FAIR VALUE MEASUREMENTS

The Company determines the fair value of its financial instruments based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Below are the three levels of inputs that may be used to measure fair value:



	Level 1	Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

	Level 2	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

	Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Items Measured at Fair Value on a Recurring Basis—The fair values of the Company’s financial assets and liabilities that are required to be measured on a recurring basis at fair value were as follows:



	September 30, 2018							December 31, 2017
	Fair Value Measurements Using							Fair Value Measurements Using
	Level 1			Level 2		Level 3		Level 1			Level 2		Level 3
Assets:
Short-term investments (1)	$	—		$	68.2	—		$	1.0		—		—
Embedded derivative in lease agreement	—			—		$	11.7	—			—		$	12.4
Liabilities:
Interest rate swap agreements	—			$	55.1	—		—			$	29.0	—
Acquisition-related contingent consideration	—			—		$	0.9	—			—		$	10.1
Fair value of debt related to interest rate swap agreements (2)	$	(52.6	)	—		—		$	(24.5	)	—		—

_______________


(1)	Consists of mutual funds with a portfolio duration of approximately 90 days and highly liquid investments with original maturities in excess of three months.


(2)	Included in the carrying values of the corresponding debt obligations.

As of September 30, 2018, the Company had marketable securities with a cost basis of $67.7 million and recognized unrealized gains of $0.5 million on these securities. During the nine months ended September 30, 2018, the Company made no changes to the methods described in note 11 to its consolidated financial statements included in the 2017 Form 10-K that it used to measure the fair value of its interest rate swap agreements, the embedded derivative in one of its lease agreements and acquisition-related contingent consideration. The changes in fair value during the nine months ended September 30, 2018 and 2017 were not material to the consolidated financial statements. As of September 30, 2018, the Company estimated the value of all potential acquisition-related contingent consideration payments to be between zero and $0.9 million.

Items Measured at Fair Value on a Nonrecurring Basis

Assets Held and Used—The Company’s long-lived assets are recorded at amortized cost and, if impaired, are adjusted to fair value using Level 3 inputs. There were no other items measured at fair value on a nonrecurring basis during the nine months ended September 30, 2018 or 2017.

On February 28, 2018, one of the Company’s tenants in Asia, Aircel Ltd. (“Aircel”), filed for bankruptcy protection with the National Company Law Tribunal of India. The bankruptcy process is ongoing and the ultimate outcome has yet to be determined. The Company performed an impairment test based on current expectations of the impact of the bankruptcy on projected cash flows for assets related to Aircel. These assets consisted primarily of towers, which typically are assessed on an individual basis, network location intangibles, which relate directly to towers, and tenant-related intangibles. As a result, an impairment of $40.1 million was taken on the tower and network intangible assets. The Company also fully impaired the tenant-related intangible asset for Aircel, which resulted in an impairment of $107.3 million during the nine months ended September 30, 2018.

The Company recorded an additional $29.5 million of impairments on tower and network intangible assets related to other carrier consolidation-driven churn in India during the nine months ended September 30, 2018. All such impairments were recorded in Other operating expenses in the consolidated statements of operations.

In October 2017, one of the Company’s tenants in Asia, Tata Teleservices, informed the Department of Telecommunications in India of its intent to exit the wireless telecommunications business and announced plans to transfer its business to another telecommunications provider. The Company considered the developments regarding these events, including ongoing negotiations with Tata Teleservices, when updating its impairment test for the Tata Teleservices tenant relationship, and concluded that there was no impairment because the estimated probability-weighted undiscounted cash flows were in excess of the carrying value of this asset, which was $355.7 million as of September 30, 2018. Developments subsequent to September 30, 2018 are discussed in note 15.

Fair Value of Financial Instruments—The Company’s financial instruments for which the carrying value reasonably approximates fair value at September 30, 2018 and December 31, 2017 include cash and cash equivalents, restricted cash, accounts receivable and accounts payable. The Company’s estimates of fair value of its long-term obligations, including the current portion, are based primarily upon reported market values. For long-term debt not actively traded, fair value is estimated using either indicative price quotes or a discounted cash flow analysis using rates for debt with similar terms and maturities. As of September 30, 2018 and December 31, 2017, the carrying value of long-term obligations, including the current portion, was $21.3 billion and $20.2 billion, respectively. As of September 30, 2018, the fair value of long-term obligations, including the current portion, was $21.2 billion, of which $13.5 billion was measured using Level 1 inputs and $7.7 billion was measured using Level 2 inputs. As of December 31, 2017, the fair value of long-term obligations, including the current portion, was $20.6 billion, of which $13.3 billion was measured using Level 1 inputs and $7.3 billion was measured using Level 2 inputs.