Analysts on Wall Street project that SBA Communications (SBAC) will announce quarterly earnings of $3.28 per share in its forthcoming report, representing an increase of 1.2% year over year. Revenues are projected to reach $664.54 million, declining 2.1% from the same quarter last year. The current level reflects no revision in the consensus EPS estimate for the quarter over the past 30 days. This demonstrates how the analysts covering the stock have collectively reappraised their initial projections over t ...

Core Viewpoint - The company is expected to report a decline in revenues year-over-year, but adjusted funds from operations (AFFO) per share are anticipated to grow slightly [11]. Financial Performance - The last reported quarter showed AFFO per share of $3.29, missing the Zacks Consensus Estimates by a cent, primarily due to lower site development revenues [2]. - The Zacks Consensus Estimate for total quarterly revenues is pegged at $664.5 million, indicating a year-over-year decline of 2.1% [5]. - The Zacks Consensus Estimate for second-quarter site-leasing revenues is $632.5 million, reflecting an increase from $626.1 million in the year-ago quarter [4]. Factors Influencing Results - The company benefits from long-term tower leases with built-in rent escalators, which support stable site-leasing revenues [3]. - The anticipated decrease in carrier activities is expected to lead to lower site-development revenues, with a consensus mark of $35.1 million, down from $52.4 million in the previous year [14]. - High interest rates and elevated churn in certain markets may have negatively impacted the company's quarterly performance [15]. Market Context - The wireless industry is experiencing secular growth trends, driven by advancements in mobile technology such as 4G and 5G networks, leading to increased mobile data usage globally [12]. - The company's healthy balance sheet is expected to support investments in existing 4G networks and efforts for 5G deployment, along with asset-base expansion through acquisitions [13].

Core Viewpoint - SBA Communications is well-positioned to benefit from the high capital spending of wireless carriers for network expansion, particularly with the ongoing deployment of 5G networks, despite concerns regarding customer concentration and high interest rates [1]. Group 1: Growth Drivers - The advancement in mobile technology, including 4G and 5G networks, along with the rise of bandwidth-intensive applications, has led to increased mobile data usage globally, prompting wireless service providers to expand their networks [2]. - SBA Communications has a stable site-leasing business model, generating most of its revenues from long-term tower leases with built-in rent escalators, ensuring steady revenue over time [3]. - The company is experiencing robust site-leasing revenue growth as wireless service providers continue to lease additional antenna space on its towers due to increased network usage and coverage requirements [4]. - SBA Communications is expanding its portfolio into select international markets with high growth potential, having acquired 11 communication sites and built 76 towers in Q1 2024 [5]. Group 2: Financial Position - As of the end of Q1 2024, SBA Communications had $261.8 million in cash and cash equivalents, with $195 million outstanding under its $2.0 billion revolving credit facility [7]. - The company's cash flow growth is projected at 13.13%, significantly outperforming the industry average of -5.32%, indicating strong financial flexibility for long-term growth opportunities [8]. Group 3: Challenges - The company faces high customer concentration, with T-Mobile, AT&T, and Verizon accounting for 38.8%, 29.5%, and 20% of its domestic site-leasing revenues, respectively, which poses a risk to its top line if any of these customers are lost [9]. - SBA Communications has a highly leveraged balance sheet, with total debt of $12.4 billion and a net debt to annualized adjusted EBITDA leverage of 6.5X, which may elevate financial obligations and borrowing costs in a high interest rate environment [11]. - Analysts have shown bearish sentiment towards the company, with the Zacks Consensus Estimate for its 2024 funds from operations per share declining to $13.22 [12].

PART I – FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the three months ended March 31, 2024, compared to the same period in 2023, including a significant reduction in depreciation and amortization expense due to a change in the estimated useful lives of towers Consolidated Statements of Operations | Metric | Three months ended March 31, 2024 (in millions) | Three months ended March 31, 2023 (in millions) | | :--- | :--- | :--- | | **Total revenues** | $657.862 | $675.516 | | Site leasing revenue | $628.276 | $617.268 | | Site development revenue | $29.586 | $58.248 | | **Operating income** | $323.358 | $224.141 | | **Net income** | $154.543 | $100.554 | | **Diluted EPS** | $1.42 | $0.93 | Consolidated Balance Sheets | Metric | March 31, 2024 (in millions) | December 31, 2023 (in millions) | | :--- | :--- | :--- | | Total current assets | $447.596 | $484.267 | | Property and equipment, net | $2,709.681 | $2,711.719 | | **Total assets** | $9,995.266 | $10,178.441 | | Total current liabilities | $2,413.289 | $1,363.259 | | Long-term debt, net | $10,550.553 | $11,681.170 | | **Total liabilities** | $15,181.509 | $15,314.276 | | **Total shareholders' deficit** | ($5,222.820) | ($5,170.882) | Consolidated Statements of Cash Flows | Cash Flow Activity | Three months ended March 31, 2024 (in millions) | Three months ended March 31, 2023 (in millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $294.453 | $311.168 | | Net cash used in investing activities | ($85.310) | ($146.761) | | Net cash used in financing activities | ($191.412) | ($160.728) | | **Net change in cash, cash equivalents, and restricted cash** | $13.386 | $3.899 | - Effective January 1, 2024, the company revised the estimated useful lives of its towers and certain related intangible assets from **15 years to 30 years**, which prospectively reduced depreciation and amortization expense by approximately **$102.7 million** for the first quarter of 2024, resulting in an after-tax increase to net income of **$93.0 million**, or **$0.86 per diluted share**[28](index=28&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's performance, highlighting the stability of the site leasing business versus a significant decline in the site development segment, covering revenue and profit trends, capital allocation, liquidity, and debt obligations [Business Overview and Strategy](index=22&type=section&id=Business%20Overview%20and%20Strategy) The company's core business is site leasing, complemented by site development, with a capital allocation strategy focused on growth, stock repurchases, and dividends - The company's primary business is site leasing, which contributed **98.8% of total segment operating profit** for Q1 2024, involving leasing antenna space on its **39,638 towers** to wireless service providers under long-term contracts[101](index=101&type=chunk)[108](index=108&type=chunk) - The site development business, conducted only in the U.S., is complementary to site leasing and includes services like network design, site construction, and antenna installation for wireless service providers[111](index=111&type=chunk) - The capital allocation strategy prioritizes portfolio growth through acquisitions and new tower construction, followed by stock repurchases when the stock is believed to be undervalued, and returning cash to shareholders via dividends[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) This section details revenue and operating profit trends across domestic and international site leasing and site development segments, highlighting the impact of accounting changes Segment Revenue Analysis | Segment | Revenue Q1 2024 (in millions) | Revenue Q1 2023 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Domestic site leasing | $461.499 | $454.833 | 1.5% | | International site leasing | $166.777 | $162.435 | 2.7% | | Site development | $29.586 | $58.248 | (49.2%) | | **Total** | **$657.862** | **$675.516** | **(2.6%)** | Segment Operating Profit Analysis | Segment | Operating Profit Q1 2024 (in millions) | Operating Profit Q1 2023 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Domestic site leasing | $395.529 | $385.083 | 2.7% | | International site leasing | $117.934 | $112.066 | 5.2% | | Site development | $6.408 | $14.063 | (54.4%) | - Site development revenues and operating profit decreased significantly by **49.2%** and **54.4%** respectively, due to reduced activity from major carriers like T-Mobile, DISH Wireless, and Verizon Wireless[123](index=123&type=chunk)[126](index=126&type=chunk) - Depreciation, accretion, and amortization expense decreased by **$105.7 million (58.1%)** year-over-year, primarily due to the change in the estimated useful lives of towers from **15 to 30 years**, which significantly boosted operating income[130](index=130&type=chunk) [Non-GAAP Financial Measures](index=29&type=section&id=Non-GAAP%20Financial%20Measures) This section presents non-GAAP financial metrics, primarily focusing on Adjusted EBITDA and its drivers Adjusted EBITDA Reconciliation | Metric (in millions) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net income | $154.543 | $100.554 | | Adjustments | $310.869 | $358.786 | | **Adjusted EBITDA** | **$465.412** | **$459.340** | - Adjusted EBITDA increased by **$6.1 million (1.3%)** to **$465.4 million** in Q1 2024 compared to the prior year period, with a constant currency increase of **$4.1 million (0.9%)**, driven by higher site leasing operating profit, offset by lower site development profit and higher cash SG&A expenses[145](index=145&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes the company's cash flow, debt management, and capital allocation activities, including share repurchases and dividends - Cash provided by operating activities decreased to **$294.5 million** in Q1 2024 from **$311.2 million** in Q1 2023, mainly due to working capital timing and lower site development profit[148](index=148&type=chunk)[149](index=149&type=chunk) - In January 2024, the company amended its Senior Credit Agreement to issue a new **$2.3 billion** 2024 Term Loan (maturing 2031) to retire its 2018 Term Loan, and also increased its Revolving Credit Facility commitment to **$2.0 billion**[159](index=159&type=chunk)[160](index=160&type=chunk) - During Q1 2024, the company repurchased **495,260 shares** of common stock for **$106.1 million** and paid cash dividends of **$108.1 million ($0.98 per share)**[154](index=154&type=chunk)[156](index=156&type=chunk)[193](index=193&type=chunk) - The company projects total debt service requirements of approximately **$2.18 billion** for the twelve months ending March 31, 2025, which includes the maturity of the **$620.0 million** 2014-2C Tower Securities and the **$1.165 billion** 2019-1C Tower Securities[175](index=175&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the company's primary market risk exposures, which are interest rate risk and foreign currency exchange rate risk, and how they are managed - The primary market risk is interest rate risk related to its variable-rate 2024 Term Loan and Revolving Credit Facility, where a hypothetical **1%** increase in variable interest rates would have increased Q1 2024 interest expense by approximately **4.7%**[181](index=181&type=chunk)[182](index=182&type=chunk) - The company is exposed to foreign currency risk, with **22.3%** of revenues and **29.7%** of operating expenses in Q1 2024 denominated in foreign currencies, where a hypothetical **10%** adverse movement in the Brazilian Real would have decreased Q1 2024 revenues by **1.3%**[183](index=183&type=chunk)[184](index=184&type=chunk) - The company has significant risk related to intercompany debt denominated in currencies other than the functional currency of the subsidiary, where a **10%** change in the underlying exchange rates would have resulted in approximately **$125.5 million** of unrealized gains or losses recorded in net income for Q1 2024[185](index=185&type=chunk) [Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the company's adherence to internal control standards, with the principal executive and financial officers concluding the effectiveness of disclosure controls and procedures - The company's CEO and CFO evaluated the effectiveness of disclosure controls and procedures and concluded that they were **effective as of March 31, 2024**[190](index=190&type=chunk)[192](index=192&type=chunk) PART II – OTHER INFORMATION [Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's stock repurchase activities and remaining authorization under its repurchase plan Stock Repurchase Activity | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | Jan 2024 | — | N/A | | Feb 2024 | — | N/A | | Mar 2024 | 495,260 | $214.33 | | **Total Q1 2024** | **495,260** | **$214.33** | - Under the **$1.0 billion** stock repurchase plan authorized in October 2021, the company had **$204.7 million** of authorization remaining as of the filing date[193](index=193&type=chunk) [Other Information](index=39&type=section&id=Item%205.%20Other%20Information) This section discloses information regarding trading plans established by the company's officers and directors - During the first quarter of 2024, **none of the company's officers or directors adopted or terminated** a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement[194](index=194&type=chunk) [Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the quarterly report, including required certifications and interactive data files - The exhibits filed with this report include certifications by the CEO and CFO pursuant to **Sections 302 and 906 of the Sarbanes-Oxley Act of 2002**, as well as XBRL interactive data files[195](index=195&type=chunk)

SBA Communications Corporation. (NASDAQ:SBAC) Q1 2024 Earnings Conference Call April 29, 2024 5:00 PM ET Company Participants Mark DeRussy - VP of Finance Marc Montagner - CFO Brendan Cavanagh - President & CEO Conference Call Participants Michael Rollins - Citigroup Jonathan Atkin - RBC Capital Markets Michael Elias - TD Cowen Simon Flannery - Morgan Stanley Ric Prentiss - Raymond James. Nick Del Deo - MoffettNathanson Batya Levi - UBS Richard Choe - JPMorgan Matthew Niknam - Deutsche Bank Eric Luebchow - ...

Exhibit 99.1 FOR IMMEDIATE RELEASE SBA Communications Corporation Reports First Quarter 2024 Results; Updates Full Year 2024 Outlook; and Declares Quarterly Cash Dividend Boca Raton, Florida, April 29, 2024 (BUSINESS NEWSWIRE) — SBA Communications Corporation (Nasdaq: SBAC) ("SBA" or the "Company") today reported results for the quarter ended March 31, 2024. Highlights of the first quarter include: In addition, the Company announced today that its Board of Directors has declared a quarterly cash dividend of ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission file number: 001-16853 SBA COMMUNICATIONS CORPORATION (Exact name of Registrant as specified in its charter) Florida 6 ...

SBA Communications Corporation (NASDAQ:SBAC) Q4 2023 Earnings Call Transcript February 26, 2024 5:00 PM ET Company Participants Mark DeRussy - VP of Finance Marc Montagner - CFO Brendan Cavanagh - President & CEO Conference Call Participants Ric Prentiss - Raymond James Jonathan Atkin - RBC Capital Markets Nick Del Deo - MoffettNathanson David Barden - Bank of America Michael Rollins - Citi Simon Flannery - Morgan Stanley Matt Niknam - Deutsche Bank Richard Choe - JPMorgan Michael Elias - TD Cowen Brendan L ...

Exhibit 99.1 FOR IMMEDIATE RELEASE Highlights of the fourth quarter include: In addition, the Company announced today that its Board of Directors has declared a quarterly cash dividend of $0.98 per share of the Company's Class A Common Stock, an increase of approximately 15% over the dividend paid in the fourth quarter. The distribution is payable March 28, 2024 to the shareholders of record at the close of business on March 14, 2024. "We had a strong finish to 2023, exceeding our outlook for Site Leasing R ...

[PART I – FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=page&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements of SBA Communications Corporation and its subsidiaries for the periods ended September 30, 2023, and December 31, 2022, including balance sheets, statements of operations, comprehensive income, shareholders' deficit, and cash flows, along with condensed notes explaining accounting policies, fair value measurements, debt, equity, and segment data [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) | Metric | Sep 30, 2023 (in millions) | Dec 31, 2022 (in millions) | | :----------------------------------- | :-------------------------- | :-------------------------- | | Total assets | $10,334.2 | $10,585.0 | | Total current liabilities | $663.1 | $696.8 | | Total long-term liabilities | $14,802.5 | $15,132.9 | | Total shareholders' deficit | $(5,166.5) | $(5,276.3) | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) | Metric (in millions, except per share) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Total revenues | $682.5 | $675.6 | $2,036.6 | $1,947.4 | | Operating income | $248.6 | $243.0 | $714.0 | $690.7 | | Net income attributable to SBAC | $87.4 | $100.0 | $392.3 | $358.2 | | Basic EPS | $0.81 | $0.93 | $3.62 | $3.32 | | Diluted EPS | $0.80 | $0.91 | $3.60 | $3.27 | [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) | Metric (in millions) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income | $85.4 | $99.8 | $387.9 | $357.2 | | Comprehensive income | $46.2 | $112.3 | $383.2 | $505.4 | [Consolidated Statements of Shareholders' Deficit](index=6&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Deficit) - Total shareholders' deficit was **$(5.17 billion)** as of September 30, 2023, compared to **$(5.28 billion)** as of December 31, 2022, showing a decrease in deficit[19](index=19&type=chunk) - For the nine months ended September 30, 2023, the company reported net income attributable to SBA Communications Corporation of **$392.3 million**, issued **395 thousand shares** of common stock, and repurchased **272 thousand shares**[19](index=19&type=chunk) - Dividends and dividend equivalents on common stock amounted to **$(278.3 million)** for the nine months ended September 30, 2023[19](index=19&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity (in millions) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $1,111.8 | $997.1 | | Net cash used in investing activities | $(361.9) | $(591.3) | | Net cash used in financing activities | $(705.7) | $(566.1) | | Net change in cash, cash equivalents, and restricted cash | $42.8 | $(155.8) | | End of period cash, cash equivalents, and restricted cash | $232.1 | $279.9 | [Condensed Notes to Consolidated Financial Statements](index=10&type=section&id=Condensed%20Notes%20to%20Consolidated%20Financial%20Statements) [Note 1. Basis of Presentation](index=10&type=section&id=Note%201.%20Basis%20of%20Presentation) - The Company is reviewing the estimated useful lives of its towers and intangible assets, with conclusions expected in 2024, which may result in a change in accounting estimate[30](index=30&type=chunk) - A **$31.2 million** net loss on intercompany loan remeasurement was recorded for the three months ended September 30, 2023, and a **$24.1 million** net gain for the nine months ended September 30, 2023[33](index=33&type=chunk) [Note 2. Fair Value Measurements](index=11&type=section&id=Note%202.%20Fair%20Value%20Measurements) | Asset Impairment and Decommission Costs (in millions) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :----------------------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Towers and related assets | $19.5 | $4.1 | $50.8 | $12.5 | | Operating lease right-of-use assets | $8.2 | $2.9 | $23.6 | $9.2 | | Write-off of carrying value of decommissioned towers | $1.6 | $1.3 | $4.4 | $3.6 | | Other | $3.8 | $0.3 | $13.5 | $0.3 | | Total asset impairment and decommission costs | $33.1 | $8.5 | $92.3 | $25.6 | - Increased asset impairment charges for the three and nine months ended September 30, 2023, were primarily due to increased churn[38](index=38&type=chunk) [Note 3. Cash, Cash Equivalents, and Restricted Cash](index=12&type=section&id=Note%203.%20Cash,%20Cash%20Equivalents,%20and%20Restricted%20Cash) | Cash Component (in millions) | As of Sep 30, 2023 | As of Dec 31, 2022 | | :---------------------------- | :----------------- | :----------------- | | Cash and cash equivalents | $190.5 | $143.7 | | Securitization escrow accounts | $31.3 | $35.8 | | Payment, performance bonds, and other | $5.9 | $6.1 | | Surety bonds and workers compensation | $4.3 | $3.6 | | Total | $232.1 | $189.3 | [Note 4. Costs and Estimated Earnings on Uncompleted Contracts](index=12&type=section&id=Note%204.%20Costs%20and%20Estimated%20Earnings%20on%20Uncompleted%20Contracts) - As of September 30, 2023, the two largest customers accounted for **92.8%** of the net costs and estimated earnings in excess of billings on uncompleted contracts[50](index=50&type=chunk) [Note 5. Prepaid Expenses and Other Current Assets and Other Assets](index=13&type=section&id=Note%205.%20Prepaid%20Expenses%20and%20Other%20Current%20Assets%20and%20Other%20Assets) | Other Assets (in millions) | As of Sep 30, 2023 | As of Dec 31, 2022 | | :-------------------------- | :----------------- | :----------------- | | Straight-line rent receivable | $410.6 | $388.6 | | Interest rate swap asset | $143.3 | $182.9 | | Loans receivable | $135.8 | $39.9 | | Deferred tax asset - long term | $68.2 | $16.2 | | Total other assets | $845.2 | $722.4 | - The company entered into a loan agreement with an unconsolidated joint venture, with an outstanding principal balance of **$93.0 million** as of September 30, 2023, accruing interest at **10.067%**[52](index=52&type=chunk) [Note 6. Acquisitions](index=14&type=section&id=Note%206.%20Acquisitions) | Acquisition Activity (in millions) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :---------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Acquisitions of towers and related intangible assets | $39.9 | $57.4 | $59.5 | $344.0 | | Land buyouts and other assets | $12.1 | $7.7 | $29.4 | $72.5 | | Total cash acquisition capital expenditures | $53.1 | $65.1 | $92.9 | $418.7 | - During the nine months ended September 30, 2023, the Company acquired **68 towers** and related assets[53](index=53&type=chunk) - Subsequent to September 30, 2023, the Company purchased or is under contract to purchase **215 communication sites** for **$74.0 million** in cash, expected to close by Q2 2024[54](index=54&type=chunk) [Note 7. Property and Equipment, Net](index=14&type=section&id=Note%207.%20Property%20and%20Equipment,%20Net) | Property and Equipment (in millions) | As of Sep 30, 2023 | As of Dec 31, 2022 | | :------------------------------------ | :----------------- | :----------------- | | Towers and related assets | $5,793.6 | $5,650.9 | | Total property and equipment | $6,878.5 | $6,685.2 | | Less: accumulated depreciation | $(4,177.8) | $(3,971.4) | | Property and equipment, net | $2,700.7 | $2,713.7 | - Depreciation expense was **$206.6 million** for the nine months ended September 30, 2023, compared to **$205.0 million** for the same period in 2022[57](index=57&type=chunk) [Note 8. Intangible Assets, Net](index=15&type=section&id=Note%208.%20Intangible%20Assets,%20Net) | Intangible Assets (in millions) | As of Sep 30, 2023 | As of Dec 31, 2022 | | :------------------------------- | :----------------- | :----------------- | | Current contract intangibles | $1,914.6 | $2,109.7 | | Network location intangibles | $609.0 | $666.8 | | Intangible assets, net | $2,523.6 | $2,776.5 | - Amortization expense for intangible assets was **$303.5 million** for the nine months ended September 30, 2023, consistent with **$303.0 million** in the prior year[59](index=59&type=chunk) [Note 9. Accrued Expenses and Other Current Liabilities](index=15&type=section&id=Note%209.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) | Accrued Expenses (in millions) | As of Sep 30, 2023 | As of Dec 31, 2022 | | :------------------------------ | :----------------- | :----------------- | | Salaries and benefits | $24.1 | $27.7 | | Acquisition related holdbacks | $15.6 | $25.7 | | Total accrued expenses | $92.7 | $101.5 | | Billings in excess of costs and estimated earnings on uncompleted contracts | $10.0 | $25.2 | | Total other current liabilities | $21.5 | $48.8 | [Note 10. Debt](index=16&type=section&id=Note%2010.%20Debt) | Debt Instrument | Principal Balance (Sep 30, 2023, in millions) | Carrying Value (Sep 30, 2023, in millions) | Principal Balance (Dec 31, 2022, in millions) | Carrying Value (Dec 31, 2022, in millions) | | :---------------------- | :--------------------------------------------- | :------------------------------------------ | :--------------------------------------------- | :------------------------------------------ | | Revolving Credit Facility | $370.0 | $370.0 | $720.0 | $720.0 | | 2018 Term Loan | $2,274.0 | $2,268.5 | $2,292.0 | $2,284.0 | | Tower Securities | $6,940.0 | $6,950.8 | $6,940.0 | $6,933.2 | | Senior Notes | $3,000.0 | $2,978.9 | $3,000.0 | $2,975.4 | | Total debt | $12,584.0 | $12,515.1 | $12,952.0 | $12,868.2 | - The Revolving Credit Facility and 2018 Term Loan were amended on July 3, 2023, to replace LIBOR with Term SOFR as the benchmark interest rate, with no material impact on financial statements[35](index=35&type=chunk)[63](index=63&type=chunk)[66](index=66&type=chunk) - Interest expense for the nine months ended September 30, 2023, was **$301.8 million**, up from **$253.5 million** in the prior year, primarily due to higher weighted-average interest rates[62](index=62&type=chunk) [Note 11. Shareholders' Equity](index=18&type=section&id=Note%2011.%20Shareholders'%20Equity) - The Board of Directors authorized a **$1.0 billion** stock repurchase plan on October 28, 2021, with **$404.7 million** remaining as of the filing date[72](index=72&type=chunk) Share Repurchases (in millions) | Share Repurchases (in millions) | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2023 | | :------------------------------ | :------------------------------ | :----------------------------- | | Total number of shares purchased | 0.4 | 0.4 | | Average price per share | $197.75 | $197.75 | | Total purchase price | $87.3 | $87.3 | Dividends Paid (in millions) | Dividends Paid (in millions) | Date Declared | Cash Paid Per Share | Aggregate Amount Paid | | :--------------------------- | :------------ | :------------------ | :-------------------- | | Q1 2023 | Feb 20, 2023 | $0.85 | $93.9 | | Q2 2023 | Apr 30, 2023 | $0.85 | $92.1 | | Q3 2023 | Jul 30, 2023 | $0.85 | $92.1 | [Note 12. Stock-Based Compensation](index=19&type=section&id=Note%2012.%20Stock-Based%20Compensation) Stock Option Activity (in thousands, except per share) | Stock Option Activity (in thousands, except per share) | Nine Months Ended Sep 30, 2023 | | :----------------------------------------------------- | :----------------------------- | | Outstanding at December 31, 2022 | 1,673 | | Granted | 20 | | Exercised | (181) | | Forfeited/canceled | (14) | | Outstanding at September 30, 2023 | 1,498 | | Weighted-average exercise price per share | $165.11 | | Aggregate intrinsic value | $54.4 | RSU and PSU Activity (in thousands) | RSU and PSU Activity (in thousands) | RSUs (Shares) | PSUs (Shares) | | :---------------------------------- | :------------ | :------------ | | Outstanding at December 31, 2022 | 222 | 429 | | Granted | 175 | 97 | | Vested | (118) | (207) | | Outstanding at September 30, 2023 | 266 | 369 | [Note 13. Income Taxes](index=20&type=section&id=Note%2013.%20Income%20Taxes) - The company released a full valuation allowance of **$66.3 million** on net deferred tax assets of its U.S. taxable REIT subsidiary during Q2 2023[80](index=80&type=chunk) - The company is contesting income tax deficiencies in Brazil for tax years 2016-2019, with estimated reasonably possible losses between zero and **$94.3 million**, excluding penalties and interest[83](index=83&type=chunk)[84](index=84&type=chunk) [Note 14. Segment Data](index=21&type=section&id=Note%2014.%20Segment%20Data) | Segment Revenues (in millions) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Domestic site leasing | $468.4 | $449.6 | $1,379.9 | $1,324.7 | | International site leasing | $169.1 | $137.7 | $500.9 | $402.3 | | Site development | $45.1 | $88.3 | $155.7 | $220.4 | | Total revenues | $682.5 | $675.6 | $2,036.6 | $1,947.4 | | Segment Operating Profit (in millions) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Domestic site leasing | $401.6 | $383.2 | $1,179.0 | $1,126.7 | | International site leasing | $117.6 | $92.1 | $348.4 | $269.6 | | Site development | $13.6 | $22.7 | $40.8 | $54.6 | - Site leasing revenue in Brazil represented **15.7%** of total site leasing revenue for the three months ended September 30, 2023, and **15.6%** for the nine months ended September 30, 2023[88](index=88&type=chunk)[125](index=125&type=chunk)[147](index=147&type=chunk) [Note 15. Earnings Per Share](index=23&type=section&id=Note%2015.%20Earnings%20Per%20Share) | EPS (per share) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :---------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Basic | $0.81 | $0.93 | $3.62 | $3.32 | | Diluted | $0.80 | $0.91 | $3.60 | $3.27 | [Note 16. Redeemable Noncontrolling Interests](index=23&type=section&id=Note%2016.%20Redeemable%20Noncontrolling%20Interests) - The ending balance of redeemable noncontrolling interests was **$35.0 million** as of September 30, 2023, an increase from **$31.7 million** at December 31, 2022[93](index=93&type=chunk) [Note 17. Derivatives and Hedging Activities](index=23&type=section&id=Note%2017.%20Derivatives%20and%20Hedging%20Activities) - The interest rate swap, amended on June 21, 2023, to transition from LIBOR to Term SOFR, had a fair value of **$143.3 million** as of September 30, 2023, and remains highly effective as a cash flow hedge[97](index=97&type=chunk)[98](index=98&type=chunk) - Accumulated other comprehensive loss, net, included an aggregate **$103.0 million** gain from interest rate swaps as of September 30, 2023[99](index=99&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=page&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and operational performance, highlighting key business segments, capital allocation strategies, and a detailed analysis of financial results for the three and nine months ended September 30, 2023, compared to the prior year, including non-GAAP measures like Adjusted EBITDA [Business Overview](index=24&type=section&id=Business%20Overview) - SBA Communications Corporation is a leading independent owner and operator of wireless communications infrastructure, owning **39,546 towers** as of September 30, 2023[102](index=102&type=chunk)[104](index=104&type=chunk) - The site leasing business is the primary business line, contributing **97.4%** of total segment operating profit for the nine months ended September 30, 2023[102](index=102&type=chunk)[109](index=109&type=chunk) [Site Leasing](index=25&type=section&id=Site%20Leasing) - Site leasing revenues are derived from long-term contracts with major carriers, typically 5-15 years with renewal options and annual rent escalators (fixed, inflationary, or a combination)[105](index=105&type=chunk) - The site leasing business is characterized by high operating margins and low customer churn, with expectations for continued growth due to increasing network use and data transfer[109](index=109&type=chunk)[111](index=111&type=chunk) - Organic site leasing revenue is expected to increase in both domestic and international segments during the remainder of 2023, driven by wireless carriers deploying unused spectrum[112](index=112&type=chunk) [Site Development](index=26&type=section&id=Site%20Development) - The site development business, conducted solely in the United States, offers end-to-end services to wireless service providers, including network pre-design, site audits, zoning approvals, tower construction, and equipment installation[113](index=113&type=chunk) [Capital Allocation Strategy](index=26&type=section&id=Capital%20Allocation%20Strategy) - The capital allocation strategy prioritizes investment in quality assets (tower acquisitions and new builds), followed by stock repurchases when the share price is below intrinsic value, and returning cash through dividends[115](index=115&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk) - The company aims to increase Adjusted Funds From Operations per share through its capital allocation strategy[115](index=115&type=chunk)[215](index=215&type=chunk) [Critical Accounting Policies and Estimates](index=26&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - Management is reviewing the estimated useful lives of towers and intangible assets with an independent consultant, expecting to conclude the analysis in 2024, which may lead to a prospective change in accounting estimate[120](index=120&type=chunk) [Reference Rate Reform](index=27&type=section&id=Reference%20Rate%20Reform) - The company amended its interest rate swap, 2018 Term Loan, and Revolving Credit Facility to transition from LIBOR to Term SOFR as the benchmark rate, effective August 1, 2023, with no material impact on consolidated financial statements[121](index=121&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) [Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022](index=27&type=section&id=Three%20Months%20Ended%20September%2030,%202023%20Compared%20to%20Three%20Months%20Ended%20September%2030,%202022) | Metric (in millions) | Sep 30, 2023 | Sep 30, 2022 | Constant Currency Change | Constant Currency % Change | | :-------------------- | :----------- | :----------- | :----------------------- | :------------------------- | | Total Revenues | $682.5 | $675.6 | $2.2 | 0.3% | | Domestic site leasing revenues | $468.4 | $449.6 | $18.8 | 4.2% | | International site leasing revenues | $169.1 | $137.7 | $26.6 | 19.3% | | Site development revenues | $45.1 | $88.3 | $(43.2) | (48.9%) | | Metric (in millions) | Sep 30, 2023 | Sep 30, 2022 | Constant Currency Change | Constant Currency % Change | | :-------------------- | :----------- | :----------- | :----------------------- | :------------------------- | | Domestic site leasing operating profit | $401.6 | $383.2 | $18.4 | 4.8% | | International site leasing operating profit | $117.6 | $92.1 | $21.9 | 23.7% | | Site development operating profit | $13.6 | $22.7 | $(9.1) | (40.2%) | - Net income decreased by **$14.4 million** (or **$10.5 million** on a constant currency basis) for the three months ended September 30, 2023, primarily due to increased cash interest expense and income taxes, and decreased site development operating income[143](index=143&type=chunk) [Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022](index=31&type=section&id=Nine%20Months%20Ended%20September%2030,%202023%20Compared%20to%20Nine%20Months%20Ended%20September%2030,%202022) | Metric (in millions) | Sep 30, 2023 | Sep 30, 2022 | Constant Currency Change | Constant Currency % Change | | :-------------------- | :----------- | :----------- | :----------------------- | :------------------------- | | Total Revenues | $2,036.6 | $1,947.4 | $91.2 | 4.7% | | Domestic site leasing revenues | $1,379.9 | $1,324.7 | $55.3 | 4.2% | | International site leasing revenues | $500.9 | $402.3 | $100.6 | 25.0% | | Site development revenues | $155.7 | $220.4 | $(64.7) | (29.3%) | | Metric (in millions) | Sep 30, 2023 | Sep 30, 2022 | Constant Currency Change | Constant Currency % Change | | :-------------------- | :----------- | :----------- | :----------------------- | :------------------------- | | Domestic site leasing operating profit | $1,179.0 | $1,126.7 | $52.3 | 4.6% | | International site leasing operating profit | $348.4 | $269.6 | $79.8 | 29.6% | | Site development operating profit | $40.8 | $54.6 | $(13.8) | (25.3%) | - Net income increased by **$30.7 million** (or **$10.9 million** on a constant currency basis) for the nine months ended September 30, 2023, driven by higher site leasing operating income and interest income, and lower income taxes and non-cash interest expense[165](index=165&type=chunk) [NON-GAAP FINANCIAL MEASURES](index=35&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) - Adjusted EBITDA is defined as net income excluding non-cash straight-line leasing revenue/ground lease expense, non-cash compensation, debt extinguishment loss, other income/expenses, acquisition/new business adjustments, asset impairment, interest income/expenses, depreciation/amortization, and income taxes[167](index=167&type=chunk) | Metric (in millions) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Adjusted EBITDA | $482.1 | $446.8 | $1,413.2 | $1,308.3 | - Adjusted EBITDA increased by **$35.4 million** (**7.1%** on a constant currency basis) for the three months and **$104.9 million** (**8.1%** on a constant currency basis) for the nine months ended September 30, 2023, primarily due to increased site leasing operating profit[170](index=170&type=chunk)[171](index=171&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=36&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) [Operating Activities](index=37&type=section&id=Operating%20Activities) - Cash provided by operating activities increased to **$1.11 billion** for the nine months ended September 30, 2023, from **$997.1 million** in the prior year, driven by higher site leasing operating profit and working capital changes[175](index=175&type=chunk) [Investing Activities](index=37&type=section&id=Investing%20Activities) | Investing Activity (in millions) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Acquisitions of towers and related intangible assets | $(59.5) | $(344.0) | | Construction and related costs | $(70.5) | $(72.3) | | Augmentation and tower upgrades | $(62.3) | $(39.5) | | Other investing activities | $(95.0) | $(24.2) | | Net cash used in investing activities | $(361.9) | $(591.3) | - For 2023, the company expects non-discretionary cash capital expenditures of **$54.0-$59.0 million** and discretionary cash capital expenditures of **$335.0-$345.0 million**[179](index=179&type=chunk) [Financing Activities](index=38&type=section&id=Financing%20Activities) | Financing Activity (in millions) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net (repayments) borrowings under Revolving Credit Facility | $(350.0) | $60.0 | | Repurchase and retirement of common stock | $(53.7) | $(431.7) | | Payment of dividends on common stock | $(278.2) | $(230.1) | | Net cash used in financing activities | $(705.7) | $(566.1) | [Dividends](index=38&type=section&id=Dividends) - The company paid cash dividends of **$0.85 per share** for each of the first three quarters of 2023, totaling **$278.1 million**[182](index=182&type=chunk) - A dividend of **$0.85 per share** was declared on November 1, 2023, payable on December 14, 2023[183](index=183&type=chunk) [Registration Statements](index=38&type=section&id=Registration%20Statements) - As of September 30, 2023, approximately **1.2 million shares** of Class A common stock remained under the Form S-4 shelf registration statement for acquisitions[185](index=185&type=chunk) - The company has an automatic shelf registration statement on Form S-3ASR for various securities, with no securities issued under it as of the filing date[186](index=186&type=chunk) [Debt Instruments and Debt Service Requirements](index=39&type=section&id=Debt%20Instruments%20and%20Debt%20Service%20Requirements) - The Revolving Credit Facility has a **$1.5 billion** aggregate principal amount, with **$370.0 million** outstanding as of September 30, 2023, and **$285.0 million** outstanding subsequent to September 30, 2023[188](index=188&type=chunk)[191](index=191&type=chunk) - The 2018 Term Loan had a principal balance of **$2.27 billion** as of September 30, 2023, accruing interest at **7.170%** per annum (excluding swap impact)[192](index=192&type=chunk)[194](index=194&type=chunk) | Debt Instrument | Amount Outstanding (Sep 30, 2023, in millions) | Interest Rate | | :---------------------- | :--------------------------------------------- | :------------ | | 2014-2C Tower Securities | $620.0 | 3.869% | | 2019-1C Tower Securities | $1,165.0 | 2.836% | | 2020 Senior Notes | $1,500.0 | 3.875% | | 2021 Senior Notes | $1,500.0 | 3.125% | - Total estimated debt service for the next 12 months ended September 30, 2024, is **$417.1 million**[202](index=202&type=chunk) [Inflation](index=42&type=section&id=Inflation) - Rising interest rates, due to efforts to combat inflation, are expected to impact growth rates and future operating results by affecting wireless service providers' capital expenditures and increasing debt refinancing costs[204](index=204&type=chunk) - Persistent high inflation could adversely affect future operating results, especially given long-term site leasing contracts with pre-determined pricing, except for international contracts with inflationary index-based escalators[204](index=204&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=page&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's exposure to market risks, primarily interest rate risk and foreign currency exchange rate risk, and provides sensitivity analyses for these exposures | Debt Obligation (in millions) | 2023 | 2024 | 2025 | 2026 | 2027 | Thereafter | Total | Fair Value | | :----------------------------- | :--- | :--- | :--- | :--- | :--- | :--------- | :---- | :--------- | | Revolving Credit Facility | $— | $— | $— | $370.0 | $— | $— | $370.0 | $370.0 | | 2018 Term Loan | $6.0 | $24.0 | $2,244.0 | $— | $— | $— | $2,274.0 | $2,271.2 | | Total debt obligation | $6.0 | $644.0 | $3,409.0 | $2,285.0 | $2,395.0 | $3,845.0 | $12,584.0 | $11,460.7 | - A hypothetical **1%** increase in variable interest rates as of September 30, 2023, would increase interest expense by approximately **4.6%** for the next twelve months[209](index=209&type=chunk) - A hypothetical **10%** adverse movement in the Brazilian Real would cause revenues and operating income to decline by approximately **1.3%** and **0.9%**, respectively, for the nine months ended September 30, 2023[211](index=211&type=chunk) [Item 4. Controls and Procedures](index=44&type=page&id=Item%204.%20Controls%20and%20Procedures) The company's principal executive and financial officers concluded that disclosure controls and procedures were effective as of September 30, 2023 - Disclosure controls and procedures were evaluated and deemed effective as of September 30, 2023[219](index=219&type=chunk) [PART II – OTHER INFORMATION](index=44&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=page&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's repurchases of Class A common stock during the third quarter of 2023 under its publicly announced repurchase plan | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :---------------- | :------------------------------- | :--------------------------- | | 9/1/2023 - 9/30/2023 | 441,639 | $197.75 | - As of the filing date, **$404.7 million** of authorization remained under the **$1.0 billion** stock repurchase plan authorized on October 28, 2021[220](index=220&type=chunk) [Item 5. Other Information](index=46&type=page&id=Item%205.%20Other%20Information) This section reports on the Thirteenth Amendment to the Senior Credit Agreement, which replaced LIBOR with Term SOFR, and confirms no changes to Rule 10b5-1 trading arrangements by officers or directors - On July 3, 2023, the Senior Credit Agreement was amended to replace LIBOR with Term SOFR as the benchmark interest rate[221](index=221&type=chunk)[222](index=222&type=chunk) - No officers or directors adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended September 30, 2023[223](index=223&type=chunk) [Item 6. Exhibits](index=47&type=page&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including the Thirteenth Amendment to the Credit Agreement and certifications - Key exhibits include the Thirteenth Amendment to the Second Amended and Restated Credit Agreement and certifications by the CEO and CFO (Sections 302 and 906 of Sarbanes-Oxley Act)[225](index=225&type=chunk) [SIGNATURES](index=48&type=page&id=SIGNATURES) This section contains the signatures of the Chief Executive Officer and Chief Financial Officer, certifying the filing of the report