ACQUISITIONS

12 Months Ended

Dec. 31, 2019

ACQUISITIONS

The Company evaluates each of its acquisitions under the accounting guidance framework to determine whether to treat an acquisition as an asset acquisition or a business combination. For those transactions treated as asset acquisitions, the purchase price is allocated to the assets or rights acquired and liabilities assumed, with no recognition of goodwill. For those transactions treated as business combinations, the estimates of the fair value of the assets or rights acquired and liabilities assumed at the date of the applicable acquisition are subject to adjustment during the measurement period (up to one year from the particular acquisition date). The primary areas of the accounting for the acquisitions that are not yet finalized relate to the fair value of certain tangible and intangible assets acquired and liabilities assumed, including tax positions, which may include contingent consideration, residual goodwill and any related tax impact.

The fair value of these net assets acquired are based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. While the Company believes that such preliminary estimates provide a reasonable basis for estimating the fair value of assets acquired and liabilities assumed, it evaluates any necessary information prior to finalization of the fair value. During the measurement period for those acquisitions accounted for as business combinations, the Company will adjust assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the revised estimated values of those assets or liabilities as of that date.

Impact of current year acquisitions—The Company typically acquires communications sites and other communications infrastructure assets from wireless carriers or other tower operators and subsequently integrates those sites and related assets into its existing portfolio of communications sites and related assets. The financial results of the Company’s acquisitions have been included in the Company’s consolidated statements of operations for the year ended December 31, 2019 from the date of the respective acquisition. The date of acquisition, and by extension the point at which the Company begins to recognize the results of an acquisition, may depend on, among other things, the receipt of contractual consents, the commencement and extent of leasing arrangements and the timing of the transfer of title or rights to the assets, which may be accomplished in phases. Sites acquired from communications service providers may never have been operated as a business and may instead have been utilized solely by the seller as a component of its network infrastructure. An acquisition may or may not involve the transfer of business operations or employees.

For those acquisitions accounted for as business combinations, the Company recognizes acquisition and merger related expenses in the period in which they are incurred and services are received; for transactions accounted for as asset acquisitions, these costs are capitalized as part of the purchase price. Acquisition and merger related costs may include finder’s fees, advisory, legal, accounting, valuation and other professional or consulting fees and general administrative costs directly related to completing the transaction. Integration costs include incremental and non-recurring costs necessary to convert data, retain employees and otherwise enable the Company to operate acquired businesses or assets efficiently. The Company records acquisition and merger related expenses for business combinations, as well as integration costs for all acquisitions, in Other operating expenses in the consolidated statements of operations.

During the years ended December 31, 2019, 2018 and 2017, the Company recorded acquisition and merger related expenses for business combinations and non-capitalized asset acquisition costs and integration costs as follows:



	Year Ended December 31,
	2019		2018		2017
Acquisition and merger related expenses	$	26.9	$	14.1	$	16.3
Integration costs	$	9.8	$	16.1	$	11.5

The Company also received $13.1 million related to pre-acquisition contingencies and settlements during the year ended December 31, 2019.

2019 Transactions

The estimated aggregate impact of the acquisitions completed in 2019 on the Company’s revenues and gross margin for the year ended December 31, 2019 was approximately $17.6 million and $12.7 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. Acquisitions completed in 2019 were included in the Company’s U.S, Africa and Latin America property segments.

Eaton Towers Acquisition—On December 31, 2019, the Company acquired 100% of the outstanding shares of Eaton Towers Holdings Limited (“Eaton Towers”), which owns and operates approximately 5,800 communications sites across five African

markets (the “Eaton Towers Acquisition”). The total consideration for the Eaton Towers Acquisition, including the Company’s assumption of Eaton Towers’ existing debt, was approximately $2.0 billion. The purchase price reflects a $9.7 million receivable from the seller for reimbursement of taxes. The Eaton Towers Acquisition was accounted for as a business combination and is subject to post-closing adjustments.

Entel Acquisition—On December 19, 2019, the Company entered into a definitive agreement to acquire approximately 3,200 communications sites in Chile and Peru from Entel PCS Telecomunicaciones S.A. and Entel Peru S.A. (“Entel”) for total consideration of approximately $0.8 billion (as of the date of signing). On December 26, 2019, the Company completed the acquisition of approximately 2,400 communications sites for an aggregate total purchase price of $672.8 million including value-added tax (as of the date of acquisition) (the “Entel Acquisition”). The Entel Acquisition was accounted for as an asset acquisition. The remaining communications sites are expected to close in tranches beginning in the first quarter of 2020, subject to certain closing conditions.

U.S. Acquisition—On August 30, 2019, the Company acquired approximately 400 towers and other related property interests in the United States for an aggregate total purchase price of $484.2 million. This acquisition was accounted for as an asset acquisition.

Other Acquisitions—During the year ended December 31, 2019, the Company acquired a total of 676 communications sites in the United States, Colombia, Mexico, Paraguay and Peru, as well as other communications infrastructure assets, for an aggregate purchase price of $201.8 million. The majority of these acquisitions were accounted for as asset acquisitions.

The following table summarizes the allocations of the purchase prices for the fiscal year 2019 acquisitions based upon their estimated fair value at the date of acquisition:



	Africa			Latin America			U.S.
	Eaton Towers Acquisition			Entel Acquisition			U.S. Acquisition			Other (1)
Current assets	$	150.4		$	0.4		$	4.0		$	9.3
Property and equipment	304.7			281.0			97.8			66.5
Intangible assets (2):
Tenant-related intangible assets	1,007.6			228.9			271.9			65.5
Network location intangible assets	272.2			70.9			111.2			32.0
Other intangible assets	—			—			—			0.8
Other non-current assets	99.5			191.7			55.5			7.8
Current liabilities	(82.0		)	(20.7		)	(3.1		)	(1.1		)
Deferred tax liability	(319.3		)	—						—
Other non-current liabilities	(138.3		)	(79.4		)	(53.1		)	(13.3		)
Net assets acquired	1,294.8			672.8			484.2			167.5
Goodwill (3)	670.0			—			—			34.3
Fair value of net assets acquired	1,964.8			672.8			484.2			201.8
Debt assumed	(329.8		)	—			—			—
Purchase price	$	1,635.0		$	672.8		$	484.2		$	201.8

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(1)	Includes 132 sites in Peru held pursuant to long-term finance leases.


(2)	Tenant-related intangible assets and network location intangible assets are amortized on a straight-line basis over periods of up to 20 years.


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

Other Signed Acquisitions

Orange—On November 28, 2019, ATC France, a majority-owned subsidiary of the Company, entered into definitive agreements with Orange S.A. for the acquisition of up to approximately 2,000 communications sites in France over a period of up to five years. This transaction is expected to close in multiple tranches beginning in the first half of 2020 for total consideration in the range of approximately 500.0 million Euros (“EUR”) to 600.0 million EUR (approximately $550.5 million to $660.5 million at the date of signing) to be paid over the five-year term.

2018 Transactions

During the year ended December 31, 2019, the allocation of the final purchase price for the acquisition of Idea Cellular Infrastructure Services Limited was finalized with no material post-closing adjustments. During the year ended December 31, 2019, there were no material post-closing adjustments that impacted other 2018 acquisitions.

Pro Forma Consolidated Results (Unaudited)

The following table presents the unaudited pro forma financial results as if the 2019 acquisitions had occurred on January 1, 2018 and the 2018 acquisitions had occurred on January 1, 2017. The pro forma results do not include any anticipated cost synergies, costs or other integration impacts. Accordingly, such pro forma amounts are not necessarily indicative of the results that actually would have occurred had the transactions been completed on the dates indicated, nor are they indicative of the future operating results of the Company.



	Year Ended December 31,
	2019		2018
Pro forma revenues	$	7,904.2	$	7,936.0
Pro forma net income attributable to American Tower Corporation common stockholders	$	1,844.9	$	1,122.6
Pro forma net income per common share amounts:
Basic net income attributable to American Tower Corporation common stockholders	$	4.17	$	2.55
Diluted net income attributable to American Tower Corporation common stockholders	$	4.14	$	2.53