Fair Value Measurements

12 Months Ended

Dec. 31, 2013

3.FAIR VALUE MEASUREMENTS

Items Measured at Fair Value on a Recurring Basis— The Company’s earnouts related to acquisitions are measured at fair value on a recurring basis using Level 3 inputs. The Company determines the fair value of acquisition-related contingent consideration, and any subsequent changes in fair value, using a discounted probability-weighted approach using Level 3 inputs. The fair value of the earnouts is reviewed quarterly and is based on the payments the Company expects to make based on historical internal observations related to the anticipated performance of the underlying assets. The Company’s estimate of the fair value of its obligation if the performance targets contained in various acquisition agreements were met was $30.1 million and $9.8 million as of December 31, 2013 and December 31, 2012, respectively, which the Company recorded in accrued expenses on its Consolidated Balance Sheets. The maximum potential obligation related to the performance targets was $42.1 million and $17.1 million as of December 31, 2013.

The Company measures its foreign currency forward contracts, which are recorded in Prepaid and other current assets, at fair value based on indicative prices in active markets (Level 2 inputs). These contracts do not qualify for hedge accounting and as such any gains and losses are reflected within Other Income, net in the accompanying Consolidated Statement of Operations.

Items Measured at Fair Value on a Nonrecurring Basis— The Company’s long-lived assets, intangibles, and asset retirement obligations are measured at fair value on a nonrecurring basis using Level 3 inputs. Level 3 valuations rely on unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. The Company considers many factors and makes certain assumptions when making this assessment, including but not limited to: general market and economic conditions, historical operating results, geographic location, lease-up potential and expected timing of lease-up. The fair value of the long-lived assets, intangibles, and asset retirement obligations is calculated using a discounted cash flow model. During the years ended December 31, 2013 and December 31, 2012, the Company recognized an impairment charge of $29.0 million and $6.4 million, respectively, which includes the write off of $23.1 million in carrying value of decommissioned towers and other third party decommission costs, related to its long-lived assets and intangibles for the year ended December 31, 2013 resulting from the Company’s analysis that the future cash flows from certain towers would not recover the carrying value of the investment in those towers. There were no write offs for decommissioned towers and other third party decommission costs, related to its long-lived assets and intangibles for the years ended December 31, 2012 or 2011. Impairment charges for all periods presented and the related impaired assets relate to the Company’s site leasing operating segment.

Fair Value of Financial Instruments— The carrying values of cash and cash equivalents, accounts receivable, restricted cash, accounts payable, and short-term investments approximate their related estimated fair values due to the short maturity of those instruments. Short-term investments consisted of $5.2 million and $5.3 million in certificate of deposits, as of December 31, 2013 and December 31, 2012, respectively. The Company’s estimate of the fair value of its held-to-maturity investments in treasury and corporate bonds, including current portion, are based primarily upon Level 1 reported market values. As of December 31, 2013, the carrying value and fair value of the held-to-maturity investments, including current portion, were $1.1 million and $1.3 million, respectively. As of December 31, 2012, the carrying value and fair value of the held-to-maturity investments, including current portion, was $1.3 million and $1.5 million, respectively.

The Company determines fair value of its debt instruments utilizing various Level 2 sources including quoted prices and indicative quotes (non-binding quotes) from brokers that require judgment to interpret market information including implied credit spreads for similar borrowings on recent trades or bid/ask prices. The fair value of the Revolving Credit Facility is considered to approximate the carrying value because the interest payments are based on Eurodollar rates that reset every month. The Company does not believe its credit risk has changed materially from the date the applicable Eurodollar Rate plus 187.5 basis points was set for the Revolving Credit Facility. The following table reflects fair values, principal balances, and carrying values of the Company’s debt instruments (see Note 13).



	As of December 31, 2013						As of December 31, 2012
	Fair Value		Principal Balance		Carrying Value		Fair Value		Principal Balance		Carrying Value
	(in thousands)
1.875% Convertible Senior Notes due 2013	$	—	$	—	$	—	$	714,096	$	468,836	$	457,351
4.000% Convertible Senior Notes due 2014		1,479,859		499,944		468,394		1,060,622		499,987		430,751
8.250% Senior Notes due 2019		262,031		243,750		242,387		272,391		243,750		242,205
5.625% Senior Notes due 2019		514,375		500,000		500,000		523,750		500,000		500,000
5.750% Senior Notes due 2020		832,000		800,000		800,000		848,000		800,000		800,000
4.254% 2010-1 Tower Securities		689,717		680,000		680,000		713,619		680,000		680,000
5.101% 2010-2 Tower Securities		586,586		550,000		550,000		621,379		550,000		550,000
2.933% 2012-1Tower Securities		604,736		610,000		610,000		635,614		610,000		610,000
2.240% 2013-1C Tower Securities		408,442		425,000		425,000		—		—		—
3.722% 2013-2C Tower Securities		530,098		575,000		575,000		—		—		—
3.598% 2013-1D Tower Securities		318,856		330,000		330,000		—		—		—
Revolving Credit Facility		215,000		215,000		215,000		100,000		100,000		100,000
2011 Term Loan B		180,980		180,529		180,234		493,731		492,500		491,518
2012-1 Term Loan A		184,538		185,000		185,000		194,513		195,000		195,000
2012-2 Term Loan B		110,383		109,971		109,745		300,750		300,000		299,278
BNDES Loans		5,847		5,847		5,847		—		—		—
Totals	$	6,923,448	$	5,910,041	$	5,876,607	$	6,478,465	$	5,440,073	$	5,356,103

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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