AMERICAN TOWER CORP /MA/AMT

AMERICAN TOWER CORP /MA/ Leases Disclosure

10-KFiled Feb 24, 20267 min read
LEASES
The Company determines if an arrangement is a lease at the inception of the agreement. The Company considers an arrangement to be a lease if it conveys the right to control the use of the communications infrastructure or ground space underneath communications infrastructure for a period of time in exchange for consideration. The Company is both a lessor and a lessee.
Lessor—The Company is a lessor in most of its revenue arrangements, as property revenue is derived from tenant leases of specifically-identified, physically distinct space on or in the Company’s communications real estate assets. The Company’s lease arrangements with its tenants for its communications sites vary depending upon the region and the industry of the tenant and generally have initial non-cancellable terms of five to ten years with multiple renewal terms. The leases also contain
provisions that periodically increase the rent due, typically annually, based on a fixed escalation percentage or an inflationary index, or a combination of both. The Company structures its leases to include financial penalties if a tenant terminates the lease, which serve to disincentivize tenants from terminating the lease prior to the expiration of the lease term.
The Company’s leasing arrangements outside of the United States may 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, or otherwise charge for, these services. Many arrangements require that the communications site has power for a specified percentage of time. In most cases, if delivery of power falls below the specified service level, a corresponding reduction in revenue is recorded. The Company has determined that this performance obligation is satisfied over time for the duration of the lease. In addition, the Company provides power to its data center customers, which is passed through, or otherwise charged, to customers pursuant to the terms of the customer power arrangement. Customer power arrangements are coterminous with such customer’s underlying lease and have the same pattern of transfer over the lease term. This performance obligation is generally satisfied over time for the duration of the lease. Fixed power revenue is recognized each month over the term of the lease. For variable power arrangements, the Company recognizes revenue each month as the uncertainty related to the consideration is resolved.
The Company typically has more than one tenant on a site and, by performing ordinary course repair and maintenance work, can often lease a site, either through renewing existing agreements or leasing to new tenants, for periods beyond the existing tenant lease term. Accordingly, the Company has minimal risk with respect to the residual value of its leased assets. Communications infrastructure assets are depreciated over their estimated useful lives, which generally do not exceed thirty years.
As of December 31, 2025, the Company does not have any material related party leases as a lessor. To the extent there are any intercompany leases, these are eliminated in consolidation.
Historically, the Company has been able to successfully renew its applicable leases as needed to ensure continuation of its revenue. Accordingly, the Company assumes that it will have access to the communications infrastructure or ground space underlying its sites when calculating future minimum rental receipts through the end of the respective terms. Future minimum rental receipts expected under non-cancellable operating lease agreements as of December 31, 2025, were as follows:
Fiscal Year Amount (1) (2)
2026$8,693.2 
20278,529.6 
20287,145.9 
20296,750.5 
20305,412.6 
Thereafter17,474.1 
Total$54,005.9 
_______________
(1)    Balances are translated at the applicable period-end exchange rate, which may impact comparability between periods.    
(2)    Balances represent contractual amounts owed with no adjustments made for expected collectibility.

The Company generally does not enter into sales-type leases or direct financing leases. If incentives are present in the Company’s leases, they are evaluated to determine proper treatment and, to the extent present, are recorded in Other current assets and Other non-current assets in the consolidated balance sheets and amortized on a straight line basis over the corresponding lease term as a non-cash reduction to revenue. As of December 31, 2025, the remaining weighted average amortization period of the Company’s lease incentives was 9 years. As of December 31, 2025, Other current assets and Other non-current assets include $47.7 million and $350.4 million, respectively, for lease incentives. In addition, the Company’s leases do not include any lessee purchase options.
Lessee—The Company enters into arrangements as a lessee primarily for ground space underneath its communications sites. These arrangements are typically long-term lease agreements with initial non-cancellable terms of approximately five to ten years with one or more automatic or exercisable renewal periods and specified increases in lease payments upon renewal. The Company typically exercises its ground lease renewal options in order to utilize the assets used and provide ongoing tenant space on or in its communications sites through the end of the tenant lease term. Escalation clauses present in operating leases, excluding those tied to CPI or other inflation-based indices, are recognized on a straight-line basis over the estimated lease term of the applicable lease as a component of rent expense. Additionally, the escalations tied to CPI or another inflation-based index are considered variable lease payments. In certain circumstances, the Company enters into revenue sharing arrangements with the ground space owner, which results in variability in lease payments. In most markets outside of the United States, in the event there are no tenants on the communications site, the Company generally has unilateral termination rights and in certain situations, the lease is structured to allow for termination by the Company with minimal or no penalties. Ground lease arrangements usually include annual escalations and do not contain any residual value guarantees or restrictions on dividends, other financial obligations or other similar terms. The Company has entered into certain transactions whereby at the end of a lease, sublease or similar arrangement, the Company has the option to purchase the corresponding communications sites. These transactions are further described in note 17.
The Company’s lease liability is the present value of the remaining minimum rental payments to be made over the remaining lease term, including renewal options reasonably certain to be exercised. The Company also considers termination options and factors those into the determination of lease payments when appropriate. To determine the lease term, the Company considers all renewal periods that are reasonably certain to be exercised, taking into consideration all economic factors, including the communications site’s estimated economic life (generally thirty years) and the respective lease terms of the Company’s tenants under the existing lease arrangements on such site.
The Company assesses its right-of-use asset and other lease-related assets for impairment, as described in note 1. During the years ended December 31, 2025, 2024 and 2023, the Company recorded $7.9 million, $0.8 million and $6.7 million, respectively, of impairment expense related to these assets.
As of December 31, 2025, the Company does not have any material related party leases or finance leases as a lessee. The Company does not have any sale-leaseback arrangements as lessee and typically does not enter into leveraged leases.
The Company leases certain land, buildings, equipment and office space under operating leases and land and improvements, towers, equipment and vehicles under finance leases. As of December 31, 2025, operating lease assets were included in Right-of-use asset and finance lease assets were included in Property and equipment, net in the consolidated balance sheet.
Information about other lease-related balances is as follows:
As of
December 31, 2025December 31, 2024
Operating leases:
Right-of-use asset$8,426.5 $8,089.6 
Current portion of lease liability$584.9 $576.7 
Lease liability7,158.7 6,875.6 
Total operating lease liability$7,743.6 $7,452.3 
As most of the Company’s leases do not specifically state an implicit rate, the Company uses a market-specific incremental borrowing rate consistent with the lease term as of the lease commencement date or upon a remeasurement event when calculating the present value of the remaining lease payments. The incremental borrowing rate reflects the cost to borrow on a securitized basis in each market. The remaining lease term does not reflect all renewal options available to the Company, only those renewal options that the Company has assessed as reasonably certain of being exercised taking into consideration the economic and other factors noted above.
The weighted-average remaining lease terms and incremental borrowing rates are as follows:
As of
December 31, 2025December 31, 2024
Operating leases:
Weighted-average remaining lease term (years)13.414.3
Weighted-average incremental borrowing rate6.6 %6.5 %

The following table sets forth the components of lease cost for the years ended December 31,:
202520242023
Operating lease cost$1,131.4 $994.2 $1,084.1 
Variable lease costs not included in lease liability (1)351.3 489.2 434.5 
_______________
(1)    Primarily includes property tax paid on behalf of the landlord.
Supplemental cash flow information is as follows for the years ended December 31,:
202520242023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$(1,108.5)$(1,202.7)$(1,264.8)
Non-cash items:
New operating leases (1)$154.6 $230.0 $245.7 
Operating lease modifications and reassessments (2)$445.3 $859.9 $405.9 
Reduction of operating lease liability due to the ATC TIPL Transaction$— $(766.4)$— 
_______________
(1)    Amount includes new operating leases and leases acquired in connection with acquisitions.
(2)    For the year ended December 31, 2024, reflects a $515 million increase as a result of the Company’s change in estimated useful lives on January 1, 2024, as additional renewal options may be included.
As of December 31, 2025, the Company does not have material operating or financing leases that have not yet commenced.
Maturities of operating lease liabilities as of December 31, 2025 were as follows:
Fiscal YearOperating Lease (1)
2026$1,028.4 
20271,005.5 
2028959.3 
2029916.1 
2030865.6 
Thereafter7,201.7 
Total lease payments11,976.6 
Less amounts representing interest(4,233.0)
Total lease liability7,743.6 
Less current portion of lease liability584.9 
Non-current lease liability$7,158.7 
_______________
(1)    Balances are translated at the applicable period-end exchange rate, which may impact comparability between periods.
Free Sentinel

Want the next AMERICAN TOWER CORP /MA/ leases disclosure the moment it drops?

Set a Sentinel and we'll alert you the moment AMERICAN TOWER CORP /MA/'s next filing hits EDGAR. No credit card, your email never gets sold.

Track for free

Historical Timeline

Fiscal YearFiled
2025Feb 24, 2026Showing above
2024Feb 25, 2025
2023Feb 27, 2024
2022Feb 23, 2023
2021Feb 25, 2022
2020Feb 25, 2021
2019Feb 25, 2020

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

Other Available Disclosures

Income TaxesRevenueEarnings Per ShareFair ValuePP&EGoodwill & IntangiblesSegmentsDebtCommitmentsStock CompensationNew Standards