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  "documentTitle": "American Tower (AMT)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson C. Block",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2013-07-17 00:00:00",
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  "notes": "Page 79 of 118",
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      "text": "We believe the Company really did not know what it was buying in some large transactions.",
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      "text": "Pass through Sales/Costs\nPass through sales are costs associated with ground leases and / or fuel costs. Typically, fuel costs are passed through in India and EMEA, while ground leases are passed through in Latin America. Pass through costs do not have a cash flow impact on the business. Carriers reimburse the Company for such costs. Pass through costs present a particularly high risk for tower companies because carriers are looking for ways to push costs onto tower companies. This will force tower companies to invest more heavily into alternative energy and cost saving technologies.",
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      "text": "Direct SG&A\nDirect SG&A costs include selling, general and administrative costs associated with the region, and exclude corporate level SG&A. For purposes of our analysis, direct SG&A costs were estimated to be partially fixed and partially variable.",
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      "text": "Direct COGS\nDirect cost of goods sold includes ground rent, monitoring, insurance, real estate taxes, utilities, site maintenance, and other costs. We have projected direct COGS as a fixed cost per tower. Per tower direct COGS were estimated to grow by the contractual escalator, which is typically inflation based. The single largest operating cost is ground lease expense. As we have discussed in the report, land aggregators and the market's increasing awareness that tower companies will pay much higher prices to ensure they have the land will continue to put upward pressure on ground lease costs. As ground leases expire, the costs will grow at a faster rate than inflation in the US market.",
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      "text": "Regional Segment EBITDA\nRegional Segment EBITDA was based on each country's sales minus direct operating expenses. We also factored in Year 1 foreign currency impacts to reflect the current view of currency rates relative to the most recent reporting period. After Year 1, we have assumed a constant currency. In the constant currency scenario, we estimated CPI escalators will be between 2%-3%, depending on the region.",
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      "text": "Regional Capital Expenditures\nWe projected capital expenditures by region based on the number of new tower builds, the projected new tower cost, maintenance costs per tower, improvement costs per tower, and refurbishment costs per tower. Our diligence included discussions with tower company manufacturers who have direct experience in AMT's markets. We assessed the quality of the towers and the ability to add tenants to existing towers, given the existing tower condition. The Company will need to make significant improvements in many of its towers to meet tenant per tower projections. We believe the Company really did not know what it was buying in some large transactions.",
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