Acquisitions

9 Months Ended

Sep. 30, 2011

Acquisitions [Abstract]

Acquisitions

5. ACQUISITIONS

During the third quarter of 2011, the Company acquired 82 completed towers and the rights to two additional antenna sites for an aggregate consideration paid for these towers and related assets (including working capital adjustments) of approximately $38.0 million, all of which was paid in cash. During the nine months ended September 30, 2011, the Company acquired a total of 388 completed towers and the rights to four additional antenna sites and related assets and liabilities (including working capital adjustments) for an aggregate consideration of $189.8 million, all of which was paid in cash. In addition, as part of the ground lease purchase program, the Company paid, in cash, $3.3 million for long-term lease extensions and $5.3 million for land and perpetual easement purchases in the third quarter of 2011 and an aggregate of $7.2 million for long-term lease extensions and $19.6 million for land and perpetual easement purchases during the first nine months of 2011.

The Company accounted for the tower acquisitions under the acquisition method of accounting. The acquisitions are recorded at fair market value at the date of each acquisition. The results of operations of the acquired assets are included with those of the Company from the dates of the respective acquisitions.

The acquisitions consummated were not significant to the Company and, accordingly, pro forma financial information has not been presented. The Company continues to evaluate all acquisitions within one year after the applicable closing date of each transaction to determine whether any additional adjustments are needed to the allocation of the purchase price paid for the assets acquired and liabilities assumed by major balance sheet caption, as well as the separate recognition of intangible assets from goodwill if certain criteria are met. These intangible assets represent the value associated with current leases in place at the acquisition date ("Current contract intangibles") and future tenant leases anticipated to be added to the acquired towers ("Network location intangibles") and were calculated using the discounted values of the current or future expected cash flows. The intangible assets are estimated to have an economic useful life consistent with the economic useful life of the related tower assets, which is typically 15 years.

From time to time, the Company agrees to pay additional consideration (or earnouts) in connection with its acquisitions if the towers or businesses that are acquired meet or exceed certain performance targets after they have been acquired. The Company records contingent consideration for acquisitions that occurred prior to January 1, 2009 when the contingent consideration is paid. Effective January 1, 2009, the Company accrues for contingent consideration in connection with acquisitions at fair value as of the date of the acquisition. All subsequent changes in fair value are recorded through the Consolidated Statements of Operations. During the three and nine months ended September 30, 2011, certain earnings targets associated with previously acquired towers were achieved and therefore the Company paid $0.2 million and $2.6 million in cash, respectively. As of September 30, 2011, the Company had potential obligations to pay up to an additional $6.9 million in consideration if the performance targets contained in various acquisition agreements are met. In connection with these potential obligations, the Company has recorded $4.5 million in accrued expenses. In certain acquisitions, the additional consideration may be paid in cash or shares of Class A common stock at the Company's option.