AMERICAN TOWER CORP MA

Previous wording

On January 4, 2024, through our subsidiaries, ATC Asia Pacific Pte. Ltd. and ATC TIPL, which holds our operations in India, we entered into an agreement with Data Infrastructure Trust (“DIT”), an infrastructure investment trust sponsored by an affiliate of Brookfield Asset Management, pursuant to which DIT will acquire a 100% ownership interest in ATC TIPL (the “Pending ATC TIPL Transaction”). Subject to certain pre-closing terms, total aggregate consideration would potentially represent up to approximately 210 billion Indian Rupees (“INR”) (approximately$2.5 billion), including the value of the VIL OCDs and the VIL Shares, payments on certain existing customer receivables, the repayment of existing intercompany debt and the repayment, or assumption, of our existing term loan in India, by DIT. During the six months ended June 30, 2024, we sold the VIL Shares and the remaining VIL OCDs (each as discussed in note 7 to our consolidated and condensed consolidated financial statements included in this Quarterly Report) and ATC TIPL distributed approximately 27.2 billion INR (approximately $325.9 million) to us. ATC TIPL expects to make a final distribution of approximately 2.4 billion INR (approximately $28.5 million), which includes the satisfactionof the economic benefit associated with the rights to payments on certain existing customer receivables. Each such distribution will be deducted from the total aggregate consideration to be received by us at closing. The Pending ATC TIPL Transaction is expected to close in the second half of 2024, subject to customary closing conditions, including government and regulatory approval.

Current wording

On January 4, 2024, we, through our subsidiaries, ATC Asia Pacific Pte. Ltd. and ATC Telecom Infrastructure Private Limited (“ATC TIPL”), which holds our operations in India, entered into an agreement with Data Infrastructure Trust (“DIT”), an infrastructure investment trust sponsored by an affiliate of Brookfield Asset Management, pursuant to which DIT agreed to acquire a 100% ownership interest in ATC TIPL (the “ATC TIPL Transaction”). Per the terms of the agreement, total aggregate consideration would potentially represent up to approximately 210 billion Indian Rupees (“INR”) (approximately $2.5 billion), including the value of the VIL OCDs and the VIL Shares (each as defined and further discussed below), payments on certain existing customer receivables, the repayment of existing intercompany debt and the repayment, or assumption, of our existing term loan in India, by DIT.

Previous wording

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 and property interests that we lease primarily to communications service providers and third-party tower operators, and, as discussed further below, we hold a portfolio of highly interconnected data center facilities and related assets in the United States. Our customers include our tenants, licensees and other payers. We refer to the business encompassing the above as our property operations, which accounted for 98% and 99% of our total revenues for the three and six months ended June 30, 2024, respectively, and includes our U.S. & Canada property, Asia-Pacific property, Africa property, Europe property and Latin America property segments and Data Centers segment.

Current wording

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 and property interests that we lease primarily to communications service providers and third-party tower operators, and, as discussed further below, we hold a portfolio of highly interconnected data center facilities and related assets in the United States. Our customers include our tenants, licensees and other payers. We refer to the business encompassing the above as our property operations, which accounted for 98% of our total revenues for each of the three and nine months ended September 30, 2024 and includes our U.S. & Canada property, Asia-Pacific property, Africa property, Europe property and Latin America property segments and Data Centers segment.

Previous wording

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

Current wording

(2)We also control land under carrier or other third-party communications sites in Australia and New Zealand, which provide recurring cash flows through tenant leasing arrangements. In September 2024, we completed the ATC TIPL Transaction, through which we sold all of our assets in India.

Previous wording

As of June 30, 2024, our property portfolio included 28 operating data center facilities across ten markets in the United States that collectively comprise approximately 3.3 million net rentable square feet (“NRSF”) of data center space, as follows:

Current wording

As of September 30, 2024, our property portfolio included 28 operating data center facilities across ten markets in the United States that collectively comprise approximately 3.2 million net rentable square feet (“NRSF”) of data center space, as follows:

Previous wording

In most of our markets, our tenant leases for our communications sites with wireless carriers generally have initial non-cancellable terms of five to ten years with multiple renewal terms. Accordingly, the vast majority of the revenue generated by our property operations during the six months ended June 30, 2024 was recurring revenue that we should continue to receive in future periods. Most of our tenant leases for our communications sites have provisions that periodically increase or “escalate” the rent due under the lease, typically based on (a) an annual fixed escalation (averaging approximately 3% in the United States), (b) an inflationary index in most of our international markets, or (c) a combination of both. In addition, certain of our tenant leases provide for additional revenue primarily to cover costs (pass-through revenue), such as ground rent or power and fuel costs.

Current wording

In most of our markets, our tenant leases for our communications sites with wireless carriers generally have initial non-cancellable terms of five to ten years with multiple renewal terms. Accordingly, the vast majority of the revenue generated by our property operations during the nine months ended September 30, 2024 was recurring revenue that we should continue to receive in future periods. Most of our tenant leases for our communications sites have provisions that periodically increase or “escalate” the rent due under the lease, typically based on (a) an annual fixed escalation (averaging approximately 3% in the United States), (b) an inflationary index in most of our international markets, or (c) a combination of both. In addition, certain of our tenant leases provide for additional revenue primarily to cover costs (pass-through revenue), such as ground rent or power and fuel costs.

Previous wording

Based upon existing customer leases and foreign currency exchange rates as of June 30, 2024, we expect to generate over $57 billion of non-cancellable customer lease revenue over future periods, before the impact of straight-line lease accounting.

Current wording

Based upon existing customer leases and foreign currency exchange rates as of September 30, 2024, we expect to generate nearly $55 billion of non-cancellable customer lease revenue over future periods, before the impact of straight-line lease accounting.

Previous wording

Following the rulings by the Supreme Court of India regarding carriers’ obligations for the adjusted gross revenue fees and charges prescribed by the court, we have experienced variability and a level of uncertainty in collections in India. As further discussed in Item 1A of the 2023 Form 10-K under the caption “Risk Factors—A substantial portion of our current and projected future revenue is derived from a small number of customers, and we are sensitive to adverse changes in the creditworthiness and financial strength of our customers,” in the third quarter of 2022, one of our customers in India, Vodafone Idea Limited (“VIL”), communicated that it would make partial payments of its contractual amounts owed to us (the “VIL Shortfall”). We recorded reserves in late 2022 and the first half of 2023 for the VIL Shortfall. In the second half of 2023, VIL began making payments in full of its monthly contractual obligations owed to us.

Current wording

Following the rulings by the Supreme Court of India regarding carriers’ obligations for the adjusted gross revenue fees and charges prescribed by the court, we experienced variability and a level of uncertainty in collections in India. As further discussed in Item 1A of the 2023 Form 10-K under the caption “Risk Factors—A substantial portion of our current and projected future revenue is derived from a small number of customers, and we are sensitive to adverse changes in the creditworthiness and financial strength of our customers,” in the third quarter of 2022, one of our customers in India, Vodafone Idea Limited (“VIL”), communicated that it would make partial payments of its contractual amounts owed to us (the “VIL Shortfall”). We recorded reserves in late 2022 and the first half of 2023 for the VIL Shortfall. In the second half of 2023, VIL began making payments in full of its monthly contractual obligations owed to us.

Previous wording

In February 2023, and as amended in August 2023, VILissued optionally convertible debentures (the “VIL OCDs”) to our subsidiary, ATC Telecom Infrastructure Private Limited (“ATC TIPL”), in exchange for VIL’s payment of certain amounts towards accounts receivables. The VIL OCDs were (a) to be repaid by VIL with interest or (b) convertible into equity of VIL. If converted and following registration, such equity shall be free to trade in the open market beginning on the one year anniversary of the date of issuance of the VIL OCDs. The VILOCDs were issued for an aggregate face value of 16.0 billion Indian Rupees (“INR”) (approximately $193.2 million on the date of issuance). The fair value of the VIL OCDs at issuance was approximately $116.5 million.

Current wording

In February 2023, and as amended in August 2023, VILissued optionally convertible debentures (the “VIL OCDs”) to ATC TIPL in exchange for VIL’s payment of certain amounts towards accounts receivables. The VILOCDs were issued for an aggregate face value of 16.0 billion Indian Rupees (“INR”) (approximately $193.2 million on the date of issuance). On March 23, 2024, we converted an aggregate face value of 14.4 billion INR (approximately $172.7 million) of VIL OCDs into 1,440 million shares of equity of VIL (the “VIL Shares”). On April 29, 2024, we completed the sale of 1,440 million VIL Shares at a price of 12.78 INR per share. The net proceeds for this transaction were approximately 18.0 billion INR (approximately $216.0 million at the date of settlement) after deducting commissions and fees. On June 5, 2024, we completed the sale of the remaining aggregate face value of 1.6 billion INR (approximately $19.2 million) of the VIL OCDs. The net proceeds for this transaction, excluding accrued interest, were approximately 1.8 billion INR (approximately $22.0 million at the date of settlement) after deducting fees. As of September 30, 2024, none of the VIL Shares or the VIL OCDs remained outstanding.

Previous wording

In 2023, we initiated a strategic review of our India business, where we evaluated our exposure to the India market within our global portfolio of communications assets, and assessed opportunities to repurpose capital to drive long-term shareholder value and sustained growth. The strategic review concluded in January 2024 with our signed agreement with DIT for the Pending ATC TIPL Transaction (each as defined below). During the process, and based on information gathered therein, we updated our estimate on the fair value of the India reporting unit and determined that the carrying value exceeded fair value. As a result, we recorded a goodwill impairment charge of $322.0 million in the third quarter of 2023.

Current wording

In 2023, we initiated a strategic review of our India business, as discussed above. During the process, and based on information gathered therein, we updated our estimate on the fair value of the India reporting unit and determined that the carrying value exceeded fair value. As a result, we recorded a goodwill impairment charge of $322.0 million in the third quarter of 2023.

Previous wording

The revenues generated by our property operations may be affected by cancellations of existing tenant leases. As discussed above, most of our tenant leases with wireless carriers and broadcasters are multiyear contracts, which typically are non-cancellable; however, in some instances, a lease may be cancelled upon the payment of a termination fee. Revenue lost from either tenant lease cancellations or the non-renewal of leases or rent renegotiations, which we refer to as churn, has historically not had a material adverse effect on the revenues generated by our consolidated property operations. During the six months ended June 30, 2024, churn was approximately 2% of our tenant billings, primarily driven by churn in our U.S. & Canada property segment, as discussed below.

Current wording

The revenues generated by our property operations may be affected by cancellations of existing tenant leases. As discussed above, most of our tenant leases with wireless carriers and broadcasters are multiyear contracts, which typically are non-cancellable; however, in some instances, a lease may be cancelled upon the payment of a termination fee. Revenue lost from either tenant lease cancellations or the non-renewal of leases or rent renegotiations, which we refer to as churn, has historically not had a material adverse effect on the revenues generated by our consolidated property operations. During the nine months ended September 30, 2024, churn was approximately 2% of our tenant billings, primarily driven by churn in our U.S. & Canada property segment, as discussed below.

Previous wording

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), including Goodwill impairment; Depreciation, amortization and accretion; and stock-based compensation expense.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

We define AFFO attributable to American Tower Corporation common stockholders as Nareit FFO (common stockholders) before (i) straight-line revenue and expense; (ii) stock-based compensation expense; (iii) the deferred portion of income tax and other income tax adjustments; (iv) non-real estate related depreciation, amortization and accretion; (v) amortization of deferred financing costs, debt discounts and premiums and long-term deferred interest charges; (vi) other income (expense); (vii) gain (loss) on retirement of long-term obligations; and (viii) other operating income (expense); less cash payments related to capital improvements and cash payments related to corporate capital expenditures and including adjustments and distributions for unconsolidated affiliates and noncontrolling interests, which includes the impact of noncontrolling interests on both Nareit FFO and the corresponding adjustments included in AFFO. In this section, we refer to AFFO attributable to American Tower Corporation common stockholders as “AFFO (common stockholders).”

Current wording

We define AFFO attributable to American Tower Corporation common stockholders as Nareit FFO (common stockholders) before (i) straight-line revenue and expense; (ii) stock-based compensation expense; (iii) the deferred portion of income tax and other income tax adjustments; (iv) non-real estate related depreciation, amortization and accretion; (v) amortization of deferred financing costs, debt discounts and premiums and long-term deferred interest charges; (vi) other income (expense); (vii) gain (loss) on retirement of long-term obligations; and (viii) other operating income (expense); less cash payments related to capital improvements and cash payments related to corporate capital expenditures and including adjustments and distributions for unconsolidated affiliates and noncontrolling interests and adjustments for discontinued operations, which includes the impact of noncontrolling interests and discontinued operations on both Nareit FFO and the corresponding adjustments included in AFFO. In this section, we refer to AFFO attributable to American Tower Corporation common stockholders as “AFFO (common stockholders).”

Previous wording

•$45.3 million due to leasing additional space on our sites (“colocations”) and amendments; and

Current wording

•$44.9 million due to leasing additional space on our sites (“colocations”) and amendments; and

Previous wording

•$0.7 million generated from sites acquired or constructed since the beginning of the prior-year period (“newly acquired or constructed sites”);

Current wording

•$0.6 million generated from sites acquired or constructed since the beginning of the prior-year period (“newly acquired or constructed sites”);

Previous wording

•$1.9 million generated from newly acquired or constructed sites; and

Current wording

•$10.0 million generated from newly acquired or constructed sites; and

Previous wording

•Partially offset by a decrease of $3.3 million from other tenant billings;

Current wording

•Partially offset by a decrease of $3.3 million in other revenue.

Previous wording

•A decrease of $49.4 million attributable to the impact of foreign currency translation, which included, among others, negative impacts of $42.6 million related to fluctuations in Nigerian Naira (“NGN”) and $7.1 million related to fluctuations in Ghanaian Cedi (“GHS”), offset by positive impacts of $1.3 million related to fluctuations in Kenyan Shilling (“KES”).

Current wording

Naira (“NGN”) and $10.9 million related to fluctuations in Ghanaian Cedi (“GHS”), offset by positive impacts of $3.5 million related to fluctuations in Kenyan Shilling (“KES”).

Previous wording

•An increase of $0.5 million in other revenue;

Current wording

•Partially offset by a decrease of $0.5 million in other revenue.

Previous wording

Segment revenue growth was partially offset by a decrease of $2.1 million attributable to the negative impact of foreign currency translation related to fluctuations in Euro (“EUR”).

Current wording

Segment revenue growth included an increase of $1.6 million attributable to the positive impact of foreign currency translation related to fluctuations in Euro (“EUR”).

Previous wording

Segment revenue growth was partially offset by a decrease of $6.6 million, attributable to the impact of foreign currency translation, which included, among others, negative impacts of $8.8 million related to fluctuations in Brazilian Real and $4.3 million related to fluctuations in Chilean Peso (“CLP”), offset by positive impacts of $4.1 million related to fluctuations in Mexican Peso (“MXN”) and $3.3 million related to fluctuations in Colombian Peso (“COP”).

Current wording

•A decrease of $42.1 million attributable to the impact of foreign currency translation, which included, among others, negative impacts of $25.4 million related to fluctuations in Brazilian Real (“BRL”), $13.7 million related to fluctuations in Mexican Peso (“MXN”) and $2.5 million related to fluctuations in Chilean Peso (“CLP”); and

Previous wording

•An increase of $4.3 million in other revenue, primarily attributable to the recognition of previously deferred revenue in Brazil, partially offset by a decrease in tenant settlements in Mexico.

Current wording

•A decrease of $23.3 million in other revenue, primarily attributable to an increase in revenue reserves related to a customer in Colombia and a decrease in tenant settlements in Mexico;

Previous wording

•$0.5 million from churn in excess of contractual escalations; and

Current wording

◦$0.9 million from churn in excess of contractual escalations; and

Previous wording

•An increase of $15.8 million in rental, related and other revenue, primarily due to new lease commencements, customer expansions and rent increases upon customer renewals;

Current wording

•An increase of $13.7 million in rental, related and other revenue, primarily due to new lease commencements, customer expansions and rent increases upon customer renewals;

Previous wording

•An increase of $8.9 million in power revenue from new lease commencements, increased power consumption and pricing increases from existing customers; and

Current wording

•An increase of $7.7 million in power revenue from new lease commencements, increased power consumption and pricing increases from existing customers; and

Previous wording

•An increase of $3.1 million in interconnection revenue, primarily due to customer interconnection net additions and set-up fees;

Current wording

•An increase of $2.8 million in interconnection revenue, primarily due to customer interconnection net additions and set-up fees;

Previous wording

•Partially offset by a decrease of $1.9 million in straight-line revenue.

Current wording

•Partially offset by a decrease of $2.4 million in straight-line revenue.

Previous wording

Services segment revenue decrease of $18.2 million was primarily attributable to a decrease in site application, zoning and permitting and structural and mount analyses services, partially offset by an increase in construction management services.

Current wording

Services segment revenue growth of $26.2 million was primarily attributable to an increase in construction management services, site application, zoning and permitting services and structural and mount analyses services.

Previous wording

•Partially offset by a decrease of $45.8 million in other revenue, which includes a $38.0 million decrease due to straight-line accounting.

Current wording

•Partially offset by a decrease of $138.8 million in other revenue, which includes a $98.0 million decrease due to straight-line accounting and a decrease due to equipment removal and other fees received in the prior year period.

Previous wording

•A decrease of $99.9 million attributable to the impact of foreign currency translation, which included, among others, negative impacts of $81.2 million related to fluctuations in NGN, $8.6 million related to fluctuations in GHS, $4.7 million related to fluctuations in KES and $2.9 million related to fluctuations in Ugandan Shilling.

Current wording

•A decrease of $130.9 million attributable to the impact of foreign currency translation, which included, among others, negative impacts of $106.1 million related to fluctuations in NGN, $19.5 million related to fluctuations in GHS, $3.2 million related to fluctuations in Ugandan Shilling and $1.2 million related to fluctuations in KES; and

Previous wording

•A decrease of $18.9 million in pass-through revenue, primarily due to a decrease in fuel costs;

Current wording

•A decrease of $36.1 million in pass-through revenue, primarily due to a decrease in fuel costs;

Previous wording

•$0.8 million from other tenant billings; and

Current wording

•Partially offset by a decrease of $0.8 million from other tenant billings; and

Previous wording

•Partially offset by a decrease of $2.9 million in pass-through revenue, primarily due to a decrease in energy costs.

Current wording

•Partially offset by a decrease of $1.3 million in pass-through revenue, primarily due to a decrease in energy costs.

Previous wording

Segment revenue growth included an increase of $0.5 million attributable to the positive impact of foreign currency translation related to fluctuations in EUR.

Current wording

Segment revenue growth included an increase of $2.1 million attributable to the positive impact of foreign currency translation related to fluctuations in EUR.

Previous wording

•A decrease of $49.6 million in other revenue, primarily attributable to a decrease in tenant settlements in Mexico and the sale of one of our subsidiaries in Mexico that held fiber assets (“Mexico Fiber”) in the prior year period, partially offset by the recognition of previously deferred revenue in Brazil;

Current wording

•A decrease of $72.8 million in other revenue, primarily attributable to an increase in revenue reserves related to a customer in Colombia, a decrease in tenant settlements in Mexico and the sale of one of our subsidiaries in Mexico that held fiber assets (“Mexico Fiber”) in the prior year period, partially offset by the recognition of previously deferred revenue in Brazil; and

Previous wording

◦$1.7 million from churn in excess of contractual escalations; and

Current wording

◦$2.6 million from churn in excess of contractual escalations; and

Previous wording

•The increase in Latin America property segment gross margin was primarily attributable to the increase in revenue described above and a decrease in direct expenses of $1.4 million. Direct expenses also benefited by $2.0 million from the impact of foreign currency translation.

Current wording

◦$2.0 million from other tenant billings; and

Previous wording

•An increase of $29.4 million in rental, related and other revenue, primarily due to new lease commencements, customer expansions and rent increases upon customer renewals;

Current wording

•An increase of $43.1 million in rental, related and other revenue, primarily due to new lease commencements, customer expansions and rent increases upon customer renewals;

Previous wording

•An increase of $16.9 million in power revenue from new lease commencements, increased power consumption and pricing increases from existing customers; and

Current wording

•An increase of $24.6 million in power revenue from new lease commencements, increased power consumption and pricing increases from existing customers; and

Previous wording

•An increase of $5.6 million in interconnection revenue, primarily due to customer interconnection net additions and set-up fees;

Current wording

•An increase of $8.4 million in interconnection revenue, primarily due to customer interconnection net additions and set-up fees;