ACQUISITIONS

3 Months Ended

Mar. 31, 2020

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 months ended March 31, 2020 from the date of the respective acquisition. The date of acquisition, and by extension the point at which the Company begins to recognize the results of an acquisition, may depend on, among other things, the receipt of contractual consents, the commencement and extent of leasing arrangements and the timing of the transfer of title or rights to the assets, which may be accomplished in phases. Sites acquired from communications service providers may never have been operated as a business and may instead have been utilized solely by the seller as a component of its network infrastructure. An acquisition may or may not involve the transfer of business operations or employees.

The Company evaluates each of its acquisitions under the accounting guidance framework to determine whether to treat an acquisition as an asset acquisition or a business combination. For those transactions treated as asset acquisitions, the purchase price is allocated to the assets acquired, with no recognition of goodwill.

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

During the three months ended March 31, 2020 and 2019, the Company recorded acquisition and merger related expenses for business combinations and non-capitalized asset acquisition costs and integration costs as follows:


	Three Months Ended March 31,
	2020		2019
Acquisition and merger related expenses	$	7.6	$	2.0
Integration costs	$	6.6	$	4.1

During the three months ended March 31, 2019, the Company received $5.7 million related to a pre-acquisition contingency in France.

2020 Transactions

The estimated aggregate impact of the acquisitions completed in 2020 on the Company’s revenues and gross margin for the three months ended March 31, 2020 was approximately $0.1 million and less than $0.1 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.

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. for total consideration of approximately $0.8 billion (as of the date of signing). The Company completed the acquisition of approximately 2,400 communications sites in December 2019 (the “Entel Acquisition”). During the three months ended March 31, 2020, the Company completed the acquisition of an additional 156 communications sites pursuant to this agreement for an aggregate total purchase price of $39.7 million, which are being accounted for as an acquisition of assets and are included below. The remaining communications sites are expected to continue to close in tranches, subject to certain closing conditions.

Other Acquisitions—During the three months ended March 31, 2020, the Company acquired a total of 37 communications sites in the United States, Mexico and Peru, as well as other communications infrastructure assets, for an aggregate purchase price of $11.2 million. These acquisitions were accounted for as asset acquisitions.

The following table summarizes the allocations of the purchase prices for the fiscal year 2020 acquisitions based upon their estimated fair value at the date of acquisition:


	Allocation (1)
Current assets	$	0.3

Property and equipment	25.9
Intangible assets (2):
Tenant-related intangible assets	14.1
Network location intangible assets	4.2
Other intangible assets	1.3
Other non-current assets	10.6
Current liabilities	(0.9)
Deferred tax liability	—
Other non-current liabilities	(4.6)
Net assets acquired	50.9
Goodwill	—
Fair value of net assets acquired	50.9
Debt assumed	—
Purchase price	$	50.9

_______________

(1) Includes 7 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.

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. On April 1, 2020, the Company completed the acquisition of 113 of these communications

sites. The remaining communications sites are expected to continue to close in tranches for total consideration in the range of approximately 500.0 million 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.

2019 Transactions

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. During the three months ended March 31, 2020, certain adjustments were made to assets of $15.1 million and liabilities of $15.0 million with a corresponding reduction in goodwill of $0.1 million and there were no other material post-closing adjustments. The full reconciliation and finalization of the assets acquired and liabilities assumed, including those subject to valuation, have not been completed and, as a result, there may be additional post-closing adjustments.

Pro Forma Consolidated Results (Unaudited)

The following table presents the unaudited pro forma financial results as if the 2020 acquisitions had occurred on January 1, 2019 and the 2019 acquisitions had occurred on January 1, 2018. 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 March 31,
	2020		2019
Pro forma revenues	$	1,993.8	$	1,899.3
Pro forma net income attributable to American Tower Corporation common stockholders	$	414.9	$	380.3
Pro forma net income per common share amounts:
Basic net income attributable to American Tower Corporation common stockholders	$	0.94	$	0.86
Diluted net income attributable to American Tower Corporation common stockholders	$	0.93	$	0.86