UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
   
FORM 10-Q
   
(Mark One):
xQuarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended June 30, 2017.March 31, 2018.
¨

Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Commission File Number: 001-14195
   
AMERICAN TOWER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 65-0723837
(State or other jurisdiction of
Incorporation or Organization)
 
(I.R.S. Employer
Identification No.)
116 Huntington Avenue
Boston, Massachusetts 02116
(Address of principal executive offices)
Telephone Number (617) 375-7500
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:    Yes  x    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check One):
Large accelerated filer x  Accelerated filer ¨
    
Non-accelerated filer ¨  Smaller reporting company ¨
       
Emerging growth company ¨    
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):    Yes  ¨    No  x
As of July 20, 2017,April 24, 2018, there were 429,177,436441,659,919 shares of common stock outstanding.
   



AMERICAN TOWER CORPORATION
TABLE OF CONTENTS
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2017MARCH 31, 2018

 
  Page Nos.
    
PART I. FINANCIAL INFORMATION  
Item 1.
Unaudited Consolidated and Condensed Consolidated Financial Statements
 
1
 
Consolidated Balance Sheets as of June 30, 2017March 31, 2018 and December 31, 20162017
 
1
 
Consolidated Statements of Operations for the three and six months ended June 30,March 31, 2018 and 2017 and 2016
 
2
 
Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30,March 31, 2018 and 2017 and 2016
 
3
 
Condensed Consolidated Statements of Cash Flows for the sixthree months ended June 30,March 31, 2018 and 2017 and 2016
 
4
 
Consolidated Statements of Equity for the sixthree months ended June 30,March 31, 2018 and 2017 and 2016
 
5
 
Notes to Consolidated and Condensed Consolidated Financial Statements
 
6
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
2928
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
 
5250
Item 4.
Controls and Procedures
 
5250
PART II. OTHER INFORMATION  
Item 1.
Legal Proceedings
 
5452
Item 1A.
Risk Factors
 
54
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
5452
Item 6.
Exhibits
 
5452
Signatures
 
55
Exhibit Index
EX-153



PART I.FINANCIAL INFORMATION
ITEM 1.UNAUDITED CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands,millions, except share count and per share data)
 June 30, 2017 December 31, 2016 March 31, 2018 December 31, 2017
ASSETS        
CURRENT ASSETS:        
Cash and cash equivalents $770,024
 $787,161
 $1,125.4
 $802.1
Restricted cash 143,277
 149,281
 153.5
 152.8
Short-term investments 1,012
 4,026
 389.4
 1.0
Accounts receivable, net 322,060
 308,369
 557.9
 513.6
Prepaid and other current assets 566,386
 441,033
 571.2
 568.6
Total current assets 1,802,759
 1,689,870
 2,797.4
 2,038.1
PROPERTY AND EQUIPMENT, net 10,725,707
 10,517,258
 11,294.8
 11,101.0
GOODWILL 5,371,165
 5,070,680
 5,647.1
 5,638.4
OTHER INTANGIBLE ASSETS, net 11,728,666
 11,274,611
 11,940.2
 11,783.3
DEFERRED TAX ASSET 213,582
 195,678
 192.9
 204.4
DEFERRED RENT ASSET 1,407,478
 1,289,530
 1,510.0
 1,499.0
NOTES RECEIVABLE AND OTHER NON-CURRENT ASSETS 888,853
 841,523
 990.3
 950.1
TOTAL $32,138,210
 $30,879,150
 $34,372.7
 $33,214.3
LIABILITIES        
CURRENT LIABILITIES:        
Accounts payable $102,726
 $118,666
 $118.7
 $142.9
Accrued expenses 727,966
 620,563
 825.4
 854.3
Distributions payable 277,772
 250,550
 335.0
 304.4
Accrued interest 154,926
 157,297
 131.0
 166.9
Current portion of long-term obligations 1,732,035
 238,806
 2,803.2
 774.8
Unearned revenue 283,486
 245,387
 331.4
 268.8
Total current liabilities 3,278,911
 1,631,269
 4,544.7
 2,512.1
LONG-TERM OBLIGATIONS 17,509,937
 18,294,659
 18,568.8
 19,430.3
ASSET RETIREMENT OBLIGATIONS 1,026,535
 965,507
 1,215.0
 1,175.3
DEFERRED TAX LIABILITY 950,299
 777,572
 791.7
 898.1
OTHER NON-CURRENT LIABILITIES 1,171,546
 1,142,723
 1,246.0
 1,244.2
Total liabilities 23,937,228
 22,811,730
 26,366.2
 25,260.0
COMMITMENTS AND CONTINGENCIES 

 

 

 

REDEEMABLE NONCONTROLLING INTERESTS 1,155,867
 1,091,220
 1,065.2
 1,126.2
EQUITY:    
Preferred stock: $.01 par value; 20,000,000 shares authorized;    
5.25%, Series A, 0 and 6,000,000 shares issued, 0 and 6,000,000 shares outstanding; aggregate liquidation value of $0 and $600,000, respectively —
 60
5.50%, Series B, 1,375,000 shares issued, 1,374,986 and 1,375,000 shares outstanding; aggregate liquidation value of $1,374,986 and $1,375,000, respectively 14
 14
Common stock: $.01 par value; 1,000,000,000 shares authorized; 437,184,947 and 429,912,536 shares issued; and 429,174,983 and 427,102,510 shares outstanding, respectively 4,372
 4,299
EQUITY (shares in thousands):    
Preferred stock: $.01 par value; 20,000 shares authorized;    
5.50%, Series B, 1,375 shares issued, 0 and 1,375 shares outstanding; aggregate liquidation value of $0.0 and $1.4, respectively —
 0.0
Common stock: $.01 par value; 1,000,000 shares authorized; 450,505 and 437,729 shares issued; and 441,596 and 428,820 shares outstanding, respectively 4.5
 4.4
Additional paid-in capital 10,165,343
 10,043,559
 10,224.0
 10,247.5
Distributions in excess of earnings (989,153) (1,076,965) (1,085.7) (1,058.1)
Accumulated other comprehensive loss (1,848,803) (1,999,332) (1,834.6) (1,978.3)
Treasury stock (8,009,964 and 2,810,026 shares at cost, respectively) (849,064) (207,740)
Treasury stock (8,909 shares at cost) (974.0) (974.0)
Total American Tower Corporation equity 6,482,709
 6,763,895
 6,334.2
 6,241.5
Noncontrolling interests 562,406
 212,305
 607.1
 586.6
Total equity 7,045,115
 6,976,200
 6,941.3
 6,828.1
TOTAL $32,138,210
 $30,879,150
 $34,372.7
 $33,214.3
See accompanying notes to unaudited consolidated and condensed consolidated financial statements.


AMERICAN TOWER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands,millions, except share and per share data)
 Three Months Ended June 30, Six Months Ended June 30, Three Months Ended March 31,
 2017 2016 2017 2016 2018 2017
REVENUES:            
Property $1,638,175
 $1,426,192
 $3,232,239
 $2,693,843
 $1,710.4
 $1,594.1
Services 24,259
 16,035
 46,433
 37,431
 31.4
 22.1
Total operating revenues 1,662,434
 1,442,227
 3,278,672
 2,731,274
 1,741.8
 1,616.2
OPERATING EXPENSES:            
Costs of operations (exclusive of items shown separately below):            
Property (including stock-based compensation expense of $645, $392, $1,300 and $899, respectively) 507,234
 452,571
 993,401
 794,861
Services (including stock-based compensation expense of $201, $255, $424 and $406, respectively) 9,949
 7,140
 16,490
 16,295
Property (each including stock-based compensation expense of $0.7) 507.4
 486.2
Services (including stock-based compensation expense of $0.3 and $0.2, respectively) 12.5
 6.5
Depreciation, amortization and accretion 396,355
 397,765
 817,495
 739,399
 446.3
 421.1
Selling, general, administrative and development expense (including stock-based compensation expense of $24,892, $21,260, $60,236 and $48,681, respectively) 153,148
 138,234
 317,944
 273,549
Selling, general, administrative and development expense (including stock-based compensation expense of $41.7 and $35.3, respectively) 204.9
 164.8
Other operating expenses 18,839
 13,711
 25,054
 22,511
 167.8
 6.2
Total operating expenses 1,085,525
 1,009,421
 2,170,384
 1,846,615
 1,338.9
 1,084.8
OPERATING INCOME 576,909
 432,806
 1,108,288
 884,659
 402.9
 531.4
OTHER INCOME (EXPENSE):            
Interest income, TV Azteca, net of interest expense of $291, $284, $582 and $567, respectively 2,770
 2,748
 5,470
 5,464
Interest income, TV Azteca (each net of interest expense of $0.3) 2.7
 2.7
Interest income 8,311
 6,468
 18,238
 10,002
 15.4
 9.9
Interest expense (187,028) (181,036) (370,723) (340,916) (199.6) (183.7)
(Loss) gain on retirement of long-term obligations (274) 830
 (55,714) 830
Other income (expense) (including unrealized foreign currency gains (losses) of $7,785, ($24,585), $35,736 and $4,777, respectively) 11,782
 (25,842) 41,084
 (13,634)
Loss on retirement of long-term obligations —
 (55.4)
Other income (including unrealized foreign currency gains of $24.9 and $28.0, respectively) 27.8
 29.3
Total other expense (164,439) (196,832) (361,645) (338,254) (153.7) (197.2)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 412,470
 235,974
 746,643
 546,405
 249.2
 334.2
Income tax provision (23,980) (43,510) (50,743) (72,634)
Income tax benefit (provision) 31.1
 (26.8)
NET INCOME 388,490
 192,464
 695,900
 473,771
 280.3
 307.4
Net income attributable to noncontrolling interests (21,439) (4,914) (12,769) (11,062)
Net loss attributable to noncontrolling interests 4.9
 8.7
NET INCOME ATTRIBUTABLE TO AMERICAN TOWER CORPORATION STOCKHOLDERS 367,051
 187,550
 683,131
 462,709
 285.2
 316.1
Dividends on preferred stock (22,843) (26,782) (49,624) (53,563) (9.4) (26.8)
NET INCOME ATTRIBUTABLE TO AMERICAN TOWER CORPORATION COMMON STOCKHOLDERS $344,208
 $160,768
 $633,507
 $409,146
 $275.8
 $289.3
NET INCOME PER COMMON SHARE AMOUNTS:            
Basic net income attributable to American Tower Corporation common stockholders $0.81
 $0.38
 $1.48
 $0.96
 $0.63
 $0.68
Diluted net income attributable to American Tower Corporation common stockholders $0.80
 $0.37
 $1.47
 $0.95
 $0.63
 $0.67
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:        
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (in thousands):    
BASIC 427,298
 424,909
 427,288
 424,484
 435,124
 427,279
DILUTED 430,487
 429,004
 430,444
 428,529
 438,520
 430,199
DISTRIBUTIONS DECLARED PER COMMON SHARE $0.64
 $0.53
 $1.26
 $1.04
 $0.75
 $0.62
See accompanying notes to unaudited consolidated and condensed consolidated financial statements.


AMERICAN TOWER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)millions)
 
  Three Months Ended June 30, Six Months Ended June 30,
  2017 2016 2017 2016
Net income $388,490
 $192,464
 $695,900
 $473,771
Other comprehensive (loss) income:        
Changes in fair value of cash flow hedges, net of tax of $0 (166) (9) (300) 65
Reclassification of unrealized gains on cash flow hedges to net income, net of tax of $0 (32) (57) (118) (65)
Foreign currency translation adjustments, net of tax (benefit) expense of ($1,083), $2,695, $2,422 and $6,883, respectively (54,461) (177,966) 239,435
 48,326
Other comprehensive (loss) income (54,659) (178,032) 239,017
 48,326
Comprehensive income 333,831
 14,432
 934,917
 522,097
Comprehensive (income) loss attributable to noncontrolling interests (56,094) 12,712
 (101,257) 6,610
Comprehensive income attributable to American Tower Corporation stockholders $277,737
 $27,144
 $833,660
 $528,707
  Three Months Ended March 31,
  2018 2017
Net income $280.3
 $307.4
Other comprehensive income (loss):    
Changes in fair value of cash flow hedges, net of tax expense of $0 0.0
 (0.1)
Reclassification of unrealized losses (gains) on cash flow hedges to net income, net of tax expense of $0 0.1
 (0.1)
Adjustment to redeemable noncontrolling interest 78.8
 —
Foreign currency translation adjustments, net of tax expense of $1.6 and $3.5, respectively 57.6
 293.9
Other comprehensive income 136.5
 293.7
Comprehensive income 416.8
 601.1
Comprehensive loss (income) attributable to noncontrolling interests 12.1
 (45.2)
Comprehensive income attributable to American Tower Corporation stockholders $428.9
 $555.9

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



AMERICAN TOWER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)millions)
 Six Months Ended June 30, Three Months Ended March 31,
 2017 2016 2018 2017
CASH FLOWS FROM OPERATING ACTIVITIES        
Net income $695,900
 $473,771
 $280.3
 $307.4
Adjustments to reconcile net income to cash provided by operating activities        
Depreciation, amortization and accretion 817,495
 739,399
 446.3
 421.1
Stock-based compensation expense 61,960
 49,986
 42.7
 36.2
Loss (gain) on early retirement of long-term obligations 55,714
 (830)
Loss on early retirement of long-term obligations —
 55.4
Other non-cash items reflected in statements of operations (50,222) 53,464
 96.8
 (45.3)
Decrease in restricted cash 5,659
 12,170
Increase in net deferred rent balances (71,470) (34,931) (3.9) (35.1)
Increase in assets (101,982) (32,984) (95.4) (40.3)
Increase in liabilities 65,404
 51,271
Increase (decrease) in liabilities 25.0
 (21.2)
Cash provided by operating activities 1,478,458
 1,311,316
 791.8
 678.2
CASH FLOWS FROM INVESTING ACTIVITIES        
Payments for purchase of property and equipment and construction activities (371,512) (319,427) (198.5) (168.1)
Payments for acquisitions, net of cash acquired (857,220) (1,216,467) (673.4) (777.8)
Payment for Verizon transaction —
 (4,748)
Proceeds from sale of short-term investments and other non-current assets 7,196
 2,601
 84.0
 3.8
Deposits, restricted cash, investments and other 7,025
 (5,360)
Payments for short-term investments (478.1) —
Deposits and other (14.6) 21.8
Cash used for investing activities (1,214,511) (1,543,401) (1,280.6) (920.3)
CASH FLOW FROM FINANCING ACTIVITIES        
Repayments of short-term borrowings, net —
 (2,843)
Borrowings under credit facilities 2,508,607
 1,397,672
 1,748.3
 1,997.0
Proceeds from issuance of senior notes, net 1,279,435
 2,237,503
Repayments of notes payable, credit facilities, senior notes and capital leases (3,126,661) (2,858,415)
Contributions from (distributions to) noncontrolling interest holders, net 265,255
 (503)
Proceeds from term loan 1,500.0
 —
Proceeds from issuance of securities in securitization transaction 500.0
 —
Repayments of notes payable, credit facilities, senior notes, secured debt and capital leases (2,584.9) (1,633.4)
(Distributions to) contributions from noncontrolling interest holders, net (0.3) 265.4
Purchases of common stock (641,324) —
 —
 (147.2)
Proceeds from stock options and ESPP 82,641
 60,361
Proceeds from stock options 20.0
 36.9
Distributions paid on common stock (514,905) (426,564) (304.3) (250.4)
Distributions paid on preferred stock (53,562) (53,563) (18.9) (26.8)
Payment for early retirement of long-term obligations (61,764) (125) —
 (61.8)
Deferred financing costs and other financing activities (28,311) (23,264) (42.6) (21.8)
Cash (used for) provided by financing activities (290,589) 330,259
Net effect of changes in foreign currency exchange rates on cash and cash equivalents 9,505
 (8,322)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (17,137) 89,852
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 787,161
 320,686
CASH AND CASH EQUIVALENTS, END OF PERIOD $770,024
 $410,538
CASH PAID FOR INCOME TAXES (NET OF REFUNDS OF $17,264 AND $14,011, RESPECTIVELY) $60,384
 $50,413
Cash provided by financing activities 817.3
 157.9
Net effect of changes in foreign currency exchange rates on cash and cash equivalents, and restricted cash (4.5) 6.0
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH 324.0
 (78.2)
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD 954.9
 936.5
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD $1,278.9
 $858.3
CASH PAID FOR INCOME TAXES (NET OF REFUNDS OF $4.7 AND $12.8, RESPECTIVELY) $24.7
 $23.1
CASH PAID FOR INTEREST $351,991
 $288,880
 $228.6
 $231.0
NON-CASH INVESTING AND FINANCING ACTIVITIES:        
Increase (decrease) in accounts payable and accrued expenses for purchases of property and equipment and construction activities $8,696
 $(36,083)
(Increase) decrease in accounts payable and accrued expenses for purchases of property and equipment and construction activities $(29.3) $10.1
Purchases of property and equipment under capital leases $21,980
 $21,651
 $9.7
 $11.9
See accompanying notes to unaudited consolidated and condensed consolidated financial statements.


AMERICAN TOWER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(in thousands, exceptmillions, share data)counts in thousands)
 Preferred Stock - Series A Preferred Stock - Series B Common Stock Treasury Stock 
Additional
Paid-in
Capital
 
Accumulated Other
Comprehensive
Loss
 
Distributions
in Excess of
Earnings
 
Noncontrolling
Interest
 
Total
Equity
 Preferred Stock - Series A Preferred Stock - Series B Common Stock Treasury Stock 
Additional
Paid-in
Capital
 
Accumulated Other
Comprehensive
Loss
 
Distributions
in Excess of
Earnings
 
Noncontrolling
Interest
 
Total
Equity
 Issued Shares Amount Issued Shares Amount 
Issued
Shares
 Amount Shares Amount  Issued Shares Amount Issued Shares Amount 
Issued
Shares
 Amount Shares Amount 
BALANCE, JANUARY 1, 2016 6,000,000
 $60
 1,375,000
 $14
 426,695,279
 $4,267
 (2,810,026) $(207,740) $9,690,609
 $(1,836,996) $(998,535) $61,139
 $6,712,818
Stock-based compensation related activity —
 —
 —
 —
 1,331,272
 13
 —
 —
 86,767
 —
 —
 —
 86,780
Issuance of common stock—stock purchase plan —
 —
 —
 —
 44,733
 —
 —
 —
 3,847
 —
 —
 —
 3,847
Changes in fair value of cash flow hedges, net of tax —
 —
 —
 —
 —
 —
 —
 —
 —
 65
 —
 —
 65
Reclassification of unrealized gains on cash flow hedges to net income —
 —
 —
 —
 —
 —
 —
 —
 —
 (65) —
 —
 (65)
Foreign currency translation adjustment, net of tax —
 —
 —
 —
 —
 —
 —
 —
 —
 65,998
 —
 (665) 65,333
Contributions from noncontrolling interest —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 13
 13
Distributions to noncontrolling interest —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 (516) (516)
Common stock distributions declared —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 (443,935) —
 (443,935)
Preferred stock dividends declared —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 (53,563) —
 (53,563)
Net income —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 462,709
 6,739
 469,448
BALANCE, JUNE 30, 2016 6,000,000
 $60
 1,375,000
 $14
 428,071,284
 $4,280
 (2,810,026) $(207,740) $9,781,223
 $(1,770,998) $(1,033,324) $66,710
 $6,840,225
                          
BALANCE, JANUARY 1, 2017 6,000,000
 $60
 1,375,000
 $14
 429,912,536
 $4,299
 (2,810,026) $(207,740) $10,043,559
 $(1,999,332) $(1,076,965) $212,305
 $6,976,200
 6,000
 $0.1
 1,375
$0.0
 429,913
 $4.3
 (2,810) $(207.7) $10,043.5
 $(1,999.3) $(1,077.0) $212.3
 $6,976.2
Stock-based compensation related activity —
 —
 —
 —
 1,617,075
 16
 —
 —
 117,232
 —
 —
 —
 117,248
 —
 —
 —
 —
 1,019
 0.0
 —
 —
 50.5
 —
 —
 —
 50.5
Issuance of common stock—stock purchase plan —
 —
 —
 —
 53,062
 1
 —
 —
 4,554
 —
 —
 —
 4,555
Conversion of preferred stock (6,000,000) (60) (14) 0
 5,602,274
 56
 —
 —
 (2) —
 —
 —
 (6)
Treasury stock activity —
 —
 —
 —
 —
 —
 (5,199,938) (641,324) —
 —
 —
 —
 (641,324) —
 —
 —
 —
 

 —
 (1,874) (225.0) 

 —
 —
 —
 (225.0)
Changes in fair value of cash flow hedges, net of tax —
 —
 —
 —
 —
 —
 —
 —
 —
 (300) —
 —
 (300) —
 —
 —
 —
 —
 —
 —
 —
 —
 (0.1) —
 —
 (0.1)
Reclassification of unrealized gains on cash flow hedges to net income —
 —
 —
 —
 —
 —
 —
 —
 —
 (118) —
 —
 (118) —
 —
 —
 —
 —
 —
 —
 —
 —
 (0.1) —
 —
 (0.1)
Foreign currency translation adjustment, net of tax —
 —
 —
 —
 —
 —
 —
 —
 —
 150,947
 —
 32,710
 183,657
 —
 —
 —
 —
 —
 —
 —
 —
 —
 240.1
 —
 2.7
 242.8
Contributions from noncontrolling interest holders —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 314,059
 314,059
 —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 314.0
 314.0
Distributions to noncontrolling interest holders —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 (568) (568) —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 (0.4) (0.4)
Common stock distributions declared —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 (541,757) —
 (541,757) —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 (266.0) —
 (266.0)
Preferred stock dividends declared —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 (53,562) —
 (53,562) —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 (26.8) —
 (26.8)
Net income —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 683,131
 3,900
 687,031
 —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 316.1
 3.7
 319.8
BALANCE, JUNE 30, 2017 —
 $—
 1,374,986
 $14
 437,184,947
 $4,372
 (8,009,964) $(849,064) $10,165,343
 $(1,848,803) $(989,153) $562,406
 $7,045,115
BALANCE, MARCH 31, 2017 6,000
 $0.1
 1,375
$0.0
 430,932
 $4.3
 (4,684) $(432.7) $10,094.0
 $(1,759.4) $(1,053.7) $532.3
 $7,384.9
                          
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 —
 —
 —
 —
 756
 0.0
 —
 —
 27.3
 —
 —
 —
 27.3
Conversion of preferred stock —
 —
 (1,375) (0.0) 12,020
 0.1
 —
 —
 (0.1) —
 —
 —
 —
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 —
 —
 —
 —
 —
 —
 —
 —
 —
 0.1
 —
 —
 0.1
Foreign currency translation adjustment, net of tax —
 —
 —
 —
 —
 —
 —
 —
 —
 64.8
 —
 15.1
 79.9
Adjustment to redeemable noncontrolling interest —
 —
 —
 —
 —
 —
 —
 —
 (50.7) 78.8
 —
 —
 28.1
Impact of the revenue recognition standard adoption —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 38.4
 —
 38.4
Distributions to noncontrolling interest holders —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 (0.3) (0.3)
Common stock distributions declared —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 (332.3) —
 (332.3)
Preferred stock dividends declared —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 (18.9) —
 (18.9)
Net income —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 285.2
 5.7
 290.9
BALANCE, MARCH 31, 2018 —
 $—
 —
$—
 450,505
 $4.5
 (8,909) $(974.0) $10,224.0
 $(1,834.6) $(1,085.7) $607.1
 $6,941.3

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.DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
American Tower Corporation (together with its subsidiaries, “ATC” or the “Company”) is one of the largest global real estate investment trusts and a leading independent owner, operator and developer of multitenant communications real estate. The Company’s primary business is the leasing of space on communications sites to wireless service providers, radio and television broadcast companies, wireless data providers, government agencies and municipalities and tenants in a number of other industries. The Company refers to this business as its property operations. Additionally, the Company offers tower-related services in the United States, which the Companyit refers to as its services operations. These services include site acquisition, zoning and permitting (“AZP”) and structural analysis, which primarily support the Company’s site leasing business, including the addition of new tenants and equipment on its sites.
The Company’s portfolio primarily consists of towers that it owns and towers that it operates pursuant to long-term lease arrangements, as well as distributed antenna system (“DAS”) networks, which provide seamless coverage solutions in certain in-building and certain outdoor wireless environments. In addition to the communications sites in its portfolio, the Company manages rooftop and tower sites for property owners under various contractual arrangements. The Company also holds other telecommunications infrastructure, fiber and property interests that it leases primarily to communications service providers and third-party tower operators.

American Tower Corporation is a holding company that conducts its operations through its directly and indirectly owned subsidiaries and its joint ventures. ATC’s principal domestic operating subsidiaries are American Towers LLC and SpectraSite Communications, LLC. ATC conducts its international operations primarily through its subsidiary, American Tower International, Inc., which in turn conducts operations through its various international holding and operating subsidiaries and joint ventures.

The Company operates as a real estate investment trust for U.S. federal income tax purposes (“REIT”). Accordingly, the Company generally is not subjectrequired to pay U.S. federal income taxes on income generated by its REIT operations, including the income derived from leasing space on its towers, as it receives a dividends paid deduction for distributions to stockholders that generally offsets its REIT income and gains. However, the Company remains obligated to pay U.S. federal income taxes on earnings from its domestic taxable REIT subsidiaries (“TRSs”). In addition, the Company’s international assets and operations, regardless of their designationclassification for U.S. tax purposes, continue to be subject to taxation in the foreign jurisdictions where those assets are held or those operations are conducted.

The use of TRSs enables the Company to continue to engage in certain businesses while complying with REIT qualification requirements. The Company may, from time to time, change the election of previously designated TRSs to be included as part of the REIT. As of June 30, 2017,March 31, 2018, the Company’s REIT-qualified businesses included its U.S. tower leasing business, its operations in Nigeria, most of its operations in Costa Rica Germany and Mexico, a majority of its operations in Germany and a majority of its indoor DAS networks business and services segment.

The accompanying consolidated and condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. 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, 20162017 (the “2016“2017 Form 10-K”). The results of operations for the three and six months ended June 30, 2017March 31, 2018 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, 2017,March 31, 2018, the Company holds (i) a 51% controlling interest, and MTN Group Limited holds a 49% noncontrolling interest, in each of two joint ventures, one in Ghana and one in Uganda. The Company


AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)


holdsUganda, (ii) a 51% controlling interest, and PGGM holds a 49% noncontrolling interest, in a joint venture (“ATC Europe”) which primarily consists of operations in Europe. In addition, the Company holdsGermany and France, (iii) an approximate 75% controlling interest, and the South African investors hold an approximate 25% noncontrolling interest, in a subsidiary of the Company in South Africa. In India, the Company holdsAfrica and (iv) a 51%63% 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 20162017 Form 10-K. There have been no material changes to the Company’s significant accounting policies during the sixthree months ended June 30, 2017.
Accounting Standards Updates—In May 2014,March 31, 2018, except the Financial Accounting Standards Board (the “FASB”) issuedadoption of new guidance on revenue recognition whichguidance, as discussed below.

Changes to Prior-Period Amounts—The Company is now disclosing its results in millions rather than thousands and, as a result, certain rounding adjustments have been made to prior-period amounts.

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 amount shown in the statement of cash flows is as follows:
 Three months ended March 31,
 2018 2017
Cash and cash equivalents$1,125.4
 $712.8
Restricted cash153.5
 145.5
Total cash and cash equivalents and restricted cash$1,278.9
 $858.3

Revenue—The new revenue recognition accounting standard requires an entityentities to recognize revenue inwhen control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On January 1, 2018, the transferCompany adopted the new revenue recognition standard using the modified retrospective method applied to contracts that were not completed as of January 1, 2018. Results for reporting periods beginning January 1, 2018 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 recorded a net reduction to opening Distributions in excess of earnings in its consolidated balance sheet of $38.4 million as of January 1, 2018 due to the cumulative impact of adopting the new revenue recognition standard. The impact is primarily related to the Company’s site inspection revenue, which is now recognized at the point in time when the inspection service is completed. The impact to revenues for the three months ended March 31, 2018 as a result of applying the new standard was an increase of $2.6 million.

The adoption of the new revenue recognition accounting standard did not have a material impact on the Company’s revenue recognition patterns. Most of the Company’s revenue is derived from leasing arrangements and is accounted for as lease revenue. A small portion of the Company’s revenue is either derived from non-lease performance obligations within the lease arrangements or from other agreements with its tenants. This revenue, designated non-lease revenue, is recognized when control of the promised goods or services is transferred to customers.the tenants, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

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

Non-lease revenue is disaggregated by geography in a manner consistent with the Company’s business segments, which are discussed further in note 14 to the consolidated and condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. A summary of non-lease revenue disaggregated by source and geography is as follows:
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)




Three Months Ended March 31, 2018 U.S. Asia EMEA 
Latin
America
 Total
Power and fuel pass-through revenue $—
 $92.3
 $34.9
 $4.5
 $131.7
Other non-lease revenue 67.7
 1.9
 0.6
 23.7
 93.9
Total non-lease property revenue $67.7
 $94.2
 $35.5
 $28.2
 $225.6
Services revenue 31.4
 —
 —
 —
 31.4
Total non-lease revenue $99.1
 $94.2
 $35.5
 $28.2
 $257.0
Property lease revenue 863.7
 178.8
 138.7
 303.6
 1,484.8
Total revenue $962.8
 $273.0
 $174.2
 $331.8
 $1,741.8

Power and fuel pass-through revenue—Most of the Company’s leasing arrangements outside of the U.S. 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 these services to its tenants. The Company recognizes revenue received in connection with such services as power and fuel pass-through revenue. Many arrangements require that the communications site has power for a specified percentage of time. In most existingsuch cases, if delivery of power falls below the specified service level, a corresponding reduction in revenue recognition guidance and will become effectiveis recorded. The Company has determined that this performance obligation is satisfied over time for the duration of the arrangement.
Other significant judgments related to this revenue stream are the (i) determination that the Company is a principal in these transactions and revenue is therefore recorded on a gross basis and (ii) service level related adjustments to revenue.
Other non-lease revenue—Other non-lease revenue consists primarily of revenue generated from DAS, fiber and other property related revenue. DAS 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 AZP and structural analysis services. 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 incurred. Structural analysis services may have more than one performance obligation, contingent upon the number of contracted services. Revenue is recognized at the point in time the services are completed.

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

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

  January 1, 2018 March 31, 2018
Accounts receivable $222.2
 $234.0
Prepaids and other current assets 79.7
 73.3
Notes receivable and other non-current assets 24.2
 23.5
Unearned revenue 26.6
 33.3
Other non-current liabilities 68.5
 65.2

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. The
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)


increase in the Unearned revenue for the three months ended March 31, 2018 is due to payments received, offset by $17.9 million of revenue recognized in the three months ended March 31, 2018 that was included in the Unearned revenue balance as of January 1, 2018. Early adoption is permitted for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016. There was $0.1 million of revenue recognized from Other non-current liabilities during the three months ended March 31, 2018.

The standard permits the use of either the retrospective or cumulative effect transition method. LeasesCompany records unbilled receivables, which are not included in Prepaids and other current assets, when it has completed a performance obligation prior to its ability to bill under the scopecustomer arrangement. Other contract assets are included in Notes receivable and other non-current assets. The decrease in unbilled receivables and contract assets attributable to revenue recognized during the three months ended March 31, 2018 was less than $0.1 million.

The Company does not disclose the value of this standard. Theunsatisfied performance obligations for agreements (i) with an original expected length of one year or less or (ii) for which it recognizes revenue at the amount to which it has the Company must apply this standard is generally limitedright to invoice for services revenue, certain power and fuel charges and other fees charged to customers. As of June 30, 2017, this revenue was approximately 13% of total revenue. Although the Company is still assessing the impact of this standard on its financial statements, it does not expect changes in the timing of revenue recognition to be material to its financial statements.performed.

Accounting Standards Updates—In January 2016, the FASBFinancial Accounting Standards Board (the “FASB”) issued new guidance on the recognition and measurement of financial assets and financial liabilities. The guidance amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments. This standard is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. The Company does not expect the adoption of this guidance todid not have a material effectimpact on itsthe Company’s financial statements.

In February 2016, the FASB issued new guidance on the accounting for leases. The guidance amends the existing accounting standards for lease accounting, including the requirement that lessees recognize right of use assets and lease liabilities for leases with terms greater than twelve months in the statement of financial position. Under the new guidance, lessor accounting is largely unchanged. This guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018. The standard is required to be applied using a modified retrospective approach for all leases existing at, or entered into after, the beginning of the earliest comparative period presented. The Company (i) has established a multidisciplinary team to assess and implement the new guidance, (ii) expects the guidance to have a material impact on its consolidated balance sheets due to the recording of right of use assets and lease liabilities for leases in which it is a lessee and which it currently treats as operating leases and (iii) continues to evaluate the impact of the new guidance.

In November 2016,January 2018, the FASB issued new guidance on amounts described as restricted cash or restricted cash equivalents within the statementtreatment of cash flows.land easements. The guidance requires amounts generally describedprovides a practical expedient to not evaluate existing or expired land easements under the new lease accounting standards if those easements were not previously accounted for as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconcilingleases under the beginning-of-period and end-of-period balances on the statement of cash flows. The guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. The standard is required to be applied using a retrospective transition method to each period presented.existing lease guidance. The Company does not expect the adoption of this guidance to have a material effectimpact on its financial statements.

In January 2017,statements or its adoption of the FASB issued new guidance that clarifies the definition of a business that an entity uses to determine whether a transaction should be accounted for as an asset acquisition (or disposal) or a business combination. The Company early adopted this guidance during the first quarter of 2017. As a result, the Company expects that more transactions will be accounted for as asset acquisitions instead of business combinations.lease accounting guidance.

In January 2017, the FASB issued new 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


AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


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 effectimpact on its financial statements.

In MayAugust 2017, the FASB issued new guidance on accounting for stock-based compensation.hedge and derivative accounting. The guidance clarifies when changessimplifies accounting rules around hedge accounting and the disclosures of hedging arrangements. Among other things, the guidance eliminates the need to separately measure and report hedge ineffectiveness and generally requires the terms or conditionsentire change in fair value of a share-based payment award musthedging instrument to be accounted forpresented in the same income statement line as modifications.the hedged item. The guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, and2018, with early adoption permitted. The Company does not expect the Company early adopted this guidance during the second quarter of 2017. The adoption of this guidance did notto have a material effectimpact on its financial statements.

In February 2018, the FASB issued new guidance on the Company’streatment of tax effects that are presented in other comprehensive income. The guidance allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects as a result of the December 2017 legislation commonly referred to as the Tax Cuts and Jobs Act. The guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)


after December 15, 2018, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on its financial statements.

2.    PREPAID AND OTHER CURRENT ASSETS
Prepaid and other current assets consisted of the following (in thousands):following:
As ofAs of
June 30, 2017 December 31, 2016March 31, 2018 December 31, 2017
Prepaid operating ground leases$148,744
 $134,167
$150.6
 $148.6
Prepaid income tax130,341
 127,142
136.5
 136.5
Unbilled receivables131,831
 57,661
110.7
 107.9
Value added tax and other consumption tax receivables63.6
 64.2
Prepaid assets51,190
 36,300
42.5
 39.6
Value added tax and other consumption tax receivables23,500
 31,570
Other miscellaneous current assets80,780
 54,193
67.3
 71.8
Prepaids and other current assets$566,386
 $441,033
Prepaid and other current assets$571.2
 $568.6

3.    GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying value of goodwill for each of the Company’s business segments were as follows (in thousands):follows:
  Property Services Total
  U.S. Asia EMEA Latin America 
Balance as of January 1, 2017 $3,379,163
 $1,029,313
 $150,511
 $509,705
 $1,988
 $5,070,680
Additions and adjustments (1) —
 400
 224,270
 49
 —
 224,719
Effect of foreign currency translation —
 53,285
 21,358
 1,123
 —
 75,766
Balance as of June 30, 2017 $3,379,163
 $1,082,998
 $396,139
 $510,877
 $1,988
 $5,371,165
_______________
(1)    Balances have been revised to reflect purchase accounting measurement period adjustments.


AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

  Property Services Total
  U.S. Asia EMEA Latin America 
Balance as of January 1, 2018 $3,379.2
 $1,095.0
 $404.9
 $757.3
 $2.0
 $5,638.4
Effect of foreign currency translation —
 (21.9) 10.8
 19.8
 —
 8.7
Balance as of March 31, 2018 $3,379.2
 $1,073.1
 $415.7
 $777.1
 $2.0
 $5,647.1


The Company’s other intangible assets subject to amortization consisted of the following:
 
  As of June 30, 2017 As of December 31, 2016  As of March 31, 2018 As of December 31, 2017
Estimated Useful
Lives		 
Gross
Carrying
Value
 
Accumulated
Amortization
 
Net Book
Value
 
Gross
Carrying
Value
 
Accumulated
Amortization
 
Net Book
Value
Estimated Useful
Lives		 
Gross
Carrying
Value
 
Accumulated
Amortization
 
Net Book
Value
 
Gross
Carrying
Value
 
Accumulated
Amortization
 
Net Book
Value
(years) (in thousands)(years)  
Acquired network location intangibles (1)Up to 20
 $4,854,128
 $(1,404,464) $3,449,664
 $4,622,316
 $(1,280,284) $3,342,032
Up to 20
 $4,922.5
 $(1,584.1) $3,338.4
 $4,858.8
 $(1,525.3) $3,333.5
Acquired tenant-related intangibles15-20
 10,737,949
 (2,491,418) 8,246,531
 10,130,466
 (2,224,119) 7,906,347
15-20
 11,431.9
 (2,883.7) 8,548.2
 11,150.9
 (2,754.7) 8,396.2
Acquired licenses and other intangibles3-20
 36,576
 (7,411) 29,165
 28,140
 (4,827) 23,313
3-20
 60.5
 (10.2) 50.3
 58.8
 (8.1) 50.7
Economic Rights, TV Azteca70
 15,925
 (12,619) 3,306
 13,893
 (10,974) 2,919
70
 15.7
 (12.4) 3.3
 14.5
 (11.6) 2.9
Total other intangible assets  $15,644,578
 $(3,915,912) $11,728,666
 $14,794,815
 $(3,520,204) $11,274,611
  $16,430.6
 $(4,490.4) $11,940.2
 $16,083.0
 $(4,299.7) $11,783.3
_______________
(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-relatedtenant-
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)


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, 2017,March 31, 2018, the remaining weighted average amortization period of the Company’s intangible assets, excluding the TV Azteca Economic Rights detailed in note 5 to the Company’s consolidated financial statements included in the 20162017 Form 10-K, was 1615 years. Amortization of intangible assets for the three and six months ended June 30,March 31, 2018 and 2017 was $192.2$202.4 million and $375.4 million, respectively, and amortization of intangible assets for the three and six months ended June 30, 2016 was $185.3 million and $337.1$183.2 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 (in millions):
years:
Fiscal Year 
Remainder of 2017$376.1
2018750.4
 
Remainder of 2018$620.6
2019747.3
823.8
2020728.5
804.1
2021719.1
787.6
2022714.1
783.1
2023778.7

4.    ACCRUED EXPENSES
Accrued expenses consisted of the following:
 As of
 March 31, 2018 December 31, 2017
Accrued property and real estate taxes$156.9
 $154.4
Amounts payable to tenants62.0
 60.8
Accrued rent57.4
 54.0
Payroll and related withholdings54.1
 82.2
Accrued pass-through costs52.9
 59.7
Accrued income tax payable35.7
 15.3
Accrued pass-through taxes35.5
 25.3
Accrued construction costs21.9
 31.9
Other accrued expenses349.0
 370.7
Total accrued expenses$825.4
 $854.3



AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


4.    ACCRUED EXPENSES
Accrued expenses consisted of the following (in thousands):
 As of
 June 30, 2017 December 31, 2016
Accrued property and real estate taxes$161,404
 $138,361
Payroll and related withholdings57,921
 76,141
Accrued rent50,855
 50,951
Amounts payable to tenants39,508
 32,326
Accrued construction costs29,119
 28,587
Accrued income tax payable20,898
 11,551
Other accrued expenses368,261
 282,646
Total accrued expenses$727,966
 $620,563



AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(tabular amounts in millions, unless otherwise noted)


5.    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 (in thousands):following:
As of  As of  
June 30, 2017 December 31, 2016 Maturity DateMarch 31, 2018 December 31, 2017 Maturity Date
2018 Term Loan (1)$1,499.2
 $—
 March 29, 2019
2013 Credit Facility (1)$853,419
 $539,975
 June 28, 20201,641.8
 2,075.6
 June 28, 2021
Term Loan (1)994,760
 993,936
 January 31, 2022
2013 Term Loan (1)994.7
 994.5
 January 31, 2023
2014 Credit Facility (1)1,180,000
 1,385,000
 January 31, 2022600.0
 495.0
 January 31, 2023
4.500% senior notes (2)999,301
 998,676
 January 15, 2018
3.40% senior notes999,781
 999,716
 February 15, 2019999.9
 999.8
 February 15, 2019
7.25% senior notes—
 297,032
 N/A
2.800% senior notes745,628
 744,917
 June 1, 2020746.7
 746.3
 June 1, 2020
5.050% senior notes697,684
 697,352
 September 1, 2020698.2
 698.0
 September 1, 2020
3.300% senior notes745,358
 744,762
 February 15, 2021746.3
 746.0
 February 15, 2021
3.450% senior notes644,454
 643,848
 September 15, 2021645.4
 645.1
 September 15, 2021
5.900% senior notes497,584
 497,343
 November 1, 2021498.0
 497.8
 November 1, 2021
2.250% senior notes576,621
 572,764
 January 15, 2022564.5
 572.4
 January 15, 2022
4.70% senior notes696,355
 696,013
 March 15, 2022696.9
 696.7
 March 15, 2022
3.50% senior notes990,066
 989,269
 January 31, 2023991.3
 990.9
 January 31, 2023
3.000% senior notes682.4
 692.5
 June 15, 2023
5.00% senior notes1,002,582
 1,002,742
 February 15, 20241,002.4
 1,002.4
 February 15, 2024
1.375% senior notes559,995
 —
 April 4, 2025605.1
 589.1
 April 4, 2025
4.000% senior notes740,491
 739,985
 June 1, 2025741.3
 741.0
 June 1, 2025
4.400% senior notes495,428
 495,212
 February 15, 2026495.8
 495.6
 February 15, 2026
3.375% senior notes984,093
 983,369
 October 15, 2026985.2
 984.8
 October 15, 2026
3.125% senior notes396,853
 396,713
 January 15, 2027397.1
 397.1
 January 15, 2027
3.55% senior notes742,503
 —
 July 15, 2027743.0
 742.8
 July 15, 2027
3.600% senior notes691.3
 691.1
 January 15, 2028
Total American Tower Corporation debt15,542,956
 14,418,624
 17,666.5
 16,494.5
 
        
Series 2013-1A securities (3)499,233
 498,642
 March 15, 2018
Series 2013-2A securities (4)1,291,056
 1,290,267
 March 15, 2023
Series 2015-1 notes (5)347,532
 347,108
 June 15, 2020
Series 2015-2 notes (6)519,767
 519,437
 June 16, 2025
2012 GTP notes (7)—
 179,459
 N/A
Unison notes (7)—
 132,960
 N/A
Series 2013-1A securities (2)—
 499.8
 N/A
Series 2013-2A securities (3)1,292.2
 1,291.8
 March 15, 2023
Series 2018-1A securities (3)493.0
 —
 March 15, 2028
Series 2015-1 notes (4)348.2
 348.0
 June 15, 2020
Series 2015-2 notes (5)520.3
 520.1
 June 16, 2025
India indebtedness (8)(6)505,664
 549,528
 Various518.6
 512.6
 Various
India preference shares (9)(7)25,808
 24,537
 March 2, 202025.6
 26.1
 March 2, 2020
Shareholder loans (10)102,752
 151,045
 Various
Other subsidiary debt (1) (11)265,546
 286,009
 Various
Shareholder loans (8)101.8
 100.6
 Various
Other subsidiary debt (1) (9)239.6
 246.1
 Various
Total American Tower subsidiary debt3,557,358
 3,978,992
 3,539.3
 3,545.1
 
Other debt, including capital lease obligations141,658
 135,849
 166.2
 165.5
 
Total19,241,972
 18,533,465
 21,372.0
 20,205.1
 
Less current portion of long-term obligations(1,732,035) (238,806) (2,803.2) (774.8) 
Long-term obligations$17,509,937
 $18,294,659
 $18,568.8
 $19,430.3
 
_______________
(1)Accrues interest at a variable rate.
(2)On June 30, 2017,Repaid in full on the Company delivered notice of its election to call for redemption all of its outstanding 4.500% senior unsecured notes dueMarch 2018 (the “4.500% Notes”). The 4.500% Notes will be redeemed at a price equal to the principal amount of the 4.500% Notes plus a make-whole premium calculated pursuant to the terms of the 4.500% Notes indenture, together with accrued and unpaid interest, if any, up to, but excluding, the redemption date, which has been set for July 31, 2017.payment date.
(3)Maturity date reflects the anticipated repayment date; final legal maturity is March 15, 2043.2048.
(4)Maturity date reflects the anticipated repayment date; final legal maturity is March 15, 2048.


AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(5)Maturity date reflects the anticipated repayment date; final legal maturity is June 15, 2045.
(6)(5)Maturity date reflects the anticipated repayment date; final legal maturity is June 15, 2050.
(7)Repaid in full on February 15, 2017.
(8)(6)Denominated in Indian Rupees (“INR”). Debt includesIncludes India working capital facility, remaining debt assumed by the Company in connection with the Viom Acquisition (as defined in note 9) and debt that has been entered into by ATC TIPL.
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)


(9)(7)Mandatorily redeemable preference shares (the “Preference Shares”) classified as debt. On March 2, 2017, ATC TIPL issued the Preference Shares and used the proceeds to redeem the preference shares previously issued by Viom (the “Viom Preference Shares”). The Preference Shares are to be redeemed on March 2, 2020 and have a dividend rate of 10.25% per annum. Denominated in INR.
(10)(8)Reflects balances owed to the Company’s joint venture partners in Ghana and Uganda. The Ghana loan is denominated in Ghanaian Cedi and the Uganda loan is denominated in Ugandan Shillings (“UGX”). Effective January 1, 2017, the Uganda loan, which had an outstanding balance of $80.0 million and accrued interest at a variable rate, was converted by the holder to a new shareholder note for 114.5 billion UGX ($31.8 million at the time of conversion), bearing interest at a fixed rate of 16.8% per annum. The remaining balance of the Uganda loan was converted into equity.Shillings.
(11)(9)Includes the BR Towers debentures and the Brazil credit facility, which are denominated in Brazilian Reais (“BRL”) and amortize through October 15, 2023 and January 15, 2022, respectively, the South African credit facility, which is denominated in South African Rand and amortizes through December 17, 2020 and the Colombian credit facility, which is denominated in Colombian Pesos and amortizes through April 24, 2021 and the Brazil credit facility, which is denominated in BRL and matures on January 15, 2022.2021.

Current portion of long-term obligations—The Company’s current portion of long-term obligations primarily includes (i) $999.314.6 billion INR ($223.6 million) of India indebtedness, (ii) $1.5 billion under its unsecured term loan entered into on March 29, 2018 (the “2018 Term Loan”) and (iii) $999.9 million under the 4.500% Notes, (ii) $499.2 million under the Secured Tower Revenue Securities, Series 2013-1A and (iii) 10.6 billion INR ($164.2 million) of India indebtedness.3.40% senior unsecured notes due 2019.

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.

Senior NotesSecuritizations

1.375% Senior Notes Offering—Secured Tower Revenue Securities, Series 2018-1, Subclass A and Series 2018-1, Subclass R—On April 6, 2017,March 29, 2018, the Company completed a registered public offering of 500.0securitization transaction (the “2018 Securitization”), in which the American Tower Trust I (the “Trust”) issued $500.0 million Euros ($532.2 million at the date of issuance) aggregate principal amount of 1.375% senior unsecured notes due 2025Secured Tower Revenue Securities, Series 2018-1, Subclass A (the “1.375% Notes”“Series 2018-1A Securities”). To satisfy the applicable risk retention requirements of Regulation RR promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act” and, such requirements, the “Risk Retention Rules”), the Trust issued, and one of the Company’s affiliates purchased, $26.4 million aggregate principal amount of Secured Tower Revenue Securities, Series 2018-1, Subclass R (the “Series 2018-1R Securities” and, together with the Series 2018-1A Securities, the “2018 Securities”) to retain an “eligible horizontal residual interest” (as defined in the Risk Retention Rules) in an amount equal to at least 5% of the fair value of the 2018 Securities.

The assets of the Trust consist of a nonrecourse loan (the “Loan”) made by the Trust to American Tower Asset Sub, LLC and American Tower Asset Sub II, LLC (together, the “AMT Asset Subs”). The net proceedsAMT Asset Subs are jointly and severally liable under the Loan, which is secured primarily by mortgages on the AMT Asset Subs’ interests in 5,116 broadcast and wireless communications towers and related assets (the “Trust Sites”).
The 2018 Securities correspond to components of the Loan made to the AMT Asset Subs pursuant to the Second Amended and Restated Loan and Security Agreement among the Trust and the AMT Asset Subs, dated as of March 29, 2018 (the “Loan Agreement”) and were issued in two separate subclasses of the same series. The 2018 Securities represent a pass-through interest in the components of the Loan corresponding to the 2018 Securities. The Series 2018-1A Securities have an interest rate of 3.652% and the Series 2018-1R Securities have an interest rate of 4.459%. The 2018 Securities have an expected life of approximately ten years with a final repayment date in March 2048.
The debt service on the Loan will be paid solely from this offering were approximately 489.8the cash flows generated from the operation of the Trust Sites held by the AMT Asset Subs. The AMT Asset Subs are required to make monthly payments of interest on the Loan. Subject to certain limited exceptions described below, no payments of principal will be required to be made on the components of the Loan corresponding to the 2018 Securities prior to the monthly payment date in March 2028, which is the anticipated repayment date for such components.
The AMT Asset Subs may prepay the Loan at any time provided it is accompanied by applicable prepayment consideration. If the prepayment occurs within thirty-six months of the anticipated repayment date for the 2018 Securities, no prepayment consideration is due. The entire unpaid principal balance of the components of the Loan corresponding to the 2018 Securities will be due in March 2048.
Under the Loan Agreement, the AMT Asset Subs are required to maintain reserve accounts, including for ground rents, real estate and personal property taxes and insurance premiums, and, in certain circumstances, to reserve a portion of advance rents from tenants on the Trust Sites. Based on the terms of the Loan Agreement, all rental cash receipts received each month are reserved for the succeeding month and held in an account controlled by the trustee and then
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)


released. The $88.8 million Euros (approximately held in the reserve accounts as of March 31, 2018 is classified as restricted cash on the Company’s accompanying condensed consolidated balance sheet.
The Secured Tower Revenue Securities, Series 2013-2A (the “Series 2013-2A Securities”) issued in a securitization transaction in March 2013 (the “2013 Securitization” and, together with the 2018 Securitization, the “Trust Securitizations”) remain outstanding and are subject to the terms of the Second Amended and Restated Trust and Servicing Agreement entered into in connection with the 2018 Securitization. The component of the Loan corresponding to the Series 2013-2A Securities also remains outstanding and is subject to the terms of the Loan Agreement. The Loan Agreement includes terms and conditions, including with respect to secured assets, substantially consistent with the First Amended and Restated Loan and Security Agreement dated as of March 15, 2013, and as further described in note 8 to the Company’s consolidated financial statements included in the 2017 Form 10-K.

Bank Facilities

2013 Credit Facility—$521.4During the three months ended March 31, 2018, the Company borrowed an aggregate of $620.0 million at the date and repaid an aggregate of issuance), after deducting commissions and estimated expenses. The Company used the net proceeds to repay existing$1.1 billion of revolving indebtedness under its multicurrency senior unsecured revolving credit facility entered into in June 2013, as amended (the “2013 Credit Facility”), and for general corporate purposes.

The 1.375% Notes will mature on April 4, 2025 and bear interest at a rate of 1.375% per annum. Accrued and unpaid interest on the 1.375% Notes will be payable in Euros in arrears on April 4 of each year, beginning on April 4, 2018. Interest on the 1.375% Notes will be computed on the basis of the actual number of days in the period for which interest is being calculated and the actual number of days from and including the last date on which interest was paid on the 1.375% Notes and commenced accruing on April 6, 2017.

3.55% Senior Notes Offering—On June 30, 2017, the Company completed a registered public offering of $750.0 million aggregate principal amount of 3.55% senior unsecured notes due 2027 (the “3.55% Notes”). The net proceeds from this offering were approximately $741.8 million, after deducting commissions and estimated expenses. The Company used the net proceeds to repay existing indebtedness under the 2013 Credit Facility.

The 3.55% Notes will mature on July 15, 2027 and bear interest at a rate of 3.55% per annum. Accrued and unpaid interest on the 3.55% 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, 2018. Interest on the 3.55% Notes is computed on the basis of a 360-day year comprised of twelve 30-day months and commenced accruing on June 30, 2017.

The Company may redeem each series of senior 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 1.375% Notes on or after January 4, 2025 or the 3.55% Notes on or after April 15, 2027, 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


AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


repurchase all of the applicable notes at a purchase price equal to 101% of the principal amount of such notes, plus accrued and unpaid interest (including additional interest, if any), up to but not including the repurchase date. The notes rank equally with all of the Company’s other senior unsecured debt and are structurally subordinated to all existing and future indebtedness and other obligations of its subsidiaries.

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 such liens does not exceed 3.5x Adjusted EBITDA, as defined in the applicable supplemental indenture.

Bank Facilities
2013 Credit Facility—During the six months ended June 30, 2017, the Company borrowed an aggregate of $2.3 billion and repaid an aggregate of $2.0 billion of revolving indebtedness under the 2013 Credit Facility. The Company used the borrowings to fund acquisitions repay existing indebtedness and for general corporate purposes.

2014 Credit Facility—During the sixthree months ended June 30, 2017,March 31, 2018, the Company borrowed an aggregate of $200.0 million$1.1 billion and repaid an aggregate of $405.0$945.0 million of revolving indebtedness under its senior unsecured revolving credit facility entered into in January 2012 and amended and restated in September 2014, as further amended (the “2014 Credit Facility”). The Company used the borrowings to repay existing indebtedness, including the Secured Tower Revenue Securities, Series 2013-1A, and for general corporate purposes.

2018 Term Loan—During the three months ended March 31, 2018, the Company entered into the 2018 Term Loan, the net proceeds of which were used to repay $1.1 billion of outstanding indebtedness under the 2013 Credit Facility and $445.0 million of outstanding indebtedness under the 2014 Credit Facility.
The 2018 Term Loan matures on March 29, 2019. Any outstanding principal and accrued but unpaid interest will be due and payable in full at maturity. The 2018 Term Loan may be paid prior to maturity in whole or in part at the Company’s option without penalty or premium.
The loan agreement for the 2018 Term Loan contains certain reporting, information, financial and operating covenants and other restrictions (including limitations on additional debt, guaranties, sales of assets and liens) with which the Company must comply. Any failure to comply with the financial and operating covenants of the loan agreement may constitute a default, which could result in, among other things, the amounts outstanding, including all accrued interest and unpaid fees, becoming immediately due and payable.

As of June 30, 2017,March 31, 2018, the key terms under the 2013 Credit Facility, the 2014 Credit Facility, and the Company’s unsecured term loan entered into in October 2013, as amended (the “Term“2013 Term Loan”), and the 2018 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)Outstanding Principal Balance Undrawn letters of credit Maturity Date Current margin over LIBOR (1) Current commitment fee (2)
2013 Credit Facility$853.4
 $4.6
 June 28, 2020(3)1.250% 0.150%$1,641.8
(3)$4.0
 June 28, 2021(4)1.125% 0.125%
2014 Credit Facility$1,180.0
 $6.4
 January 31, 2022(3)1.250% 0.150%$600.0
 $6.3
 January 31, 2023(4)1.250% 0.150%
Term Loan$1,000.0
 $—
 January 31, 2022 1.250% N/A
2013 Term Loan$1,000.0
 N/A
 January 31, 2023 1.250% N/A
2018 Term Loan$1,500.0
 N/A
 March 29, 2019 0.875% N/A
_______________
(1)    LIBOR means the London Interbank Offered Rate.
(2)    Fee on undrawn portion of each credit facility.
(3)    Includes $140.0 million borrowed at the base rate of 4.750% plus a margin of 0.125%.
(4)    Subject to two optional renewal periods.

Repayment of 2012 GTP Notes and Unison Notes and Redemption of Senior Notes—On February 15, 2017, the Company repaid the $173.5 million remaining principal amount outstanding under the Secured Cellular Site Revenue Notes, Series 2012-2 Class A, Series 2012-2 Class B and Series 2012-2 Class C issued by GTP Cellular Sites, LLC, plus prepayment consideration and accrued and unpaid interest. The Company recorded a loss on retirement of long-term obligations of $1.8 million, which includes prepayment consideration of $7.2 million offset by the remaining portion of the unamortized premium.

On February 15, 2017, the Company repaid the $129.0 million principal amount outstanding under the Secured Cellular Site Revenue Notes, Series 2010-2, Class C and Series 2010-2, Class F issued by Unison Ground Lease Funding, LLC, plus prepayment consideration and accrued and unpaid interest. The Company recorded a loss on retirement of long-term obligations of $14.5 million, which includes prepayment consideration of $18.3 million offset by the remaining portion of the unamortized premium.

On February 10, 2017, the Company redeemed all of the outstanding 7.25% senior unsecured notes due 2019 (the “7.25% Notes”) at a price equal to 112.0854% of the principal amount, plus accrued and unpaid interest up to, but excluding, February 10, 2017, for an aggregate redemption price of $341.4 million, including $5.1 million in accrued and unpaid interest. The Company recorded a loss on retirement of long-term obligations of $39.2 million, which includes prepayment consideration of $36.3 million and the remaining portion of the unamortized discount and deferred financing costs. Upon completion of the redemption, none of the 7.25% Notes remained outstanding.



AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)


The repayments and the redemption were funded with borrowings under the 2013 Credit Facility and cash on hand.


6.    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 1Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
   
 Level 2Observable 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 3Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Items Measured at Fair Value on a Recurring Basis—The fair values of the Company’s financial assets and liabilities that are required to be measured on a recurring basis at fair value were as follows (in thousands):follows:
 
 June 30, 2017 December 31, 2016 March 31, 2018 December 31, 2017
 Fair Value Measurements Using Fair Value Measurements Using Fair Value Measurements Using Fair Value Measurements Using
 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Assets:                        
Short-term investments (1) $1,012
 —
 —
 $4,026
 —
 —
 $—
 $389.4
 —
 $1.0
 —
 —
Interest rate swap agreements —
 —
 —
 —
 $3
 —
Embedded derivative in lease agreement —
 —
 $12,846
 —
 —
 $13,290
 —
 —
 $12.2
 —
 —
 $12.4
Liabilities:                        
Interest rate swap agreements —
 $23,025
 —
 —
 $24,682
 —
 —
 $45.4
 —
 —
 $29.0
 —
Acquisition-related contingent consideration —
 —
 $16,126
 —
 —
 $15,444
 —
 —
 $1.0
 —
 —
 $10.1
Fair value of debt related to interest rate swap agreements $(43.0) —
 —
 $(24.5) —
 —
_______________
(1)Consists of highly liquid investments with original maturities in excess of three months.months and mutual funds with a portfolio duration of less than 90 days.

As of March 31, 2018, the Company had marketable securities with a cost basis of $386.7 million and recognized unrealized gains of $2.7 million on these securities. During the sixthree months ended June 30, 2017,March 31, 2018, the Company has made no changes to the methods described in note 11 to the Company’sits consolidated financial statements included in the 20162017 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 and acquisition-related contingent consideration. The changes in fair value during the sixthree months ended June 30,March 31, 2018 and 2017 and 2016 were not material to the consolidated financial statements. As of June 30, 2017,March 31, 2018, the Company estimated the value of all potential acquisition-related contingent consideration payments to be between zero and $47.6$1.0 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. During the three and six months ended June 30, 2017 and 2016, the Company did not record any material asset impairment charges. There were no other items measured at fair value on a nonrecurring basis during the sixthree months ended June 30, 2017March 31, 2018 or 2016.2017.

AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)


On February 28, 2018, one of the Company’s tenants in Asia, Aircel Ltd. (“Aircel”), filed for bankruptcy protection with the National Company Law Tribunal of India. The bankruptcy process is expected to take at least several months to complete and the ultimate outcome has yet to be determined. The Company performed an impairment test based on current expectations of the impact of the bankruptcy on projected cash flows for assets related to Aircel. These assets consisted primarily of towers, which are assessed on an individual basis, network location intangibles, which relate directly to towers, and tenant-related intangibles. As a result, an impairment of $40.1 million was taken on the tower and network intangible assets. The Company also fully impaired the tenant-related intangible asset for Aircel, which resulted in an impairment of $107.3 million during the three months ended March 31, 2018. These impairments were recorded in Other operating expenses in the consolidated statements of operations.

In October 2017, one of the Company’s tenants in Asia, Tata Teleservices Limited (“Tata Teleservices”), informed the Department of Telecommunications in India of its intent to exit the wireless telecommunications business and announced plans to transfer its business to another telecommunications provider. The Company considered the recent developments regarding these events, including ongoing negotiations with Tata Teleservices, when updating its impairment test for the Tata Teleservices tenant relationship, which did not result in an impairment since the estimated probability-weighted undiscounted cash flows were in excess of the carrying value of this asset. However, the Company will continue to monitor the status of these developments, as it is possible that the estimated future cash flows may differ from current estimates. Changes in estimated cash flows from Tata Teleservices could impact previously recorded tangible and intangible assets, including amounts originally recorded as tenant-related intangibles, which have a current net book value of $417.0 million as of March 31, 2018.
Fair Value of Financial Instruments—The Company’s financial instruments for which the carrying value reasonably approximates fair value at June 30, 2017March 31, 2018 and December 31, 20162017 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


AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


and maturities. As of June 30, 2017March 31, 2018 and December 31, 2016,2017, the carrying value of long-term obligations, including the current portion, was $19.2$21.4 billion and $18.5$20.2 billion, respectively. As of June 30,March 31, 2018, the fair value of long-term obligations, including the current portion, was $21.4 billion, of which $13.0 billion was measured using Level 1 inputs and $8.4 billion was measured using Level 2 inputs. As of December 31, 2017, the fair value of long-term obligations, including the current portion, was $19.8$20.6 billion, of which $13.0$13.3 billion was measured using Level 1 inputs and $6.8$7.3 billion was measured using Level 2 inputs. As of December 31, 2016, the fair value of long-term obligations, including the current portion, was $18.8 billion, of which $11.8 billion was measured using Level 1 inputs and $7.0 billion was measured using Level 2 inputs.

7.    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 REIT operations. The Company continues to be subject to income taxes on the income of its TRSs 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 positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets.

The change in the income tax benefit (provision) for the three months ended March 31, 2018 was primarily attributable to the tax effect of an increase in impairment charges and a one-time benefit for merger-related activity in the Company’s Asia property segment.
As of June 30, 2017March 31, 2018 and December 31, 2016,2017, the total unrecognized tax benefits that would impact the ETR, if recognized, were approximately $106.2$102.8 million and $102.9$105.8 million, respectively. The amount of unrecognized tax benefits during the three and six months ended June 30, 2017March 31, 2018 includes additions of $2.1 million to the Company’s existing tax positions, reductions of $1.9$2.6 million due to a settlement with authorities and $3.8reductions of $1.7 million respectively, and foreign currency fluctuations of ($0.9 million) and $2.7 million, respectively.related to
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)


positions taken in prior years. 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 20162017 Form 10-K. The impact of the amount of these changes to previously recorded uncertain tax positions could range from zero to $11.5$8.7 million.
The Company recorded the following penalties and income tax-related interest expense during the three and six months ended June 30, 2017 of $1.0 millionMarch 31, 2018 and $2.3 million, respectively, and during the three and six months ended June 30, 2016 of $2.2 million and $5.2 million, respectively. 2017:
 Three Months Ended March 31,
 2018 2017
Penalties and income tax-related interest expense$1.0
 $1.3
As of June 30, 2017March 31, 2018 and December 31, 2016,2017, the total amount of accrued income tax related interest and penalties included in the consolidated balance sheets was $28.1$28.9 million and $24.3$29.0 million, respectively.

During the three months ended June 30, 2017, the Ghana Revenue Authority issued a clarification to its income tax law, which resulted in a benefit to income tax expense of $11.6 million.

8.    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 ten10 years from the date of grant. As of June 30, 2017,March 31, 2018, the Company had the ability to grant stock-based awards with respect to an aggregate of 8.47.6 million shares of common stock under the 2007 Plan. In addition, the Company maintains an employee stock purchase plan (“ESPP”(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


During the three and six months ended June 30,March 31, 2018 and 2017, and 2016, the Company recorded and capitalized the following stock-based compensation expense (in thousands):expense:
Three Months Ended June 30, Six Months Ended June 30,Three Months Ended March 31,
2017 2016 2017 20162018 2017
Stock-based compensation expense$25,738
 $21,907
 $61,960
 $49,986
$42.7
 $36.2
Stock-based compensation expense capitalized as property and equipment$444
 $104
 $970
 $762
$0.5
 $0.5
Stock Options—As of June 30, 2017,March 31, 2018, total unrecognized compensation expense related to unvested stock options was $18.3$10.0 million, which is expected to be recognized over a weighted average period of approximately two years.
The Company’s option activity for the sixthree months ended June 30, 2017March 31, 2018 was as follows:follows (shares disclosed in full amounts):
  Number of Options
Outstanding as of January 1, 20172018 7,269,3765,557,561
Granted 6,534—
Exercised (1,182,551243,118)
Forfeited (21,611—)
Expired —
Outstanding as of June 30, 2017March 31, 2018 6,071,7485,314,443
 
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)


Restricted Stock Units—As of June 30, 2017,March 31, 2018, total unrecognized compensation expense related to unvested RSUs granted under the 2007 Plan was $131.6$166.1 million and is expected to be recognized over a weighted average period of approximately three years.
Performance-Based Restricted Stock Units—During the sixthree months ended June 30,March 31, 2018, 2017 and 2016, the Company’s Compensation Committee granted an aggregate of 131,311 PSUs (the “2018 PSUs”), 154,520 PSUs (the “2017 PSUs”) and 169,340 PSUs (the “2016 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 the 2018 PSUs, the 2017 PSUs and the 2016 PSUs, and for each year in the three-year performance period with respect to PSUs granted to executive officers in 2015 (the “2015 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. In the event of thean executive’s death, disability or qualifying retirement, PSUs will be paid out pro rata in accordance with the terms of the applicable award agreement. PSUs will accrue dividend equivalents prior to vesting, which will be paid out only in respect of shares that actually vest.


AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Restricted Stock Units and Performance-Based Restricted Stock Units—The Company’s RSU and PSU activity for the sixthree months ended June 30, 2017March 31, 2018 was as follows:follows (shares disclosed in full amounts): 
RSUs PSUsRSUs PSUs
Outstanding as of January 1, 2017 (1)1,663,743
 242,757
Outstanding as of January 1, 2018 (1)1,742,725
 444,031
Granted (2)818,539
 177,897
671,618
 131,311
Vested(3)(644,004) —
(644,022) (120,171)
Forfeited(42,668) —
(12,063) —
Outstanding as of June 30, 20171,795,610
 420,654
Outstanding as of March 31, 20181,758,258
 455,171
_______________
(1)PSUs consist of the shares issuable for the 2015 PSUs at the end of the three-year performance cycle based on achievement against the performance metric for the first and second year’s performance periods and the target number of shares issuable at the end of the three-year performance period for the 2017 PSUs and the 2016 PSUs.PSUs, or 154,520 and 169,340 shares, respectively, and the shares issuable at the end of the three-year vesting period for the PSUs granted in 2015 (the “2015 PSUs”), based on achievement against the performance metrics for the the first, second and third year’s performance periods, or 120,171 shares.
(2)PSUs consist of the target number of shares issuable at the end of the three-year performance cycle attributable to the third year’s performance period for the 20152018 PSUs, or 23,377 shares, and the target number131,311 shares.
(3)PSUs consist of shares issuable atvested pursuant to the end of2015 PSUs. There are no additional shares to be earned related to the three-year performance cycle for the 2017 PSUs, or 154,520 shares.2015 PSUs.

During the three and six months ended June 30, 2017,March 31, 2018, the Company recorded $6.0$8.8 million and $11.6 million, respectively, in stock-based compensation expense for equity awards in which the performance goals had been established and were probable of being achieved. The remaining unrecognized compensation expense related to these awards at June 30, 2017March 31, 2018 was $32.5$41.8 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.

9.    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 Viom,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 Teleservices, Limited, IDFC Private Equity Fund III, Macquarie SBI Infrastructure Investments Pte Limited and SBI Macquarie Infrastructure Trust (collectively, the “Remaining Shareholders”). During the three months ended March 31, 2018, pursuant to the terms of the Shareholders Agreement, the Company received regulatory approval to merge its other wholly-owned India subsidiaries into ATC TIPL. As a result, the Company’s controlling interest in ATC TIPL increased from 51% to 63%, which resulted in an increase in the Company’s additional paid-in capital of $28.1 million. Similarly, the noncontrolling interest was reduced from 49% to 37%, and a corresponding adjustment to reduce the
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)


redeemable noncontrolling interest value by $28.1 million was recorded during the three months ended March 31, 2018. In addition, the Company reclassified $78.8 million of previously recorded accumulated other comprehensive loss to additional paid-in capital due to the change in ownership of ATC TIPL.

The Shareholders Agreement also provides for, among other things, put options held by certain of the Remaining Shareholders with put options, which allow the Remaining Shareholdersthem to sell outstanding shares of ATC TIPL to the Company, and the Company with call options, held by the Company, which allow the Companyit 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 requirerequires classification as redeemable noncontrolling interests in the consolidated balance sheet, separate from equity.

Given the provisions governing the put rights, the redeemable noncontrolling interests are recorded outside of permanent equity at their redemption value. The noncontrolling interests become redeemable after the passage of time, and therefore, the Company records the carrying amount of the noncontrolling interests at the greater of (i) the initial carrying amount, increased or decreased for the noncontrolling interests’ share of net income or loss and foreign currency translation adjustments, and (ii) the redemption value. If required, the Company will adjust the redeemable noncontrolling interests to redemption value on each balance sheet date with changes in redemption value recognized as an adjustment to Distributions in excess of earnings. Due to the impact of impairment charges on net income, the Company adjusted certain noncontrolling interests, which are subject to minimum redemption values, by $17.5 million for the three months ended March 31, 2018.

The put options may be exercised, requiring the Company to purchase the Remaining Shareholders’ equity interests, on specified dates beginning April 1, 2018 through March 31, 2021. The price of the put options will be based on the fair market value of the exercising Remaining Shareholder’s interest in the Company’s India operations at the time the option is exercised. Put options held by certain of the Remaining Shareholders are subject to a floor price of 216 INR per share.

The changes in Redeemable noncontrolling interests for the sixthree months ended June 30,March 31, 2018 and 2017 were as follows (in thousands):follows:
  Three Months Ended March 31,
  2018 2017
Balance as of January 1, $1,126.2
 $1,091.3
Net loss attributable to noncontrolling interests (28.1) (12.3)
Adjustment to noncontrolling interest redemption value 17.5
 —
Adjustment to noncontrolling interest due to merger (28.1) —
Foreign currency translation adjustment attributable to noncontrolling interests (22.3) 51.1
Balance as of March 31, $1,065.2
 $1,130.1

10.    EQUITY

Series B Preferred Stock—In March 2015, the Company issued 1,375,000 shares of its 5.50% Mandatory Convertible Preferred Stock, Series B, par value $0.01 per share (the “Series B Preferred Stock”). During the three months ended
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)


Balance as of January 1, 2017 $1,091,220
Net income attributable to noncontrolling interests 8,869
Foreign currency translation adjustment attributable to noncontrolling interests 55,778
Balance as of June 30, 2017 $1,155,867

10.    EQUITY

Series A Preferred Stock—In May 2014, the Company issued 6,000,000 shares of its 5.25% Mandatory Convertible Preferred Stock, Series A, par value $0.01 per share (the “Series A Preferred Stock”). During the three months ended June 30, 2017,March 31, 2018, all outstanding shares of the Series AB Preferred Stock converted at a rate of 0.93378.7420 per share of Series B Preferred Stock, or 0.8742 per depositary share, each representing a 1/10th interest in a share of Series B Preferred Stock, into an aggregate of 5,602,15312,020,064 shares of the Company’s common stock pursuant to the provisions of the Certificate of Designations governing the Series AB Preferred Stock. The Company paid cash in lieu of fractional shares of the Company’s common stock. These payments were recorded as a reduction to Additional paid-in capital.

On MayFebruary 15, 2017,2018, the Company paid the final dividend of $7.9$18.9 million to holders of record of the Series AB Preferred Stock at the close of business on MayFebruary 1, 2017.

Series B Preferred Stock—The Company has 13,749,860 depositary shares, each representing a 1/10th interest in a share of its 5.50% Mandatory Convertible Preferred Stock, Series B, par value $0.01 per share (the “Series B Preferred Stock”) outstanding, after giving effect to the early conversion of 140 depositary shares at the option of the holder at a conversion rate of 0.8687 per depositary share in May 2017. The Company paid cash in lieu of fractional shares of the Company’s common stock. This payment was recorded as a reduction to Additional paid-in capital. The Series B Preferred Stock was issued in March 2015.

Unless converted or redeemed earlier, each share of the Series B Preferred Stock will automatically convert on February 15, 2018, into between 8.6870 and 10.4244 shares of the Company’s common stock, depending on the applicable market value of the Company’s common stock and subject to anti-dilution adjustments. Subject to certain restrictions, at any time prior to February 15, 2018, holders of the Series B Preferred Stock may elect to convert all or a portion of their shares into common stock at the minimum conversion rate then in effect.

Dividends on shares of the Series B Preferred Stock are payable on a cumulative basis when, as and if declared by the Company’s Board of Directors at an annual rate of 5.50% on the liquidation preference of $1,000.00 per share (and, correspondingly, $100.00 per share with respect to the depositary shares) on February 15, May 15, August 15 and November 15 of each year, commencing on May 15, 2015 to, and including, February 15, 2018.

The Company may pay dividends in cash or, subject to certain limitations, in shares of common stock or any combination of cash and shares of common stock. The terms of the Series B Preferred Stock provide that, unless full cumulative dividends have been paid or set aside for payment on all outstanding Series B Preferred Stock for all prior dividend periods, no dividends may be declared or paid on common stock.

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 sixthree months ended June 30, 2017,March 31, 2018, the Company received an aggregate of $82.6$20.0 million in proceeds upon exercises of stock options and sales pursuant to the ESPP.options.

Stock Repurchase Program—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 sixthree months ended June 30, 2017, the Company resumed the 2011 Buyback and repurchased 5,199,938 shares of its common stock thereunder for an aggregate of $641.3 million, including commissions and fees.March 31, 2018, there were no repurchases under either program. As of June 30, 2017,March 31, 2018, the Company had repurchased a total of 11,456,84212,356,054 shares of its common stock under the 2011 Buyback for an aggregate of $1.0$1.2 billion, including commissions and fees.


AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Under the 2011 Buyback Programs, the Company is authorized to purchase shares from time to time through open market purchases, orin privately negotiated transactions at prevailingnot to exceed market prices, and (with respect to such open market purchases) pursuant to plans adopted in accordance with Rule 10b5-1 under the Exchange Act in accordance with securities laws and other legal requirements, and subject to market conditions and other factors. To facilitate repurchases, the Company makes purchases pursuant to trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, which allows the Company to repurchase shares during periods when it otherwise might be prevented from doing so under insider trading laws or because of self-imposed trading blackout periods.

The Company expects to fund any further repurchases of its common stock through a combination of cash on hand, cash generated by operations and borrowings under its credit facilities. Purchases under the 2011 Buyback Programs are subject to the Company having available cash to fund repurchases.

Distributions—During the sixthree months ended June 30, 2017,March 31, 2018, the Company declared or paid the following cash distributions:distributions (per share data reflects actual amounts):
Declaration Date Payment Date Record Date Distribution per share Aggregate Payment Amount (in millions)
Common Stock        
December 14, 2016 January 13, 2017 December 28, 2016 $0.58
 $247.7
March 9, 2017 April 28, 2017 April 12, 2017 $0.62
 $264.3
June 1, 2017 July 14, 2017 June 19, 2017 $0.64
 $274.7
         
Series A Preferred Stock        
January 13, 2017 February 15, 2017 February 1, 2017 $1.3125
 $7.9
April 13, 2017 May 15, 2017 May 1, 2017 $1.3125
 $7.9
         
Series B Preferred Stock        
January 13, 2017 February 15, 2017 February 1, 2017 $13.75
 $18.9
April 13, 2017 May 15, 2017 May 1, 2017 $13.75
 $18.9
Declaration Date Payment Date Record Date Distribution per share Aggregate Payment Amount (1)
Common Stock        
December 6, 2017 January 16, 2018 December 28, 2017 $0.70
 $300.2
March 8, 2018 April 27, 2018 April 11, 2018 $0.75
 $331.2
         
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, 2017,March 31, 2018, the amount accrued for distributions payable related to unvested restricted stock units was $6.6$7.1 million. During the sixthree months ended June 30, 2017,March 31, 2018, the Company paid $2.9$4.1 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)


11.    EARNINGS PER COMMON SHARE

The following table sets forth basic and diluted net income per common share computational data (in(shares in thousands, except per share data)data reflects actual amounts):
 
Three Months Ended June 30, Six Months Ended June 30,Three Months Ended March 31,
2017 2016 2017 20162018 2017
Net income attributable to American Tower Corporation stockholders$367,051
 $187,550
 $683,131
 $462,709
$285.2
 $316.1
Dividends on preferred stock(22,843) (26,782) (49,624) (53,563)(9.4) (26.8)
Net income attributable to American Tower Corporation common stockholders344,208
 160,768
 633,507
 409,146
275.8
 289.3
Basic weighted average common shares outstanding427,298
 424,909
 427,288
 424,484
435,124
 427,279
Dilutive securities3,189
 4,095
 3,156
 4,045
3,396
 2,920
Diluted weighted average common shares outstanding430,487
 429,004
 430,444
 428,529
438,520
 430,199
Basic net income attributable to American Tower Corporation common stockholders per common share$0.81
 $0.38
 $1.48
 $0.96
$0.63
 $0.68
Diluted net income attributable to American Tower Corporation common stockholders per common share$0.80
 $0.37
 $1.47
 $0.95
$0.63
 $0.67

Shares Excluded From Dilutive Effect—The following shares were not included in the computation of diluted earnings per share because the effect would be anti-dilutive (in thousands, on a weighted average basis):

Three Months Ended June 30, Six Months Ended June 30,Three Months Ended March 31,
2017 2016 2017 20162018 2017
Restricted stock—
 —
 —
 1
Restricted stock units118
 159
Stock options5
 1,120
 33
 1,974
—
 30
Preferred stock14,528
 17,444
 16,041
 17,444
5,904
 17,547

12.    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 11,286approximately 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 2,3502,340 towers commencing between


AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


December 2000 and August 2004. Substantially all of the towers are part of the Company’s 2013 securitization transaction.Trust Securitizations. The average term of the lease or sublease for all sites at the inception of the agreement was approximately 27 years, assuming renewals or
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)


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, 2017,March 31, 2018, the Company has purchased an aggregate of 7788 of the subleased towers upon expiration of the applicable agreement. The aggregate purchase option price for the remaining towers leased and subleased is $796.9$851.1 million and will accrete at a rate of 10% per annum through the applicable expiration of the lease or sublease of a site. For all such sites, purchased byAT&T has the Company priorright to June 30, 2020, AT&T will 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. For all such sites purchased by the Company subsequent to June 30, 2020, AT&T has the right to continue to lease the reserved space for successive one-year terms at a rent equal to the lesser of the agreed upon market rate or the then-current monthly fee, which is subject to an annual increase based on changes in the U.S. Consumer Price Index.
ALLTEL Transaction—In December 2000, the Company entered into an agreement with ALLTEL 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. TheDuring the year ended December 31, 2016, the Company exercised the purchase options for approximately 1,523 towers in a single closing, which occurred on December 8, 2016. The Company hasand 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, 2017,March 31, 2018, 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 subleased towers was $10.4 million as of June 30, 2017.March 31, 2018.
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. In certain jurisdictions, taxing authorities may issue preliminary notices or assessments while audits are being conducted. These preliminary notices or 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. The Company evaluates the circumstances of each notification or assessment based on the information available and records a liability for any potential outcome that is probable or more likely than not unfavorable if the liability is also reasonably estimable.
On December 5, 2016, the Company received an income tax assessment of Essar Telecom Infrastructure Private Limited (“ETIPL”) from the India Income Tax Department (the “Tax Department”) for the fiscal year ending 2008 in the amount of 4.75 billion INR ($69.8 million on the date of assessment) related to capital contributions. The Company is challengingchallenged the assessment before India’s tax authorities andthe Office of Commissioner of Income Tax - Appeals, which ruled in the Company’s favor in January 2018. However, the Tax Department may appeal 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.sustained upon appeal. Accordingly, no such liability has been recorded. Additionally, the assessment was made with respect to transactions that took place in the tax year commencing in 2007, prior to the Company’s acquisition of ETIPL. Under the Company’s definitive acquisition agreement of ETIPL, the seller is obligated to indemnify and defend the Company with respect to any tax-related liability that may arise from activities prior to March 31, 2010.
Tenant Leases—The Company’s lease agreements with its tenants vary depending upon the region and the industry of the tenant, and generally have initial terms of ten years with multiple renewal terms at the option of the tenant.






AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Future minimum rental receipts expected from tenants under non-cancellable operating lease agreements in effect at June 30, 2017March 31, 2018 were as follows (in millions)billions):
Remainder of 2017$2,540
20184,897
Remainder of 2018$4
20194,662
5
20204,367
5
20213,898
4
20223
Thereafter13,196
11
Total$33,560
$32
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)


Lease Obligations—The Company leases certain land, office and tower space under operating leases that expire over various terms. Many of the leases contain renewal options with specified increases in lease payments upon exercise of the renewal option. Escalation clauses present in operating leases, excluding those tied to a consumer price index or other inflation-based indices, are recognized on a straight-line basis over the non-cancellable term of the leases.
Future minimum rental payments under non-cancellable operating leases include payments for certain renewal periods at the Company’s option because failure to renew could result in a loss of the applicable communications sites and related revenues from tenant leases, thereby making it reasonably assured that the Company will renew the leases. Such payments at June 30, 2017March 31, 2018 are as follows (in millions)billions):
Remainder of 2017$464
2018882
Remainder of 2018$1
2019847
1
2020802
1
2021758
1
20221
Thereafter6,516
6
Total$10,269
$11
13.    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 three and six months ended June 30, 2017March 31, 2018 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 is treated 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 fair value adjustments to contingent consideration and general administrative costs directly related to the transaction. Integration costs include incremental and non-recurring costs necessary to convert data, retain employees and otherwise enable the Company to operate new businesses or assets efficiently. The Company records acquisition and merger related expenses for business


AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


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,March 31, 2018 and 2017, and 2016, the Company recorded acquisition and merger related expenses for business combinations and non-capitalized asset acquisition costs and integration costs as follows (in thousands):follows:

  Three Months Ended June 30, Six Months Ended June 30,
  2017 2016 2017 2016
Acquisition and merger related expenses $2,397
 $5,735
 $8,082
 $6,720
Integration costs $3,808
 $3,234
 $8,378
 $6,505
The Company also recorded a purchase price refund of $21.5 million during the six months ended June 30, 2017. This refund related to an acquisition in Brazil in 2014 for which the measurement period has closed.
 Three Months Ended March 31,
 2018 2017
Acquisition and merger related expenses$1.4
 $5.7
Integration costs$0.5
 $4.6

2017
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)


2018 Transactions

The estimated aggregate impact of the 2017 acquisitions completed in 2018 on the Company’s revenues and gross margin for the three months ended June 30, 2017 was approximately $18.0 million and $15.2 million, respectively, and for the six months ended June 30, 2017March 31, 2018 was approximately $26.30.9 million and $22.00.6 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.

FPS Towers France—Vodafone Acquisition—OnFebruary 15, 2017, ATC Europe March 31, 2018, the Company acquired 100%10,238 communications sites from Vodafone India Limited and Vodafone Mobile Services Limited (together, “Vodafone”) for an aggregate total purchase price of the outstanding shares of FPS Towers (“FPS”) from Antin Infrastructure Partners and the individuals party to the purchase agreement (the “FPS Acquisition”), for total consideration of 727.2 million Euros38.2 billion INR ($771.2586.9 million at the date of acquisition). FPS owns and operates nearly 2,500 wireless tower sites in France. The Company made a loan to fund 225.0 million Euros ($238.6 million at the date of acquisition) of the total consideration. The remainder of the purchase price of 502.2 million Euros ($532.6 million at the date of acquisition) was funded by the Company and PGGM in proportion to their respective interests in ATC Europe. The Company funded its portion of the purchase price with borrowings under the 2013 Credit Facility and cash on hand. The acquisition is consistent with the Company’s strategy to expand in selected geographic areas. TheThis acquisition was accounted for as a business combination and is subject to post-closing adjustments.an asset acquisition.

Other Acquisitions—During the sixthree months ended June 30, 2017,March 31, 2018, the Company acquired a total of 174338 communications sites in the United States, Brazil, Chile, Germany,Colombia, Mexico, Paraguay and NigeriaPeru for an aggregate purchase price of $101.1$93.2 million. Of the aggregate purchase price, $1.0$1.6 million is reflected in Accounts payable in the consolidated balance sheet as of June 30, 2017.March 31, 2018. These acquisitions were accounted for as asset acquisitions.

The following table summarizes the allocationallocations of the purchase prices for the fiscal year 20172018 acquisitions based upon their estimated fair value at the date of acquisition (in thousands):acquisition:


AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


 EMEA Other Asia  
 FPS Towers France (1)  Vodafone (1) (2) Other (1) (3)
Current assets $31,048
 $4,511
 $16.6
 $1.3
Non-current assets 9,142
 2,022
 9.9
 1.1
Property and equipment 113,981
 30,804
 197.6
 30.1
Intangible assets (2):    
Intangible assets (4):    
Tenant-related intangible assets 400,901
 53,635
 326.1
 42.5
Network location intangible assets 164,441
 12,670
 64.5
 23.5
Other intangible assets 7,954
 —
Current liabilities (29,326) (1,539) (15.8) (0.7)
Deferred tax liability (134,488) —
Other non-current liabilities (16,703) (999) (12.0) (4.6)
Net assets acquired 546,950
 101,104
 586.9
 93.2
Goodwill (3) 224,270
 —
Goodwill —
 —
Fair value of net assets acquired 771,220
 101,104
 586.9
 93.2
Debt assumed —
 —
 —
 —
Purchase Price $771,220
 $101,104
Purchase price $586.9
 $93.2
_______________
(1)Accounted for as a business combination. Amounts represent preliminary purchase price allocation.asset acquisitions.
(2)Tenant-related intangible assetsIncludes $1.3 million in acquisition and network location intangible assets are amortized on a straight-line basis over periodsmerger related expenses that were capitalized as part of up to 20 years.the purchase price.
(3)Primarily results from purchase accounting adjustments, which are not deductible for tax purposes.

2016 Transactions

During the six months ended June 30, 2017, post-closing adjustments impacted the following 2016 acquisitions:

Viom Acquisition—On April 21, 2016, the Company acquired a 51% controlling ownership interest in Viom. Consideration for the acquisition included 76.4 billion INR in cash ($1.1 billion at the date of acquisition), as well as the assumption of approximately 52.3 billion INR ($0.8 billion at the date of the acquisition) of existing debt, which included 1.7 billion INR ($25.1 million at the date of the acquisition) of the Viom Preference Shares.
Other Acquisitions—During the year ended December 31, 2016, the Company acquired a total of 891 communicationsIncludes 35 sites in the United States, Brazil, Chile, Germany, Mexico, Nigeria and South Africa, and a company holding urban telecommunications assets and fiber in Argentina, for an aggregate purchase price of $304.4 million (including contingent consideration of $8.8 million).


AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


The following table summarizes the preliminary and updated allocations of the purchase prices paid and the amounts of assets acquired and liabilities assumed for the fiscal year 2016 acquisitions based upon their estimated fair value at the date of acquisition (in thousands). Balances are reflected in the accompanying consolidated balance sheet as of June 30, 2017.
  Preliminary Allocation (1) Updated Allocation
  Asia Other (2) Asia Other
  Viom  Viom (3) 
Current assets $276,560
 $25,477
 $281,930
 $25,477
Non-current assets 57,645
 2,336
 52,275
 2,336
Property and equipment 701,988
 81,521
 705,849
 81,472
Intangible assets (4):        
     Tenant-related intangible assets 1,369,580
 105,557
 1,369,580
 105,557
     Network location intangible assets 666,364
 83,645
 666,364
 83,645
Current liabilities (195,900) (14,782) (201,142) (14,782)
Deferred tax liability (619,070) (43,756) (619,074) (43,756)
Other non-current liabilities (102,751) (29,472) (101,766) (29,472)
Net assets acquired 2,154,416
 210,526
 2,154,016
 210,477
Goodwill (5) 881,783
 93,856
 882,183
 93,905
Fair value of net assets acquired 3,036,199
 304,382
 3,036,199
 304,382
Debt assumed (786,889) —
 (786,889) —
Redeemable noncontrolling interests (1,100,804) —
 (1,100,804) —
Purchase Price $1,148,506
 $304,382
 $1,148,506
 $304,382
_______________
(1)As reported for the year ended December 31, 2016.
(2)Of the total purchase price, $12.1 million was reflected in Accounts payable in the consolidated balance sheet as of December 31, 2016.
(3)The allocation of the purchase price for the Viom Acquisition was finalized during the six months ended June 30, 2017.Peru held pursuant to long-term capital leases.
(4)Tenant-related intangible assets and network location intangible assets are amortized on a straight-line basis over periods of up to 20 years.
(5)Primarily results from purchase accounting adjustments, which are at least partially deductible for tax purposes.


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 FPS Acquisition2018 acquisitions had occurred on January 1, 20162017 and the acquisitions completed in 20162017 had occurred on January 1, 2015.2016. 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,
  2017 2016 2017 2016
Pro forma revenues $1,663,200
 $1,515,150
 $3,288,907
 $3,027,457
Pro forma net income attributable to American Tower Corporation common stockholders $344,344
 $162,170
 $634,274
 $402,288
Pro forma net income per common share amounts:        
Basic net income attributable to American Tower Corporation common stockholders $0.81
 $0.38
 $1.48
 $0.95
Diluted net income attributable to American Tower Corporation common stockholders $0.80
 $0.38
 $1.47
 $0.94


AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


 Three Months Ended March 31,
 2018 2017
Pro forma revenues$1,780.3
 $1,690.0
Pro forma net income attributable to American Tower Corporation common stockholders$275.8
 $284.9
Pro forma net income per common share amounts:   
Basic net income attributable to American Tower Corporation common stockholders$0.63
 $0.67
Diluted net income attributable to American Tower Corporation common stockholders$0.63
 $0.66

Other Signed Acquisitions

Paraguay—Idea Cellular Limited—On April 25,November 13, 2017, the Company entered into a definitivean agreement with Idea Cellular Limited (“Idea”) and Idea’s subsidiary, Idea Cellular Infrastructure Services Limited (“ICISL”), to acquire up to100% of the outstanding shares of ICISL, a telecommunications company that owns and operates approximately 1,4009,900 communications sites in Paraguay from Millicom International Cellular’s subsidiary, Tigo Paraguay,India, for a totalcash consideration of approximately 700.040 billion Paraguayan Guaraní (approximately $125.0INR ($611.4 million at the date of signing), subject to certain adjustments (the “Idea Transaction”). Consummation of the Idea Transaction is subject to certain conditions, including regulatory approval. The transactionIdea Transaction is expected to close duringin the second halfquarter of 2017, subject to customary closing conditions. 2018.

Airtel Tanzania—On March 17, 2016, the Company entered into a definitive agreement with Bharti Airtel Limited, through its subsidiary company Airtel Tanzania Limited (“Airtel Tanzania”), pursuant to which the Company could, subject to a number of conditions, acquire certain of Airtel Tanzania’s communications sites in Tanzania. In light of recent legislation in Tanzania, the Company did not extend the agreement beyond the expiration date therein. Accordingly, on March 17, 2017, the agreement expired pursuant to its terms and is no longer in effect. 

14.    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, 2017,March 31, 2018, 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, Nigeria, South Africa and Uganda; and
Latin America: property operations in Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico, Paraguay and Peru.
The Company has applied the aggregation criteria to operations within the EMEA and Latin America property operating segments on a basis that is consistent with management’s review of information and performance evaluations of these regions.
The Company’s services segment offers tower-related services in the United States, including site acquisition, zoning and permittingAZP 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 2016 Form 10-K.1. Among other factors, in evaluating financial performance in each business segment, management uses segment gross margin and
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions, unless otherwise noted)


segment operating profit. The Company defines segment gross margin as segment revenue less segment operating expenses excluding stock-based compensation expense recorded in costs of operations; Depreciation, amortization and accretion; Selling, general, administrative and development expense; and Other operating expenses. The Company defines segment operating profit as segment gross margin less Selling, general, administrative and development expense attributable to the segment, excluding stock-based compensation expense and corporate expenses. For reporting purposes, the Latin America property segment gross margin and segment operating profit also include Interest income, TV Azteca, net. These measures of segment gross margin and segment operating profit are also before Interest income, Interest expense, Gain (loss) on retirement of long-term obligations, Other income (expense), Net income (loss) attributable to noncontrolling interests and Income tax benefit (provision). The categories of expenses indicated above, such as depreciation, have been excluded from segment operating performance as they are not considered in the review of information or the evaluation of results by management. There are no significant revenues resulting from transactions between the Company’s operating segments. All intercompany transactions are eliminated to reconcile segment results and assets to the consolidated statements of operations and consolidated balance sheets.

Summarized financial information concerning the Company’s reportable segments for the three and six months ended June 30,March 31, 2018 and 2017 and 2016 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, 2017 U.S. Asia EMEA Latin America 
  (in thousands)
Segment revenues $897,296
 $294,556
 $159,628
 $286,695
 $1,638,175
 $24,259
   $1,662,434
Segment operating expenses (1) 183,625
 167,993
 59,069
 95,902
 506,589
 9,748
   516,337
Interest income, TV Azteca, net —
 —
 —
 2,770
 2,770
 —
   2,770
Segment gross margin 713,671
 126,563
 100,559
 193,563
 1,134,356
 14,511
   1,148,867
Segment selling, general, administrative and development expense (1) 36,223
 16,571
 17,949
 19,482
 90,225
 3,422
   93,647
Segment operating profit $677,448
 $109,992
 $82,610
 $174,081
 $1,044,131
 $11,089
   $1,055,220
Stock-based compensation expense             $25,738
 25,738
Other selling, general, administrative and development expense             34,609
 34,609
Depreciation, amortization and accretion             396,355
 396,355
Other expense (2)             186,048
 186,048
Income from continuing operations before income taxes               $412,470
Total assets $18,717,076
 $4,808,551
 $3,189,403
 $5,100,443
 $31,815,473
 $43,366
 $279,371
 $32,138,210
_______________
(1)Segment operating expenses and segment selling, general, administrative and development expenses exclude stock-based compensation expense of $0.8 million and $24.9 million, respectively.
(2)Primarily includes interest expense.


AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


  Property
Total 
Property
 

Services
 Other Total
Three Months Ended June 30, 2016 U.S. Asia EMEA Latin America 
  (in thousands)
Segment revenues $829,680
 $224,611
 $134,762
 $237,139
 $1,426,192
 $16,035
   $1,442,227
Segment operating expenses (1) 182,376
 127,855
 58,462
 83,486
 452,179
 6,885
   459,064
Interest income, TV Azteca, net —
 —
 —
 2,748
 2,748
 —
   2,748
Segment gross margin 647,304
 96,756
 76,300
 156,401
 976,761
 9,150
   985,911
Segment selling, general, administrative and development expense (1) 34,721
 14,770
 16,685
 15,031
 81,207
 3,346
   84,553
Segment operating profit $612,583
 $81,986
 $59,615
 $141,370
 $895,554
 $5,804
   $901,358
Stock-based compensation expense             $21,907
 21,907
Other selling, general, administrative and development expense             32,421
 32,421
Depreciation, amortization and accretion             397,765
 397,765
Other expense (2)             213,291
 213,291
Income from continuing operations before income taxes               $235,974
Total assets $18,949,936
 $4,557,692
 $2,025,767
 $4,929,052
 $30,462,447
 $62,766
 $214,985
 $30,740,198
_______________
(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.
 Property
Total 
Property
 

Services
 Other Total Property
Total 
Property
 

Services
 Other Total
Six Months Ended June 30, 2017 U.S. Asia EMEA Latin America 
 (in thousands)
Segment revenues $1,789,180
 $570,087
 $310,035
 $562,937
 $3,232,239
 $46,433
   $3,278,672
Three Months Ended March 31, 2018 U.S. Asia EMEA Latin America 
Total 
Property
 

Services
 Other Total
Total segment revenues $931.4
 $273.0
 $174.2
 $331.8
 
Segment operating expenses (1) 364,960
 317,394
 120,564
 189,183
 992,101
 16,066
   1,008,167
 186.3
 157.9
 59.1
 103.4
 506.7
 12.2
   518.9
Interest income, TV Azteca, net —
 —
 —
 5,470
 5,470
 —
   5,470
 —
 —
 —
 2.7
 2.7
 —
   2.7
Segment gross margin 1,424,220
 252,693
 189,471
 379,224
 2,245,608
 30,367
   2,275,975
 745.1
 115.1
 115.1
 231.1
 1,206.4
 19.2
   1,225.6
Segment selling, general, administrative and development expense (1) 70,871
 37,066
 34,402
 38,043
 180,382
 6,593
   186,975
 35.4
 44.2
 16.8
 24.6
 121.0
 3.5
   124.5
Segment operating profit $1,353,349
 $215,627
 $155,069
 $341,181
 $2,065,226
 $23,774
   $2,089,000
 $709.7
 $70.9
 $98.3
 $206.5
 $1,085.4
 $15.7
   $1,101.1
Stock-based compensation expense             $61,960
 61,960
             $42.7
 42.7
Other selling, general, administrative and development expense             70,733
 70,733
             38.7
 38.7
Depreciation, amortization and accretion             817,495
 817,495
             446.3
 446.3
Other expense (2)             392,169
 392,169
             324.2
 324.2
Income from continuing operations before income taxes               $746,643
               $249.2
Total assets $18,894.7
 $5,796.8
 $3,343.4
 $6,084.1
 $34,119.0
 $47.0
 $206.7
 $34,372.7
_______________
(1)Segment operating expenses and segment selling, general, administrative and development expenses exclude stock-based compensation expense of $1.7$1.0 million and $60.2$41.7 million, respectively.
(2)Primarily includes interest expense.expense and $147.4 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 Property 
Total 
Property
 

Services
 Other Total
Six Months Ended June 30, 2016 U.S. Asia EMEA Latin America 
 (in thousands)
Three Months Ended March 31, 2017 U.S. Asia EMEA Latin America 
Total 
Property
 

Services
 Other Total
Segment revenues $1,681,424
 $287,827
 $264,402
 $460,190
 $2,693,843
 $37,431
   $2,731,274
 $891.9
 $275.5
 $150.4
 $276.3
 
Segment operating expenses (1) 360,098
 160,935
 114,121
 158,808
 793,962
 15,889
   809,851
 181.4
 149.4
 61.5
 93.2
 485.5
 6.3
   491.8
Interest income, TV Azteca, net —
 —
 —
 5,464
 5,464
 —
   5,464
 —
 —
 —
 2.7
 2.7
 —
   2.7
Segment gross margin 1,321,326
 126,892
 150,281
 306,846
 1,905,345
 21,542
 
 1,926,887
 710.5
 126.1
 88.9
 185.8
 1,111.3
 15.8
 
 1,127.1
Segment selling, general, administrative and development expense (1) 72,007
 21,346
 32,837
 29,615
 155,805
 6,262
 
 162,067
 34.6
 20.5
 16.5
 18.6
 90.2
 3.1
 
 93.3
Segment operating profit $1,249,319
 $105,546
 $117,444
 $277,231
 $1,749,540
 $15,280
   $1,764,820
 $675.9
 $105.6
 $72.4
 $167.2
 $1,021.1
 $12.7
   $1,033.8
Stock-based compensation expense             $49,986
 49,986
             $36.2
 36.2
Other selling, general, administrative and development expense             62,801
 62,801
             36.2
 36.2
Depreciation, amortization and accretion             739,399
 739,399
             421.1
 421.1
Other expense (2)             366,229
 366,229
             206.1
 206.1
Income from continuing operations before income taxes               $546,405
               $334.2
Total assets $18,768.4
 $4,765.9
 $3,054.5
 $5,189.3
 $31,778.1
 $49.2
 $230.1
 $32,057.4
_______________
(1)Segment operating expenses and segment selling, general, administrative and development expenses exclude stock-based compensation expense of $1.3$0.9 million and $48.7$35.3 million, respectively.
(2)Primarily includes interest expense.
15.    SUBSEQUENT EVENTS
Kenya—On April 3, 2018, the Company, through its recently formed Kenyan subsidiary, entered into a definitive agreement with Telkom Kenya Limited to acquire up to 723 communications sites in Kenya. The transaction is expected to close during the second half of 2018, subject to customary closing conditions, including the satisfaction of regulatory approvals.

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Quarterly Report on Form 10-Q contains forward-looking statements relating to our goals, beliefs, plans or current expectations and other statements that are not of historical facts. For example, when we use words such as “project,” “believe,” “anticipate,” “expect,” “forecast,” “estimate,” “intend,” “should,” “would,” “could,” “may” or other words that convey uncertainty of future events or outcomes, we are making forward-looking statements. Certain important factors may cause actual results to differ materially from those indicated by our forward-looking statements, including those set forth under the caption “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 20162017 (the “2016“2017 Form 10-K”). Forward-looking statements represent management’s current expectations and are inherently uncertain. We do not undertake any obligation to update forward-looking statements made by us.

The discussion and analysis of our financial condition and results of operations that follow are based upon our consolidated and condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates and such differences could be material to the financial statements. This discussion should be read in conjunction with our consolidated and condensed consolidated financial statements herein and the accompanying notes thereto, information set forth under the caption “Critical Accounting Policies and Estimates” in the 20162017 Form 10-K, and in particular, the information set forth therein under Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Overview

We are one of the largest global real estate investment trusts and a leading independent owner, operator and developer of multitenant communications real estate. Our primary business is the leasing of space on communications sites to wireless service providers, radio and television broadcast companies, wireless data providers, government agencies and municipalities and tenants in a number of other industries. In addition to the communications sites in our portfolio, we manage rooftop and tower sites for property owners under various contractual arrangements. We also hold other telecommunications infrastructure, fiber and property interests that we lease primarily to communications service providers and third-party tower operators. We refer to this business as our property operations, which accounted for 99%98% of our total revenues for the sixthree months ended June 30, 2017March 31, 2018 and includes our U.S. property segment, Asia property segment, Europe, Middle East and Africa (“EMEA”) property segment and Latin America property segment. On February 15, 2017, we expanded into a new market by acquiring FPS Towers in France through our European joint venture (the “FPS Acquisition”).

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


The following table details the number of communications sites, excluding managed sites, that we owned or operated as of June 30, 2017:March 31, 2018: 
 
Number of
Owned Towers
 
Number of
Operated 
Towers (1)
 Number of
Owned DAS Sites		 
Number of
Owned Towers
 
Number of
Operated 
Towers (1)
 Number of
Owned DAS Sites
U.S. 23,122
 16,677
 349
 24,295
 15,987
 379
Asia:            
India 57,772
 —
 318
 67,071
 —
 342
EMEA:            
France 2,472
 —
 —
 2,170
 307
 9
Germany 2,208
 —
 —
 2,208
 —
 —
Ghana 2,165
 —
 21
 2,181
 —
 23
Nigeria 4,748
 —
 —
 4,757
 —
 —
South Africa(2) 2,438
 —
 —
 2,533
 —
 —
Uganda 1,425
 

 

 1,462
 —
 —
EMEA total 15,456
 —
 21
 15,311
 307
 32
Latin America (2):      
Latin America:      
Argentina (3) 9
 —
 1
Brazil 16,411
 2,269
 69
 16,531
 2,257
 84
Chile 1,281
 —
 8
 1,295
 —
 11
Colombia 2,995
 777
 1
 3,819
 777
 1
Costa Rica 488
 —
 2
 492
 —
 2
Mexico 8,720
 199
 69
Mexico (4) 8,932
 199
 78
Paraguay 957
 —
 —
Peru 661
 —
 —
 676
 162
 —
Latin America total 30,556
 3,245
 149
 32,711
 3,395
 177
_______________
(1)Approximately 97%98% of the operated towers are held pursuant to long-term capital leases, including those subject to purchase options.
(2)In South Africa, we also own fiber.
(3)In Argentina, we also own or operate urban telecommunications assets, fiber and the rights to utilize certain existing utility infrastructure for future telecommunications equipment installation.
(4)In Mexico, we also own or operate urban telecommunications assets, including fiber, concrete poles and other infrastructure.
    
We operate in five reportable segments: U.S. property, Asia property, EMEA property, Latin America property and services. In evaluating operating performance in each business segment, management uses, among other factors, segment gross margin and segment operating profit (see note 14 to our consolidated and condensed consolidated financial statements included in this Quarterly Report on Form 10-Q).
In the section that follows, we provide information regarding management’s expectations of long-term drivers of demand for our communications sites, as well as our current results of operations, financial position and sources and uses of liquidity. In addition, we highlight key trends, which management believes provide valuable insight into our operating and financial resource allocation decisions.

Revenue Growth. The primary factors affecting the revenue growth in our property segments are:

•Growth in tenant billings, including:
New revenue attributable to leases in place on day one on sites acquired or constructed since the beginning of the prior-year period;
New revenue attributable to leasing additional space on our sites (“colocations”) and lease amendments; and
Contractual rent escalations on existing tenant leases, net of churn (as defined below).


Revenue growth from other items, including additional tenant payments to cover costs, such as ground rent or power and fuel costs, (“pass-through”) included in certain tenant leases (“pass-through”), straight-line revenue and decommissioning.



Due to our diversified communications site portfolio, our tenant lease rates vary considerably depending upon numerous factors, including, but not limited to, tower location, amount, type and position of tenant equipment on the tower, ground space required by the tenant and remaining tower capacity.capacity and tower location. We measure the remaining tower capacity by assessing several factors, including tower height, tower type, environmental conditions, existing equipment on the tower and zoning and permitting regulations in effect in the jurisdiction where the tower is located. In many instances, tower capacity can be increased with relatively modest tower augmentation capital expenditures.

In general,most of our markets, our tenant leases with wireless carriers have an initial non-cancellable term of at least ten years, with multiple renewal terms. Accordingly, nearly allthe vast majority of the revenue generated by our property operations during the three and six months ended June 30, 2017March 31, 2018 was recurring revenue that we should continue to receive in future periods. Based upon foreign currency exchange rates and the tenant leases in place as of June 30, 2017,March 31, 2018, we expect to generate nearly $34over $32 billion of non-cancellable tenant lease revenue over future periods, before the impact of straight-line lease accounting. Most of our tenant leases have provisions that periodically increase the rent due under the lease, typically based on an annual fixed escalation (averaging approximately 3% in the United States) or an inflationary index in our international markets, or a combination of both. In addition, certain of our tenant leases provide for pass-through revenue.additional revenue primarily to cover costs, such as ground rent or power and fuel costs.

The revenues generated by our property operations may be affected by cancellations of existing tenant leases. As discussed above, most of our tenant leases with wireless carriers and broadcasters are multiyear contracts, which typically are non-cancellable; however, in some instances, a lease may be cancelled upon the payment of a termination fee.

Revenue lost from either cancellations or the non-renewal of leases or rent renegotiations, which we refer to as churn, historically has not had a material adverse effect on the revenues generated by our property operations. We define churn asThis was again the case during the three months ended March 31, 2018, in which loss of tenant billings lost when afrom tenant cancelslease cancellations, non-renewal or does not renew its lease or, in limited circumstances, when the lease rates on existing leases are reduced. During the six months ended June 30, 2017, churnrenegotiations represented approximately 2%3% of our tenant billings.

We do anticipate an increase in revenue lost from cancellations or non-renewals in 2018 primarily due to carrier consolidation-driven churn in India, which is likely to result in a higher impact on our revenues, including tenant billings, as compared to the historical average, particularly in our Asia property segment. We also expect this churn will compress our gross margin and operating profit for the duration of the carrier consolidation process, particularly in our Asia property segment, although we expect this to be partially offset by lower expenses due to reduced tenancy on existing sites. In addition, we expect to periodically evaluate the carrying value of our Indian assets, which may result in the realization of impairment expense or other similar charges. For more information, please see Item 7 of the 2017 Form 10-K under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates.”

For the three months ended March 31, 2018, carrier consolidation-driven churn in India negatively impacted our consolidated property revenue by $19.8 million, including approximately $4.3 million in pass-through revenue, and negatively impacted our gross margin and operating profit by $14.4 million. We also recorded an impairment charge of approximately $147.4 million as a result of Aircel Ltd.’s (“Aircel”) filing for bankruptcy protection in February 2018. For the full year ending December 31, 2018, we expect carrier consolidation-driven churn in India to negatively impact our consolidated property revenue by approximately $190.0 million, including $70.0 million in pass-through revenue, and our operating profit by approximately $115.0 million.

Demand Drivers. We continue to believe that our site leasing revenue is likely to increase due to the growing use of wireless services globally and our ability to meet the corresponding incremental demand for our communications real estate. By adding new tenants and new equipment for existing tenants on our sites, we are able to increase these sites’ utilization and profitability. We believe the majority of our site leasing activity will continue to come from wireless service providers, with tenants in a number of other industries contributing incremental leasing demand. Our site portfolio and our established tenant base provide us with new business opportunities, which have historically resulted in


consistent and predictable organic revenue growth as wireless carriers seek to increase the coverage and capacity of their existing networks, while also deploying next generation wireless technologies. In addition, we intend to continue to supplement our organic growth by selectively developing or acquiring new sites in our existing and new markets where we can achieve our risk-adjusted return on investment objectives.

Consistent with our strategy to increase the utilization and return on investment offrom our sites, our objective is to add new tenants and new equipment for existing tenants through colocation and lease amendments. Our ability to lease additional space on our sites is primarily a function of the rate at which wireless carriers and other tenants deploy capital to improve and expand their wireless networks. This rate, in turn, is influenced by the growth of wireless services, the penetration of advanced wireless devices, the level of emphasis on network quality and capacity in carrier competition, the financial performance of our tenants and their access to capital and general economic conditions.

Based on industry research and projections, we expect that a number of key industry trends will result in incremental revenue opportunities for us:

In less advanced wireless markets where initial voice and data networks are still being deployed, we expect these deployments to drive demand for our tower space as carriers seek to expand their footprints and increase the scope and density of their networks. We have established operations in many of these markets at the early stages of wireless development, which we believe will enable us to meaningfully participate in these deployments over the long term.
Subscribers’ use of wirelessmobile data continues to grow rapidly given increasing smartphone and other advanced device penetration, the proliferation of bandwidth-intensive applications on these devices and the continuing


evolution of the mobile ecosystem. We believe carriers will be compelled to deploy additional equipment on existing networks while also rolling out more advanced wireless networks to address coverage and capacity needs resulting from this increasing wirelessmobile data usage.
The deployment of advanced wirelessmobile technology across existing wireless networks will provide higher speed data services and further enable fixed broadband substitution. As a result, we expect that our tenants will continue deploying additional equipment across their existing networks.
Wireless service providers compete based on the quality of their existing wireless networks, which is driven by capacity and coverage. To maintain or improve their network performance as overall network usage increases, our tenants continue deploying additional equipment across their existing sites while also adding new cell sites. We anticipate increasing network densification over the next several years, as existing network infrastructure is anticipated to be insufficient to account for rapidly increasing levels of wireless data usage.
Wireless service providers continue to acquire additional spectrum, and as a result are expected to add additional sites and equipment to their networks as they seek to optimize their network configuration and utilize additional spectrum.
Next generation technologies centered on wireless connections have the potential to provide incremental revenue opportunities for us. These technologies may include autonomous vehicle networks and a number of other internet-of-things, or IoT, applications.applications, as well as other potential use cases for wireless services.

As part of our international expansion initiatives, we have targeted markets in various stages of network development to diversify our international exposure and position us to benefit from a number of different wireless technology deployments over the long term. In addition, we have focused on building relationships with large multinational carriers such as Bharti Airtel Limited, Telefónica S.A. and Vodafone Group PLC.PLC, among others. We believe that consistent carrier network investments in their networks across our international markets position us to generate meaningful organic revenue growth going forward.

In emerging markets, such as Ghana, India, Nigeria and Uganda, wireless networks tend to be significantly less advanced than those in the United States, and initial voice networks continue to be deployed in underdeveloped areas. A majority of consumers in these markets still utilize basic wireless services, predominantly on feature phones, while advanced device penetration remains low.

In more developed urban locations within these markets, early-stage data network


deployments are underway. Carriers are focused on completing voice network build-outs while also investing in initial data networks as wirelessmobile data usage and smartphone penetration within their customer bases begin to accelerate.

In India, the ongoing transition from second generation (2G) technology to fourth generation (4G) technology has included and is expected to continue to include a period of carrier consolidation over the next several years, whereby the number of carriers operating in the marketplace will be reduced through mergers, acquisitions and select carrier exits from the marketplace. Over the long term, this consolidation process is expected to result in a more favorable structural environment for both the wireless carriers as well as communications infrastructure providers. In the shorter term, as discussed above, we expect the consolidation process to continue to result in elevated levels of churn within our India business as merging carriers rationalize redundant legacy equipment installations and as select carriers exit the marketplace.

In markets with rapidly evolving network technology, such as South Africa and most of the countries in Latin America where we do business, initial voice networks, for the most part, have already been built out, and carriers are focused on third generation (3G) and fourth generation (4G)4G network build outs. Consumers in these regions are increasingly adopting smartphones and other advanced devices and, as a result, the usage of bandwidth-intensive mobile applications is growing materially. Recent spectrum auctions in these rapidly evolving markets have allowed incumbent carriers to accelerate their data network deployments and have also enabled new entrants to begin initial investments in data networks. Smartphone penetration and wireless data usage in these markets are growingadvancing rapidly, which typically requires that carriers continue to invest in their networks in order to maintain and augment their quality of service.

Finally, in markets with more mature network technology, such as Germany and France, carriers are focused on deploying 4G data networks to account for rapidly increasing wireless data usage among their customer base. With higher smartphone and advanced device penetration and significantly higher per capita data usage, carrier investment in networks is focused on 4G coverage and capacity.

We believe that the network technology migration we have seen in the United States, which has led to significantly denser networks and meaningful new business commencements for us over a number of years, will ultimately be replicated in our less advanced international markets. As a result, we expect to be able to leverage our extensive international portfolio of approximately 107,515119,345 communications sites and the relationships we have built with our carrier tenants to drive sustainable, long-term growth.



We have master lease agreements with certain of our tenants that provide for consistent, long-term revenue and reduce the likelihood of churn. Certain of those master lease agreements are holistic in nature and further build and augment strong strategic partnerships with our tenants and have significantly reduced colocation cycle times, thereby providing our tenants with the ability to rapidly and efficiently deploy equipment on our sites.

Property Operations Expenses. Direct operating expenses incurred by our property segments include direct site level expenses and consist primarily of ground rent and power and fuel costs, some or all of which may be passed through to our tenants, as well as property taxes, repairs and maintenance. These segment direct operating expenses exclude all segment and corporate selling, general, administrative and development expenses, which are aggregated into one line item entitled Selling, general, administrative and development expense in our consolidated statements of operations. In general, our property segments’ selling, general, administrative and development expenses do not significantly increase as a result of adding incremental tenants to our sites and typically increase only modestly year-over-year. As a result, leasing additional space to new tenants on our sites provides significant incremental cash flow. We may, however, incur additional segment selling, general, administrative and development expenses as we increase our presence in our existing markets or expand into new markets. Our profit margin growth is therefore positively impacted by the addition of new tenants to our sites but can be temporarily diluted by our development activities.

Services Segment Revenue Growth. As we continue to focus on growing our property operations, we anticipate that our services revenue will continue to represent a small percentage of our total revenues.



Non-GAAP Financial Measures

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

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

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

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

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

Adjusted EBITDA, NAREITNareit FFO (common stockholders), Consolidated AFFO and AFFO (common stockholders) are not intended to replace net income or any other performance measures determined in accordance with GAAP. None


of Adjusted EBITDA, NAREITNareit FFO (common stockholders), Consolidated AFFO or AFFO (common stockholders) represents cash flows from operating activities in accordance with GAAP and, therefore, these measures should not be considered indicative of cash flows from operating activities, as a measure of liquidity or a measure of funds available to fund our cash needs, including our ability to make cash distributions. Rather, Adjusted EBITDA, NAREITNareit FFO (common stockholders), Consolidated AFFO and AFFO (common stockholders) are presented as we believe each is a useful indicator of our current operating performance. We believe that these metrics are useful to an investor in evaluating our operating performance because (1) each is a key measure used by our management team for decision making purposes and for evaluating our operating segments’ performance; (2) Adjusted EBITDA is a component underlying our credit ratings; (3) Adjusted EBITDA is widely used in the telecommunications real estate sector to measure operating performance as depreciation, amortization and accretion may vary significantly among companies depending upon accounting methods and useful lives, particularly where acquisitions and non-operating factors are involved; (4) Consolidated AFFO is widely used in the telecommunications real estate sector to adjust NAREITNareit FFO (common stockholders) for items that may otherwise cause material fluctuations in NAREITNareit FFO (common stockholders) growth from period to period that would not be representative of the underlying performance of property assets in those periods; (5) each provides investors with a meaningful measure for evaluating our period-to-period operating performance by eliminating items that are not operational in nature; and (6) each provides investors with a measure for comparing our results of operations to those of other companies, particularly those in our industry.
 
Our measurement of Adjusted EBITDA, NAREITNareit FFO (common stockholders), Consolidated AFFO and AFFO (common stockholders) may not, however, be fully comparable to similarly titled measures used by other companies.


Reconciliations of Adjusted EBITDA, NAREITNareit FFO (common stockholders), Consolidated AFFO and AFFO (common stockholders) to net income, the most directly comparable GAAP measure, have been included below.



Results of Operations
Three and Six Months Ended June 30, 2017March 31, 2018 and 20162017
(in thousands,millions, except percentages)

We are now disclosing our results in millions rather than thousands and, as a result, certain rounding adjustments have been made to prior-period amounts.

Revenue
 Three Months Ended June 30, Percent Increase (Decrease) Six Months Ended June 30,Percent Increase (Decrease)
 2017 2016  2017 2016 
Property           
U.S.$897,296
 $829,680
 8% $1,789,180
 $1,681,424
 6%
Asia294,556
 224,611
 31
 570,087
 287,827
 98
EMEA159,628
 134,762
 18
 310,035
 264,402
 17
Latin America286,695
 237,139
 21
 562,937
 460,190
 22
Total property1,638,175
 1,426,192
 15
 3,232,239
 2,693,843
 20
Services24,259
 16,035
 51
 46,433
 37,431
 24
Total revenues$1,662,434
 $1,442,227
 15% $3,278,672
 $2,731,274
 20%

Three Months Ended June 30, 2017
 Three Months Ended March 31,Percent Increase (Decrease)
 2018 2017 
Property     
U.S.$931.4
 $891.9
 4 %
Asia273.0
 275.5
 (1)
EMEA174.2
 150.4
 16
Latin America331.8
 276.3
 20
Total property1,710.4
 1,594.1
 7
Services31.4
 22.1
 42
Total revenues$1,741.8
 $1,616.2
 8 %

U.S. property segment revenue growth of $67.6$39.5 million was attributable to:
Tenant billings growth of $50.2$58.9 million, which was driven by:
$38.437.6 million due to colocations and amendments;
$10.515.3 million from contractual escalations, net of churn; and
$1.67.3 million generated from newly acquired or constructed sites; and
APartially offset by a decrease of $0.3$1.3 million from other tenant billings; and
$17.4A decrease of $19.4 million ofin other revenue growth, primarily due to a $15.6$25.3 million impact of straight-line accounting.accounting, partially offset by a $5.9 million increase in other revenue.

Asia property segment revenue decrease of $2.5 million was attributable to:
Tenant billings decrease of $6.3 million, which was driven by:
A decrease of $19.6 million resulting from churn in excess of contractual escalations, including $14.3 million due to carrier consolidation-driven churn;
Partially offset by:
▪Growth of $11.6 million due to colocations and amendments; and
▪Growth of $1.7 million generated from newly acquired or constructed sites;
A decrease of $3.7 million in other revenue primarily due to an increase of $3.0 million in revenue reserves; and
A decrease in pass-through revenue of $4.6 million.

Segment revenue decrease was partially offset by an increase of $12.1 million attributable to the impact of foreign currency translation related to fluctuations in Indian Rupees.

EMEA property segment revenue growth of $69.9$23.8 million was attributable to:
Tenant billings growth of $41.8$14.0 million, which was driven by:
$28.65.6 million generated from newly acquired or constructed sites, primarily due to the acquisition of Viom Networks Limited (“Viom”)FPS Towers in IndiaFrance through our European joint venture (the “Viom“FPS Acquisition”);
$15.34.3 million from contractual escalations, net of churn;
$3.8 million due to colocations and amendments; and
A decrease$0.3 million from other tenant billings;


$6.5 million of $2.1 million resulting from churnother revenue growth;
An increase in excesspass-through revenue of contractual escalations;
Pass-through revenue growth of $24.6 million, primarily due to the Viom Acquisition;$0.7 million; and
A decrease of $6.8$1.3 million, in other revenue partially dueattributable to an increase of $3.2 million in revenue reserves, partially offset by a $0.7 millionthe impact of straight-line accounting.

Segment revenue also increased by $10.3$3.9 million attributable to the positive impact of foreign currency translation, which included, among others, $4.7 million related to fluctuations in Indian Rupees (“INR”).the Euro and $3.5 million related to fluctuations in South African Rand, partially offset by a decrease of $3.7 million related to fluctuations in Nigerian Naira.

EMEALatin America property segment revenue growth of $24.9$55.5 million was attributable to:
Tenant billings growth of $25.4$29.0 million, which was driven by:
$16.611.9 million due to colocations and amendments;
$9.0 million from contractual escalations, net of churn;
$6.4 million generated from newly acquired or constructed sites; and
$4.8 million due to colocations and amendments;
$4.5 million from contractual escalations, net of churn; and
A decrease of $0.51.7 million from other tenant billings; and
Pass-through revenue growth of $14.0 million.$7.3 million; and


An increase of $14.9 million in other revenue, due in part to $15.3 million from our newly acquired fiber business and a $6.0 million reduction in revenue reserves from a settlement related to the judicial reorganization of a tenant in Brazil, partially offset by the impact of straight-line accounting.

Segment revenue growth was partially offsetalso increased by a decrease of $14.5$4.3 million attributable to the impact of foreign currency translation, which included, among others, $12.8 million related to fluctuations in Nigerian Naira (“NGN”) and $3.7 million related to fluctuations in Ghanaian Cedi (“GHS”), and was partially offset by an increase of $3.3 million related to fluctuations in South African Rand (“ZAR”).

Latin America property segment revenue growth of $49.6 million was attributable to:
Tenant billings growth of $22.9 million, which was driven by:
$9.4 million from contractual escalations, net of churn;
$8.9 million due to colocations and amendments;
$4.1 million generated from newly acquired or constructed sites; and
$0.5 million from other tenant billings;
Pass-through revenue growth of $5.7 million; and
$8.5 million of other revenue growth, primarily due to the impact of a $7.0 million reduction in revenue in the prior-year period resulting from a judicial reorganization of a tenant in Brazil.    

Segment revenue also increased by $12.5 million attributable to the impact of foreign currency translation, which included, among others, $14.0 million related to fluctuations in Brazilian Real (“BRL”), which was partially offset by a decrease of $2.3$8.6 million related to fluctuations in Mexican Peso, (“MXN”).partially offset by a decrease of $4.6 million related to fluctuations in Brazilian Real.

The increase in services segment revenue of $8.2 million was primarily attributable to an increase in site acquisition projects.

Six Months Ended June 30, 2017
U.S. property segment revenue growth of $107.8 million was attributable to:
Tenant billings growth of $101.3 million, which was driven by:
$78.2 million due to colocations and amendments;
$18.7 million from contractual escalations, net of churn;
$2.6 million generated from newly acquired or constructed sites; and
$1.8 million from other tenant billings; and
$6.5 million of other revenue growth, primarily due to a $34.7 million impact of straight-line accounting, partially offset by a $28.3 million net decrease in other revenue, primarily due to the absence of $31.2 million in decommissioning revenue recognized in the prior year.

Asia property segment revenue growth of $282.3 million was attributable to:
Tenant billings growth of $171.8 million, which was driven by:
$147.7 million generated from newly acquired or constructed sites, primarily due to the Viom Acquisition;
$27.9 million due to collocations and amendments;
A decrease of $3.6 million resulting from churn in excess of contractual escalations; and
A decrease of $0.2 million from other tenant billings;    
Pass-through revenue growth of $108.4 million, primarily due to the Viom Acquisition; and
A decrease of $9.5 million in other revenue primarily due to an increase of $9.8 million in revenue reserves.

Segment revenue also increased by $11.6 million attributable to the impact of foreign currency translation related to fluctuations in INR.

EMEA property segment revenue growth of $45.6 million was attributable to:
Tenant billings growth of $48.8 million, which was driven by:
$29.2 million generated from newly acquired or constructed sites, primarily due to the FPS Acquisition;
$9.6 million due to collocations and amendments;


$8.9 million from contractual escalations, net of churn; and
$1.1 million from other tenant billings;
Pass-through revenue growth of $30.8 million; and
A decrease of $2.0 million in other revenue, partially offset by a $1.8 million impact of straight-line accounting.

Segment growth was partially offset by a decrease of $32.0 million attributable to the impact of foreign currency translation, which included, among others, $29.1 million related to fluctuations in NGN and $7.9 million related to fluctuations in GHS, and was partially offset by an increase of $7.4 million related to fluctuations in ZAR.

Latin America property segment revenue growth of $102.7 million was attributable to:
Tenant billings growth of $49.0 million, which was driven by:
$18.8 million from contractual escalations, net of churn;
$17.5 million due to collocations and amendments;
$11.7 million generated from newly acquired or constructed sites; and
$1.0 million from other tenant billings;
Pass-through revenue growth of $10.7 million; and
$7.4 million of other revenue growth, primarily due to the impact of a $7.0 million reduction in revenue in the prior-year period resulting from a judicial reorganization of a tenant in Brazil.

Segment revenue also increased $35.6 million attributable to the impact of foreign currency translation, which included, among others, $43.9 million related to fluctuations in BRL and $2.8 million related to fluctuations in Colombian Peso, and was partially offset by a decrease of $12.2 million related to fluctuations in MXN.

The increase in services segment revenue of $9.0$9.3 million was primarily attributable to an increase in site acquisition projects.

Gross Margin
 Three Months Ended June 30, Percent Increase (Decrease) Six Months Ended June 30,Percent Increase (Decrease)
 2017 2016  2017 2016 
Property           
U.S.$713,671
 $647,304
 10% $1,424,220
 $1,321,326
 8%
Asia126,563
 96,756
 31
 252,693
 126,892
 99
EMEA100,559
 76,300
 32
 189,471
 150,281
 26
Latin America193,563
 156,401
 24
 379,224
 306,846
 24
Total property1,134,356
 976,761
 16
 2,245,608
 1,905,345
 18
Services14,511
 9,150
 59% 30,367
 21,542
 41%

Three Months Ended June 30, 2017
The increase in U.S. property segment gross margin was primarily attributable to the increase in revenue described above, partially offset by an increase in direct expenses of $1.2 million.

The increase in Asia property segment gross margin was primarily attributable to the increase in revenue described above, partially offset by an increase in direct expenses of $34.2 million, primarily due to the Viom Acquisition. Direct expenses increased by an additional $5.9 million attributable to the impact of foreign currency translation.

The increase in EMEA property segment gross margin was primarily attributable to the increase in revenue described above and a benefit of $12.5 million attributable to the impact of foreign currency translation on direct expenses, partially offset by an increase in direct expenses of $13.1 million.



The increase in Latin America property segment gross margin was primarily attributable to the increase in revenue described above, partially offset by an increase in direct expenses of $7.8 million. Direct expenses increased by an additional $4.6 million due to the impact of foreign currency translation.

The increase in services segment gross margin was primarily due to higher-margin projects.

Six Months Ended June 30, 2017
 Three Months Ended March 31,Percent Increase (Decrease)
 2018 2017 
Property     
U.S.$745.1
 $710.5
 5 %
Asia115.1
 126.1
 (9)
EMEA115.1
 88.9
 29
Latin America231.1
 185.8
 24
Total property1,206.4
 1,111.3
 9
Services19.2
 15.8
 22 %

The increase in U.S. property segment gross margin was primarily attributable to the increase in revenue described above, partially offset by an increase in direct expenses of $4.9 million.

The increasedecrease in Asia property segment gross margin was primarily attributable to the increasedecrease in revenue described above, partially offset byas well as an increase in direct expenses of $149.9 million, primarily due to the Viom Acquisition.$1.6 million. Direct expenses increased by an additional $6.6$6.9 million attributable to the impact of foreign currency translation.

The increase in EMEA property segment gross margin was primarily attributable to the increase in revenue described above, andas well as a benefitdecrease in direct expenses of $28.2$1.2 million. Direct expenses decreased an additional $1.2 million attributable to the impact of foreign currency translation on direct expenses, partially offset by an increase in direct expenses of $34.6 million.translation.



The increase in Latin America property segment gross margin was primarily attributable to the increase in revenue described above, partially offset by an increase in direct expenses of $16.5$9.3 million. Direct expenses increased by an additional $13.8$0.9 million dueattributable to the impact of foreign currency translation.

The increase in services segment gross margin was primarily due to higher-margin projects.increased project volume.

Selling, General, Administrative and Development Expense (“SG&A”)
 Three Months Ended June 30, Percent Increase (Decrease) Six Months Ended June 30, Percent Increase (Decrease)
 2017 2016  2017 2016 
Property           
U.S.$36,223
 $34,721
 4% $70,871
 $72,007
 (2)%
Asia16,571
 14,770
 12
 37,066
 21,346
 74
EMEA17,949
 16,685
 8
 34,402
 32,837
 5
Latin America19,482
 15,031
 30
 38,043
 29,615
 28
Total property90,225
 81,207
 11
 180,382
 155,805
 16
Services3,422
 3,346
 2
 6,593
 6,262
 5
Other59,501
 53,681
 11
 130,969
 111,482
 17
Total selling, general, administrative and development expense$153,148
 $138,234
 11% $317,944
 $273,549
 16 %

Three Months Ended June 30, 2017
The increases in each of our property segments’ SG&A were primarily driven by increased personnel costs to support our business, including additional costs as a result of the Viom Acquisition in our Asia property segment and the FPS Acquisition in our EMEA property segment.

The increase in other SG&A was primarily attributable to an increase in stock-based compensation expense of $3.6 million and an increase in corporate SG&A.



Six Months Ended June 30, 2017
The decrease in our U.S. property segment SG&A was due to a decrease in cancelled-project costs.
 Three Months Ended March 31, Percent Increase (Decrease)
 2018 2017 
Property     
U.S.$35.4
 $34.6
 2%
Asia44.2
 20.5
 116
EMEA16.8
 16.5
 2
Latin America24.6
 18.6
 32
Total property121.0
 90.2
 34
Services3.5
 3.1
 13
Other80.4
 71.5
 12
Total selling, general, administrative and development expense$204.9
 $164.8
 24%

The increases in each of our Asia,U.S., EMEA and Latin America property segments’ SG&A were primarily driven by increased personnel costs to support our business, including additional costs as a result of the Viom Acquisition in our Asia property segment and the FPS Acquisition in our EMEA property segment and our acquisition of urban telecommunications assets in our Latin America property segment.

The increase in our Asia property segment SG&A increase was also partiallyprimarily driven by an increase in bad debt expense of $23.0 million as a result of receivable reserves with certain tenants, including Aircel.

The increase in other SG&A was primarily attributable to an increase in stock-based compensation expense of $6.4 million.million and an increase in corporate SG&A.

The increase in our services segment SG&A was primarily attributable to an increase in personnel costs within our tower services group.

The increase in other SG&A was primarily attributable to an increase in stock-based compensation expense of $11.6 million and an increase in corporate SG&A.

Operating Profit
Three Months Ended June 30, Percent Increase (Decrease) Six Months Ended June 30, Percent Increase (Decrease)Three Months Ended March 31, Percent Increase (Decrease)
2017 2016 2017 2016 2018 2017 
Property                
U.S.$677,448
 $612,583
 11% $1,353,349
 $1,249,319
 8%$709.7
 $675.9
 5 %
Asia109,992
 81,986
 34
 215,627
 105,546
 104
70.9
 105.6
 (33)
EMEA82,610
 59,615
 39
 155,069
 117,444
 32
98.3
 72.4
 36
Latin America174,081
 141,370
 23
 341,181
 277,231
 23
206.5
 167.2
 24
Total property1,044,131
 895,554
 17
 2,065,226
 1,749,540
 18
1,085.4
 1,021.1
 6
Services11,089
 5,804
 91% 23,774
 15,280
 56%15.7
 12.7
 24 %

The growth in operating profit for the three and six months ended June 30, 2017 for each of our property segments was primarily attributable to an increase in our segment gross margin. The growth in operating profit for the three and six months ended June 30, 2017 in our Asia,U.S., EMEA and Latin America property segments, as well as our U.S. property segment for the three months ended June 30, 2017, were partially offset by increases in our segment SG&A.

The growth in operating profit for the three and six months ended June 30, 2017 for our services segment, was primarily attributable to an increase in our segment gross margin, partially offset by increases in our segment SG&A.



The decrease in operating profit in our Asia property segment was primarily attributable to a decrease in our segment gross margin combined with an increase in our segment SG&A.

Depreciation, Amortization and Accretion
 Three Months Ended June 30, Percent Increase (Decrease) Six Months Ended June 30, Percent Increase (Decrease)
 2017 2016  2017 2016 
Depreciation, amortization and accretion$396,355
 $397,765
 0% $817,495
 $739,399
 11%
 Three Months Ended March 31, Percent Increase (Decrease)
 2018 2017 
Depreciation, amortization and accretion$446.3
 $421.1
 6%

The increase in depreciation, amortization and accretion expense for the sixthree months ended June 30, 2017March 31, 2018 was primarily attributable to the acquisition, lease or construction of new sites since the beginning of the prior-year period, which resulted in an increaseincreases in property and equipment and intangible assets subject to amortization.



Other Operating Expenses
 
 Three Months Ended June 30, Percent Increase (Decrease) Six Months Ended June 30, Percent Increase (Decrease)
 2017 2016  2017 2016 
Other operating expenses$18,839
 $13,711
 37% $25,054
 $22,511
 11%
 Three Months Ended March 31, Percent Increase (Decrease)
 2018 2017 
Other operating expenses$167.8
 $6.2
 2,606%

The increase in other operating expenses for the three months ended June 30, 2017 was primarily attributable to a net increase of $7.5 million in losses from sale or disposal of assets, partially offset by a decrease of $2.8 million in integration, acquisition and merger related expenses.

The increase in other operating expenses for the six months ended June 30, 2017March 31, 2018 was primarily attributable to an increase in impairment charges of $10.2$145.3 million. These charges included $40.1 million in losses on sales or disposals ofrelated to tower and network intangible assets and impairments, an$107.3 million related to tenant-related intangible assets in our Asia property segment due to Aircel’s filing for bankruptcy protection. The increase in integration, acquisition and merger related expenseswas also attributable to the absence of $3.2a $21.5 million and $10.0 million to fund our charitable foundation. These items were partially offset by the refund of $21.5 million of acquisition costs relatingrecorded in the prior-year period related to an acquisition in Brazil completed in 2014.Brazil.

Total Other Expense
 Three Months Ended June 30, Percent Increase (Decrease) Six Months Ended June 30, Percent Increase (Decrease)
 2017 2016  2017 2016 
Total other expense$164,439
 $196,832
 (16)% $361,645
 $338,254
 7%
 Three Months Ended March 31, Percent Increase (Decrease)
 2018 2017 
Total other expense$153.7
 $197.2
 (22)%

The decrease in total other expense during the three months ended June 30, 2017 was primarily due to foreign currency gains of $6.9 million in the current period, compared to foreign currency losses of $28.1 million in the prior-year period. The decrease was partially offset by incremental interest expense of $6.0 million due to a $0.6 billion increase in our average debt outstanding and a 17 basis point increase in our annualized weighted-average cost of borrowing.

The increase in total other expense during the six months ended June 30, 2017March 31, 2018 was primarily due to a loss on retirement of long-term obligations of $55.7$55.4 million recorded in the prior-year period attributable to the redemption of the 7.25% senior unsecured notes due 2019 (the “7.25% Notes”), and the repayment of the Secured Cellular Site Revenue Notes, Series 2012-2 Class A, Series 2012-2 Class B and Series 2012-2 Class C issued by GTP Cellular Sites, LLC and Secured Cellular Site Revenue Notes, Series 2010-2, Class C and Series 2010-2, Class F issuedF. The decrease was offset by Unison Ground Lease Funding, LLC, compared to the six months ended June 30, 2016, where we recorded a gain on retirement of long-term obligations of $0.8 million attributable to the repayment of the Secured Tower Cellular Site Revenue Notes, Series 2012-1 Class A issued by GTP Cellular Sites, LLC. The increase was also attributable to additional interest expense of $29.8$15.9 million due to a $1.0$2.2 billion increase in our average debt outstanding and a four basis point increase in our annualized weighted average cost of borrowing. These items were partially offset by foreign currency gains of $35.0 million compared to foreign currency losses of $17.5 million in the prior-year period, as well as an additional $8.2 million in interest income compared to the prior year period.outstanding.



Income Tax (Benefit) Provision
Three Months Ended June 30, Percent Increase (Decrease) Six Months Ended June 30, Percent Increase (Decrease)Three Months Ended March 31, Percent Increase (Decrease)
2017 2016 2017 2016 2018 2017 
Income tax provision$23,980
 $43,510
 (45)% $50,743
 $72,634
 (30)%
Income tax (benefit) provision$(31.1) $26.8
 (216)%
Effective tax rate5.8% 18.4%   6.8% 13.3%  (12.5)% 8.0%  

As a real estate investment trust for U.S. federal income tax purposes (“REIT”), we may deduct earnings distributed to stockholders against the income generated by our REIT operations. In addition, we are able to offset certain income by utilizing our net operating losses (“NOLs”), subject to specified limitations. Consequently, the effective tax rate on income from continuing operations for the three and six months ended June 30,March 31, 2018 and 2017 and 2016 differs from the federal statutory rate.



The decreasechange in the income tax (benefit) provision for the three and six months ended June 30, 2017March 31, 2018 was primarily attributable to fewer uncertainthe tax positions taken than in 2016 and a clarificationeffect of income tax law in Ghana, which resulted in an income tax benefit of $11.6 million, offset by an increase in foreign earnings.impairment charges and a one-time benefit for merger-related activity in Asia.

Net Income/Adjusted EBITDA and Net Income/NAREITNareit FFO/Consolidated AFFO
 
 Three Months Ended June 30, Percent Increase (Decrease) Six Months Ended June 30, Percent Increase (Decrease)Three Months Ended March 31, Percent Increase (Decrease)
 2017 2016 2017 2016 2018 2017 
Net income $388,490
 $192,464
 102 % $695,900
 $473,771
 47 %$280.3
 $307.4
 (9)%
Income tax provision 23,980
 43,510
 (45) 50,743
 72,634
 (30)
Other (income) expense (11,782) 25,842
 (146) (41,084) 13,634
 (401)
Loss (gain) on retirement of long-term obligations 274
 (830) (133) 55,714
 (830) (6,813)
Income tax (benefit) provision(31.1) 26.8
 (216)
Other income(27.8) (29.3) (5)
Loss on retirement of long-term obligations—
 55.4
 (100)
Interest expense 187,028
 181,036
 3
 370,723
 340,916
 9
199.6
 183.7
 9
Interest income (8,311) (6,468) 28
 (18,238) (10,002) 82
(15.4) (9.9) 56
Other operating expenses 18,839
 13,711
 37
 25,054
 22,511
 11
167.8
 6.2
 2,606
Depreciation, amortization and accretion 396,355
 397,765
 0
 817,495
 739,399
 11
446.3
 421.1
 6
Stock-based compensation expense 25,738
 21,907
 17
 61,960
 49,986
 24
42.7
 36.2
 18
Adjusted EBITDA $1,020,611
 $868,937
 17 % $2,018,267
 $1,702,019
 19 %$1,062.4
 $997.6
 6 %


Three Months Ended June 30, Percent Increase (Decrease)Six Months Ended June 30, Percent Increase (Decrease)Three Months Ended March 31, Percent Increase (Decrease)
2017 2016 2017 2016 2018 2017 
Net income$388,490
 $192,464
 102 %$695,900
 $473,771
 47 %$280.3
 $307.4
 (9)%
Real estate related depreciation, amortization and accretion352,566
 360,333
 (2)730,530
 657,846
 11
397.3
 378.0
 5
Losses from sale or disposal of real estate and real estate related impairment charges12,370
 5,130
 141
19,740
 9,732
 103
166.3
 7.4
 2,147
Dividends on preferred stock(22,843) (26,782) (15)(49,624) (53,563) (7)(9.4) (26.8) (65)
Adjustments for unconsolidated affiliates and noncontrolling interests(51,284) (22,942) 124
(82,938) (33,958) 144
(86.9) (31.7) 174
NAREIT FFO attributable to American Tower Corporation common stockholders$679,299
 $508,203
 34 %$1,313,608
 $1,053,828
 25 %
Nareit FFO attributable to American Tower Corporation common stockholders$747.6
 $634.3
 18 %
Straight-line revenue(50,759) (35,236) 44
(102,785) (67,244) 53
(17.8) (51.9) (66)
Straight-line expense14,346
 16,476
 (13)31,315
 32,313
 (3)14.0
 17.0
 (18)
Stock-based compensation expense25,738
 21,907
 17
61,960
 49,986
 24
42.7
 36.2
 18
Deferred portion of income tax(1)(13,330) 12,465
 (207)(9,641) 22,221
 (143)(55.8) 3.7
 (1,608)
Non-real estate related depreciation, amortization and accretion43,789
 37,432
 17
86,965
 81,553
 7
49.0
 43.1
 14
Amortization of deferred financing costs, capitalized interest, debt discounts and premiums and long-term deferred interest charges8,027
 4,417
 82
14,061
 11,846
 19
2.9
 6.0
 (52)
Other (income) expense (1)(11,782) 25,842
 (146)(41,084) 13,634
 (401)
Loss (gain) on retirement of long-term obligations274
 (830) (133)55,714
 (830) (6,813)
Other operating expense (2)6,468
 8,581
 (25)5,313
 12,779
 (58)
Other income (2)(27.8) (29.3) (5)
Loss on retirement of long-term obligations—
 55.4
 (100)
Other operating expense (income) (3)1.5
 (1.2) (225)
Capital improvement capital expenditures(24,785) (25,753) (4)(45,299) (42,477) 7
(33.7) (20.5) 64
Corporate capital expenditures(3,521) (4,557) (23)(6,672) (7,224) (8)(2.4) (3.2) (25)
Adjustments for unconsolidated affiliates and noncontrolling interests51,284
 22,942
 124
82,938
 33,958
 144
86.9
 31.7
 174
Consolidated AFFO$725,048
 $591,889
 22 %$1,446,393
 $1,194,343
 21 %$807.1
 $721.3
 12 %
Adjustments for unconsolidated affiliates and noncontrolling interests (3)(4)(43,869) (21,434) 105 %(84,658) (37,124) 128 %(47.8) (40.8) 17 %
AFFO attributable to American Tower Corporation common stockholders$681,179
 $570,455
 19 %$1,361,735
 $1,157,219
 18 %$759.3
 $680.5
 12 %
_______________
(1)Includes unrealized (gains) losses on foreign currency exchange rate fluctuationsFor the three months ended March 31, 2018, amount includes a tax benefit primarily attributable to the tax effect of ($7.8 million), $24.6 million, ($35.7 million)an increase in impairment charges and ($4.8 million), respectively.a one-time benefit for merger-related activity in our Asia property segment.
(2)Includes integrationunrealized gains on foreign currency exchange rate fluctuations of $24.9 million and acquisition-related costs. For the six months ended June 30, 2017, amount also includes a refund for acquisition costs and a charitable contribution.$28.0 million, respectively.
(3)Includes integration and acquisition-related costs.
(4)Includes adjustments for the impact on both NAREITNareit FFO attributable to American Tower Corporation common stockholders as well as the other line items included in the calculation of Consolidated AFFO. 

Three Months Ended June 30, 2017
The increasedecrease in net income was primarily due to an increase in other operating expenses, primarily related to an increase in impairment charges of $145.3 million, increases in interest expense and depreciation, amortization and accretion expense, partially offset by an increase in our operating profit, an increase in foreign currency gains included in other expense and a decreasethe change in the income tax (benefit) provision partially offset by increasesand the absence of a loss on retirement of long-term obligations of $55.4 million recorded in other SG&A, including stock-based compensation expense, and interest expense.

the prior-year period.

The increase in Adjusted EBITDA was primarily attributable to the increase in our gross margin and was partially offset by an increase in SG&A of $11.3$33.7 million, excluding the impact of stock-based compensation expense.

The growth in Consolidated AFFO and AFFO attributable to American Tower Corporation common stockholders was primarily attributable to the increase in our operating profit, a decrease in dividends on preferred stock and a decrease in the adjustment for straight-line revenue, partially offset by increases in straight-line revenue,cash paid for interest, and income taxes, including adjustments,capital improvement expenditures and corporate SG&A.

Six Months Ended June 30, 2017
The increase in net income was primarily due to an increase in our operating profit and an increase in foreign currency gains included in other expense, partially offset by increases in depreciation, amortization and accretion expense and interest expense, and a loss on retirement of long-term obligations of $55.7 million.

The increase in Adjusted EBITDA was primarily attributable to the increase in our gross margin and was partially offset by an increase in SG&A of $32.8 million, excluding the impact of stock-based compensation expense.

The growth in Consolidated AFFO and AFFO attributable to American Tower Corporation common stockholders was primarily attributable to the increase in our operating profit, partially offset by increases in straight-line revenue, interest and income taxes, including adjustments, and corporate SG&A.



Liquidity and Capital Resources
The information in this section updates as of June 30, 2017March 31, 2018 the “Liquidity and Capital Resources” section of the 20162017 Form 10-K and should be read in conjunction with that report.
 
Overview
As a holding company, our cash flows are derived primarily from the operations of, and distributions from, our operating subsidiaries or funds raised through borrowings under our credit facilities and debt or equity offerings.
The following table summarizes the significant components of our liquidity (in thousands)millions):
As of June 30, 2017As of March 31, 2018
Available under the 2013 Credit Facility$1,896,581
$1,108.2
Available under the 2014 Credit Facility820,000
1,400.0
Letters of credit(10,967)(10.3)
Total available under credit facilities, net2,705,614
2,497.9
Cash and cash equivalents770,024
1,125.4
Total liquidity$3,475,638
$3,623.3
Subsequent to June 30, 2017,March 31, 2018, we borrowed an additional $105.0a net amount of $749.1 million under our multicurrency senior unsecured revolving credit facility entered into in June 2013, as amended (the “2013 Credit Facility”), which included the repayment of 38.0 million Euros previously borrowed by one of our German subsidiaries. We primarily used the borrowings to repay existing indebtedness and for general corporate purposes. We also repaid $600.0 million under our multicurrency senior unsecured revolving credit facility entered into in January 2012 and amended and restated in September 2014, as further amended (the “2014 Credit Facility”).
Summary cash flow information is set forth below (in thousands)millions):
Six Months Ended June 30,Three Months Ended March 31,
2017 20162018 2017
Net cash provided by (used for):      
Operating activities$1,478,458
 $1,311,316
$791.8
 $678.2
Investing activities(1,214,511) (1,543,401)(1,280.6) (920.3)
Financing activities(290,589) 330,259
817.3
 157.9
Net effect of changes in foreign currency exchange rates on cash and cash equivalents9,505
 (8,322)(4.5) 6.0
Net (decrease) increase in cash and cash equivalents$(17,137) $89,852
Net increase (decrease) in cash and cash equivalents$324.0
 $(78.2)
We use our cash flows to fund our operations and investments in our business, including tower maintenance and improvements, communications site construction and managed network installations and tower and land acquisitions. Additionally, we use our cash flows to make distributions, including distributions of our REIT taxable income to maintain our qualification for taxation as a REIT under the Internal Revenue Code of 1986, as amended. We may also repay or repurchase our existing indebtedness or equity from time to time. We typically fund our international expansion efforts primarily through a combination of cash on hand, intercompany debt and equity contributions.
As of June 30, 2017,March 31, 2018, we had total outstanding indebtedness of $19.4$21.5 billion, with a current portion of $1.7$2.8 billion. During the sixthree months ended June 30, 2017,March 31, 2018, we generated sufficient cash flow from operations to fund our capital expenditures and debt service obligations, as well as our required distributions. We believe cash generated by operating activities during the year ending December 31, 2017,2018, together with our borrowing capacity under our credit facilities, will be sufficient to fund our required distributions, capital expenditures, debt service obligations (interest and principal repayments) and signed acquisitions. As of June 30, 2017,March 31, 2018, we had $601.4 million$1.0 billion of cash and cash equivalents held by our foreign subsidiaries, of which $232.7$661.3 million was held by our joint ventures and minority interest holders.ventures. A portion of these amounts are being held in anticipation of funding signed acquisitions. While certain subsidiaries may pay us interest or principal on intercompany debt, it has not been our practice to repatriate earnings from our foreign subsidiaries primarily due to our


ongoing expansion efforts and related capital needs. However, in the event that we do repatriate any funds, we may be required to accrue and pay taxes.



Cash Flows from Operating Activities

The increase in cash provided by operating activities for the sixthree months ended June 30, 2017March 31, 2018 was attributable to an increase in the operating profit of most of our property segments, partially offset bya decrease in straight-line revenue and an increase in cash paid for interest as well asincome, partially offset by an increase in cash used for working capital.

Cash Flows from Investing Activities

Our significant investing activities during the sixthree months ended June 30, 2017March 31, 2018 are highlighted below:

We spent $857.2$673.4 million for acquisitions, primarily related to fund the fundingacquisition of the FPS Acquisition.communications sites from Vodafone India Limited and Vodafone Mobile Services Limited in India.

We spent $387.6$206.3 million for capital expenditures, as follows (in millions):
Discretionary capital projects (1)$66.3
$67.0
Ground lease purchases62.9
31.7
Capital improvements and corporate expenditures (2)52.0
36.1
Redevelopment108.1
50.3
Start-up capital projects98.3
21.2
Total capital expenditures(3)$387.6
$206.3
_______________
(1)Includes the construction of 928313 communications sites globally.
(2)Includes $16.1$9.3 million of capital lease payments included in Repayments of notes payable, credit facilities, senior notes, secured debt and capital leases in the cash flow from financing activities in our condensed consolidated statements of cash flows.
(3)Net of purchase credits of $1.5 million on certain assets, which are reported in operating activities in our consolidated statements of cash flows.

We plan to continue to allocate our available capital, after satisfying our distribution requirements, among investment alternatives that meet our return on investment criteria, while maintaining our commitment to our long-term financial policies. Accordingly, we expect to continue to deploy capital through our annual capital expenditure program, including land purchases and new site construction, and through acquisitions. We expect that our 20172018 total capital expenditures will be between $800.0$850 million and $900.0$950 million, as follows (in millions):

Discretionary capital projects (1)$145
to$175
$250
to$290
Ground lease purchases150
to160
150
to170
Capital improvements and corporate expenditures145
to155
150
to160
Redevelopment195
to225
210
to230
Start-up capital projects165
to185
90
to100
Total capital expenditures$800
to$900
$850
to$950
_______________
(1)    Includes the construction of approximately 2,0002,500 to 3,0003,500 communications sites globally.



Cash Flows from Financing Activities

Our significant financing activities were as follows (in millions):
 Six Months Ended June 30,
 2017 2016
Proceeds from issuance of senior notes, net$1,279.4
 $2,237.5
Proceeds from (repayments of) credit facilities, net93.6
 (1,292.1)
Repayments of securitized notes(302.7) (94.1)
Repayment of senior notes(300.0) —
Contributions from (distributions to) noncontrolling interest holders, net (1)265.3
 (0.5)
Distributions paid on common and preferred stock(568.5) (480.1)
Purchases of common stock(641.3) —
 Three Months Ended March 31,
 2018 2017
(Repayments of) proceeds from credit facilities, net(330.0) 1,038.8
Proceeds from term loan1,500.0
 —
Proceeds from issuance of securities in securitization transaction500.0
 —
Repayments of securitized debt(500.0) (302.5)
Repayment of senior notes—
 (300.0)
(Distributions to) contributions from noncontrolling interest holders, net (1)(0.3) 265.4
Distributions paid on common and preferred stock(323.2) (277.2)
Purchases of common stock—
 (147.2)
_______________
(1)     2017 contributions primarily relate to the funding of the FPS Acquisition.    

Senior Notes
1.375% Senior Notes Offering. On April 6, 2017, we completed a registered public offering of 500.0 million Euros ($532.2 million at the date of issuance) aggregate principal amount of 1.375% senior unsecured notes due 2025 (the “1.375% Notes”). The net proceeds from this offering were approximately 489.8 million Euros (approximately $521.4 million at the date of issuance), after deducting commissions and estimated expenses. We used the net proceeds to repay existing indebtedness under the 2013 Credit Facility and for general corporate purposes.

The 1.375% Notes will mature on April 4, 2025 and bear interest at a rate of 1.375% per annum. Accrued and unpaid interest on the 1.375% Notes will be payable in Euros in arrears on April 4 of each year, beginning on April 4, 2018. Interest on the 1.375% Notes will be computed on the basis of the actual number of days in the period for which interest is being calculated and the actual number of days from and including the last date on which interest was paid on the 1.375% Notes and commenced accruing on April 6, 2017.Securitizations

3.55% Senior Notes Offering. Repayment of Series 2013-1A Securities. On June 30, 2017,the March 2018 payment date, we completed a registered public offering of $750.0repaid the $500.0 million aggregate principal amount of 3.55% senior unsecured notes due 2027 (the “3.55% Notes”). The net proceeds from this offering were approximately $741.8 million, after deducting commissions and estimated expenses. We used the net proceeds to repay existing indebtednessoutstanding under the 2013 Credit Facility.

The 3.55% Notes will mature on July 15, 2027 and bear interest at a rate of 3.55% per annum. Accrued and unpaid interest onSecured Tower Revenue Securities, Series 2013-1A (the “Series 2013-1A Securities”), pursuant to the 3.55% 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, 2018. Interest on the 3.55% Notes is computed on the basis of a 360-day year comprised of twelve 30-day months and commenced accruing on June 30, 2017.

We may redeem each series of senior notes at any time, in whole or in part, at a redemption price equal to 100%terms of the principal amount of the notes plus a make-whole premium, together with accrued interest to the redemption date. If we redeem the 1.375% Notes on or after January 4, 2025 or the 3.55% Notes on or after April 15, 2027, we will not be required to pay a make-whole premium. In addition, if we undergo a change of control and corresponding ratings decline, each as defined in the applicable supplemental indenture, we may be required to repurchase all of the applicable notes at a purchase price equal to 101% of the principal amount ofagreements governing such notes, plus accrued and unpaid interest (including additional interest, if any), up to but not including the repurchase date.securities. The notes rank equally with all of our other senior unsecured debt and are structurally subordinated to all existing and future indebtedness and other obligations of our subsidiaries.

The supplemental indentures contain certain covenants that restrict our ability to merge, consolidate or sell assets and our (together with our subsidiaries’) ability to incur liens. These covenants are subject to a number of exceptions, including that we and our subsidiaries may incur certain liens on assets, mortgages or other liens securing indebtedness if


the aggregate amount of such liens does not exceed 3.5x Adjusted EBITDA, as defined in the applicable supplemental indenture.

Redemption of 7.25% Senior Notes. On February 10, 2017, we redeemed all of the 7.25% Notes at a price equal to 112.0854% of the principal amount, plus accrued and unpaid interest up to, but excluding, February 10, 2017, for an aggregate redemption price of $341.4 million, including $5.1 million in accrued and unpaid interest. The redemptionrepayment was funded with borrowings under the 20132014 Credit Facility and cash on hand. Upon completion of the redemption, none of the 7.25% Notes remained outstanding.

Notice of Redemption of 4.500% Senior Notes.Secured Tower Revenue Securities, Series 2018-1, Subclass A and Series 2018-1, Subclass R. On June 30, 2017,March 29, 2018, we delivered notice of our election to call for redemption all of our outstanding 4.500% senior unsecured notes due 2018completed a securitization transaction (the “4.500% Notes”“2018 Securitization”). The 4.500% Notes will be redeemed at a price equal to, in which the American Tower Trust I (the “Trust”) issued $500.0 million aggregate principal amount of Secured Tower Revenue Securities, Series 2018-1, Subclass A (the “Series 2018-1A Securities”). To satisfy the 4.500% Notes plusapplicable risk retention requirements of Regulation RR promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act” and, such requirements, the “Risk Retention Rules”), the Trust issued, and one of our affiliates purchased, $26.4 million aggregate principal amount of Secured Tower Revenue Securities, Series 2018-1, Subclass R (the “Series 2018-1R Securities” and, together with the Series 2018-1A Securities, the “2018 Securities”) to retain an “eligible horizontal residual interest” (as defined in the Risk Retention Rules) in an amount equal to at least 5% of the fair value of the 2018 Securities.

The assets of the Trust consist of a make-whole premium calculatednonrecourse loan (the “Loan”) made by the Trust to American Tower Asset Sub, LLC and American Tower Asset Sub II, LLC (together, the “AMT Asset Subs”). The AMT Asset Subs are jointly and severally liable under the Loan, which is secured primarily by mortgages on the AMT Asset Subs’ interests in 5,116 broadcast and wireless communications towers and related assets (the “Trust Sites”).

The 2018 Securities correspond to components of the Loan made to the AMT Asset Subs pursuant to the Second Amended and Restated Loan and Security Agreement among the Trust and the AMT Asset Subs, dated as of March 29, 2018 (the “Loan Agreement”) and were issued in two separate subclasses of the same series. The 2018 Securities represent a pass-through interest in the components of the Loan corresponding to the 2018 Securities. The Series 2018-1A Securities have an interest rate of 3.652% and the Series 2018-1R Securities have an interest rate of 4.459%. The 2018 Securities have an expected life of approximately ten years with a final repayment date in March 2048.

The AMT Asset Subs may prepay the Loan at any time provided it is accompanied by applicable prepayment consideration. If the prepayment occurs within thirty-six months of the anticipated repayment date for the 2018 Securities, no prepayment consideration is due. The entire unpaid principal balance of the components of the Loan corresponding to the 2018 Securities will be due in March 2048.

The Loan is secured by (1) mortgages, deeds of trust and deeds to secure debt on substantially all of the Trust Sites and their operating cash flows, (2) a security interest in substantially all of the AMT Asset Subs’ personal property and


fixtures and (3) the AMT Asset Subs’ rights under that certain management agreement among the AMT Asset Subs and SpectraSite Communications, LLC entered into in March 2013. American Tower Holding Sub, LLC (the “Guarantor”), whose only material assets are its equity interests in each of the AMT Asset Subs, and American Tower Guarantor Sub, LLC whose only material asset is its equity interests in the Guarantor, have each guaranteed repayment of the Loan and pledged their equity interests in their respective subsidiary or subsidiaries as security for such payment obligations.

The Secured Tower Revenue Securities, Series 2013-2A (the “Series 2013-2A Securities”) issued in a securitization transaction in March 2013 (the “2013 Securitization” and, together with the 2018 Securitization, the “Trust Securitizations”) remain outstanding and are subject to the terms of the 4.500% Notes indenture, togetherSecond Amended and Restated Trust and Servicing Agreement entered into in connection with accruedthe 2018 Securitization. The component of the Loan corresponding to the Series 2013-2A Securities also remains outstanding and unpaid interest, if any, upis subject to but excluding, the redemption date, which has been set for July 31, 2017.terms of the Loan Agreement.

For more information regarding the Trust Securitizations, see “—Factors Affecting Sources of Liquidity” below.

Bank Facilities

2013 Credit Facility. During the sixthree months ended June 30, 2017,March 31, 2018, we borrowed an aggregate of $2.3 billion$620.0 million and repaid an aggregate of $2.0$1.1 billion of revolving indebtedness under the 2013 Credit Facility. We used the borrowings to fund acquisitions repay existing indebtedness and for general corporate purposes. We currently have $4.6$4.0 million of undrawn letters of credit and maintain the ability to draw down and repay amounts under the 2013 Credit Facility in the ordinary course.

2014 Credit Facility. During the sixthree months ended June 30, 2017,March 31, 2018, we borrowed an aggregate of $200.0 million$1.1 billion and repaid an aggregate of $405.0$945.0 million of revolving indebtedness under our senior unsecured revolving credit facility entered into in January 2012the 2014 Credit Facility. We used the borrowings to repay existing indebtedness, including the Series 2013-1A Securities, and amended and restated in September 2014, as further amended (the “2014 Credit Facility”).for general corporate purposes. We currently have $6.4$6.3 million of undrawn letters of credit and maintain the ability to draw down and repay amounts under the 2014 Credit Facility in the ordinary course.

2018 Term Loan. On March 29, 2018, we entered into a $1.5 billion unsecured term loan (the “2018 Term Loan”), the net proceeds of which were used to repay $1.1 billion of outstanding indebtedness under the 2013 Credit Facility and $445.0 million of outstanding indebtedness under the 2014 Credit Facility. Any outstanding principal and accrued but unpaid interest will be due and payable in full at maturity.

Our $1.0 billion unsecured term loan entered into in October 2013, as amended (the “Term“2013 Term Loan”), the 2013 Credit Facility, and the 2014 Credit Facility and the 2018 Term Loan do not require amortization of principal and may be paid prior to maturity in whole or in part at our option without penalty or premium. We have the option of choosing either a defined base rate or the London Interbank Offered Rate (“LIBOR”) as the applicable base rate for borrowings under these bank facilities.

As of March 31, 2018, the Term Loan,key terms under the 2013 Credit Facility, and the 2014 Credit Facility. The interest rates range between 1.000% to 2.000% above LIBOR for LIBOR based borrowings or up to 1.000% above the defined base rate for base rate borrowings, in each case based upon our debt ratings. The current margin over LIBOR and the base rate for each of the Term Loan, the 2013 Credit Facility and the 2014 Credit Facility, is 1.250% and 0.250%, respectively.
Thethe 2013 Credit FacilityTerm Loan and the 2014 Credit Facility are subject to two optional renewal periods. 2018 Term Loan were as follows:

Bank Facility (1)Outstanding Principal Balance Maturity Date LIBOR borrowing interest rate range (2)Base rate borrowing interest rate range (2)Current margin over LIBOR and the base rate, respectively
2013 Credit Facility$1,641.8
(3)June 28, 2021(4)0.875% - 1.750%0.000% - 0.750%1.125% and 0.125%
2014 Credit Facility$600.0
 January 31, 2023(4)1.000% - 2.000%0.000% - 1.000%1.250% and 0.250%
2013 Term Loan$1,000.0
 January 31, 2023 1.000% - 2.000%0.000% - 1.000%1.250% and 0.250%
2018 Term Loan$1,500.0
 March 29, 2019 0.625% - 1.500%0.000% - 0.500%0.875% and 0.000%
_______________
(1)    Currently borrowed at LIBOR, except where noted.
(2)Represents interest rate above LIBOR for LIBOR based borrowings and the interest rate above the defined base rate for base rate borrowings, in each case based on our debt ratings.
(3)    Includes $140.0 million borrowed at the base rate of 4.750% plus a margin of 0.125%.
(4)Subject to two optional renewal periods.



We must pay a quarterly commitment fee on the undrawn portion of each of the 2013 Credit Facility and the 2014 Credit Facility. The commitment fee for the 2013 Credit Facility whichranges from 0.100% to 0.350% per annum, based upon our debt ratings, and is currently 0.125%. The commitment fee for the 2014 Credit Facility ranges from 0.100% to 0.400% per annum, based upon our debt ratings, and is currently 0.150%.
The loan agreements for each of the 2013 Term Loan, the 2013 Credit Facility, and the 2014 Credit Facility and the 2018 Term Loan contain certain reporting, information, financial and operating covenants and other restrictions (including limitations on additional debt, guaranties, sales of assets and liens) with which we must comply. Failure to comply with the financial and operating covenants of the loan agreements could not only prevent us from being able to borrow additional funds under the revolving credit facilities, but may constitute a default, which could result in, among other things, the amounts outstanding, including all accrued interest and unpaid fees, becoming immediately due and payable.
Stock Repurchase Program.Programs. In March 2011, our Board of Directors approved a stock repurchase program, pursuant to which we are authorized to repurchase up to $1.5 billion of our common stock (the “2011 Buyback”).
During the six months ended June 30, In December 2017, our Board of Directors approved an additional stock repurchase program, pursuant to which we resumed the 2011 Buyback and repurchased 5,199,938 sharesare authorized to repurchase up to $2.0 billion of our common stock thereunder for an aggregate of $641.3 million, including commissions(the “2017 Buyback” and, fees.together with the 2011 Buyback, the “Buyback Programs”).


During the three months ended March 31, 2018, we had no repurchases under either program.

We expect to continue managing the pacing of the remaining $469.7 million$2.3 billion (as of April 24, 2018) under the 2011 Buyback Programs in response to general market conditions and other relevant factors. We expect to fund further repurchases of our common stock through a combination of cash on hand, cash generated by operations and borrowings under our credit facilities. Purchases under the 2011 Buyback Programs are subject to us having available cash to fund repurchases. For more information on the 2011 Buyback, see Part II, Item 2 in this Quarterly Report on Form 10-Q.
Sales of Equity Securities. We receive proceeds from sales of our equity securities pursuant to our employee stock purchase plan (“ESPP”) and upon exercise of stock options granted under our equity incentive plans. For the sixthree months ended June 30, 2017,March 31, 2018, we received an aggregate of $82.6$20.0 million in proceeds upon exercises of stock options and sales pursuant to the ESPP.options.
Distributions. As a REIT, we must annually distribute to our stockholders an amount equal to at least 90% of our REIT taxable income (determined before the deduction for distributed earnings and excluding any net capital gain). Generally, we have distributed, and expect to continue to distribute, all or substantially all of our REIT taxable income after taking into consideration our utilization of NOLs. We have distributed an aggregate of approximately $3.7$4.6 billion to our common stockholders, including the dividend paid in July 2017,April 2018, primarily subject to taxationclassified as ordinary income.
During the three months ended March 31, 2018, we paid $0.70 per share, or $300.2 million, to common stockholders of record. In addition, we declared a distribution of $0.75 per share, or $331.2 million, paid on April 27, 2018 to our common stockholders of record at the close of business on April 11, 2018.
The amount, timing and frequency of future distributions will be at the sole discretion of our Board of Directors and will depend on various factors, a number of which may be beyond our control, including our financial condition and operating cash flows, the amount required to maintain our qualification for taxation as a REIT and reduce any income and excise taxes that we otherwise would be required to pay, limitations on distributions in our existing and future debt, and preferred equity instruments, our ability to utilize NOLs to offset our distribution requirements, limitations on our ability to fund distributions using cash generated through our taxable REIT subsidiaries and other factors that our Board of Directors may deem relevant.

We have one seriesDuring the three months ended March 31, 2018, all outstanding shares of preferred stock outstanding, our 5.50% Mandatory Convertible Preferred Stock, Series B, par value $0.01 per share (the “Series B”B Preferred Stock”), withconverted automatically at a dividend rate of 5.50%. Dividends are payable quarterly8.7420 per share of Series B Preferred Stock, or 0.8742 per depositary share, each representing a 1/10th interest in arrears, subject to declaration bya share of Series B Preferred Stock, into an aggregate of 12,020,064 shares of our Board of Directors. During the quarter ended June 30, 2017,common stock pursuant to the termsprovisions of the Certificate of Designations governing our 5.25% Mandatory Convertible Preferred Stock, Series A, par value $0.01 per share (the “Series A”), all outstanding shares of the Series A converted into shares of our common stock at a conversion rate of 0.9337 per share.

B Preferred Stock.
During the sixthree months ended June 30, 2017,March 31, 2018, we paid dividends of $2.625 per share, or $15.8 million, to Series A preferred stockholders of record and $27.50 per share, or $37.8 million, to Series B preferred stockholders of record.

In addition, in July 2017, we declared athe final dividend of $13.75 per share, or $18.9 million, payable on August 15, 2017 to holders of the Series B preferred stockholdersPreferred Stock of record at the close of business on AugustFebruary 1, 2017.2018.
During the six months ended June 30, 2017, we paid $1.20 per share, or $512.0 million, to common stockholders of record. In addition, we declared a distribution of $0.64 per share, or $274.7 million, paid on July 14, 2017 to our common stockholders of record at the close of business on June 19, 2017.

We accrue distributions on unvested restricted stock units, which are payable upon vesting. As of June 30, 2017,March 31, 2018, the amount accrued for distributions payable related to unvested restricted stock units was $6.6$7.1 million. During the sixthree months ended June 30, 2017,March 31, 2018, we paid $2.9$4.1 million of distributions upon the vesting of restricted stock units.

Factors Affecting Sources of Liquidity
    
As discussed in the “Liquidity and Capital Resources” section of the 20162017 Form 10-K, our liquidity depends on our ability to generate cash flow from operating activities, borrow funds under our credit facilities and maintain compliance with the contractual agreements governing our indebtedness. We believe that the debt agreements discussed below represent our material debt agreements that contain covenants, our compliance with which would be material to an investor’s understanding of our financial results and the impact of those results on our liquidity.
         
Restrictions Under Loan Agreements Relating to Our Credit Facilities. The loan agreements for the 2013 Credit Facility, the 2014 Credit Facility, the 2013 Term Loan and the 2018 Term Loan contain certain financial and operating covenants and other


restrictions applicable to us and our subsidiaries that are not designated as unrestricted subsidiaries on a consolidated basis. These restrictions include limitations on additional debt, distributions and dividends, guaranties, sales of assets and liens. The loan agreements also contain covenants that establish financial tests with which we and our restricted subsidiaries must comply related to total leverage and senior secured leverage, as set forth in the table below. In the event that our debt ratings fall below investment grade, we must also maintain an interest coverage ratio of Adjusted EBITDA to Interest Expense (each as defined in the applicable loan agreement) of at least 2.50:1.00. As of June 30, 2017,March 31, 2018, we were in compliance with each of these covenants.

    
Compliance Tests For The 12 Months Ended
June 30, 2017March 31, 2018
($ in billions)
  Ratio (1) Additional Debt Capacity Under Covenants (2) Capacity for Adjusted EBITDA Decrease Under Covenants (3)
Consolidated Total Leverage Ratio 
Total Debt to Adjusted EBITDA
≤ 6.00:1.00
 ~ $4.5$4.4 ~ $0.8$0.7
Consolidated Senior Secured Leverage Ratio 
Senior Secured Debt to Adjusted EBITDA
≤ 3.00:1.00
 ~ $8.3$9.3 (4) ~ $2.8$3.1
_______________
(1)    Each component of the ratio as defined in the applicable loan agreement.
(2)    Assumes no change to Adjusted EBITDA.
(3)    Assumes no change to our debt levels.
(4)    Effectively, however, additional Senior Secured Debt under this ratio would be limited to the capacity under the Consolidated Total Leverage Ratio.
(1)Each component of the ratio as defined in the applicable loan agreement.
(2)Assumes no change to Adjusted EBITDA.
(3)Assumes no change to our debt levels.
(4)Effectively, however, additional Senior Secured Debt under this ratio would be limited to the capacity under the Consolidated Total Leverage Ratio.

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

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

Restrictions Under Agreements Relating to the 2015 Securitization and the 2013 SecuritizationTrust Securitizations. The indenture and related supplemental indentures governing the American Tower Secured Revenue Notes, Series 2015-1, Class A (the “Series 2015-1 Notes”) and the American Tower Secured Revenue Notes, Series 2015-2, Class A (the “Series 2015-2 Notes,” and, together with the Series 2015-1 Notes, the “2015 Notes”) issued by GTP Acquisition Partners I, LLC (“GTP


Acquisition Partners”) in a private securitization transaction in May 2015 (the “2015 Securitization”) and the loan agreement related to the securitization transaction completed in March 2013 (the “2013 Securitization”)Loan Agreement include certain financial ratios and operating covenants and other restrictions customary for transactions subject to rated securitizations. Among other things, American Towerthe AMT Asset Sub, LLC and American Tower Asset Sub II, LLC (together, the “AMT Asset Subs”)Subs and GTP Acquisition Partners are prohibited from incurring other indebtedness for borrowed money or further encumbering their assets, subject to customary carve-outs for ordinary course trade payables and permitted encumbrances (as defined in the applicable agreement).
Under the agreements, amounts due will be paid from the cash flows generated by the assets securing the 2015 Notes orand the assets securing the nonrecourse loan that secures the Secured Tower Revenue Securities, Series 2013-1A and Series 2013-2A issued in the 2013 Securitization (the “Loan”),Loan, as applicable, which must be deposited into certain reserve accounts, and thereafter distributed, solely pursuant to the terms of the applicable agreement. On a monthly basis, after payment of all required amounts under the applicable agreement, subject to the conditions described in the table


below, the excess cash flows generated from the operation of such assets are released to GTP Acquisition Partners or the AMT Asset Subs, as applicable, which can then be distributed to, and used by, us. As of June 30, 2017, $96.2March 31, 2018, $105.5 million held in such reserve accounts was classified as restricted cash.

Certain information with respect to the 2015 Securitization and the 2013 SecuritizationTrust Securitizations is set forth below. The debt service coverage ratio (“DSCR”) is generally calculated as the ratio of the net cash flow (as defined in the applicable agreement) to the amount of interest, servicing fees and trustee fees required to be paid over the succeeding 12 months on the principal amount of the 2015 Notes or the Loan, as applicable, that will be outstanding on the payment date following such date of determination.
Issuer or BorrowerNotes/Securities IssuedConditions Limiting Distributions of Excess CashExcess Cash Distributed During the Six Months Ended June 30, 2017DSCR as of June 30, 2017Capacity for Decrease in Net Cash Flow Before Triggering Cash Trap DSCR (1)Capacity for Decrease in Net Cash Flow Before Triggering Minimum DSCR (1)Issuer or BorrowerNotes/Securities IssuedConditions Limiting Distributions of Excess CashExcess Cash Distributed During the Three Months Ended March 31, 2018DSCR as of March 31, 2018Capacity for Decrease in Net Cash Flow Before Triggering Cash Trap DSCR (1)Capacity for Decrease in Net Cash Flow Before Triggering Minimum DSCR (1)
Cash Trap DSCRAmortization PeriodCash Trap DSCRAmortization Period
 (in millions) (in millions)(in millions) (in millions) (in millions)(in millions)
2015 SecuritizationGTP Acquisition PartnersAmerican Tower Secured Revenue Notes, Series 2015-1 and Series 2015-21.30x, Tested Quarterly (2)(3)(4)$99.48.30x$187.0$191.0GTP Acquisition PartnersAmerican Tower Secured Revenue Notes, Series 2015-1 and Series 2015-21.30x, Tested Quarterly (2)(3)(4)$51.18.35x$188.2$192.3
2013 SecuritizationAMT Asset SubsSecured Tower Revenue Securities, Series 2013-1A and Series 2013-2A1.30x, Tested Quarterly (2)(3)(5)$267.411.83x$506.3$513.5
Trust SecuritizationsAMT Asset SubsSecured Tower Revenue Securities, Series 2013-2A, Secured Tower Revenue Securities, Series 2018-1, Subclass A and Secured Tower Revenue Securities, Series 2018-1, Subclass R1.30x, Tested Quarterly (2)(3)(5)$199.810.38x$542.3$551.3
_______________
(1)Based on the net cash flow of the applicable issuer or borrower as of June 30, 2017March 31, 2018 and the expenses payable over the next 12 months on the 2015 Notes or the Loan, as applicable.
(2)Once triggered, a Cash Trap DSCR condition continues to exist until the DSCR exceeds the Cash Trap DSCR for two consecutive calendar quarters. During a Cash Trap DSCR condition, all cash flow in excess of amounts required to make debt service payments, to fund required reserves, to pay management fees and budgeted operating expenses and to make other payments required under the loanapplicable transaction documents, referred to as excess cash flow, will be deposited into a reserve account (the “Cash Trap Reserve Account”) instead of being released to the applicable issuer or borrower. 
(3)An amortization period commences if the DSCR is equal to or below 1.15x (the “Minimum DSCR”) at the end of any calendar quarter and continues to exist until the DSCR exceeds the Minimum DSCR for two consecutive calendar quarters.
(4)No amortization period is triggered if the outstanding principal amount of a series has not been repaid in full on the applicable anticipated repayment date. However, in such event, additional interest will accrue on the unpaid principal balance of the applicable series, and such series will begin to amortize on a monthly basis from excess cash flow.
(5)An amortization period exists if the outstanding principal amount has not been paid in full on the applicable anticipated repayment date and continues to exist until such principal has been repaid in full.

A failure to meet the noted DSCR tests could prevent GTP Acquisition Partners or the AMT Asset Subs from distributing excess cash flow to us, which could affect our ability to fund our capital expenditures, including tower construction and acquisitions and meet REIT distribution requirements and make preferred stock dividend payments.requirements. During an “amortization period,” all excess cash


flow and any amounts then in the applicable Cash Trap Reserve Account would be applied to pay principal of the 2015 Notes or the Loan, as applicable, on each monthly payment date, and so would not be available for distribution to us. Further, additional interest will begin to accrue with respect to any series of the 2015 Notes or subclass of the Loan from and after the anticipated repayment date at a per annum rate determined in accordance with the applicable agreement. With respect to the 2015 Notes, upon the occurrence of, and during, an event of default, the applicable trustee may, in its discretion or at the direction of holders of more than 50% of the aggregate outstanding principal of any series of the 2015 Notes, declare such series of 2015 Notes immediately due and payable, in which case any excess cash flow would need to be used to pay holders of such notes. Furthermore, if GTP Acquisition Partners or the AMT Asset Subs were to default on a series of the 2015 Notes or the Loan, the applicable trustee may seek to foreclose upon or otherwise convert the ownership of all or any portion of the 3,584 communications sites that secure the 2015 Notes or the 5,180 wireless and broadcast towers5,116 sites that secure the Loan, respectively, in which case we could lose such sites and the revenue associated with those assets.



As discussed above, we use our available liquidity and seek new sources of liquidity to fund capital expenditures, future growth and expansion initiatives, satisfy our distribution requirements and repay or repurchase our debt. If we determine that it is desirable or necessary to raise additional capital, we may be unable to do so, or such additional financing may be prohibitively expensive or restricted by the terms of our outstanding indebtedness. If we are unable to raise capital when our needs arise, we may not be able to fund capital expenditures, future growth and expansion initiatives, satisfy our REIT distribution requirements and debt service obligations pay preferred stock dividends or refinance our existing indebtedness.
In addition, our liquidity depends on our ability to generate cash flow from operating activities. As set forth under the caption “Risk Factors” in Item 1A of the 20162017 Form 10-K, we derive a substantial portion of our revenues from a small number of tenants and, consequently, a failure by a significant tenant to perform its contractual obligations to us could adversely affect our cash flow and liquidity.
For more information regarding the terms of our outstanding indebtedness, please see note 8 to our consolidated financial statements included in the 20162017 Form 10-K.
Critical Accounting Policies and Estimates
Management’s discussion and analysis of financial condition and results of operations are based upon our consolidated and condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as related disclosures of contingent assets and liabilities. We evaluate our policies and estimates on an ongoing basis, including those related to impairment of long-lived assets, asset retirement obligations, revenue recognition, rent expense, stock-based compensation, income taxes and accounting for business combinations and acquisitions of assets, which we discussed in the 20162017 Form 10-K. Management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
We have reviewed our policies and estimates to determine our critical accounting policies for the sixthree months ended June 30, 2017.March 31, 2018. We have made no material changes to the critical accounting policies described in the 20162017 Form 10-K.
During the quarter ended March 31, 2018, no potential impairment was identified as the fair value of each of our reporting units was in excess of its carrying amount. The fair value of our India reporting unit, which is based on the present value of forecasted future value cash flows (the income approach) exceeded the carrying value by approximately $156.5 million, or 4%. As a result of the telecommunications carrier consolidation occurring in the India market, including the impact of Aircel’s filing for bankruptcy protection, we lowered our discounted cash flow projections, which increases the sensitivity of these projections to changes in the key assumptions used in determining the fair value of the India reporting unit as of March 31, 2018. Key assumptions include future revenue growth rates and operating margins, capital expenditures, terminal period growth rate and the weighted-average cost of capital, which were determined considering historical data and current assumptions related to the impacts of the carrier consolidation.


For this reporting unit, we performed a sensitivity analysis on our significant assumptions and determined that (i) a 7% reduction on projected revenues, (ii) a 35 basis point increase in the weighted-average cost of capital or (iii) a 16% reduction in terminal sales growth rate, individually, each of which we determined to be reasonable, would impact our conclusion that the fair value of the India reporting unit exceeds its carrying value. Events that could negatively affect our India reporting units financial results include increased customer attrition exceeding our forecast resulting from the ongoing carrier consolidation, carrier tenant bankruptcies and other factors set forth under the caption “Risk Factors” in Item 1A of the 2017 Form 10-K.
The carrying value of goodwill in the India reporting unit was $1,073.1 million as of March 31, 2018, which represents 19% of our consolidated balance of $5,647.1 million.
Accounting Standards Update
For a discussion of recent accounting standards updates, see note 1 to our consolidated and condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.



ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk
As of June 30, 2017,March 31, 2018, we have one interest rate swap agreement related to debt in Colombia. This swap has been designated as a cash flow hedge, has a notional amount of $25.5$23.8 million, has an interest rate of 5.74% and expires in April 2021. We also have three interest rate swap agreements related to the 2.250% senior unsecured notes due 2022 (the “2.250% Notes”). These swaps have been designated as fair value hedges, have an aggregate notional amount of $600.0 million, have an interest rate of one-month LIBOR plus applicable spreads and expire in January 2022. In addition, we have three interest rate swap agreements related to a portion of the 3.000% senior unsecured notes due 2023 (the “3.000% Notes”). These swaps have been designated as fair value hedges, have an aggregate notional amount of $500.0 million and an interest rate of one-month LIBOR plus applicable spreads and expire in June 2023.
Changes in interest rates can cause interest charges to fluctuate on our variable rate debt. Variable rate debt as of June 30, 2017March 31, 2018 consisted of $1,180.0$600.0 million under the 2014 Credit Facility, $853.4$1,641.8 million under the 2013 Credit Facility, $1,000.0 million$1.0 billion under the 2013 Term Loan, $1.5 billion under the 2018 Term Loan, $600.0 million under the interest rate swap agreements related to the 2.250% Notes, $77.9$500.0 million under the interest rate swap agreements related to the 3.000% Notes, $67.6 million under the South African credit facility, $25.5$23.8 million under the Colombian credit facility after giving effect to our interest rate swap agreement, $96.8$90.6 million under the BR Towers debentures and $41.6$35.3 million under the Brazil credit facility. A 10% increase in current interest rates would result in an additional $5.5$4.8 million of interest expense for the sixthree months ended June 30, 2017.March 31, 2018.

Foreign Currency Risk
We are exposed to market risk from changes in foreign currency exchange rates primarily in connection with our foreign subsidiaries and joint ventures internationally. Any transaction denominated in a currency other than the U.S. Dollar is reported in U.S. Dollars at the applicable exchange rate. All assets and liabilities are translated into U.S. Dollars at exchange rates in effect at the end of the applicable fiscal reporting period and all revenues and expenses are translated at average rates for the period. The cumulative translation effect is included in equity as a component of Accumulated other comprehensive loss. We may enter into additional foreign currency financial instruments in anticipation of future transactions to minimize the impact of foreign currency fluctuations. For the sixthree months ended June 30, 2017,March 31, 2018, 44% of our revenues and 50%56% of our total operating expenses were denominated in foreign currencies.
As of June 30, 2017,March 31, 2018, we have incurred intercompany debt that is not considered to be permanently reinvested and similar unaffiliated balances that were denominated in a currency other than the functional currency of the subsidiary in which it is recorded. As this debt had not been designated as being a long-term investment in nature, any changes in the foreign currency exchange rates will result in unrealized gains or losses, which will be included in our determination of net income. An adverse change of 10% in the underlying exchange rates of our unsettled intercompany debt and similar unaffiliated balances would result in $101.7$90.2 million of unrealized losses that would be included in Other expense in our consolidated statements of operations for the sixthree months ended June 30, 2017.March 31, 2018.

ITEM 4.CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We have established disclosure controls and procedures designed to ensure that material information relating to us, including our consolidated subsidiaries, is made known to the officers who certify our financial reports and to other members of senior management and the Board of Directors.
Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”))Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our principal executive officer and principal financial officer concluded that these disclosure controls and procedures were effective as of June 30, 2017March 31, 2018 and designed to ensure that the information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the requisite time periods specified in the applicable rules and forms, and that it is accumulated and


communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.




Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the fiscal quarter ended June 30, 2017March 31, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



PART II. OTHER INFORMATION
ITEM 1.LEGAL PROCEEDINGS

We periodically become involved in various claims and lawsuits that are incidental to our business. In the opinion of management, after consultation with counsel, there are no matters currently pending that would, in the event of an adverse outcome, have a material impact on our consolidated financial position, results of operations or liquidity.
 
ITEM 1A.RISK FACTORS

There were no material changes to the risk factors discussed in Item 1A of the 20162017 Form 10-K.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

During the three months ended June 30, 2017, we repurchased a total of 3,326,022 shares of our common stock for an aggregate of $416.3 million, including commissions and fees, pursuant to the 2011 Buyback. The table below sets forth details of our repurchases during the three months ended June 30, 2017.
Period Total Number of Shares Purchased (1) Average Price Paid per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
        (in millions)
April 1, 2017 - April 30, 2017 1,926,858
 $123.26
 1,926,858
 $648.5
May 1, 2017 - May 31, 2017 1,279,664
 $127.62
 1,279,664
 $485.2
June 1, 2017 - June 30, 2017 119,500
 $129.43
 119,500
 $469.7
Total Second Quarter 3,326,022
 $125.16
 3,326,022
 $469.7
_______________
(1)Repurchases made pursuant to the 2011 Buyback. Under this program, our management is authorized to purchase shares from time to time through open market purchases or privately negotiated transactions at prevailing prices as permitted by securities laws and other legal requirements, and subject to market conditions and other factors. To facilitate repurchases, we make purchases pursuant to trading plans under Rule 10b5-1 of the Exchange Act, which allows us to repurchase shares during periods when we otherwise might be prevented from doing so under insider trading laws or because of self-imposed trading blackout periods. This program may be discontinued at any time.
(2)Average price paid per share is a weighted average calculation using the aggregate price, excluding commissions and fees.

We have repurchased a total of 11.5 million shares of our common stock under the 2011 Buyback for an aggregate of $1.0 billion, including commissions and fees. We expect to continue to manage the pacing of the remaining $469.7 million under the 2011 Buyback in response to general market conditions and other relevant factors. We expect to fund any further repurchases of our common stock through a combination of cash on hand, cash generated by operations and borrowings under our credit facilities. Purchases under the 2011 Buyback are subject to our having available cash to fund repurchases.


ITEM 6.EXHIBITS
See Page EX-1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
AMERICAN TOWER CORPORATION
Date: July 27, 2017By:
/S/   THOMAS A. BARTLETT   
Thomas A. Bartlett
Executive Vice President, Chief Financial Officer and Treasurer
(Duly Authorized Officer and Principal Financial Officer)





EXHIBIT INDEX
Exhibit No.  Description of Document
  
4.110.1 
Supplemental Indenture No. 7,Term Loan Agreement, dated March 29, 2018, among the Company, as borrower, Mizuho Bank, Ltd., as administrative agent, joint lead arranger and joint bookrunner, Royal Bank of Canada and TD Securities (USA) LLC, as co-syndication agents, and RBC Capital Markets and TD Securities (USA) LLC as joint lead arrangers and joint bookrunners
10.2
Second Amended and Restated Loan and Security Agreement, dated as of April 6, 2017, to Indenture dated as of May 23, 2013,March 29, 2018, by and between the Company,American Tower Asset Sub, LLC and American Tower Asset Sub II, LLC, as Borrowers, and U.S. Bank National Association, as trustee,Trustee for American Tower Trust I, as Lender

10.3
Second Amended and Elavon FinancialRestated Trust and Servicing Agreement, dated as of March 29, 2018, by and among American Tower Depositor Sub, LLC, as Depositor, Midland Loan Services, DAC, UK Branch,a Division of PNC Bank, National Association, successor to The Bank of New York Mellon, as paying agent, for the 1.375% Senior Notes due 2025 (filedServicer, and U.S. Bank National Association, as Exhibit 4.1 to the Company’s Current Report on Form 8-K on April 6, 2017, and incorporated herein by reference)Trustee
  
4.210.4 
Supplemental Indenture No. 8,Second Amended and Restated Cash Management Agreement, dated as of June 30, 2017, to IndentureMarch 29, 2018, by and among American Tower Asset Sub, LLC and American Tower Asset Sub II, LLC, as Borrowers, U.S. Bank National Association, as Trustee for American Tower Trust I Secured Tower Revenue Securities, as Lender, Midland Loan Services, a Division of PNC Bank, National Association, as Servicer, U.S. Bank National Association, as Agent, and SpectraSite Communications, LLC, as Manager
10.5
Amended and Restated Letter Agreement, dated as of May 23, 2013,April 12, 2018, by and between the Company and U.S. Bank National Association, as trustee, for the 3.55% Senior Notes due 2027 (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K on June 30, 2017, and incorporated herein by reference)William H. Hess

   
12  
Statement Regarding Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
  
31.1  
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  
31.2  
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  
32  
Certifications filed pursuant to 18. U.S.C. Section 1350
   
101.INS  XBRL Instance Document
  
101.SCH  XBRL Taxonomy Extension Schema Document
  
101.CAL  XBRL Taxonomy Extension Calculation Linkbase Document
  
101.LAB  XBRL Taxonomy Extension Label Linkbase Document
  
101.PRE  XBRL Taxonomy Extension Presentation Linkbase Document
  
101.DEF  XBRL Taxonomy Extension Definition


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
AMERICAN TOWER CORPORATION
Date: May 1, 2018By:
/S/   THOMAS A. BARTLETT   
Thomas A. Bartlett
Executive Vice President, Chief Financial Officer and Treasurer
(Duly Authorized Officer and Principal Financial Officer)








EX-153