Chapter 7 – Restricted Cash Disclosures
AMERICAN TOWER CORP.
Concentrations of Credit Risk—The Company is subject to concentrations of credit risk related to its cash and cash
equivalents, notes receivable, accounts receivable, deferred rent asset and derivative financial instruments. The
Company mitigates its risk with respect to cash and cash equivalents and derivative financial instruments by
maintaining its deposits and contracts at high quality financial institutions and monitoring the credit ratings of those
institutions.
The Company derives the largest portion of its revenues, corresponding accounts receivable and the related deferred
rent asset from a relatively small number of tenants in the telecommunications industry, and approximately 51% of
its revenues is derived from four customers. In addition, the Company has concentrations of credit risk in certain
geographic areas.
The Company mitigates its concentrations of credit risk with respect to notes and trade receivables and the related
deferred rent assets by actively monitoring the credit worthiness of its borrowers and tenants. In recognizing
customer revenue, the Company must assess the collectibility of both the amounts billed and the portion recognized
on a straight-line basis. This assessment takes tenant credit risk and business and industry conditions into
consideration to ultimately determine the collectibility of the amounts billed. To the extent the amounts, based on
management’s estimates, may not be collectible, recognition is deferred until such point as the uncertainty is
resolved. Any amounts that were previously recognized as revenue and subsequently determined to be uncollectible
are charged to bad debt expense included in selling, general, administrative and development expense in the
accompanying consolidated statement of operations.
Accounts receivable are reported net of allowances for doubtful accounts related to estimated losses resulting from a
tenant’s inability to make required payments and allowances for amounts invoiced whose collectibility is not
reasonably assured. These allowances are generally estimated based on payment patterns, days past due and
collection history, and incorporate changes in economic conditions that may not be reflected in historical trends,
such as tenants in bankruptcy, liquidation or reorganization. Receivables are written-off against the allowances
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
when they are determined uncollectible. Such determination includes analysis and consideration of the particular
conditions of the account. Changes in the allowances were as follows for the years ended December 31, (in
thousands):
Balance as of January 1
Current year increases
Write-offs, net of recoveries and other
Balance as of December 31
2012
2011
2010
$ 24,412
8,028
(12,034)
$ 20,406
$ 22,505
17,008
(15,101)
$ 24,412
$ 28,520
16,219
(22,234)
$ 22,505
Restricted Cash—The Company classifies as restricted cash all cash pledged as collateral to secure obligations and
all cash whose use is otherwise limited by contractual provisions, including cash on deposit in reserve accounts
relating to the Commercial Mortgage Pass-Through Certificates, Series 2007-1 issued in the Company’s
securitization transaction and the Secured Cellular Site Revenue Notes, Series 2010-1 Class C, Series 2010-2 Class
C and Series 2010-2 Class F, assumed by the Company as a result of the acquisition of certain legal entities from
Unison Holdings, LLC and Unison Site Management II, L.L.C. (collectively, “Unison”).