SBA Communications Corporation (NASDAQ:SBAC) Q1 2022 Earnings Conference Call April 25, 2022 5:00 PM ET Company Participants Mark DeRussy - VP of Finance Brendan Cavanagh - CFO Jeffrey Stoops - CEO Conference Call Participants Amir Razban - JPMorgan Simon Flannery - Morgan Stanley Ric Prentiss - Raymond James David Barden - Bank of America Merrill Lynch Nick Del Deo - MoffettNathanson Michael Rollins - Citi Sami Badri - Credit Suisse Greg Williams - Cowen Brett Feldman - Goldman Sachs Walter Piecyk - ...

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, 2021 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION 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 2021 Earnings Conference Call February 28, 2022 5:00 PM ET Company Participants Jeffrey Stoops – President and Chief Executive Officer Brendan Cavanagh – Chief Financial Officer Mark DeRussy – Vice President, Finance Conference Call Participants Phil Cusick – JPMorgan Brett Feldman – Goldman Sachs Michael Rollins – Citigroup Richard Prentiss – Raymond James Walter Piecyk – LightShed Partners Nicholas Del Deo – MoffettNathanson Greg Williams – Cowen and Company ...

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited consolidated financial statements and accompanying notes for the three and nine months ended September 30, 2021 and 2020 Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Item | September 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :--- | :--- | :--- | | **Total Assets** | **$9,668,082** | **$9,158,018** | | Cash and cash equivalents | $187,806 | $308,560 | | Total current assets | $403,788 | $472,990 | | Long-term debt, net | $11,822,536 | $11,071,796 | | Total liabilities | $14,611,210 | $13,967,206 | | Total shareholders' deficit | ($4,958,305) | ($4,824,382) | Consolidated Statements of Operations Highlights (Unaudited) | Metric (in thousands, except per share) | Q3 2021 | Q3 2020 | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$589,305** | **$522,940** | **$1,713,696** | **$1,547,231** | | Site leasing revenue | $535,492 | $486,765 | $1,564,814 | $1,461,523 | | Site development revenue | $53,813 | $36,175 | $148,882 | $85,708 | | **Operating Income** | **$211,776** | **$160,337** | **$585,117** | **$468,591** | | **Net Income (Loss)** | **$47,798** | **$22,676** | **$188,720** | **($82,139)** | | **Diluted EPS** | **$0.43** | **$0.20** | **$1.70** | **($0.73)** | Consolidated Statements of Cash Flows Highlights (Unaudited, Nine Months Ended Sep 30) | Cash Flow Item (in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $891,330 | $882,908 | | Net cash used in investing activities | ($1,277,822) | ($353,378) | | Net cash provided by (used in) financing activities | $308,612 | ($314,250) | | **Net Change in Cash, Cash Equivalents, and Restricted Cash** | **($88,409)** | **$194,853** | [Note 6. Acquisitions](index=13&type=section&id=Note%206.%20Acquisitions) Details significant acquisition activities in 2021, including nearly **$1.2 billion** in capital expenditures and the acquisition of 710 utility transmission structures Acquisition Activity (in thousands) | Category | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | Acquisitions of towers and related intangible assets | $217,140 | $121,319 | | Acquisition of right-of-use assets | $948,392 | $0 | | Land buyouts and other assets | $22,222 | $78,580 | | **Total cash acquisition capital expenditures** | **$1,187,754** | **$199,899** | - During the first nine months of 2021, the company acquired the exclusive right to lease and operate 710 utility transmission structures from PG&E for **$969.9 million**, which was accounted for as a right-of-use asset[46](index=46&type=chunk) - Subsequent to September 30, 2021, the company purchased or is under contract to purchase approximately **1,700 communication sites** for an aggregate of **$231.0 million**, including about **1,400 sites** from Airtel Tanzania for **$175.0 million**[48](index=48&type=chunk) [Note 10. Debt](index=15&type=section&id=Note%2010.%20Debt) Outlines the company's **$11.9 billion** total debt as of September 30, 2021, and significant debt market activities during the period Debt Principal Balance as of September 30, 2021 (in thousands) | Debt Instrument | Principal Balance | | :--- | :--- | | 2018 Term Loan | $2,322,000 | | Tower Securities (various series) | $5,515,000 | | Senior Notes (various series) | $4,100,000 | | **Total Debt** | **$11,937,000** | - On July 7, 2021, the company amended its Revolving Credit Facility, increasing commitments from **$1.25 billion** to **$1.5 billion** and extending the maturity to July 7, 2026[59](index=59&type=chunk) - In January 2021, the company issued **$1.5 billion** of 3.125% 2021 Senior Notes due 2029, with proceeds used to redeem the 2017 Senior Notes and repay amounts under the Revolving Credit Facility[72](index=72&type=chunk)[74](index=74&type=chunk) - Subsequent to the quarter end, on October 27, 2021, the company issued **$1.79 billion** of new Tower Securities (2021-2C and 2021-3C) and used proceeds to repay the Revolving Credit Facility and redeem the 2016 Senior Notes[67](index=67&type=chunk)[68](index=68&type=chunk) [Note 11. Shareholders' Equity](index=18&type=section&id=Note%2011.%20Shareholders'%20Equity) Reports changes in shareholders' equity, including **$318.9 million** in stock repurchases and **$190.4 million** in dividend payments during the first nine months of 2021 Share Repurchases | Period | Total Shares Purchased (millions) | Average Price Paid per Share | Total Price Paid (millions) | | :--- | :--- | :--- | :--- | | Q3 2021 | 0.4 | $340.70 | $150.0 | | Nine Months 2021 | 1.1 | $291.48 | $318.9 | - On October 28, 2021, the Board of Directors authorized a new **$1.0 billion** stock repurchase plan, replacing the prior plan[79](index=79&type=chunk) - The company paid three cash dividends of **$0.58 per share** during the first nine months of 2021, totaling approximately **$190.4 million**[80](index=80&type=chunk) [Note 14. Segment Data](index=21&type=section&id=Note%2014.%20Segment%20Data) Describes the company's two business segments, with site leasing accounting for the vast majority of revenues and operating profit in the first nine months of 2021 Segment Performance for Nine Months Ended Sep 30, 2021 (in thousands) | Segment | Revenues | Operating Profit | | :--- | :--- | :--- | | Domestic Site Leasing | $1,249,291 | $1,054,836 | | International Site Leasing | $315,523 | $220,468 | | Site Development | $148,882 | $32,710 | - For the nine months ended September 30, 2021, site leasing revenue in Brazil was **$174.5 million**, with no other foreign country representing a material amount of total revenues[93](index=93&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Discusses the company's financial performance, business segments, capital allocation strategy, and liquidity - The company's primary business is site leasing, which contributed **97.5%** of total segment operating profit for the nine months ended September 30, 2021[105](index=105&type=chunk)[111](index=111&type=chunk) - The capital allocation strategy focuses on increasing shareholder value through portfolio growth, stock repurchases when the stock is believed to be below intrinsic value, and cash dividends[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) - The company has experienced minimal impact to its business or results of operations from the COVID-19 pandemic but continues to monitor developments[117](index=117&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Compares financial results for Q3 and the nine months ended September 30, 2021 and 2020, highlighting revenue and profit growth across segments Q3 2021 vs. Q3 2020 Revenue and Operating Profit (in thousands) | Segment | Q3 2021 Revenue | Q3 2020 Revenue | % Change | Q3 2021 Operating Profit | Q3 2020 Operating Profit | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Domestic site leasing | $426,758 | $390,961 | 9.2% | $361,498 | $326,733 | 10.6% | | International site leasing | $108,734 | $95,804 | 13.5% | $75,328 | $67,310 | 11.9% | | Site development | $53,813 | $36,175 | 48.8% | $12,456 | $7,378 | 68.8% | Nine Months 2021 vs. Nine Months 2020 Revenue and Operating Profit (in thousands) | Segment | Nine Months 2021 Revenue | Nine Months 2020 Revenue | % Change | Nine Months 2021 Operating Profit | Nine Months 2020 Operating Profit | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Domestic site leasing | $1,249,291 | $1,165,322 | 7.2% | $1,054,836 | $973,096 | 8.4% | | International site leasing | $315,523 | $296,201 | 6.5% | $220,468 | $208,307 | 5.8% | | Site development | $148,882 | $85,708 | 73.7% | $32,710 | $17,291 | 89.2% | - Site development revenue and operating profit increased significantly in both the three and nine-month periods due to increased carrier activity, primarily from T-Mobile and DISH[126](index=126&type=chunk)[129](index=129&type=chunk)[145](index=145&type=chunk) [Non-GAAP Financial Measures](index=34&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) Explains the use of Adjusted EBITDA as a key non-GAAP performance measure, which increased to **$407.0 million** in Q3 2021 and **$1.20 billion** for the nine months Adjusted EBITDA Reconciliation (in thousands) | Metric | Q3 2021 | Q3 2020 | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $47,798 | $22,676 | $188,720 | ($82,139) | | Adjustments | $359,166 | $350,625 | $1,008,494 | $1,201,325 | | **Adjusted EBITDA** | **$406,964** | **$373,301** | **$1,197,214** | **$1,119,186** | - Adjusted EBITDA is defined as net income excluding items such as non-cash straight-line leasing revenue/expense, non-cash compensation, debt extinguishment losses, interest, taxes, and D&A, used by management to evaluate economic productivity and allocate resources[167](index=167&type=chunk)[168](index=168&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Details the company's liquidity sources, significant investing activities of **$1.28 billion**, and financing activities, confirming sufficient liquidity for the next twelve months Cash Capital Expenditures (Nine Months Ended Sep 30, in thousands) | Category | 2021 | 2020 | | :--- | :--- | :--- | | Acquisitions of towers and related intangible assets | ($217,140) | ($121,319) | | Acquisition of right-of-use assets | ($948,392) | $0 | | Land buyouts and other assets | ($22,222) | ($78,580) | | Construction and related costs | ($39,182) | ($40,126) | | Augmentation and tower upgrades | ($22,886) | ($29,712) | | **Total Cash Used in Investing Activities** | **($1,277,822)** | **($353,378)** | Financing Activities (Nine Months Ended Sep 30, in thousands) | Category | 2021 | 2020 | | :--- | :--- | :--- | | Net Debt Issuance/(Repayments) | $730,449 | ($483,618) | | Repurchase and retirement of common stock | ($284,343) | ($378,988) | | Payment of dividends on common stock | ($190,456) | ($156,199) | | **Net Cash Provided By (Used In) Financing** | **$308,612** | **($314,250)** | - The company estimates its total debt service requirement for the next twelve months to be approximately **$379.1 million**, based on debt outstanding as of September 30, 2021[206](index=206&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Identifies interest rate risk and foreign currency exchange rate risk as primary market exposures, along with their management strategies - Primary market risks are interest rate risk related to debt refinancing and variable-rate debt, and foreign currency exchange rate risk from international operations[212](index=212&type=chunk)[213](index=213&type=chunk) - Interest rate risk is managed through a large percentage of fixed-rate debt and interest rate swaps, with an interest rate swap hedging **$1.95 billion** of the variable-rate 2018 Term Loan[212](index=212&type=chunk) - For the nine months ended September 30, 2021, approximately **13.5%** of revenues were denominated in foreign currencies, where a hypothetical **10%** adverse movement in the Brazilian Real would have caused revenues to decline by approximately **0.9%**[213](index=213&type=chunk)[214](index=214&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms the effectiveness of the company's disclosure controls and procedures as evaluated by the CEO and CFO as of September 30, 2021 - The company's principal executive officer and principal financial officer evaluated the disclosure controls and procedures and concluded they were effective as of September 30, 2021[220](index=220&type=chunk) PART II – OTHER INFORMATION [Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Provides details on the company's repurchase of **440,274** Class A common shares during Q3 2021 at an average price of **$340.70** per share Issuer Purchases of Equity Securities (Q3 2021) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | July 2021 | 0 | N/A | | August 2021 | 158,055 | $347.27 | | September 2021 | 282,219 | $337.02 | | **Total** | **440,274** | **$340.70** | [Exhibits](index=46&type=section&id=Item%206.%20Exhibits) Lists the exhibits filed with the Form 10-Q report, including CEO/CFO certifications and XBRL files - The exhibits filed with this report include: * CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906 * XBRL Instance Document and related taxonomy files[222](index=222&type=chunk) [Signatures](index=47&type=section&id=SIGNATURES) - The report was duly signed on November 5, 2021, by Jeffrey A. Stoops, Chief Executive Officer, and Brendan T. Cavanagh, Chief Financial Officer[225](index=225&type=chunk)

Financial Data and Key Metrics Changes - Total GAAP site leasing revenues for Q3 2021 were $535.5 million, with cash site leasing revenues at $525.1 million, positively impacted by foreign exchange rates by $3.2 million year-over-year [8][19] - Adjusted EBITDA for Q3 was $407 million, with an adjusted EBITDA margin of 70.3%, increasing to 74.7% when excluding revenues from pass-through expenses [14][19] - AFFO in Q3 was $302.5 million, with AFFO per share at $2.71, reflecting a 13.9% increase over Q3 2020 [16] Business Line Data and Key Metrics Changes - Same tower recurring cash leasing revenue growth was 3.6% year-over-year, with a gross basis growth of 6.1% [9] - Domestic same-tower recurring cash leasing revenue growth was 5.7% on a gross basis and 3.3% on a net basis, including 2.4% of churn [9] - The services business achieved record results with $53.8 million in revenue and $12.5 million in segment operating profit, with backlogs reaching an all-time high [15] Market Data and Key Metrics Changes - International same-tower cash leasing revenue growth was 5.2% net, including 2.7% of churn, and 7.9% on a gross basis [11] - Brazil, the largest international market, saw a gross same-tower organic growth of 9.5% on a constant currency basis [12] - The majority of consolidated cash site leasing revenue (84.5%) was denominated in U.S. dollars, with Brazil contributing 11.7% of consolidated cash site leasing revenues [12] Company Strategy and Development Direction - The company has increased its full-year 2021 outlook for site development revenue to $200 million at the midpoint, driven by strong third-quarter performance and growing backlogs [16][19] - The company continues to invest in land under its sites, spending $11.6 million to buy land and easements, with 72% of towers having land owned or controlled for over 20 years [17][18] - The company anticipates continued strong domestic operational leasing activity into 2022, supported by a growing backlog of new lease and amendment applications [10][28] Management's Comments on Operating Environment and Future Outlook - Management noted high levels of carrier activity in the U.S., with major customers like Verizon and T-Mobile actively deploying new technologies [27] - The company expects elevated domestic leasing activities to continue through 2022, driven by ongoing upgrades and new deployments [28][98] - International markets are returning to pre-pandemic activity levels, with expectations for growth in network investment from carrier customers [30] Other Important Information - The company ended Q3 with $11.9 billion in total debt and a net debt to annualized adjusted EBITDA leverage ratio of 7.2x, with the highest net cash interest coverage ratio in its history at 4.6x [21][33] - The company repurchased approximately 1 million shares for $350 million, with a new $1 billion stock repurchase plan authorized by the Board of Directors [24][25] - A fourth-quarter dividend of $0.58 per share was declared, representing a payout ratio of 21% of third-quarter AFFO per share [26] Q&A Session Summary Question: Insights on backlog and leasing activity for 2022 - Management expects leasing activity to build throughout 2022, with visibility improving as the year progresses [39] Question: Update on Sprint churn and its impact - The company adjusted its domestic churn impact for 2021 due to timing issues with Sprint, expecting a total impact of around $7 million for 2021 and higher in 2022 [44][46] Question: DISH's contribution to leasing and future spectrum auctions - DISH's activity is expected to contribute significantly in 2022, with most revenue recognition starting next year due to their payment schedule [51] Question: International market outlook and labor availability - Management sees growth opportunities in Africa and is monitoring labor market conditions, which are currently stable [56][57] Question: Insights on international churn and capital allocation - Elevated international churn is expected in Q4 and into 2022, primarily due to consolidation-related churn [65][67]

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201%2E%20Financial%20Statements) This section presents the unaudited consolidated financial statements of SBA Communications Corporation and its subsidiaries for the periods ended June 30, 2021, and December 31, 2020, including balance sheets, statements of operations, comprehensive income (loss), 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) This statement provides a snapshot of the company's assets, liabilities, and shareholders' deficit at specific points in time | Metric | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total assets | $9,960,313 | $9,158,018 | | Total current assets | $482,226 | $472,990 | | Total liabilities | $14,784,878 | $13,967,206 | | Total shareholders' deficit | $(4,839,742) | $(4,824,382) | - Total assets increased by approximately **$802.3 million** from December 31, 2020, to June 30, 2021[10](index=10&type=chunk) [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) This statement details the company's revenues, expenses, and net income (loss) over specific reporting periods | Metric | Three Months Ended June 30, 2021 (in thousands) | Three Months Ended June 30, 2020 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | Six Months Ended June 30, 2020 (in thousands) | | :------------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total revenues | $575,528 | $507,226 | $1,124,266 | $1,024,292 | | Operating income | $199,764 | $157,054 | $373,342 | $308,256 | | Net income (loss) attributable to SBA Comm. Corp. | $152,669 | $22,813 | $140,922 | $(104,247) | | Basic EPS | $1.40 | $0.20 | $1.29 | $(0.93) | | Diluted EPS | $1.37 | $0.20 | $1.27 | $(0.93) | - Total revenues increased by **13.5%** for the three months ended June 30, 2021, and **9.8%** for the six months ended June 30, 2021, compared to the prior year periods[12](index=12&type=chunk) - Net income attributable to SBA Communications Corporation significantly increased from **$22.8 million** to **$152.7 million** for the three months ended June 30, 2021, and from a loss of **$104.2 million** to a gain of **$140.9 million** for the six months ended June 30, 2021[12](index=12&type=chunk) [Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) This statement presents net income alongside other comprehensive income or loss items not recognized in net income | Metric | Three Months Ended June 30, 2021 (in thousands) | Three Months Ended June 30, 2020 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | Six Months Ended June 30, 2020 (in thousands) | | :------------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net income (loss) | $152,669 | $23,118 | $140,922 | $(104,816) | | Adjustments related to interest rate swaps | $5,565 | $(12,684) | $48,352 | $(115,923) | | Foreign currency translation adjustments | $63,869 | $(8,166) | $20,235 | $(184,193) | | Comprehensive income (loss) | $222,103 | $2,268 | $209,509 | $(404,932) | - Comprehensive income significantly increased to **$222.1 million** for the three months ended June 30, 2021, from **$2.3 million** in the prior year, driven by positive adjustments from interest rate swaps and foreign currency translation[15](index=15&type=chunk) [Consolidated Statement of Shareholders' Deficit](index=6&type=section&id=Consolidated%20Statement%20of%20Shareholders%27%20Deficit) This statement outlines changes in the company's shareholders' deficit, including net income, share repurchases, and dividends | Metric | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total Shareholders' Deficit | $(4,839,742) | $(4,824,382) | | Net income attributable to SBAC | $140,922 | N/A (for 6 months) | | Common stock repurchased | $(168,922) | N/A (for 6 months) | | Dividends on common stock | $(127,361) | N/A (for 6 months) | - The company reported a net income of **$140.9 million** for the six months ended June 30, 2021, contributing to changes in accumulated deficit[20](index=20&type=chunk) - Share repurchases amounted to **$168.9 million** and dividends paid were **$127.4 million** for the six months ended June 30, 2021[20](index=20&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This statement categorizes cash inflows and outflows from operating, investing, and financing activities | Cash Flow Activity | Six Months Ended June 30, 2021 (in thousands) | Six Months Ended June 30, 2020 (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by operating activities | $638,282 | $592,418 | | Net cash used in investing activities | $(1,184,754) | $(413,970) | | Net cash provided by (used in) financing activities | $545,394 | $(52,121) | | Net change in cash, cash equivalents, and restricted cash | $(3,998) | $110,518 | | End of period cash, cash equivalents, and restricted cash | $338,810 | $251,638 | - Operating cash flow increased to **$638.3 million** for the six months ended June 30, 2021, from **$592.4 million** in the prior year[22](index=22&type=chunk) - Investing activities used significantly more cash, **$1.18 billion**, in the first six months of 2021, primarily due to acquisitions, compared to **$414.0 million** in the prior year[22](index=22&type=chunk) [Condensed Notes to Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Condensed%20Notes%20to%20Consolidated%20Financial%20Statements%20%28Unaudited%29) These notes provide detailed explanations and additional information supporting the unaudited consolidated financial statements [Note 1. Basis of Presentation](index=10&type=section&id=Note%201%2E%20Basis%20of%20Presentation) This note describes the accounting principles and methods used in preparing the financial statements - The Company recorded a **$73.6 million** gain on intercompany loan remeasurement for the three months ended June 30, 2021, compared to a **$20.4 million** loss in the prior year, and a **$16.6 million** gain for the six months ended June 30, 2021, compared to a **$173.2 million** loss in the prior year, due to foreign exchange rate changes[30](index=30&type=chunk) - The Company amended its Credit Facility on July 7, 2021, to address the transition away from LIBOR as a benchmark interest rate[31](index=31&type=chunk) [Note 2. Fair Value Measurements](index=11&type=section&id=Note%202%2E%20Fair%20Value%20Measurements) This note details the valuation techniques and inputs used for assets and liabilities measured at fair value | Cost Type | Three Months Ended June 30, 2021 (in thousands) | Three Months Ended June 30, 2020 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | Six Months Ended June 30, 2020 (in thousands) | | :------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Asset impairment | $2,211 | $5,424 | $5,366 | $16,432 | | Write-off of decommissioned towers | $1,264 | $739 | $2,592 | $3,439 | | Other decommission costs | $322 | $79 | $742 | $726 | | Total asset impairment and decommission costs | $3,797 | $6,242 | $8,700 | $20,597 | - Total asset impairment and decommission costs decreased by **40.8%** for the three months and **57.8%** for the six months ended June 30, 2021, compared to the prior year periods[35](index=35&type=chunk) [Note 3. Cash, Cash Equivalents, and Restricted Cash](index=12&type=section&id=Note%203%2E%20Cash%2C%20Cash%20Equivalents%2C%20and%20Restricted%20Cash) This note provides a breakdown of the company's cash and cash equivalents, including any restricted amounts | Category | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :--------------------------------------- | :----------------------------- | :------------------------------- | | Cash and cash equivalents | $273,803 | $308,560 | | Securitization escrow accounts | $62,201 | $31,507 | | Payment and performance bonds | $169 | $164 | | Surety bonds and workers compensation | $2,637 | $2,577 | | Total cash, cash equivalents, and restricted cash | $338,810 | $342,808 | - Restricted cash in securitization escrow accounts nearly doubled from **$31.5 million** to **$62.2 million**[40](index=40&type=chunk) [Note 4. Costs and Estimated Earnings on Uncompleted Contracts](index=12&type=section&id=Note%204%2E%20Costs%20and%20Estimated%20Earnings%20on%20Uncompleted%20Contracts) This note outlines the accounting for revenues and costs associated with long-term construction contracts | Category | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :---------------------------------------------------------------- | :----------------------------- | :------------------------------- | | Costs incurred on uncompleted contracts | $73,925 | $54,949 | | Estimated earnings | $27,991 | $21,778 | | Billings to date | $(71,992) | $(43,725) | | Costs and estimated earnings in excess of billings on uncompleted contracts, net | $29,924 | $33,002 | - Costs incurred on uncompleted contracts increased by **$18.9 million**, while billings to date increased by **$28.3 million**[42](index=42&type=chunk) [Note 5. Prepaid Expenses and Other Current Assets and Other Assets](index=13&type=section&id=Note%205%2E%20Prepaid%20Expenses%20and%20Other%20Current%20Assets%20and%20Other%20Assets) This note details the composition of prepaid expenses, other current assets, and non-current assets | Category | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total prepaid expenses and other current assets | $26,840 | $23,875 | | Straight-line rent receivable | $333,434 | $321,816 | | Interest rate swap asset | $38,032 | $12,123 | | Total other assets | $491,998 | $477,992 | - The interest rate swap asset significantly increased from **$12.1 million** to **$38.0 million**[43](index=43&type=chunk) [Note 6. Acquisitions](index=13&type=section&id=Note%206%2E%20Acquisitions) This note provides information on business combinations, including acquired assets, liabilities, and consideration paid | Acquisition Type | Six Months Ended June 30, 2021 (in thousands) | Six Months Ended June 30, 2020 (in thousands) | | :------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Acquisitions of towers and related intangible assets | $168,885 | $99,424 | | Acquisition of right-of-use assets | $947,698 | — | | Land buyouts and other assets | $13,268 | $19,611 | | Total cash acquisition capital expenditures | $1,129,851 | $119,035 | - Total cash acquisition capital expenditures surged to **$1.13 billion** for the six months ended June 30, 2021, primarily due to the acquisition of right-of-use assets, including 699 utility transmission structures from PG&E for **$955.8 million**[44](index=44&type=chunk)[45](index=45&type=chunk) - Subsequent to June 30, 2021, the Company purchased or agreed to purchase approximately 1,800 communication sites for an aggregate consideration of approximately **$270.0 million** in cash, including 1,400 sites from Airtel Tanzania[47](index=47&type=chunk) [Note 7. Property and Equipment, Net](index=14&type=section&id=Note%207%2E%20Property%20and%20Equipment%2C%20Net) This note presents the carrying value of property and equipment, net of accumulated depreciation | Category | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Towers and related components | $5,292,525 | $5,213,019 | | Total property and equipment | $6,215,376 | $6,123,966 | | Accumulated depreciation | $(3,590,279) | $(3,446,640) | | Property and equipment, net | $2,625,097 | $2,677,326 | - Depreciation expense was **$139.8 million** for the six months ended June 30, 2021, a slight decrease from **$143.2 million** in the prior year[50](index=50&type=chunk) [Note 8. Intangible Assets, Net](index=14&type=section&id=Note%208%2E%20Intangible%20Assets%2C%20Net) This note details the company's intangible assets, such as contract intangibles and network location intangibles, net of amortization | Category | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Current contract intangibles | $2,333,665 | $2,405,442 | | Network location intangibles | $717,951 | $750,708 | | Intangible assets, net | $3,051,616 | $3,156,150 | - Amortization expense for intangible assets was **$212.9 million** for the six months ended June 30, 2021, down from **$218.0 million** in the prior year[51](index=51&type=chunk) [Note 9. Accrued Expenses](index=15&type=section&id=Note%209%2E%20Accrued%20Expenses) This note provides a breakdown of various accrued liabilities, including salaries, taxes, and capital expenditures | Category | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Salaries and benefits | $21,397 | $20,958 | | Real estate and property taxes | $9,932 | $9,583 | | Unpaid capital expenditures | $6,987 | $6,073 | | Other | $30,339 | $26,417 | | Total accrued expenses | $68,655 | $63,031 | - Total accrued expenses increased by **$5.6 million** from December 31, 2020, to June 30, 2021[53](index=53&type=chunk) [Note 10. Debt](index=15&type=section&id=Note%2010%2E%20Debt) This note describes the company's debt instruments, including principal balances, interest rates, and maturities | Debt Instrument | June 30, 2021 Principal Balance (in thousands) | December 31, 2020 Principal Balance (in thousands) | | :-------------------------------- | :--------------------------------------------- | :----------------------------------------------- | | Revolving Credit Facility | $85,000 | $380,000 | | 2018 Term Loan | $2,328,000 | $2,340,000 | | Tower Securities | $5,515,000 | $4,410,000 | | Senior Notes | $4,100,000 | $3,350,000 | | Total debt | $12,028,000 | $11,180,000 | - Total debt increased by **$848 million** to **$12.03 billion** as of June 30, 2021, primarily due to new Tower Securities and Senior Notes issuances[54](index=54&type=chunk) - The Revolving Credit Facility was amended on July 7, 2021, increasing commitments to **$1.5 billion**, extending maturity to July 7, 2026, lowering interest rate margins, and incorporating sustainability-linked targets[58](index=58&type=chunk) - The Company issued **$1.165 billion** of 2021-1C Tower Securities and **$1.5 billion** of 2021 Senior Notes, using proceeds to repay existing debt and for general corporate purposes[63](index=63&type=chunk)[66](index=66&type=chunk) [Note 11. Shareholders' Equity](index=18&type=section&id=Note%2011%2E%20Shareholders%27%20Equity) This note details the components of shareholders' equity, including common stock, accumulated deficit, and other comprehensive income | Metric | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Total shares repurchased (millions) | 0.7 | 0.8 | | Average price paid per share | $258.33 | $242.86 | | Total price paid (millions) | $168.9 | $200.0 | - The Board authorized a new **$1.0 billion** stock repurchase plan on November 2, 2020, with **$475.1 million** remaining as of the filing date[71](index=71&type=chunk) - Cash dividends of **$0.58 per share** were paid in March and June 2021, totaling **$126.8 million** for the six months[73](index=73&type=chunk) [Note 12. Stock-Based Compensation](index=19&type=section&id=Note%2012%2E%20Stock-Based%20Compensation) This note explains the accounting for equity awards granted to employees and directors | Stock Options Activity | December 31, 2020 (in thousands) | June 30, 2021 (in thousands) | | :-------------------------------- | :------------------------------- | :--------------------------- | | Outstanding shares | 3,202 | 2,928 | | Weighted-average exercise price | $143.01 | $144.55 | | Aggregate intrinsic value | N/A | $509,774 | | RSU/PSU Activity | December 31, 2020 (in thousands) | June 30, 2021 (in thousands) | | :-------------------------------- | :------------------------------- | :--------------------------- | | RSUs Outstanding shares | 274 | 247 | | PSUs Outstanding shares | 148 | 299 | [Note 13. Income Taxes](index=19&type=section&id=Note%2013%2E%20Income%20Taxes) This note outlines the company's income tax provisions, effective tax rates, and deferred tax assets and liabilities - The Company's effective tax rate differs from the U.S. statutory rate primarily due to its REIT election and a full valuation allowance on the net deferred tax assets of its U.S. taxable REIT subsidiary (TRS)[77](index=77&type=chunk) - As a REIT, the Company is generally not subject to U.S. federal corporate income tax on distributed net income and can use approximately **$651.1 million** in federal net operating losses (NOLs) as of December 31, 2020, to offset REIT taxable income[78](index=78&type=chunk) [Note 14. Segment Data](index=20&type=section&id=Note%2014%2E%20Segment%20Data) This note provides financial information for the company's operating segments, including revenues and operating profit | Segment | Six Months Ended June 30, 2021 Revenues (in thousands) | Six Months Ended June 30, 2020 Revenues (in thousands) | | :-------------------- | :--------------------------------------------- | :----------------------------------------------- | | Domestic Site Leasing | $822,407 | $774,361 | | International Site Leasing | $206,790 | $200,397 | | Site Development | $95,069 | $49,534 | | Total Revenues | $1,124,266 | $1,024,292 | | Segment | Six Months Ended June 30, 2021 Operating Profit (in thousands) | Six Months Ended June 30, 2020 Operating Profit (in thousands) | | :-------------------- | :------------------------------------------------- | :------------------------------------------------- | | Domestic Site Leasing | $693,338 | $646,364 | | International Site Leasing | $145,141 | $140,997 | | Site Development | $20,254 | $9,914 | | Total Operating Profit | $858,733 | $797,275 | - Site leasing business generated **97.6%** of total segment operating profit for the six months ended June 30, 2021[98](index=98&type=chunk) [Note 15. Earnings Per Share](index=21&type=section&id=Note%2015%2E%20Earnings%20Per%20Share) This note presents the calculation of basic and diluted earnings per share | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic EPS | $1.40 | $0.20 | $1.29 | $(0.93) | | Diluted EPS | $1.37 | $0.20 | $1.27 | $(0.93) | | Basic weighted-average shares outstanding (thousands) | 109,412 | 111,738 | 109,441 | 111,823 | | Diluted weighted-average shares outstanding (thousands) | 111,301 | 113,634 | 111,210 | 111,823 | - Diluted EPS significantly increased to **$1.37** for the three months and **$1.27** for the six months ended June 30, 2021, from **$0.20** and **$(0.93)** respectively, in the prior year periods[87](index=87&type=chunk) [Note 16. Redeemable Noncontrolling Interests](index=22&type=section&id=Note%2016%2E%20Redeemable%20Noncontrolling%20Interests) This note describes the accounting for noncontrolling interests that are redeemable by the holder - The Company acquired the remaining **6%** minority interest in Atlas Tower South Africa (Atlas SA) for **$13.7 million** on March 25, 2021, though litigation regarding the transaction is ongoing[90](index=90&type=chunk) - The fair value of the redeemable noncontrolling interest is based on the contractually-defined redemption value[91](index=91&type=chunk) [Note 17. Derivatives and Hedging Activities](index=22&type=section&id=Note%2017%2E%20Derivatives%20and%20Hedging%20Activities) This note details the company's use of derivative instruments and their impact on financial statements - The Company entered into an interest rate swap for **$1.95 billion** notional value on August 4, 2020, fixing the rate at **1.874%** per annum through the 2018 Term Loan's maturity, designated as a cash flow hedge[92](index=92&type=chunk)[93](index=93&type=chunk) | Metric | Three Months Ended June 30, 2021 (in thousands) | Three Months Ended June 30, 2020 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | Six Months Ended June 30, 2020 (in thousands) | | :------------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Change in fair value recorded in AOCI (Cash Flow Hedge) | $(5,657) | $(17,326) | $25,909 | $(125,208) | | Amount reclassified from AOCI into Non-cash interest expense (De-designated Hedges) | $11,222 | $4,642 | $22,443 | $9,285 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202%2E%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations, highlighting performance drivers, segment analysis, capital allocation strategy, and liquidity [Business Overview](index=23&type=section&id=Business%20Overview) This section describes the company's core operations, strategic focus, and market position in the wireless communications infrastructure industry - SBA Communications is a leading independent owner and operator of wireless communications infrastructure, with primary operations in the U.S. and territories, and towers in South America, Central America, Canada, and South Africa[98](index=98&type=chunk) - The site leasing business is the primary focus, contributing **97.6%** of total segment operating profit for the six months ended June 30, 2021, characterized by long-term contracts, rent escalators, high operating margins, and low customer churn[98](index=98&type=chunk)[104](index=104&type=chunk) - The capital allocation strategy focuses on portfolio growth (tower acquisitions and new builds), stock repurchases when the stock price is below intrinsic value, and returning cash through dividends[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk) - The Company has experienced minimal impact to its business or results of operations from the COVID-19 pandemic[112](index=112&type=chunk) [Critical Accounting Policies and Estimates](index=25&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section discusses the significant accounting policies and estimates that require management's judgment and could materially affect financial results - Management's preparation of financial statements requires estimates and assumptions that affect reported amounts, with actual results potentially varying significantly[114](index=114&type=chunk) - The Company is evaluating the impact of ASU 2020-04 and ASU 2021-01, Reference Rate Reform, on its consolidated financial statements, having already amended its Credit Facility for the LIBOR transition[115](index=115&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including revenue, expenses, and net income trends over specified periods | Metric | Three Months Ended June 30, 2021 (in thousands) | Three Months Ended June 30, 2020 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | Six Months Ended June 30, 2020 (in thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total Revenues | $575,528 (12.8% increase) | $507,226 | $1,124,266 (10.7% increase) | $1,024,292 | | Total Operating Profit | $439,769 (11.1% increase) | $395,724 | $858,733 (7.7% increase) | $797,275 | | Net Income (Loss) | $152,669 (561.0% increase) | $23,118 | $140,922 (N/A, from loss) | $(104,816) | - Domestic site leasing revenues increased by **$30.8 million (7.9%)** for the three months and **$48.0 million (6.2%)** for the six months, driven by acquired towers and organic growth[118](index=118&type=chunk)[140](index=140&type=chunk) - Site development revenues increased significantly by **$26.6 million (107.2%)** for the three months and **$45.5 million (91.9%)** for the six months, due to increased carrier activity from T-Mobile and DISH[120](index=120&type=chunk)[142](index=142&type=chunk) - Other income (expense), net, included a **$111.3 million** gain for the three months and a **$25.0 million** gain for the six months ended June 30, 2021, from remeasurement of U.S. dollar denominated intercompany loans, compared to losses in the prior year periods[135](index=135&type=chunk)[157](index=157&type=chunk) [Non-GAAP Financial Measures](index=34&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP financial measures, such as Adjusted EBITDA, to their most directly comparable GAAP measures - Adjusted EBITDA is defined as net income excluding non-cash straight-line leasing revenue and ground lease expense, non-cash compensation, debt extinguishment loss, other income/expenses, acquisition/new business initiatives, asset impairment, interest income/expense, depreciation, accretion, amortization, and income taxes[161](index=161&type=chunk) | Metric | Three Months Ended June 30, 2021 (in thousands) | Three Months Ended June 30, 2020 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | Six Months Ended June 30, 2020 (in thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Adjusted EBITDA | $400,194 (7.9% increase) | $368,767 | $790,265 (7.8% increase) | $738,715 | - Adjusted EBITDA increased by **$29.3 million** (constant currency) for the three months and **$57.6 million** (constant currency) for the six months ended June 30, 2021, primarily due to increased segment operating profit[166](index=166&type=chunk)[167](index=167&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to generate and manage cash flows, fund operations, and meet financial obligations | Cash Flow Activity | Six Months Ended June 30, 2021 (in thousands) | Six Months Ended June 30, 2020 (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Cash provided by operating activities | $638,282 | $592,418 | | Cash used in investing activities | $(1,184,754) | $(413,970) | | Cash provided by (used in) financing activities | $545,394 | $(52,121) | - The increase in operating cash flow was primarily due to higher segment operating profit, positive foreign currency exchange rate impacts, and lower net cash interest paid[170](index=170&type=chunk) - Discretionary cash capital expenditures for 2021 are expected to be **$1.45 billion to $1.47 billion**, funded by cash on hand, operations, and new financings[172](index=172&type=chunk) - Financing activities provided **$545.4 million** in cash for the six months ended June 30, 2021, a significant increase from a net use of **$52.1 million** in the prior year, driven by new debt issuances[174](index=174&type=chunk) [Debt Instruments and Debt Service Requirements](index=38&type=section&id=Debt%20Instruments%20and%20Debt%20Service%20Requirements) This section provides details on the company's debt structure, including terms, maturities, and associated debt service obligations - The Revolving Credit Facility was amended on July 7, 2021, to increase commitments to **$1.5 billion**, extend maturity to July 7, 2026, and incorporate sustainability-linked targets[180](index=180&type=chunk) - As of June 30, 2021, the 2018 Term Loan had a principal balance of **$2.3 billion**, with quarterly principal payments of **$6.0 million**[184](index=184&type=chunk) - The Company issued **$1.165 billion** of 2021-1C Tower Securities with a **1.631%** fixed interest rate and **$1.5 billion** of 2021 Senior Notes with a **3.125%** interest rate[186](index=186&type=chunk)[192](index=192&type=chunk) | Debt Instrument | Total Debt Service for Next 12 Months (in thousands) | | :-------------------------------- | :--------------------------------------------- | | Revolving Credit Facility | $3,690 | | 2018 Term Loan | $67,572 | | Tower Securities (various series) | $125,583 | | Senior Notes (various series) | $158,625 | | Total | $379,234 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203%2E%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 outlines strategies for managing these risks, including sensitivity analysis - The Company is exposed to interest rate risk from its variable rate debt (2018 Term Loan and Revolving Credit Facility) and manages this through fixed-rate debt and interest rate swaps[200](index=200&type=chunk) - A hypothetical **10%** adverse movement in the Brazilian Real would cause revenues and operating income to decline by approximately **0.9%** and **0.5%**, respectively, for the six months ended June 30, 2021[202](index=202&type=chunk) - A **10%** change in underlying exchange rates of unsettled intercompany debt would result in approximately **$62.7 million** of unrealized gains or losses[203](index=203&type=chunk) [Special Note Regarding Forward-Looking Statements](index=42&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This section provides a cautionary statement regarding forward-looking statements within the report, highlighting various factors that could cause actual results to differ materially from projections, including industry trends, financial conditions, and operational risks - The report contains forward-looking statements concerning future growth, financial health of the wireless industry, demand for towers, capital investments, and competitive factors[205](index=205&type=chunk)[207](index=207&type=chunk) - Key risk factors include consolidation among wireless service providers, ability to comply with debt covenants, risks of international operations and acquisitions, industry developments, competition, interest rate fluctuations, and the impact of COVID-19[206](index=206&type=chunk)[208](index=208&type=chunk) [Item 4. Controls and Procedures](index=44&type=section&id=Item%204%2E%20Controls%20and%20Procedures) This section confirms the effectiveness of the Company's disclosure controls and procedures as of June 30, 2021, following a review and evaluation by the principal executive and financial officers - The Company's disclosure controls and procedures were effective as of June 30, 2021[209](index=209&type=chunk) PART II – OTHER INFORMATION [Item 6. Exhibits](index=44&type=section&id=Item%206%2E%20Exhibits) This section lists the exhibits filed as part of the Form 10-Q, including certifications by the Chief Executive Officer and Chief Financial Officer, and XBRL-related documents - Exhibits include certifications by the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[210](index=210&type=chunk) - XBRL Instance Document, Taxonomy Extension Schema, Definition Linkbase, Calculation Linkbase, Label Linkbase, and Presentation Linkbase Documents are included[210](index=210&type=chunk) [Signatures](index=45&type=section&id=SIGNATURES) This section contains the duly authorized signatures of the Chief Executive Officer and Chief Financial Officer, affirming the submission of the report - The report was signed by Jeffrey A. Stoops, Chief Executive Officer, and Brendan T. Cavanagh, Chief Financial Officer, on August 5, 2021[215](index=215&type=chunk)

PRESENTATION SBA Communications Corporation Second Quarter 2021 Supplemental Financial Data Key Financial and Operational Measures and Non-GAAP Financial Measures 2 This Supplemental Financial Data package provides key financial and operational data as well as reconciliations of those non-GAAP financial measures that SBA Communications Corporation ("SBA" or "We") use in evaluating the performance of our business. These non-GAAP financial measures include (1) Cash Site Leasing Revenue, (2) Core Recurring Cas ...

Financial Data and Key Metrics Changes - Total GAAP site leasing revenues for Q2 2021 were $524.1 million, with cash site leasing revenues at $514.6 million, reflecting strong performance [7][8] - AFFO in Q2 was $293.5 million, translating to an AFFO per share of $2.64, a 15.3% increase year-over-year [17] - Adjusted EBITDA for the quarter was $400.2 million, with an adjusted EBITDA margin of 70.7% [15][25] Business Line Data and Key Metrics Changes - Domestic same tower recurring cash leasing revenue growth was 5.5% on a gross basis and 3% on a net basis, including 2.5% churn [9][10] - International same tower cash leasing revenue growth was 5.3% net, including 2.2% churn, with Brazil showing 8.9% growth on a constant currency basis [12][13] - The services business generated record revenue of $51.4 million, with a segment operating profit exceeding $11 million [16][41] Market Data and Key Metrics Changes - The big four carriers (AT&T, T-Mobile, Verizon, and Dish) accounted for 97% of total incremental domestic leasing revenue in Q2 [11] - Internationally, the company saw increased leasing activity, particularly in Brazil and South Africa, despite ongoing COVID-19 impacts [43][44] Company Strategy and Development Direction - The company is focusing on expanding its portfolio, acquiring 57 communication sites for $67 million and building 98 new sites in Q2 [18] - A joint venture with Airtel Tanzania aims to acquire approximately 1,400 towers, with a total purchase price of about $175 million [19][21] - The company is committed to investing in land under its sites, controlling land for over 71% of its towers with an average remaining lease life of 37 years [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a multiyear increase in US wireless carrier CapEx, driven by 5G network buildouts and initial C band initiatives [38][40] - The company anticipates continued high levels of services activity and has increased its full-year outlook for site development revenue by $25 million [17][41] - Management expects gross domestic same tower revenue growth to increase in the second half of the year, with a strong finish anticipated for 2021 [28] Other Important Information - The company ended Q2 with $12 billion in total debt and a net debt to annualized adjusted EBITDA leverage ratio of 7.3, within its target range [31][52] - A cash dividend of $63.5 million was declared for Q2, with a payout ratio of 22% of second quarter AFFO per share [36] Q&A Session Summary Question: Impact of PG&E transaction on site activity - Management noted strong activity and demand in application backlogs, with no significant issues expected from PG&E's plans to bury electric lines [61][62] Question: Consideration of proportionate AFFO per share - Management indicated that while they have not consolidated joint ventures to date, they will consider it if it becomes material [64][66] Question: Update on T-Mobile's plans for Sprint towers - Management stated that T-Mobile is organized in their network planning, but no material changes in expectations regarding decommissioning were noted [75][80] Question: Domestic leasing activity and growth expectations - Management confirmed that DISH and Verizon were significant contributors to leasing activity, with expectations for continued growth [93][99] Question: Details on the Tanzania joint venture - Management confirmed a mechanism exists for potential buyout of Paradigm's stake in the joint venture, with a timeframe of approximately five years [100][102]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Registrant's telephone number, including area code (561) 995-7670 Securities registered pursuant to Section 12(b) of the Act: x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ ...

Financial Data and Key Metrics Changes - Total GAAP site leasing revenues for Q1 2021 were $505.1 million, with cash site leasing revenues at $504.5 million, impacted by foreign exchange rates which negatively affected revenues by $12.6 million year-over-year [8][9] - Same tower recurring cash leasing revenue growth was 3.6% on a constant currency basis, with domestic same tower growth at 5.6% gross and 3.1% net, including 2.5% churn [10][11] - Adjusted EBITDA for Q1 was $390.1 million, with an adjusted EBITDA margin of 71.2%, and AFFO was $286.3 million, translating to $2.58 per share, a 13.2% increase year-over-year [14][38] Business Line Data and Key Metrics Changes - Domestic operational leasing activity was modestly lower sequentially, but there were substantial increases in new lease and amendment application backlogs due to agreements with Verizon Wireless and Dish [11] - International same tower cash leasing revenue growth was 6.1% on a constant currency basis, with Brazil showing 8.5% gross growth [12] - The services business generated $43.6 million in revenue, marking the strongest quarter in nearly seven years, with increased activity levels leading to a higher services backlog [14][29] Market Data and Key Metrics Changes - The majority of cash site leasing revenue (85.3%) was denominated in U.S. dollars, with Brazil contributing 11.1% of total cash site leasing revenues [12] - The company ended Q1 with $12.1 billion in total debt and a net debt to annualized adjusted EBITDA leverage ratio of 7.6 times, slightly above the target range [24][35] Company Strategy and Development Direction - The company has increased its outlook for full-year 2021 site leasing revenue, primarily due to a global amendment agreement with Verizon Wireless [17][20] - The strategy includes expanding the portfolio through acquisitions, with 731 communication sites acquired for $975.5 million and plans for additional site purchases [15][22] - The company is focused on capital allocation and opportunistic financing, having completed a $1.5 billion unsecured bond offering at a historically low rate [36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in growth driven by 5G deployment plans from major carriers, with expectations for increased domestic organic leasing activity [28][30] - The company anticipates that domestic same tower revenue growth will increase in the second half of the year, ending 2021 at the highest rate [20] - Management noted that the pandemic has had no material impact on U.S. operations, and they are optimistic about international markets as conditions improve [39] Other Important Information - The company repurchased 654,000 shares for $160.9 million, with $475.1 million remaining under the stock repurchase plan [26] - A cash dividend of $63.4 million was declared for Q1, with a second quarter dividend of $0.58 per share announced [26] Q&A Session Summary Question: Equipment installation on U.S. towers - Management indicated that while signed leases and amendments exist, actual installations have not yet occurred due to typical execution timelines [42][43] Question: Brazil's macroeconomic environment - Management acknowledged Brazil's economic challenges but noted that their operations continue to perform well despite the overall environment [44] Question: PG&E assets and lease applications - Interest in PG&E assets has been strong, with demand for both amendments and new leases [45] Question: Domestic organic growth expectations - Management suggested that Q1 might be the trough for domestic organic growth, with expectations for improvement in the second half of the year [48][49] Question: Cash taxes and PG&E acquisition impact - The increase in cash taxes is attributed to benefits from the PG&E acquisition, with expectations for future increases as international operations grow [72][75] Question: CBRS opportunity and rural broadband - Management discussed ongoing efforts to bridge the digital divide through CBRS initiatives, emphasizing the need for rental payment guarantees [102] Question: Edge compute developments - The company is actively pursuing edge compute opportunities, with new customers and facilities under construction [105] Question: C-Band spectrum utilization - Management expressed confidence that carriers will broadly utilize their towers for C-Band upgrades, although the exact extent remains uncertain [119]