aggregate principal amount of the American Tower Secured Revenue Notes, Series 2015-1, Class A, issued by GTP Acquisition Partners I, LLC in a private securitization transaction in May 2015, with anticipated repayment date in 2020.
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 pay the securitized debt and other obligations arising out of the securitizations. The securitized debt is the obligation of the issuers thereof or borrowers thereunder, as applicable, and their subsidiaries, and not of the Company or its other subsidiaries.
Repayments of Senior Notes
Repayment of
3.40%
Senior Notes—
On the February 15, 2019 maturity date, the Company repaid
$1.0 billion
aggregate principal amount of
3.40%
senior unsecured notes due 2019 (the “
3.40%
Notes”). The
3.40%
Notes were repaid with borrowings from the Company’s multicurrency senior unsecured revolving credit facility entered into in June 2013, as amended (the “2013 Credit Facility”) and the Company’s senior unsecured revolving credit facility entered into in January 2012 and amended and restated in September 2014, as further amended (the “2014 Credit Facility”). Upon completion of the repayment, none of the
3.40%
Notes remained outstanding.
Repayment of
5.050%
Senior Notes—
On April 22, 2019, the Company redeemed all of the
$700.0 million
aggregate principal amount of
5.050%
senior unsecured notes due 2020 (the “
5.050%
Notes”) at a price equal to
103.0050%
of the principal amount, plus accrued and unpaid interest up to, but excluding April 22, 2019, for an aggregate redemption price of
$726.0 million
, including
$5.0 million
in accrued and unpaid interest. The Company recorded a loss on retirement of long-term obligations of
$22.1 million
, which includes prepayment consideration of
$21.0 million
and the associated unamortized discount and deferred financing costs. The redemption was funded with borrowings from the 2014 Credit Facility and cash on hand. Upon completion of the repayment, none of the
5.050%
Notes remained outstanding.
Offerings of Senior Notes
3.375%
Senior Notes and
3.950%
Senior Notes Offering—
On March 15, 2019, the Company completed a registered public offering of
$650.0 million
aggregate principal amount of
3.375%
senior unsecured notes due 2024 (the “
3.375%
Notes”) and
$600.0 million
aggregate principal amount of
3.950%
senior unsecured notes due 2029 (the “
3.950%
Notes”). The net proceeds from this offering were approximately
$1,231.0 million
, after deducting
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)
commissions and estimated expenses. The Company used the net proceeds to repay existing indebtedness under the 2013 Credit Facility and the 2014 Credit Facility.
The
3.375%
Notes will mature on May 15, 2024 and bear interest at a rate of
3.375%
per annum. The
3.950%
Notes will mature on March 15, 2029 and bear interest at a rate of
3.950%
per annum. Accrued and unpaid interest on the
3.375%
Notes will be payable in U.S. Dollars semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2019. Accrued and unpaid interest on the
3.950%
Notes will be payable in U.S. Dollars semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2019. Interest on the
3.375%
Notes and the
3.950%
Notes will accrue from March 15, 2019 and will be computed on the basis of a
360
-day year comprised of twelve 30-day months.
2.950%
Senior Notes and
3.800%
Senior Notes Offering—
On June 13, 2019, the Company completed a registered public offering of
$650.0 million
aggregate principal amount of
2.950%
senior unsecured notes due 2025 (the “
2.950%
Notes”) and
$1.65 billion
aggregate principal amount of
3.800%
senior unsecured notes due 2029 (the “
3.800%
Notes” and, collectively with the
3.375%
Notes, the
3.950%
Notes and the
2.950%
Notes, the “Notes”). The net proceeds from this offering were approximately
$2,269.0 million
, after deducting commissions and estimated expenses. The Company used the net proceeds to repay existing indebtedness under the 2013 Credit Facility and the 2014 Credit Facility.
The
2.950%
Notes will mature on January 15, 2025 and bear interest at a rate of
2.950%
per annum. The
3.800%
Notes will mature on August 15, 2029 and bear interest at a rate of
3.800%
per annum. Accrued and unpaid interest on the
2.950%
Notes will be payable in U.S. Dollars semi-annually in arrears on January 15 and July 15 of each year, beginning on January 15, 2020. Accrued and unpaid interest on the
3.800%
Notes will be payable in U.S. Dollars semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2020. Interest on the
2.950%
Notes and the
3.800%
Notes will accrue from June 13, 2019 and will be computed on the basis of a
360
-day year comprised of twelve 30-day months.
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
3.375%
Notes on or after April 15, 2024, the
2.950%
Notes on or after December 15, 2024, the
3.950%
Notes on or after December 15, 2028 or the
3.800%
Notes on or after May 15, 2029, it 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 applicable supplemental indenture, it 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
3.5
x Adjusted EBITDA, as defined in the applicable supplemental indenture.
Bank Facilities
2013 Credit Facility—
During the
six months ended June 30, 2019
, the Company borrowed an aggregate of
$995.0 million
and repaid an aggregate of
$2.2 billion
of revolving indebtedness under the 2013 Credit Facility. The Company used the borrowings to fund acquisitions, to purchase redeemable noncontrolling interests in its Indian subsidiary, ATC TIPL, to repay existing indebtedness and for general corporate purposes.
2014 Credit Facility—
During the
six months ended June 30, 2019
, the Company borrowed an aggregate of
$1.6 billion
and repaid an aggregate of
$1.6 billion
of revolving indebtedness under the 2014 Credit Facility. The Company used the borrowings to repay existing indebtedness and for general corporate purposes.
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)
2019 Term Loan—
During the
six months ended June 30, 2019
, the Company entered into the 2019 Term Loan, the net proceeds of which were used, together with cash on hand, to repay all outstanding indebtedness under its
$1.5 billion
unsecured term loan entered into on March 29, 2018.
The 2019 Term Loan matures on February 13, 2020. Any outstanding principal and accrued but unpaid interest will be due and payable in full at maturity. The 2019 Term Loan may be paid prior to maturity in whole or in part at the Company’s option without penalty or premium.
The 2019 Term Loan agreement contains certain reporting, information, financial and operating covenants and other restrictions (including limitations on additional debt, guaranties, sales of assets and liens) with which the Company must comply. Failure to comply with the financial and operating covenants of the loan agreement may constitute a default, which could result in, among other things, the amounts outstanding, including all accrued interest and unpaid fees, becoming immediately due and payable.
As of
June 30, 2019
, the key terms under the 2013 Credit Facility, the 2014 Credit Facility, the Company’s unsecured term loan entered into in October 2013, as amended (the “2013 Term Loan”) and the 2019 Term Loan were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding Principal Balance (in millions)
|
|
Undrawn letters of credit (in millions)
|
|
Maturity Date
|
|
Current margin over LIBOR (1)
|
|
Current commitment fee (2)
|
2013 Credit Facility
|
$
|
642.0
|
|
|
$
|
3.8
|
|
|
June 28, 2022
|
(3)
|
1.125
|
%
|
|
0.125
|
%
|
2014 Credit Facility
|
$
|
—
|
|
|
$
|
6.2
|
|
|
January 31, 2024
|
(3)
|
1.125
|
%
|
|
0.125
|
%
|
2013 Term Loan
|
$
|
1,000.0
|
|
|
N/A
|
|
|
January 31, 2024
|
|
1.125
|
%
|
|
N/A
|
|
2019 Term Loan
|
$
|
1,300.0
|
|
|
N/A
|
|
|
February 13, 2020
|
|
0.800
|
%
|
|
N/A
|
|
_______________
(1) LIBOR means the London Interbank Offered Rate.
(2) Fee on undrawn portion of each credit facility.
(3) Subject to
two
optional renewal periods.
9. 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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
|
|
Fair Value Measurements Using
|
|
Fair Value Measurements Using
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap agreements
|
|
—
|
|
|
$
|
9.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Embedded derivative in lease agreement
|
|
—
|
|
|
—
|
|
|
$
|
11.1
|
|
|
—
|
|
|
—
|
|
|
$
|
11.5
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap agreements
|
|
—
|
|
|
$
|
10.6
|
|
|
—
|
|
|
—
|
|
|
$
|
33.8
|
|
|
—
|
|
Acquisition-related contingent consideration
|
|
—
|
|
|
—
|
|
|
$
|
0.8
|
|
|
—
|
|
|
—
|
|
|
$
|
0.9
|
|
Fair value of debt related to interest rate swap agreements (1)
|
|
$
|
1.0
|
|
|
—
|
|
|
—
|
|
|
$
|
(31.3
|
)
|
|
—
|
|
|
—
|
|
Redeemable noncontrolling interests
|
|
—
|
|
|
—
|
|
|
$
|
590.2
|
|
|
—
|
|
|
—
|
|
|
$
|
1,004.8
|
|
_______________
|
|
(1)
|
Included in the carrying values of the corresponding debt obligations.
|
During the
six months ended June 30, 2019
, the Company made no changes to the methods described in note 11 to its consolidated financial statements included in the 2018 Form 10-K that it used to measure the fair value of its interest rate swap agreements, the embedded derivative in one of its lease agreements, acquisition-related contingent consideration and redeemable noncontrolling interests. The changes in fair value for the embedded derivative in one of its lease agreements and acquisition-related contingent consideration during the
six months ended June 30, 2019
and
2018
were not material to the consolidated financial statements. The changes in the carrying amount of the redeemable noncontrolling interests are described in note 12. As of
June 30, 2019
, the Company estimated the value of all potential acquisition-related contingent consideration payments to be between
zero
and
$0.8 million
.
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. The Company recorded
$13.0 million
and
$31.1 million
of impairments during the three and
six months ended June 30, 2019
, respectively, and
$33.2 million
and
$180.6 million
of impairments during the three and six months ended June 30, 2018, respectively. These impairments were recorded in Other operating expenses in the consolidated statements of operations. There were no other items measured at fair value on a nonrecurring basis during the
six months ended June 30, 2019
or
2018
.
Fair Value of Financial Instruments
—The Company’s financial instruments for which the carrying value reasonably approximates fair value at
June 30, 2019
and
December 31, 2018
include cash and cash equivalents, restricted cash, accounts receivable and accounts payable. The Company’s estimates of fair value of its long-term obligations, including the current portion, are based primarily upon reported market values. For long-term debt not actively traded, fair value is estimated using either indicative price quotes or a discounted cash flow analysis using rates for debt with similar terms and maturities. As of
June 30, 2019
and
December 31, 2018
, the carrying value of long-term obligations, including the current portion, was
$21.1 billion
and
$21.2 billion
, respectively. As of
June 30, 2019
, the fair value of long-term obligations, including the current portion, was
$21.8 billion
, of which
$16.0 billion
was measured using Level 1 inputs and
$5.8 billion
was measured using Level 2 inputs. As of
December 31, 2018
, the fair value of long-term obligations, including the current portion, was
$21.1 billion
, of which
$13.4 billion
was measured using Level 1 inputs and
$7.7 billion
was measured using Level 2 inputs.
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)
10. 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 June 30, 2019
was primarily attributable to an increase in foreign earnings subject to taxation in the current period, as well as the nonrecurrence of the tax effect of certain impairment charges during the
three months ended June 30, 2018
. The change in the income tax provision (benefit) for the
six months ended June 30, 2019
was primarily attributable to an increase in foreign earnings subject to taxation in the current period, as well as the nonrecurrence of certain events during the
six months ended June 30, 2018
, including a one-time benefit for merger-related activity in the Company’s Asia property segment and the tax effect of certain impairment charges.
As of
June 30, 2019
and
December 31, 2018
, the total unrecognized tax benefits that would impact the ETR, if recognized, were approximately
$96.1 million
and
$93.7 million
, respectively. The amount of unrecognized tax benefits during the three and
six months ended June 30, 2019
includes additions to the Company’s existing tax positions of
$1.5 million
and
$3.0 million
, respectively, and foreign currency exchange rate fluctuations of
$0.7 million
and
$1.0 million
, respectively. 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 12 to the Company’s consolidated financial statements included in the
2018
Form 10-K. The impact of the amount of these changes to previously recorded uncertain tax positions could range from
zero
to
$2.8 million
.
The Company recorded the following penalties and income tax-related interest expense during the three and
six months ended June 30, 2019
and 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Penalties and income tax-related interest expense
|
$
|
1.1
|
|
|
$
|
0.7
|
|
|
$
|
2.2
|
|
|
$
|
1.7
|
|
As of
June 30, 2019
and
December 31, 2018
, the total amount of accrued income tax related interest and penalties included in the consolidated balance sheets were
$21.6 million
and
$19.1 million
, respectively.
11. 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
June 30, 2019
, the Company had the ability to grant stock-based awards with respect to an aggregate of
7.0 million
shares of common stock under the 2007 Plan. In addition, the Company maintains an employee stock purchase plan (the “ESPP”) pursuant to which eligible employees may purchase shares of the Company’s common stock on the last day of each bi-annual offering period at a
15%
discount from the lower of the closing market value on the first or last day of such offering period. The offering periods run from June 1 through November 30 and from December 1 through May 31 of each year.
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)
During the three and
six months ended June 30, 2019
and
2018
, the Company recorded and capitalized the following stock-based compensation expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Stock-based compensation expense Property
|
|
$
|
0.4
|
|
|
$
|
0.5
|
|
|
$
|
1.0
|
|
|
$
|
1.2
|
|
Stock-based compensation expense Services
|
|
0.2
|
|
|
0.2
|
|
|
0.5
|
|
|
0.5
|
|
Stock-based compensation expense SG&A
|
|
21.3
|
|
|
24.1
|
|
|
62.9
|
|
|
65.8
|
|
Total stock-based compensation expense
|
|
$
|
21.9
|
|
|
$
|
24.8
|
|
|
$
|
64.4
|
|
|
$
|
67.5
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense capitalized as property and equipment
|
|
$
|
0.4
|
|
|
$
|
0.5
|
|
|
$
|
0.9
|
|
|
$
|
1.0
|
|
Stock Options
—As of
June 30, 2019
, total unrecognized compensation expense related to unvested stock options was
$2.3 million
, which is expected to be recognized over a weighted average period of less than
one year
.
The Company’s option activity for the
six months ended June 30, 2019
was as follows (shares disclosed in full amounts):
|
|
|
|
|
|
|
Number of Options
|
Outstanding as of January 1, 2019
|
|
4,257,470
|
|
Granted
|
|
—
|
|
Exercised
|
|
(639,926
|
)
|
Forfeited
|
|
(7,211
|
)
|
Expired
|
|
—
|
|
Outstanding as of June 30, 2019
|
|
3,610,333
|
|
Restricted Stock Units—
As of
June 30, 2019
, total unrecognized compensation expense related to unvested RSUs granted under the 2007 Plan was
$157.0 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
six months ended June 30, 2019
, 2018 and 2017, the Company’s Compensation Committee granted an aggregate of
114,823
PSUs (the “2019 PSUs”),
131,311
PSUs (the “2018 PSUs”) and
154,520
PSUs (the “2017 PSUs”), respectively, to its executive officers and established the performance metrics for these awards. Threshold, target and maximum parameters were established for the metrics for a
three
-year performance period with respect to each of the 2019 PSUs, the 2018 PSUs and the 2017 PSUs and will be used to calculate the number of shares that will be issuable when each award vests, which may range from
zero
to
200%
of the target amounts. At the end of each
three
-year performance period, the number of shares that vest will depend on the degree of achievement against the pre-established performance goals. PSUs will be paid out in common stock at the end of each performance period, subject generally to the executive’s continued employment or death, disability or qualified retirement (each as defined in the applicable PSU award agreement). PSUs will accrue dividend equivalents prior to vesting, which will be paid out only in respect of shares that actually vest.
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)
Restricted Stock Units and Performance-Based Restricted Stock Units
—The Company’s RSU and PSU activity for the
six months ended June 30, 2019
was as follows (shares disclosed in full amounts):
|
|
|
|
|
|
|
|
RSUs
|
|
PSUs
|
Outstanding as of January 1, 2019 (1)
|
1,649,973
|
|
|
624,511
|
|
Granted (2)
|
542,744
|
|
|
114,823
|
|
Vested and Released (3)
|
(648,826
|
)
|
|
(338,680
|
)
|
Forfeited
|
(50,089
|
)
|
|
—
|
|
Outstanding as of June 30, 2019
|
1,493,802
|
|
|
400,654
|
|
Vested and deferred as of June 30, 2019 (4)
|
19,810
|
|
|
—
|
|
_______________
|
|
(1)
|
PSUs consist of the target number of shares issuable at the end of the
three
-year performance period for the 2018 PSUs and 2017 PSUs, or
131,311
and
154,520
shares, respectively, and the shares issuable at the end of the
three
-year performance period for the PSUs granted in 2016 (“2016 PSUs”) based on achievement against the performance metrics for the
three
-year performance period, or
338,680
shares.
|
|
|
(2)
|
PSUs consist of the target number of shares issuable at the end of the
three
-year performance period for the 2019 PSUs, or
114,823
shares.
|
|
|
(3)
|
This includes
32,596
and
46,500
of previously vested and deferred RSUs and PSUs, respectively. PSUs consist of shares vested pursuant to the 2016 PSUs. There are no additional shares to be earned related to the 2016 PSUs.
|
|
|
(4)
|
Vested and deferred RSUs are related to deferred compensation for certain former employees.
|
During the three and
six months ended June 30, 2019
, the Company recorded
$2.8 million
and
$13.5 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
June 30, 2019
was
$17.6 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
.
12. REDEEMABLE NONCONTROLLING INTERESTS
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”).
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 (collectively, the “Remaining Shareholders”).
The Shareholders Agreement also provides certain of the Remaining Shareholders with put options, which allow them to sell outstanding shares of ATC TIPL to the Company, and the Company with call options, which allow it to buy the noncontrolling shares of ATC TIPL. The put options, which are not under the Company’s control, cannot be separated from the noncontrolling interests. As a result, the combination of the noncontrolling interests and the redemption feature requires classification as redeemable noncontrolling interests in the consolidated balance sheet, separate from equity.
The noncontrolling interests become redeemable after the passage of time, and therefore, the Company records the carrying amount of the noncontrolling interests
outside of permanent equity
at the greater of (i) the initial carrying amount, increased or decreased for the noncontrolling interests’ share of net income or loss and foreign currency translation adjustments, or (ii) the estimated redemption value. If required, the Company will adjust the redeemable noncontrolling interests to the estimated redemption value on each balance sheet date with changes in the estimated redemption value recognized as an adjustment to Net income attributable to noncontrolling interests. During the
six months ended June 30, 2019
and 2018, the Company adjusted the estimated redemption value of the noncontrolling interests by
$0.2 million
and
$33.4 million
, respectively, based on the operating results of ATC TIPL and previously recorded adjustments to the estimated redemption value. The adjustment for the six months ended June 30, 2018 was primarily due to the impact of impairment charges on net income and, as a result, on the carrying value of the noncontrolling interests.
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)
The put options may be exercised, requiring the Company to purchase the Remaining Shareholders’ equity interests, on specified dates through March 31, 2021. The price of the put options will be based on the fair market value of the exercising Remaining Shareholders’ interest in the Company’s India operations at the time the option is exercised. Put options held by certain of the Remaining Shareholders are subject to a floor price of INR
216
per share.
During the
six months ended June 30, 2019
, the Company redeemed
50%
of Tata Teleservices and Tata Sons’ combined holdings of ATC TIPL and
100%
of IDFC’s holdings of ATC TIPL, for total consideration of INR
29.4 billion
(
$425.7 million
at the date of redemption). As a result of the redemption, the Company’s controlling interest in ATC TIPL increased from
63%
to
79%
and the noncontrolling interest decreased from
37%
to
21%
.
The changes in Redeemable noncontrolling interests for the
six months ended June 30, 2019
and
2018
were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
Balance as of January 1,
|
|
$
|
1,004.8
|
|
|
$
|
1,126.2
|
|
Net loss attributable to noncontrolling interests
|
|
(0.2
|
)
|
|
(48.7
|
)
|
Adjustment to noncontrolling interest redemption value
|
|
0.2
|
|
|
33.4
|
|
Adjustment to noncontrolling interest due to merger
|
|
—
|
|
|
(28.1
|
)
|
Purchase of redeemable noncontrolling interest
|
|
(425.7
|
)
|
|
—
|
|
Foreign currency translation adjustment attributable to noncontrolling interests
|
|
11.1
|
|
|
(73.5
|
)
|
Balance as of June 30,
|
|
$
|
590.2
|
|
|
$
|
1,009.3
|
|
In April 2019, Tata Teleservices and Tata Sons delivered notice of exercise of their put options with respect to
100%
of their remaining holdings in ATC TIPL. The Company expects to complete the redemption of the put shares, subject to regulatory approval, for total consideration of INR
24.8 billion
(approximately
$359.4 million
at the June 30, 2019 exchange rate) in the third quarter of 2019. After the completion of the redemption, the Company will hold an approximately
92%
ownership interest in ATC TIPL.
13. EQUITY
Sales of Equity Securities
—The Company receives proceeds from the sale of its equity securities pursuant to the ESPP and upon exercise of stock options granted under its equity incentive plan. During the
six months ended June 30, 2019
, the Company received an aggregate of
$56.6 million
in proceeds upon exercises of stock options and sales pursuant to the ESPP.
Stock Repurchase Programs
—In March 2011, the Board of Directors approved a stock repurchase program, pursuant to which the Company is authorized to repurchase up to
$1.5 billion
of its common stock (the “2011 Buyback”). In December 2017, the Board of Directors approved an additional stock repurchase program, pursuant to which the Company is authorized to repurchase up to
$2.0 billion
of its common stock (the “2017 Buyback” and, together with the 2011 Buyback, the “Buyback Programs”).
During the
six months ended June 30, 2019
, there were
no
repurchases under either of the Buyback Programs. As of
June 30, 2019
, the Company has repurchased a total of
14,003,543
shares of its common stock under the 2011 Buyback for an aggregate of
$1.4 billion
, including commissions and fees. The Company has not made any repurchases under the 2017 Buyback.
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
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)
amended, in accordance with securities laws and other legal requirements and subject to market conditions and other factors.
The Company expects to fund any further purchases of its common stock through a combination of cash on hand, cash generated by operations and borrowings under its credit facilities. Purchases under the Buyback Programs are subject to the Company having available cash to fund the purchases.
Distributions
—During the
six months ended June 30, 2019
, 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
|
|
|
|
|
|
|
|
|
May 22, 2019
|
|
July 12, 2019
|
|
June 19, 2019
|
|
$
|
0.92
|
|
|
$
|
407.0
|
|
March 7, 2019
|
|
April 26, 2019
|
|
April 11, 2019
|
|
$
|
0.90
|
|
|
$
|
397.8
|
|
December 5, 2018
|
|
January 14, 2019
|
|
December 27, 2018
|
|
$
|
0.84
|
|
|
$
|
370.5
|
|
|
|
(1)
|
Does not include amounts accrued for distributions payable related to unvested restricted stock units.
|
During the
six months ended June 30, 2018
, 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
|
|
|
|
|
|
|
|
|
May 24, 2018
|
|
July 13, 2018
|
|
June 19, 2018
|
|
$
|
0.77
|
|
|
$
|
339.8
|
|
March 8, 2018
|
|
April 27, 2018
|
|
April 11, 2018
|
|
$
|
0.75
|
|
|
$
|
331.2
|
|
December 6, 2017
|
|
January 16, 2018
|
|
December 28, 2017
|
|
$
|
0.70
|
|
|
$
|
300.2
|
|
|
|
|
|
|
|
|
|
|
Series B Preferred Stock
|
|
|
|
|
|
|
|
|
January 22, 2018
|
|
February 15, 2018
|
|
February 1, 2018
|
|
$
|
13.75
|
|
|
$
|
18.9
|
|
|
|
(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
June 30, 2019
, the amount accrued for distributions payable related to unvested restricted stock units was
$10.5 million
. During the
six months ended June 30, 2019
, the Company paid
$6.8 million
of distributions upon the vesting of restricted stock units. To maintain its qualification for taxation as a REIT, the Company expects to continue paying distributions, the amount, timing and frequency of which will be determined, and subject to adjustment, by the Company’s Board of Directors.
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)
14. 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 June 30,
|
|
Six Months Ended June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net income attributable to American Tower Corporation stockholders
|
$
|
429.1
|
|
|
$
|
306.7
|
|
|
$
|
826.5
|
|
|
$
|
591.9
|
|
Dividends on preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.4
|
)
|
Net income attributable to American Tower Corporation common stockholders
|
429.1
|
|
|
306.7
|
|
|
826.5
|
|
|
582.5
|
|
Basic weighted average common shares outstanding
|
442,203
|
|
|
441,497
|
|
|
441,778
|
|
|
438,328
|
|
Dilutive securities
|
3,134
|
|
|
2,865
|
|
|
3,262
|
|
|
3,185
|
|
Diluted weighted average common shares outstanding
|
445,337
|
|
|
444,362
|
|
|
445,040
|
|
|
441,513
|
|
Basic net income attributable to American Tower Corporation common stockholders per common share
|
$
|
0.97
|
|
|
$
|
0.69
|
|
|
$
|
1.87
|
|
|
$
|
1.33
|
|
Diluted net income attributable to American Tower Corporation common stockholders per common share
|
$
|
0.96
|
|
|
$
|
0.69
|
|
|
$
|
1.86
|
|
|
$
|
1.32
|
|
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 June 30,
|
|
Six Months Ended June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Restricted stock units
|
1
|
|
|
4
|
|
|
0
|
|
|
2
|
|
Stock options
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
2,936
|
|
15
. 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
2,270
towers commencing between
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)
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
June 30, 2019
, the Company has purchased an aggregate of
154
of the subleased towers upon expiration of the applicable agreement. The aggregate purchase option price for the remaining towers leased and subleased is
$933.0 million
and will accrete at a rate of
10%
per annum through the applicable expiration of the lease or sublease of a site. For all such sites, AT&T has the right to continue to lease the reserved space through June 30, 2020 at the then-current monthly fee, which shall escalate in accordance with the standard master lease agreement for the remainder of AT&T’s tenancy. Thereafter, AT&T shall have the right to renew such lease for up to
four
successive
five
-year terms.
ALLTEL Transaction
—In December 2000, the Company entered into an agreement with ALLTEL Communications, LLC, a predecessor entity to Verizon Wireless, to acquire towers through a
15
-year sublease agreement. Pursuant to the agreement, as amended, with Verizon Wireless, the Company acquired rights to approximately
1,800
towers in tranches between April 2001 and March 2002. The Company has the option to purchase each tower at the expiration of the applicable sublease. During the year ended December 31, 2016, the Company exercised the purchase options for
1,523
towers in a single closing and provided notice to the tower owner, Verizon’s assignee, of its intent to exercise the purchase options related to the
243
remaining towers. As of
June 30, 2019
, the purchase price per tower was
$42,844
payable in cash or, at the tower owner’s option, with
769
shares of the Company’s common stock per tower. The aggregate cash purchase option price for the remaining subleased towers was
$10.4 million
as of
June 30, 2019
.
Other Contingencies
—The Company is subject to income tax and other taxes in the geographic areas where it operates, and periodically receives notifications of audits, assessments or other actions by taxing authorities. Taxing authorities may issue notices or assessments while audits are being conducted. In certain jurisdictions, taxing authorities may issue assessments with minimal examination. These notices and assessments do not represent amounts that the Company is obligated to pay and are often not reflective of the actual tax liability for which the Company will ultimately be liable. In the process of responding to assessments of taxes that the Company believes are not enforceable, the Company avails itself of remedies both administrative and through the applicable court system. The Company evaluates the circumstances of each notification or assessment based on the information available and, in those instances in which the Company does not anticipate a successful defense of positions taken in its tax filings, a liability is recorded in the appropriate amount based on the underlying assessment.
On December 5, 2016, the Company received an income tax assessment of Essar Telecom Infrastructure Private Limited (“ETIPL”) from the India Income Tax Department (the “Tax Department”) for the fiscal year ending 2008 in the amount of INR
4.75 billion
(
$69.8 million
on the date of assessment) related to capital contributions. The Company challenged the assessment before the Office of Commissioner of Income Tax - Appeals, which ruled in the Company’s favor in January 2018. However, the Tax Department has appealed this ruling at a higher appellate authority. The Company estimates that there is a more likely than not probability that the Company’s position will be sustained upon appeal. Accordingly, no liability has been recorded. Additionally, the assessment was made with respect to transactions that took place in the tax year commencing in 2007, prior to the Company’s acquisition of ETIPL. Under the Company’s definitive acquisition agreement of ETIPL, the seller is obligated to indemnify and defend the Company with respect to any tax-related liability that may arise from activities prior to March 31, 2010.
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)
16. ACQUISITIONS
Impact of current year acquisitions
—The Company typically acquires communications sites from wireless carriers or other tower operators and subsequently integrates those sites into its existing portfolio of communications sites. The financial results of the Company’s acquisitions have been included in the Company’s consolidated statements of operations for the
six months ended June 30, 2019
from the date of the respective acquisition. The date of acquisition, and by extension the point at which the Company begins to recognize the results of an acquisition, may depend on, among other things, the receipt of contractual consents, the commencement and extent of leasing arrangements and the timing of the transfer of title or rights to the assets, which may be accomplished in phases. Sites acquired from communications service providers may never have been operated as a business and may instead have been utilized solely by the seller as a component of its network infrastructure. An acquisition may or may not involve the transfer of business operations or employees.
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, 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
six months ended June 30,
2019
and
2018
, 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 June 30,
|
|
Six Months Ended June 30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Acquisition and merger related expenses
|
|
$
|
3.8
|
|
|
$
|
4.5
|
|
|
$
|
5.8
|
|
|
$
|
5.9
|
|
Integration costs
|
|
$
|
2.1
|
|
|
$
|
4.7
|
|
|
$
|
6.2
|
|
|
$
|
5.2
|
|
The Company also received
$8.1 million
related to pre-acquisition contingencies and settlements during the six months ended June 30, 2019.
2019 Transactions
The estimated aggregate impact of the acquisitions completed in
2019
on the Company’s revenues and gross margin for the
three months ended June 30, 2019
was approximately
$2.2 million
and
$1.5 million
, respectively, and for the
six months ended June 30, 2019
was approximately
$2.6 million
and
$1.8 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.
During the
six months ended June 30, 2019
, the Company acquired a total of
363
communications sites in the United States, Colombia, Mexico, Paraguay and Peru, as well as other communications infrastructure assets, for an aggregate purchase price of
$150.4 million
. The majority of these acquisitions were accounted for as asset acquisitions.
The following table summarizes the allocations of the purchase prices for the fiscal year 2019 acquisitions based upon their estimated fair value at the date of acquisition:
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)
|
|
|
|
|
|
|
|
Allocation (1)
|
Current assets
|
|
$
|
5.9
|
|
Property and equipment
|
|
40.6
|
|
Intangible assets (2):
|
|
|
Tenant-related intangible assets
|
|
54.3
|
|
Network location intangible assets
|
|
20.4
|
|
Other intangible assets
|
|
0.8
|
|
Other non-current assets
|
|
7.0
|
|
Current liabilities
|
|
(0.9
|
)
|
Deferred tax liability
|
|
—
|
|
Other non-current liabilities
|
|
(12.0
|
)
|
Net assets acquired
|
|
116.1
|
|
Goodwill (3)
|
|
34.3
|
|
Fair value of net assets acquired
|
|
150.4
|
|
Debt assumed
|
|
—
|
|
Purchase price
|
|
$
|
150.4
|
|
_______________
|
|
(1)
|
Includes
72
sites in Peru held pursuant to long-term finance leases.
|
|
|
(2)
|
Tenant-related intangible assets and network location intangible assets are amortized on a straight-line basis over periods of up to
20
years.
|
|
|
(3)
|
The Company expects the majority of goodwill to be deductible for tax purposes.
|
Other Signed Acquisitions
Eaton Towers
—On May 30, 2019, the Company entered into a definitive agreement to acquire
100%
of the outstanding shares of Eaton Towers Holding Limited (“Eaton Towers”), which owns and operates approximately
5,500
communications sites across
five
African markets. The total consideration for the transaction, including the Company’s assumption of existing Eaton Towers debt, is approximately
$1.85 billion
, subject to customary closing adjustments. The transaction is expected to close by the end of 2019, subject to customary closing conditions, including the satisfaction of regulatory approvals.
U.S. Acquisition—
On July 24, 2019, the Company entered into a definitive agreement to acquire approximately
400
towers and other related property interests in the United States for total consideration of approximately
$0.5 billion
. The transaction is expected to close in the third quarter of 2019, subject to certain closing conditions.
2018 Transactions
During the six months ended June 30, 2019, the allocation of the purchase price for the acquisition of Idea Cellular Infrastructure Services Limited was finalized with no material post-closing adjustments. During the six months ended June 30, 2019, there were no material post-closing adjustments that impacted other 2018 acquisitions.
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 2019 acquisitions had occurred on January 1, 2018 and the 2018 acquisitions had occurred on January 1, 2017. The pro forma results do not include any anticipated cost synergies, costs or other integration impacts. Accordingly, such pro forma amounts are not necessarily indicative of the results that actually would have occurred had the transactions been completed on the date indicated, nor are they indicative of the future operating results of the Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Pro forma revenues
|
|
$
|
1,890.1
|
|
|
$
|
1,829.5
|
|
|
$
|
3,705.6
|
|
|
$
|
3,674.1
|
|
Pro forma net income attributable to American Tower Corporation common stockholders
|
|
$
|
429.0
|
|
|
$
|
304.2
|
|
|
$
|
826.8
|
|
|
$
|
577.4
|
|
Pro forma net income per common share amounts:
|
|
|
|
|
|
|
|
|
Basic net income attributable to American Tower Corporation common stockholders
|
|
$
|
0.97
|
|
|
$
|
0.69
|
|
|
$
|
1.87
|
|
|
$
|
1.32
|
|
Diluted net income attributable to American Tower Corporation common stockholders
|
|
$
|
0.96
|
|
|
$
|
0.68
|
|
|
$
|
1.86
|
|
|
$
|
1.31
|
|
17
. BUSINESS SEGMENTS
The Company’s primary business is leasing space on multitenant communications sites to wireless service providers, radio and television broadcast companies, wireless data providers, government agencies and municipalities and tenants in a number of other industries. This business is referred to as the Company’s property operations, which as of
June 30, 2019
, consisted of the following:
|
|
•
|
U.S.: property operations in the United States;
|
|
|
•
|
Asia: property operations in India;
|
|
|
•
|
Europe, Middle East and Africa (“EMEA”): property operations in France, Germany, Ghana, Kenya, Nigeria, South Africa and Uganda; 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 2018 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. For reporting purposes, for periods through September 30, 2018, the Latin America property segment gross margin and segment operating profit also include Interest income (expense), TV Azteca, net. These measures of segment gross margin and segment operating profit are also before Interest income, Interest expense, Gain (loss) on retirement of long-term obligations, Other 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.
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)
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
six months ended June 30, 2019
and
2018
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 June 30, 2019
|
|
U.S.
|
|
Asia
|
|
EMEA
|
|
Latin America
|
|
Segment revenues
|
|
$
|
1,007.2
|
|
|
$
|
321.1
|
|
|
$
|
175.0
|
|
|
$
|
345.6
|
|
|
$
|
1,848.9
|
|
|
$
|
40.7
|
|
|
|
|
$
|
1,889.6
|
|
Segment operating expenses (1)
|
|
196.6
|
|
|
188.3
|
|
|
60.6
|
|
|
103.5
|
|
|
549.0
|
|
|
13.7
|
|
|
|
|
562.7
|
|
Segment gross margin
|
|
810.6
|
|
|
132.8
|
|
|
114.4
|
|
|
242.1
|
|
|
1,299.9
|
|
|
27.0
|
|
|
|
|
1,326.9
|
|
Segment selling, general, administrative and development expense (1)
|
|
42.2
|
|
|
17.7
|
|
|
20.0
|
|
|
23.8
|
|
|
103.7
|
|
|
2.0
|
|
|
|
|
105.7
|
|
Segment operating profit
|
|
768.4
|
|
|
115.1
|
|
|
94.4
|
|
|
218.3
|
|
|
1,196.2
|
|
|
25.0
|
|
|
|
|
1,221.2
|
|
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
21.9
|
|
|
21.9
|
|
Other selling, general, administrative and development expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37.8
|
|
|
37.8
|
|
Depreciation, amortization and accretion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
448.9
|
|
|
448.9
|
|
Other expense (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
248.7
|
|
|
248.7
|
|
Income from continuing operations before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
463.9
|
|
Total assets
|
|
$
|
21,991.8
|
|
|
$
|
5,486.5
|
|
|
$
|
3,747.6
|
|
|
$
|
7,469.9
|
|
|
$
|
38,695.8
|
|
|
$
|
55.8
|
|
|
$
|
321.1
|
|
|
$
|
39,072.7
|
|
_______________
|
|
(1)
|
Segment operating expenses and segment selling, general, administrative and development expenses exclude stock-based compensation expense of
$0.6 million
and
$21.3 million
, respectively.
|
|
|
(2)
|
Primarily includes interest expense.
|
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 June 30, 2018
|
|
U.S.
|
|
Asia
|
|
EMEA
|
|
Latin America
|
|
Segment revenues
|
|
$
|
957.0
|
|
|
$
|
307.9
|
|
|
$
|
166.7
|
|
|
$
|
317.8
|
|
|
$
|
1,749.4
|
|
|
$
|
31.5
|
|
|
|
|
$
|
1,780.9
|
|
Segment operating expenses (1)
|
|
198.8
|
|
|
180.1
|
|
|
58.5
|
|
|
109.3
|
|
|
546.7
|
|
|
12.9
|
|
|
|
|
559.6
|
|
Interest expense, TV Azteca, net (2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.4
|
)
|
|
(3.4
|
)
|
|
—
|
|
|
|
|
(3.4
|
)
|
Segment gross margin
|
|
758.2
|
|
|
127.8
|
|
|
108.2
|
|
|
205.1
|
|
|
1,199.3
|
|
|
18.6
|
|
|
|
|
1,217.9
|
|
Segment selling, general, administrative and development expense (1)
|
|
43.8
|
|
|
15.1
|
|
|
17.6
|
|
|
19.1
|
|
|
95.6
|
|
|
2.9
|
|
|
|
|
98.5
|
|
Segment operating profit
|
|
714.4
|
|
|
112.7
|
|
|
90.6
|
|
|
186.0
|
|
|
1,103.7
|
|
|
15.7
|
|
|
|
|
1,119.4
|
|
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
24.8
|
|
|
24.8
|
|
Other selling, general, administrative and development expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35.3
|
|
|
35.3
|
|
Depreciation, amortization and accretion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
449.7
|
|
|
449.7
|
|
Other expense (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
291.3
|
|
|
$
|
291.3
|
|
Income from continuing operations before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
318.3
|
|
Total assets
|
|
$
|
18,759.4
|
|
|
$
|
5,498.7
|
|
|
$
|
3,113.6
|
|
|
$
|
5,555.6
|
|
|
$
|
32,927.3
|
|
|
$
|
45.0
|
|
|
$
|
233.4
|
|
|
$
|
33,205.7
|
|
_______________
|
|
(1)
|
Segment operating expenses and segment selling, general, administrative and development expenses exclude stock-based compensation expense of
$0.7 million
and
$24.1 million
, respectively.
|
|
|
(2)
|
Represents reversal of interest income recognized in the prior period due to nonpayment.
|
|
|
(3)
|
Primarily includes interest expense and
$33.2 million
in impairment charges.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
|
Total
Property
|
|
Services
|
|
Other
|
|
Total
|
Six Months Ended June 30, 2019
|
|
U.S.
|
|
Asia
|
|
EMEA
|
|
Latin America
|
|
Segment revenues
|
|
$
|
1,993.5
|
|
|
$
|
610.0
|
|
|
$
|
352.5
|
|
|
$
|
678.9
|
|
|
$
|
3,634.9
|
|
|
$
|
68.1
|
|
|
|
|
$
|
3,703.0
|
|
Segment operating expenses (1)
|
|
387.9
|
|
|
366.3
|
|
|
120.3
|
|
|
206.9
|
|
|
1,081.4
|
|
|
23.8
|
|
|
|
|
1,105.2
|
|
Segment gross margin
|
|
1,605.6
|
|
|
243.7
|
|
|
232.2
|
|
|
472.0
|
|
|
2,553.5
|
|
|
44.3
|
|
|
|
|
2,597.8
|
|
Segment selling, general, administrative and development expense (1)
|
|
83.9
|
|
|
44.3
|
|
|
38.4
|
|
|
51.5
|
|
|
218.1
|
|
|
5.4
|
|
|
|
|
223.5
|
|
Segment operating profit
|
|
1,521.7
|
|
|
199.4
|
|
|
193.8
|
|
|
420.5
|
|
|
2,335.4
|
|
|
38.9
|
|
|
|
|
2,374.3
|
|
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
64.4
|
|
|
64.4
|
|
Other selling, general, administrative and development expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
76.5
|
|
|
76.5
|
|
Depreciation, amortization and accretion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
885.8
|
|
|
885.8
|
|
Other expense (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
442.1
|
|
|
442.1
|
|
Income from continuing operations before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
905.5
|
|
_______________
|
|
(1)
|
Segment operating expenses and segment selling, general, administrative and development expenses exclude stock-based compensation expense of
$1.5 million
and
$62.9 million
, respectively.
|
|
|
(2)
|
Primarily includes interest expense and
$31.1 million
in impairment charges.
|
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
|
Six Months Ended June 30, 2018
|
|
U.S.
|
|
Asia
|
|
EMEA
|
|
Latin America
|
|
Segment revenues
|
|
$
|
1,888.4
|
|
|
$
|
580.9
|
|
|
$
|
340.9
|
|
|
$
|
649.6
|
|
|
$
|
3,459.8
|
|
|
$
|
62.9
|
|
|
|
|
$
|
3,522.7
|
|
Segment operating expenses (1)
|
|
385.1
|
|
|
338.0
|
|
|
117.6
|
|
|
212.7
|
|
|
1,053.4
|
|
|
25.1
|
|
|
|
|
1,078.5
|
|
Interest expense, TV Azteca, net (2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
(0.7
|
)
|
|
—
|
|
|
|
|
(0.7
|
)
|
Segment gross margin
|
|
1,503.3
|
|
|
242.9
|
|
|
223.3
|
|
|
436.2
|
|
|
2,405.7
|
|
|
37.8
|
|
|
|
|
2,443.5
|
|
Segment selling, general, administrative and development expense (1)
|
|
79.2
|
|
|
59.3
|
|
|
34.4
|
|
|
43.7
|
|
|
216.6
|
|
|
6.4
|
|
|
|
|
223.0
|
|
Segment operating profit
|
|
1,424.1
|
|
|
183.6
|
|
|
188.9
|
|
|
392.5
|
|
|
2,189.1
|
|
|
31.4
|
|
|
|
|
2,220.5
|
|
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
67.5
|
|
|
67.5
|
|
Other selling, general, administrative and development expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
74.0
|
|
|
74.0
|
|
Depreciation, amortization and accretion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
896.0
|
|
|
896.0
|
|
Other expense (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
615.5
|
|
|
$
|
615.5
|
|
Income from continuing operations before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
567.5
|
|
_______________
|
|
(1)
|
Segment operating expenses and segment selling, general, administrative and development expenses exclude stock-based compensation expense of
$1.7 million
and
$65.8 million
, respectively.
|
|
|
(2)
|
Consists of interest expense. Due to nonpayment, no interest income has been recognized in the period.
|
|
|
(3)
|
Primarily includes interest expense and
$180.6 million
in impairment charges.
|