SBA COMMUNICATIONS CORP 10-Q

ITEM 1: FINANCIAL STATEMENTS SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except par values) June 30, December 31, 2020 2019 ASSETS (unaudited) Current assets: Cash and cash equivalents $ 207,487 $ 108,309 Restricted cash 41,684 30,243 Accounts receivable, net 91,295 132,125 Costs and estimated earnings in excess of billings on uncompleted contracts 18,877 26,313 Short-term investments 225,853 534 Prepaid expenses and other current assets 38,890 36,747 Total current assets 624,086 334,271 Property and equipment, net 2,658,889 2,794,602 Intangible assets, net 3,174,567 3,626,773 Right-of-use assets, net 2,375,247 2,572,217 Other assets 557,750 432,078 Total assets $ 9,390,539 $ 9,759,941 LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND SHAREHOLDERS' DEFICIT Current Liabilities: Accounts payable $ 26,353 $ 31,846 Accrued expenses 65,581 67,618 Current maturities of long-term debt 24,000 522,090 Deferred revenue 130,670 113,507 Accrued interest 50,420 49,269 Current lease liabilities 229,850 247,015 Other current liabilities 25,785 16,948 Total current liabilities 552,659 1,048,293 Long-term liabilities: Long-term debt, net 10,555,568 9,812,335 Long-term lease liabilities 2,113,602 2,279,400 Other long-term liabilities 459,353 270,868 Total long-term liabilities 13,128,523 12,362,603 Redeemable noncontrolling interests 14,349 16,052 Shareholders' deficit: Preferred stock - par value $ 0.01 , 30,000 shares authorized, no shares issued or outstanding — — Common stock - Class A, par value $ 0.01 , 400,000 shares authorized, 111,918 shares and 111,775 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively 1,119 1,118 Additional paid-in capital 2,534,423 2,461,335 Accumulated deficit ( 5,972,657 ) ( 5,560,695 ) Accumulated other comprehensive loss, net ( 867,877 ) ( 568,765 ) Total shareholders' deficit ( 4,304,992 ) ( 3,667,007 ) Total liabilities, redeemable noncontrolling interests, and shareholders' deficit $ 9,390,539 $ 9,759,941 The accompanying condensed notes are an integral part of these consolidated financial statements. 1 Table of Contents SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share amounts) For the three months For the six months ended June 30, ended June 30, 2020 2019 2020 2019 Revenues: Site leasing $ 482,403 $ 459,003 $ 974,758 $ 911,186 Site development 24,823 41,144 49,534 82,254 Total revenues 507,226 500,147 1,024,292 993,440 Operating expenses: Cost of revenues (exclusive of depreciation, accretion, and amortization shown below): Cost of site leasing 91,598 93,460 187,397 186,175 Cost of site development 19,904 30,988 39,620 62,089 Selling, general, and administrative expenses (1) 49,088 55,524 98,704 106,483 Acquisition and new business initiatives related adjustments and expenses 4,634 2,539 8,433 4,976 Asset impairment and decommission costs 6,242 9,620 20,597 15,391 Depreciation, accretion, and amortization 178,706 171,564 361,285 342,602 Total operating expenses 350,172 363,695 716,036 717,716 Operating income 157,054 136,452 308,256 275,724 Other income (expense): Interest income 699 1,581 1,584 3,381 Interest expense ( 95,687 ) ( 97,447 ) ( 191,538 ) ( 196,114 ) Non-cash interest expense ( 2,337 ) ( 651 ) ( 4,743 ) ( 1,292 ) Amortization of deferred financing fees ( 5,188 ) ( 5,116 ) ( 10,328 ) ( 10,176 ) Loss from extinguishment of debt, net — — ( 16,864 ) — Other (expense) income, net ( 31,588 ) 12,762 ( 257,885 ) 12,254 Total other expense, net ( 134,101 ) ( 88,871 ) ( 479,774 ) ( 191,947 ) Income (loss) before income taxes 22,953 47,581 ( 171,518 ) 83,777 Benefit (provision) for income taxes 165 ( 15,608 ) 66,702 ( 25,815 ) Net income (loss) 23,118 31,973 ( 104,816 ) 57,962 Net (income) loss attributable to noncontrolling interests ( 305 ) — 569 — Net income (loss) attributable to SBA Communications Corporation $ 22,813 $ 31,973 $ ( 104,247 ) $ 57,962 Net income (loss) per common share attributable to SBA Communications Corporation: Basic $ 0.20 $ 0.28 $ ( 0.93 ) $ 0.51 Diluted $ 0.20 $ 0.28 $ ( 0.93 ) $ 0.51 Weighted average number of common shares Basic 111,738 113,205 111,823 112,958 Diluted 113,634 114,940 111,823 114,643 (1) Includes non-cash compensation of $ 18,131 and $ 24,131 for the three months ended June 30, 2020 and 2019, respectively, and $ 33,684 and $ 46,736 for the six months ended June 30, 2020 and 2019, respectively. The accompanying condensed notes are an integral part of these consolidated financial statements. 2 Table of Contents SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited) (in thousands) For the three months For the six months ended June 30, ended June 30, 2020 2019 2020 2019 Net income (loss) $ 23,118 $ 31,973 $ ( 104,816 ) $ 57,962 Unrealized loss on interest rate swaps ( 12,684 ) ( 36,281 ) ( 115,923 ) ( 51,593 ) Foreign currency translation adjustments ( 8,166 ) 13,122 ( 184,193 ) 8,578 Comprehensive income (loss) 2,268 8,814 ( 404,932 ) 14,947 Comprehensive (income) loss attributable to noncontrolling interests ( 485 ) — 1,573 — Comprehensive income (loss) attributable to SBA Communications Corporation $ 1,783 $ 8,814 $ ( 403,359 ) $ 14,947 The accompanying condensed notes are an integral part of these consolidated financial statements. ‎ 3 Table of Contents SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS ’ DEFICIT (unaudited) (in thousands) Accumulated Class A Additional Other Total Common Stock Paid-In Accumulated Comprehensive Shareholders' Shares Amount Capital Deficit Loss, Net Equity (Deficit) BALANCE, March 31, 2020 111,559 $ 1,116 $ 2,471,886 $ ( 5,943,386 ) $ ( 846,847 ) $ ( 4,317,231 ) Net income (loss) attributable to SBA Communications Corporation — — — 22,813 — 22,813 Common stock issued in connection with equity awards and stock purchase plans, offset by the impact of net share settlements 359 3 42,932 — — 42,935 Non-cash stock compensation — — 18,991 — — 18,991 Unrealized loss on interest rate swaps — — — — ( 12,684 ) ( 12,684 ) Foreign currency translation adjustments attributable to SBA Communications Corporation — — — — ( 8,346 ) ( 8,346 ) Dividends on common stock — — — ( 52,084 ) — ( 52,084 ) Adjustment to fair value related to noncontrolling interests — — 614 — — 614 BALANCE, June 30, 2020 111,918 $ 1,119 $ 2,534,423 $ ( 5,972,657 ) $ ( 867,877 ) $ ( 4,304,992 ) Accumulated Class A Additional Other Total Common Stock Paid-In Accumulated Comprehensive Shareholders' Shares Amount Capital Deficit Loss Equity (Deficit) BALANCE, March 31, 2019 113,205 $ 1,132 $ 2,359,195 $ ( 5,131,347 ) $ ( 531,761 ) $ ( 3,302,781 ) Net income (loss) attributable to SBA Communications Corporation — — — 31,973 — 31,973 Common stock issued in connection with equity awards and stock purchase plans, offset by the impact of net share settlements 348 3 24,443 — — 24,446 Non-cash stock compensation — — 24,747 — — 24,747 Unrealized loss on interest rate swaps — — — — ( 36,281 ) ( 36,281 ) Repurchase and retirement of common stock ( 463 ) ( 4 ) — ( 94,568 ) — ( 94,572 ) Foreign currency translation adjustments attributable to SBA Communications Corporation — — — — 13,122 13,122 BALANCE, June 30, 2019 113,090 $ 1,131 $ 2,408,385 $ ( 5,193,942 ) $ ( 554,920 ) $ ( 3,339,346 ) ‎ 4 Table of Contents SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ DEFICIT (unaudited) (in thousands) Accumulated Class A Additional Other Total Common Stock Paid-In Accumulated Comprehensive Shareholders' Shares Amount Capital Deficit Loss Equity (Deficit) BALANCE, December 31, 2019 111,775 1,118 2,461,335 ( 5,560,695 ) ( 568,765 ) ( 3,667,007 ) Net income (loss) attributable to SBA Communications Corporation — — — ( 104,247 ) — ( 104,247 ) Common stock issued in connection with equity awards and stock purchase plans, offset by the impact of net share settlements 980 9 37,307 — — 37,316 Non-cash stock compensation — — 35,651 — — 35,651 Unrealized loss on interest rate swaps — — — — ( 115,923 ) ( 115,923 ) Repurchase and retirement of common stock ( 837 ) ( 8 ) — ( 203,322 ) — ( 203,330 ) Foreign currency translation adjustments attributable to SBA Communications Corporation — — — — ( 183,189 ) ( 183,189 ) Dividends on common stock — — — ( 104,393 ) — ( 104,393 ) Adjustment to fair value related to noncontrolling interests — — 130 — — 130 BALANCE, June 30, 2020 111,918 $ 1,119 $ 2,534,423 $ ( 5,972,657 ) $ ( 867,877 ) $ ( 4,304,992 ) Accumulated Class A Additional Other Total Common Stock Paid-In Accumulated Comprehensive Shareholders' Shares Amount Capital Deficit Loss Equity (Deficit) BALANCE, December 31, 2018 112,433 $ 1,124 $ 2,270,326 $ ( 5,136,368 ) $ ( 511,905 ) $ ( 3,376,823 ) Net income (loss) attributable to SBA Communications Corporation — — — 57,962 — 57,962 Common stock issued in connection with equity awards and stock purchase plans, offset by the impact of net share settlements 1,110 11 87,910 — — 87,921 Non-cash stock compensation — — 48,469 — — 48,469 Common stock issued in connection with acquisitions 10 — 1,680 — — 1,680 Unrealized loss on interest rate swaps — — — — ( 51,593 ) ( 51,593 ) Repurchase and retirement of common stock ( 463 ) ( 4 ) — ( 94,568 ) — ( 94,572 ) Foreign currency translation adjustments attributable to SBA Communications Corporation — — — — 8,578 8,578 Impact of adoption of ASU 2016-02 related to leases — — — ( 20,968 ) — ( 20,968 ) BALANCE, June 30, 2019 113,090 $ 1,131 $ 2,408,385 $ ( 5,193,942 ) $ ( 554,920 ) $ ( 3,339,346 ) The accompanying condensed notes are an integral part of these consolidated financial statements. ‎ 5 Table of Contents SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) For the six months ended June 30, 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) income $ ( 104,816 ) $ 57,962 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation, accretion, and amortization 361,285 342,602 Non-cash asset impairment and decommission costs 20,160 14,737 Non-cash compensation expense 34,857 47,901 Amortization of deferred financing fees 10,328 10,176 Loss (gain) on remeasurement of U.S. dollar denominated intercompany loans 261,308 ( 7,007 ) Deferred income tax (benefit) expense ( 77,707 ) 14,822 Other non-cash items reflected in the Statements of Operations 16,875 ( 3,577 ) Changes in operating assets and liabilities, net of acquisitions: Accounts receivable and costs and estimated earnings in excess of billings on uncompleted contracts, net 34,127 ( 4,546 ) Prepaid expenses and other assets 1,979 3,915 Operating lease right-of-use assets, net 59,559 47,237 Accounts payable and accrued expenses 4,093 1,853 Accrued interest ( 474 ) 513 Long-term lease liabilities ( 49,828 ) ( 41,732 ) Other liabilities 20,672 ( 18,750 ) Net cash provided by operating activities 592,418 466,106 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions ( 119,035 ) ( 151,182 ) Capital expenditures ( 66,979 ) ( 72,785 ) Purchase of investments ( 1,135,026 ) ( 285,599 ) Proceeds from sale of investments 910,000 255,557 Other investing activities ( 2,930 ) ( 1,466 ) Net cash used in investing activities ( 413,970 ) ( 255,475 ) CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings under Revolving Credit Facility 515,000 90,000 Repayments under Revolving Credit Facility ( 1,005,000 ) ( 335,000 ) Proceeds from issuance of Senior Notes, net of fees 1,480,206 — Repayment of Senior Notes ( 759,143 ) — Proceeds from employee stock purchase/stock option plans, net of taxes 37,316 87,921 Repurchase and retirement of common stock ( 203,330 ) ( 94,572 ) Payment of dividends on common stock ( 104,171 ) — Other financing activities ( 12,999 ) ( 12,812 ) Net cash used in financing activities ( 52,121 ) ( 264,463 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash ( 15,809 ) 2,344 NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 110,518 ( 51,488 ) CASH, CASH EQUIVALENTS, AND RESTRICTED CASH: Beginning of period 141,120 178,300 End of period $ 251,638 $ 126,812 The accompanying condensed notes are an integral part of these consolidated financial statements. 6 Table of Contents SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) For the six months ended June 30, 2020 2019 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 191,929 $ 195,671 Income taxes $ 8,940 $ 11,777 SUPPLEMENTAL CASH FLOW INFORMATION OF NON-CASH ACTIVITIES: Right-of-use assets obtained in exchange for new operating lease liabilities $ 12,269 $ 27,225 Operating lease modifications and reassessments $ 20,501 $ ( 52,644 ) Right-of-use assets obtained in exchange for new finance lease liabilities $ 893 $ 1,678 Common stock issued in connection with acquisitions $ — $ 1,680 The accompanying condensed notes are an integral part of these consolidated financial statements. ‎ 7 Table of Contents SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION The accompanying consolidated financial statements should be read in conjunction with the Annual Report on Form 10-K for the fiscal year ended December 31, 2019 for SBA Communications Corporation and its subsidiaries (the “Company”). These financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and, therefore, omit or condense certain footnotes and other information normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States. In the opinion of the Company’s management, all adjustments (consisting of normal recurring accruals) considered necessary for fair financial statement presentation have been made. The results of operations for an interim period may not give a true indication of the results for the year. Certain reclassifications have been made to prior year amounts or balances to conform to the presentation adopted in the current year. The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. While the Company believes that such estimates are fair when considered in conjunction with the consolidated financial statements and accompanying notes, the actual amounts, when known, may vary from these estimates. Foreign Currency Translation All assets and liabilities of foreign subsidiaries that do not utilize the U.S. dollar as its functional currency are translated at period-end exchange rates, while revenues and expenses are translated at monthly average exchange rates during the period. Unrealized remeasurement gains and losses are reported as foreign currency translation adjustments through Accumulated Other Comprehensive Loss in the Consolidated Statement of Shareholders’ Deficit. For foreign subsidiaries where the U.S. dollar is the functional currency, monetary assets and liabilities of such subsidiaries, which are not denominated in U.S. dollars, are remeasured at exchange rates in effect at the balance sheet date, and revenues and expenses are remeasured at monthly average rates prevailing during the year. Unrealized translation gains and losses are reported as other income (expense), net in the Consolidated Statements of Operations. Intercompany Loans Subject to Remeasurement In accordance with Accounting Standards Codification (ASC) 830, the Company remeasures foreign denominated intercompany loans with the corresponding change in the balance being recorded in Other income (expense), net in the Consolidated Statement of Operations as settlement is anticipated or planned in the foreseeable future. The Company recorded a $ 20.4 million loss and a $ 6.0 million gain, net of taxes, on the remeasurement of intercompany loans for the three months ended June 30, 2020 and 2019, respectively, and a $ 173.2 million loss and a $ 4.6 million gain, net of taxes, on the remeasurement of intercompany loans for the six months ended June 30, 2020 and 2019, respectively, due to changes in foreign exchange rates. As of June 30, 2020 and December 31, 2019, the aggregate amount outstanding under the intercompany loan agreements subject to remeasurement with the Company’s foreign subsidiaries was $ 915.1 million and $ 899.7 million, respectively. Coronavirus On January 20, 2020, the World Health Organization declared a “public health emergency of international concern” related to the emergence of the Coronavirus (“COVID-19”) outbreak which could negatively affect the global economy. As of June 30, 2020, the Company has experienced minimal impact to its business or the consolidated financial statements from COVID-19. The extent to which COVID-19 could adversely affect the Company’s future business operations will depend on future developments such as the duration of the outbreak, new information on the severity of COVID-19, and methods taken to contain or treat the outbreak of COVID-19. While the full impact of COVID-19 is not yet known, the Company will continue to monitor this recent outbreak and the potential effects on its business. Credit Losses Effective January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) prospectively. ASU 2016-13 replaces the incurred loss impairment model with an expected credit loss impairment model for financial instruments, including trade receivables. The amendment requires entities to consider forward-looking information to estimate expected credit losses over the lifetime of the asset, 8 Table of Contents resulting in earlier recognition of losses for receivables that are current or not yet due, which were not considered under the previous accounting guidance. The impact of the adoption of ASU 2016-13 was not material individually or in the aggregate to the Company. ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses (“ASU 2018-19”) clarified that operating lease receivables are not within the scope of ASC 326-20 and should instead be accounted for under the new leasing standard, ASC 842. The Company is exposed to credit losses primarily through the site development business segment which provides consulting and construction related services The Company’s expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions, and a review of the current status of customers’ trade accounts receivables. Due to the short-term nature of such receivables, the estimate of amount of accounts receivable that may not be collected is based on aging of the accounts receivable balances and the financial condition of customers. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. The Company’s monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of customers’ financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible. Reference Rate Reform ASU 2020-04, Reference Rate Reform, provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The amendments are effective for all entities as of March 12, 2020 through December 31, 2022. As of June 30, 2020, the Company has not modified any contracts as a result of reference rate reform and is evaluating the impact this standard may have on its consolidated financial statements. 2. FAIR VALUE MEASUREMENTS Items Measured at Fair Value on a Recurring Basis — The Company’s asset retirement obligations are measured at fair value on a recurring basis using Level 3 inputs and are recorded in Other long-term liabilities in the Consolidated Balance Sheets. The fair value of the asset retirement obligations is calculated using a discounted cash flow model. Items Measured at Fair Value on a Nonrecurring Basis — The Company’s long-lived and intangible assets are measured at fair value on a nonrecurring basis using Level 3 inputs. The Company considers many factors and makes certain assumptions when making this assessment, including, but not limited to: general market and economic conditions, historical operating results, geographic location, lease-up potential and expected timing of lease-up. The fair value of the long-lived and intangible assets is calculated using a discounted cash flow model. Asset impairment and decommission costs for all periods presented and the related impaired assets primarily relate to the Company’s site leasing operating segment. The following summarizes the activity of asset impairment and decommission costs (in thousands): For the three months For the six months ended June 30, ended June 30, 2020 2019 2020 2019 Asset impairment (1) $ 5,424 $ 4,282 $ 16,432 $ 7,585 Write-off of carrying value of decommissioned towers 739 5,007 3,439 7,164 Other (including third party decommission costs) 79 331 726 642 Total asset impairment and decommission costs $ 6,242 $ 9,620 $ 20,597 $ 15,391 (1) Represents impairment charges resulting from the Company’s regular analysis of whether the future cash flows from certain towers are adequate to recover the carrying value of the investment in those towers. Fair Value of Financial Instruments — The carrying values of cash and cash equivalents, accounts receivable, restricted cash, accounts payable, and short-term investments approximate their estimated fair values due to the shorter maturity of these instruments. The Company’s estimate of its short term investments are based primarily upon Level 1 reported market values. As of June 30, 2020 and December 31, 2019, the Company had $ 225.9 million and $ 0.5 million of short-term investments. For the three 9 Table of Contents months ended June 30, 2020, the Company purchased $ 525.0 million and sold $ 300.0 million of short-term investments. For the six months ended June 30, 2020, the Company purchased $ 1.1 billion and sold $ 0.9 billion of short-term investments. The Company determines fair value of its debt instruments utilizing various Level 2 sources including quoted prices and indicative quotes (non-binding quotes) from brokers that require judgment to interpret market information including implied credit spreads for similar borrowings on recent trades or bid/ask prices. The fair value of the Revolving Credit Facility is considered to approximate the carrying value because the interest payments are based on Eurodollar rates that reset monthly or more frequently. The Company does not believe its credit risk has changed materially from the date the applicable Eurodollar Rate was set for the Revolving Credit Facility ( 112.5 to 175.0 basis points). Refer to Note 10 for the fair values, principal balances, and carrying values of the Company’s debt instruments. For discussion of the Company’s derivatives and hedging activities, refer to Note 17. 3. CASH, CASH EQUIVALENTS, AND RESTRICTED CASH The cash, cash equivalents, and restricted cash balances on the Consolidated Statements of Cash Flows consist of the following: As of As of June 30, 2020 December 31, 2019 Included on Balance Sheet (in thousands) Cash and cash equivalents $ 207,487 $ 108,309 Securitization escrow accounts 41,524 30,046 Restricted cash - current asset Payment and performance bonds 160 197 Restricted cash - current asset Surety bonds and workers compensation 2,467 2,568 Other assets - noncurrent Total cash, cash equivalents, and restricted cash $ 251,638 $ 141,120 Pursuant to the terms of the Tower Securities (see Note 10), the Company is required to establish a securitization escrow account, held by the indenture trustee, into which all rents and other sums due on the towers that secure the Tower Securities are directly deposited by the lessees. These restricted cash amounts are used to fund reserve accounts for the payment of (1) debt service costs, (2) ground rents, real estate and personal property taxes and insurance premiums related to towers, (3) trustee and servicing expenses, and (4) management fees. The restricted cash in the securitization escrow account in excess of required reserve balances is subsequently released to the Borrowers (as defined in Note 10) monthly, provided that the Borrowers are in compliance with their debt service coverage ratio and that no event of default has occurred. All monies held by the indenture trustee are classified as restricted cash on the Company’s Consolidated Balance Sheets. Payment and performance bonds relate primarily to collateral requirements for tower construction currently in process by the Company. Cash is pledged as collateral related to surety bonds issued for the benefit of the Company or its affiliates in the ordinary course of business and primarily related to the Company’s tower removal obligations. As of June 30, 2020 and December 31, 2019, the Company had $ 41.3 million and $ 41.7 million in surety, payment and performance bonds, respectively, for which no collateral was required to be posted. The Company periodically evaluates the collateral posted for its bonds to ensure that it meets the minimum requirements. As of June 30, 2020 and December 31, 2019, the Company had also pledged $ 2.3 million as collateral related to its workers’ compensation policy. 4. COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS The Company’s costs and estimated earnings on uncompleted contracts are comprised of the following: As of As of June 30, 2020 December 31, 2019 (in thousands) Costs incurred on uncompleted contracts $ 46,688 $ 52,339 Estimated earnings 18,244 19,954 Billings to date ( 46,647 ) ( 47,401 ) $ 18,285 $ 24,892 ‎ 10 Table of Contents These amounts are included in the Consolidated Balance Sheets under the following captions: As of As of June 30, 2020 December 31, 2019 (in thousands) Costs and estimated earnings in excess of billings on uncompleted contracts $ 18,877 $ 26,313 Billings in excess of costs and estimated earnings on uncompleted contracts (included in Other current liabilities) ( 592 ) ( 1,421 ) $ 18,285 $ 24,892 At June 30, 2020 and December 31, 2019, eight customers comprised 95.8 % and 94.4 % of the costs and estimated earnings in excess of billings on uncompleted contracts, net of billings in excess of costs and estimated earnings, respectively. 5. PREPAID EXPENSES AND OTHER CURRENT ASSETS AND OTHER ASSETS The Company’s prepaid expenses and other current assets are comprised of the following: As of As of June 30, 2020 December 31, 2019 (in thousands) Prepaid ground rent $ 2,354 $ 1,632 Prepaid real estate taxes 1,927 3,003 Prepaid taxes 6,748 4,924 Other 27,861 27,188 Total prepaid expenses and other current assets $ 38,890 $ 36,747 The Company’s other assets are comprised of the following: As of As of June 30, 2020 December 31, 2019 (in thousands) Straight-line rent receivable $ 318,791 $ 330,660 Interest rate swap asset (1) 116,451 47,583 Loan receivables 11,794 8,295 Deferred lease costs, net 4,781 4,865 Deferred tax asset - long term 69,978 4,342 Other 35,955 36,333 Total other assets $ 557,750 $ 432,078 (1) Refer to Note 17 for more information on the Company’s interest rate swaps. 6. ACQUISITIONS The following table summarizes the Company’s acquisition activity: For the three months For the six months ended June 30, ended June 30, 2020 2019 2020 2019 (in thousands) Acquisitions of towers and related intangible assets (1) $ 17,150 $ 83,264 $ 99,424 $ 125,412 Land buyouts and other assets (2) 12,354 12,631 19,611 25,770 Total cash acquisition capital expenditures $ 29,504 $ 95,895 $ 119,035 $ 151,182 (1) The six months ended June 30, 2019 excludes $ 1.7 million of acquisition costs funded through the issuance of 10,000 shares of Class A common stock. (2) In addition, the Company paid $ 1.6 million and $ 3.5 million for ground lease extensions and term easements on land underlying the Company’s towers during the three months ended June 30, 2020 and 2019, respectively, and paid $ 3.6 million and $ 6.7 million for ground lease extensions and term easements on land underlying the Company’s towers during the six 11 Table of Contents months ended June 30, 2020 and 2019, respectively. The Company recorded these amounts in prepaid rent on its Consolidated Balance Sheets. During the six months ended June 30, 2020, the Company allocated the purchase price of 85 acquired towers and related assets and liabilities consisting of $ 12.9 million of property and equipment, $ 82.3 million of intangible assets, and $ 4.2 million of other net assets and liabilities assumed. All acquisitions in the three and six months ended June 30, 2020 were accounted for as asset acquisitions. Subsequent to June 30, 2020, the Company acquired 25 towers and related assets and one data center for $ 61.6 million in cash. The maximum potential obligation related to the performance targets for acquisitions, which have not been recorded on the Company’s Consolidated Balance Sheet, were $ 27.1 million and $ 29.7 million as of June 30, 2020 and December 31, 2019, respectively. 7. PROPERTY AND EQUIPMENT, NET Property and equipment, net consists of the following: As of As of June 30, 2020 December 31, 2019 (in thousands) Towers and related components $ 5,122,198 $ 5,164,104 Construction-in-process (1) 33,046 33,644 Furniture, equipment, and vehicles 50,247 51,654 Land, buildings, and improvements 751,680 736,378 Total property and equipment 5,957,171 5,985,780 Less: accumulated depreciation ( 3,298,282 ) ( 3,191,178 ) Property and equipment, net $ 2,658,889 $ 2,794,602 (1) Construction-in-process represents costs incurred related to towers that are under development and will be used in the Company’s site leasing operations. Depreciation expense was $ 71.3 million and $ 69.5 million for the three months ended June 30, 2020 and 2019, respectively, and $ 143.2 million and $ 138.6 million for the six months ended June 30, 2020 and 2019, respectively. At June 30, 2020 and December 31, 2019, unpaid capital expenditures that are included in accounts payable and accrued expenses were $ 8.9 million and $ 14.7 million, respectively. 8. INTANGIBLE ASSETS, NET The following table provides the gross and net carrying amounts for each major class of intangible assets: As of June 30, 2020 As of December 31, 2019 Gross carrying Accumulated Net book Gross carrying Accumulated Net book amount amortization value amount amortization value (in thousands) Current contract intangibles $ 4,703,085 $ ( 2,298,491 ) $ 2,404,594 $ 4,996,591 $ ( 2,218,404 ) $ 2,778,187 Network location intangibles 1,728,974 ( 959,001 ) 769,973 1,764,484 ( 915,898 ) 848,586 Intangible assets, net $ 6,432,059 $ ( 3,257,492 ) $ 3,174,567 $ 6,761,075 $ ( 3,134,302 ) $ 3,626,773 All intangible assets noted above are included in the Company’s site leasing segment. Amortization expense relating to the intangible assets above was $ 107.4 million and $ 102.0 million for the three months ended June 30, 2020 and 2019, respectively, and $ 218.0 million and $ 203.8 million for the six months ended June 30, 2020 and 2019, respectively. ‎ 12 Table of Contents 9. ACCRUED EXPENSES The Company’s accrued expenses are comprised of the following: As of As of June 30, 2020 December 31, 2019 (in thousands) Salaries and benefits $ 15,257 $ 19,838 Real estate and property taxes 11,134 9,598 Unpaid capital expenditures 8,884 14,669 Other 30,306 23,513 Total accrued expenses $ 65,581 $ 67,618 10. DEBT The principal values, fair values, and carrying values of debt consist of the following (in thousands): As of As of June 30, 2020 December 31, 2019 Maturity Date Principal ‎ Balance Fair Value Carrying ‎ Value Principal ‎ Balance Fair Value Carrying ‎ Value Revolving Credit Facility Apr. 11, 2023 $ — $ — $ — $ 490,000 $ 490,000 $ 490,000 2018 Term Loan Apr. 11, 2025 2,352,000 2,269,680 2,335,750 2,364,000 2,369,910 2,346,183 2013-2C Tower Securities (1) Apr. 11, 2023 575,000 606,211 571,459 575,000 585,954 570,866 2014-2C Tower Securities (1) Oct. 8, 2024 620,000 678,522 615,663 620,000 644,912 615,205 2015-1C Tower Securities (1) Oct. 8, 2020 500,000 502,605 499,298 500,000 502,095 498,090 2016-1C Tower Securities (1) Jul. 9, 2021 700,000 712,838 697,930 700,000 704,095 696,936 2017-1C Tower Securities (1) Apr. 11, 2022 760,000 781,113 756,104 760,000 763,405 755,061 2018-1C Tower Securities (1) Mar. 9, 2023 640,000 679,430 635,187 640,000 658,266 634,344 2019-1C Tower Securities (1) Jan. 12, 2025 1,165,000 1,229,017 1,154,002 1,165,000 1,158,057 1,153,086 2014 Senior Notes Jul. 15, 2022 — — — 750,000 760,313 743,580 2016 Senior Notes Sep. 1, 2024 1,100,000 1,126,125 1,087,566 1,100,000 1,142,625 1,086,241 2017 Senior Notes Oct. 1, 2022 750,000 753,750 745,728 750,000 764,063 744,833 2020 Senior Notes Feb. 15, 2027 1,500,000 1,496,250 1,480,881 — — — Total debt $ 10,662,000 $ 10,835,541 $ 10,579,568 $ 10,414,000 $ 10,543,695 $ 10,334,425 Less: current maturities of long-term debt ( 24,000 ) ( 522,090 ) Total long-term debt, net of current maturities $ 10,555,568 $ 9,812,335 (1) The maturity date represents the anticipated repayment date for each issuance. ‎ 13 Table of Contents The table below reflects cash and non-cash interest expense amounts recognized by debt instrument for the periods presented: For the three months ended June 30, For the six months ended June 30, Interest 2020 2019 2020 2019 Rates as of Cash Non-cash Cash Non-cash Cash Non-cash Cash Non-cash June 30, 2020 Interest Interest Interest Interest Interest Interest Interest Interest (in thousands) Revolving Credit Facility 1.597 % $ 1,661 $ — $ 1,564 $ — $ 4,375 $ — $ 4,401 $ — 2018 Term Loan (1) 3.464 % 20,950 2,030 26,944 190 43,152 4,052 53,866 376 2013-2C Tower Securities 3.722 % 5,396 — 5,396 — 10,792 — 10,792 — 2014 Tower Securities (2) 3.869 % 6,046 — 12,785 — 12,092 — 25,569 — 2015-1C Tower Securities 3.156 % 3,985 — 3,985 — 7,969 — 7,969 — 2016-1C Tower Securities 2.877 % 5,090 — 5,090 — 10,181 — 10,181 — 2017-1C Tower Securities 3.168 % 6,088 — 6,088 — 12,173 — 12,173 — 2018-1C Tower Securities 3.448 % 5,570 — 5,570 — 11,141 — 11,141 — 2019-1C Tower Securities 2.836 % 8,357 — — — 16,714 — — — 2014 Senior Notes 4.875 % — — 9,141 199 3,352 112 18,281 395 2016 Senior Notes 4.875 % 13,406 275 13,406 262 26,813 547 26,813 521 2017 Senior Notes 4.000 % 7,500 — 7,500 — 15,000 — 15,000 — 2020 Senior Notes 3.875 % 11,571 32 — — 17,707 32 — — Other 67 — ( 22 ) — 77 — ( 72 ) — Total $ 95,687 $ 2,337 $ 97,447 $ 651 $ 191,538 $ 4,743 $ 196,114 $ 1,292 (1) The 2018 Term Loan has a blended rate of 3.464 % which includes the impact of the interest rate swaps entered into in 2019 which swapped $ 1.95 billion of notional value accruing interest at one month LIBOR plus 175 basis points for a fixed rate of 3.78 % per annum through the maturity date of the 2018 Term Loan. Excluding the impact of the interest rate swaps, the 2018 Term Loan was accruing interest at 1.93 % as of June 30, 2020. (2) The 2014-1C Tower Securities, which was repaid September 13, 2019, accrued interest at 2.898 %. The 2014-2C Tower Securities accrue interest at 3.869 %. Revolving Credit Facility under the Senior Credit Agreement During the three months ended June 30, 2020, the Company borrowed $ 15.0 million and repaid $ 500.0 million of the outstanding balance under the Revolving Credit Facility. During the six months ended June 30, 2020, the Company borrowed $ 515.0 million and repaid $ 1.0 billion of the outstanding balance under the Revolving Credit Facility. As of June 30, 2020, the Company had no amount outstanding under the $ 1.25 billion Revolving Credit Facility. In addition, SBA Senior Finance II was required to pay a commitment fee of 0.25 % per annum on the amount of the unused commitment. As of June 30, 2020, SBA Senior Finance II was in compliance with the financial covenants contained in the Senior Credit Agreement. As of the date of this filing, the Company had no amount outstanding under the Revolving Credit Facility. Term Loan under the Senior Credit Agreement During the three and six months ended June 30, 2020, the Company repaid an aggregate of $ 6.0 million and $ 12.0 million, respectively, of principal on the 2018 Term Loan. As of June 30, 2020, the 2018 Term Loan had a principal balance of $ 2.4 billion. Secured Tower Revenue Securities As of June 30, 2020, the entities that are borrowers on the mortgage loan (the “Borrowers”) met the debt service coverage ratio required by the mortgage loan agreement and were in compliance with all other covenants as set forth in the agreement. The sole asset of the Trust (defined below) consists of a non-recourse mortgage loan made in favor of the Borrowers. 2020 Tower Securities On July 14, 2020, the Company, through a New York common law trust (the “Trust”), issued $ 750.0 million of 1.884 % Secured Tower Revenue Securities Series 2020-1C which have an anticipated repayment date of January 9, 2026 and a final maturity date of July 11, 2050 (the “2020-1C Tower Securities”) and $ 600.0 million of 2.328 % Secured Tower Revenue Securities Series 2020-2C which have an anticipated repayment date of January 11, 2028 and a final maturity date of July 9, 2052 (the “2020-2C Tower 14 Table of Contents Securities”) (collectively the “2020 Tower Securities”). The aggregate $ 1.35 billion of 2020 Tower Securities have a blended interest rate of 2.081 % and a weighted average life through the anticipated repayment date of 6.4 years. Net proceeds from this offering were used to repay the entire aggregate principal amount of the 2015-1C Tower Securities ($ 500.0 million) and the 2016-1C Tower Securities ($ 700.0 million). The remaining net proceeds were used for general corporate purposes. The Company has incurred deferred financing fees of $ 13.6 million to date in relation to this transaction which are being amortized through the anticipated repayment date of the 2020 Tower Securities. In addition, to satisfy certain risk retention requirements of Regulation RR promulgated under the Exchange Act, SBA Guarantor, LLC, a wholly owned subsidiary, purchased $ 71.1 million of Secured Tower Revenue Securities Series 2020-2R issued by the Trust. These securities have an anticipated repayment date of January 11, 2028 and a final maturity date of July 9, 2052 (the “2020-2R Tower Securities”). The fixed interest rate on the 2020-2R Tower Securities is 4.336 % per annum, payable monthly. Principal and interest payments made on the 2020-2R Tower Securities eliminate in consolidation. Senior Notes 2014 Senior Notes On February 20, 2020, the Company redeemed the entire $ 750.0 million balance of the 2014 Senior Notes with proceeds from the 2020 Senior Notes (defined below). In addition, the Company paid a $ 9.1 million call premium and expensed $ 7.7 million for the write-off of the original issue discount and financing fees related to the redemption of the 2014 Senior Notes which are reflected in loss from extinguishment of debt on the Consolidated Statement of Operations. 2020 Senior Notes On February 4, 2020, the Company issued $ 1.0 billion of unsecured senior notes at par value (the “2020-1 Senior Notes”). On May 26, 2020, the Company issued $ 500.0 million of additional unsecured senior notes under the same indenture at 99.500 % of par value (the “2020-2 Senior Notes”). These notes, collectively the “2020 Senior Notes,” accrue interest at a rate of 3.875 % per annum and are due February 15, 2027 . Interest on the 2020 Senior Notes is due semi-annually on February 15 and August 15 of each year, beginning on August 15, 2020. Net proceeds from these offerings were used to redeem all of the outstanding principal amount of the 2014 Senior Notes, repay amounts outstanding under the Revolving Credit Facility, and for general corporate purposes. The Company incurred financing fees of $ 17.3 million to date in relation to these transactions, which are being amortized through the maturity date. The 2020 Senior Notes are subject to redemption in whole or in part on or after February 15, 2023 at the redemption prices set forth in the indenture agreement plus accrued and unpaid interest. Prior to February 15, 2023 , the Company may, at its option, redeem up to 35 % of the aggregate principal amount of the 2020 Senior Notes originally issued at a redemption price of 103.875 % of the principal amount of the 2020 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest with the net proceeds of certain equity offerings. The Company may redeem the 2020 Senior Notes during the twelve-month period beginning on the following dates at the following redemption prices: February 15, 2023 at 101.938 %, February 15, 2024 at 100.969 %, or February 15, 2025 until maturity at 100.000 %, of the principal amount of the 2020 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest. 11. SHAREHOLDERS’ EQUITY Common Stock Equivalents The Company has outstanding stock options, time-based restricted stock units (“RSUs”), and performance-based restricted stock units (“PSUs”) which were considered in the Company’s diluted earnings per share calculation (see Note 15). Stock Repurchases The Company’s Board of Directors authorizes the Company to purchase, from time to time, outstanding Class A common stock through open market repurchases in compliance with Rule 10b-18 under the Exchange Act and/or in privately negotiated transactions at management’s discretion based on market and business conditions, applicable legal requirements and other factors. Once authorized, the repurchase plan has no time deadline and will continue until otherwise modified or terminated by the Company’s Board of Directors at any time in its sole discretion. Shares repurchased are retired. As of the date of this filing, the Company had $ 424.3 million of authorization remaining under the current stock repurchase plan. 15 Table of Contents The following is a summary of the Company’s share repurchases: For the three months For the six months ended June 30, ended June 30, 2020 2019 2020 2019 Total number of shares purchased (in millions) (1) — 0.5 0.8 0.5 Average price paid per share (1) $ — $ 204.06 $ 242.86 $ 204.06 Total price paid (in millions) (1) $ — $ 94.6 $ 200.0 $ 94.6 (1) Amounts are calculated based on the trade date. For the six months ended June 30, 2020, this differs from the Consolidated Statements of Cash Flows which calculate share repurchases based on the settlement date and includes an additional $ 3.3 million spent to repurchase 13,870 shares which settled on January 2, 2020. Dividends As of June 30, 2020, the Company paid the following cash dividends: Payable to Shareholders of Record At the Close Cash Paid Aggregate Amount Date Declared of Business on Per Share Paid Date Paid February 20, 2020 March 10, 2020 $ 0.465 $ 52.2 million March 26, 2020 May 5, 2020 May 28, 2020 $ 0.465 $ 52.0 million June 18, 2020 Subsequent to June 30, 2020, the Company declared the following cash dividends: Payable to Shareholders Cash to of Record At the Close be Paid Date Declared of Business on Per Share Date to be Paid August 3, 2020 August 25, 2020 $ 0.465 September 22, 2020 12. STOCK-BASED COMPENSATION Commencing with the 2020 equity award, the Company modified the type of equity granted to certain employees to align long-term compensation with Company performance. Under the new structure, the Company continued to issue RSUs; however, RSUs will now vest ratably over three years rather than four years . The Company further replaced stock options with PSUs which will cliff vest at the end of three years . PSUs have performance metrics for which threshold, target, and maximum parameters are established at the time of the grant. The performance metrics are used to calculate the number of shares that will be issuable when the awards vest, which may range from zero to 200 % of the target amounts. At the end of each three year performance period, the number of shares that vest will depend on the results achieved against the pre-established performance metrics. The Company recognizes compensation expense for RSUs and PSUs on a straight-line basis over the vesting period; however, compensation expense related to certain PSUs are subject to adjustment on performance relative to the established targets. Furthermore, effective with the 2020 grant, RSUs and PSUs will accrue dividend equivalents prior to vesting, which will be paid out only in respect to shares that actually vest. On February 25, 2020, the Company’s 2010 Performance and Equity Incentive Plan (the “2010 Plan”) expired by its terms. On May 14, 2020, the Company’s shareholders approved the 2020 Performance and Equity Incentive Plan (the “2020 Plan”) which provides for the issuance of a maximum of 3.0 million shares of the Company’s Class A common stock (of which approximately 3.0 million shares remain available for future issuance as of June 30, 2020). The 2020 Plan also provides for the issuance of additional shares of Class A common stock (a) subject to awards granted under the 2010 Plan that may become available for issuance or reissuance, as applicable, under the 2020 Plan if such awards are forfeited or are settled in cash or otherwise expire or terminate without the delivery of the shares or (b) which become issuable under the 2020 Plan by reason of any stock dividend, stock split, recapitalization or other similar transaction effected without the receipt of consideration which results in an increase in the number of outstanding shares of Class A common stock. Stock Options The Company records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes option-pricing model with the assumptions included in the table below. The Company uses a combination of historical data and historical volatility to establish the expected volatility, as well as to estimate the expected option 16 Table of Contents life. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the estimated life of the option. The following assumptions were used to estimate the fair value of options granted using the Black-Scholes option-pricing model: For the six months ended June 30, 2020 2019 Risk free interest rate 1.66 % 1.84 % - 2.47 % Dividend yield 1.3 % 1.3 % Expected volatility 20 % 20 % Expected lives 4.6 years 4.6 years The following table summarizes the Company’s activities with respect to its stock option plans for the six months ended June 30, 2020 as follows (dollars and shares in thousands, except for per share data): Weighted- Weighted-Average Average Remaining Number Exercise Price Contractual Aggregate of Shares Per Share Life (in years) Intrinsic Value Outstanding at December 31, 2019 4,507 $ 133.68 Granted 10 $ 240.99 Exercised ( 1,164 ) $ 109.72 Forfeited/canceled ( 19 ) $ 171.25 Outstanding at June 30, 2020 3,334 $ 142.15 4.2 $ 519,323 Exercisable at June 30, 2020 1,821 $ 124.40 3.5 $ 316,048 Unvested at June 30, 2020 1,513 $ 163.53 5.1 $ 203,275 The weighted-average per share fair value of options granted during the six months ended June 30, 2020 was $ 41.09 . The total intrinsic value for options exercised during the six months ended June 30, 2020 was $ 211.2 million. Restricted Stock Units and Performance-Based Restricted Stock Units The following table summarizes the Company’s RSU and PSU activity for the six months ended June 30, 2020: RSUs PSUs Weighted-Average Weighted-Average Number of Grant Date Fair Number of Grant Date Fair Shares Value per Share Shares Value per Share (in thousands) (in thousands) Outstanding at December 31, 2019 313 $ 152.98 — $ — Granted (1) 98 $ 290.67 149 $ 375.81 Vested ( 129 ) $ 141.90 — $ — Forfeited/canceled ( 5 ) $ 190.95 — $ — Outstanding at June 30, 2020 277 $ 206.26 149 $ 375.81 (1) PSUs represent the target number of shares granted that are issuable at the end of the three year performance period. Fair value for a portion of the PSUs was calculated using a Monte Carlo simulation model. 13. INCOME TAXES The primary reasons for the difference between the Company’s effective tax rate and the U.S. statutory rate are the Company’s REIT election and the Company’s full valuation allowance on the net deferred tax assets of the U.S. taxable REIT subsidiary (“TRS”). The TRS has concluded that it is not more likely than not that its deferred tax assets will be realized and has recorded a full valuation allowance. A foreign tax provision is recognized because certain foreign subsidiaries of the Company have profitable operations or are in a net deferred tax liability position. The Company elected to be taxed as a REIT commencing with its taxable year ended December 31, 2016. As a REIT, the Company generally will be entitled to a deduction for dividends that it pays, and therefore, not subject to U.S. federal corporate income tax on that portion of its net income that it distributes to its shareholders. As a REIT, the Company will continue to pay U.S. federal income tax on earnings, if any, from assets and operations held through its TRSs. These assets and operations currently consist 17 Table of Contents primarily of the Company’s site development services and its international operations. The Company’s international operations would continue to be subject, as applicable, to foreign taxes in the jurisdictions in which those operations are located. The Company may also be subject to a variety of taxes, including payroll taxes and state, local, and foreign income, property, and other taxes on its assets and operations. The Company’s determination as to the timing and amount of future dividend distributions will be based on a number of factors, including REIT distribution requirements, its existing federal net operating losses (“NOLs”) of approximately $ 652.9 million as of December 31, 2019, the Company’s financial condition, earnings, debt covenants, and other possible uses of such funds. The Company may use these NOLs to offset its REIT taxable income, and thus any required distributions to shareholders may be reduced or eliminated until such time as the NOLs have been fully utilized . 14. SEGMENT DATA The Company operates principally in two business segments: site leasing and site development. The Company’s site leasing business includes two reportable segments, domestic site leasing and international site leasing. The Company’s business segments are strategic business units that offer different services. They are managed separately based on the fundamental differences in their operations. The site leasing segment includes results of the managed and sublease businesses. The site development segment includes the results of both consulting and construction related activities. The Company’s Chief Operating Decision Maker utilizes segment operating profit and operating income as his two measures of segment profit in assessing performance and allocating resources at the reportable segment level. The Company has applied the aggregation criteria to operations within the international site leasing segment on a basis that is consistent with management’s review of information and performance evaluations of the individual markets in this region. Revenues, cost of revenues (exclusive of depreciation, accretion and amortization), capital expenditures (including assets acquired through the issuance of shares of the Company’s Class A common stock) and identifiable assets pertaining to the segments in which the Company continues to operate are presented below. Domestic Site Int'l Site Site Leasing Leasing Development Other Total For the three months ended June 30, 2020 (in thousands) Revenues $ 388,018 $ 94,385 $ 24,823 $ — $ 507,226 Cost of revenues (2) 64,093 27,505 19,904 — 111,502 Operating profit 323,925 66,880 4,919 — 395,724 Selling, general, and administrative expenses 25,233 9,035 4,494 10,326 49,088 Acquisition and new business initiatives related adjustments and expenses 3,004 1,630 — — 4,634 Asset impairment and decommission costs 5,342 900 — — 6,242 Depreciation, amortization and accretion 134,569 42,011 597 1,529 178,706 Operating income (loss) 155,777 13,304 ( 172 ) ( 11,855 ) 157,054 Other expense (principally interest expense and other income (expense)) ( 134,101 ) ( 134,101 ) Income before income taxes 22,953 Cash capital expenditures (3) 38,507 17,201 282 1,202 57,192 For the three months ended June 30, 2019 Revenues $ 369,180 $ 89,823 $ 41,144 $ — $ 500,147 Cost of revenues (2) 65,576 27,884 30,988 — 124,448 Operating profit 303,604 61,939 10,156 — 375,699 Selling, general, and administrative expenses 27,193 8,310 6,885 13,136 55,524 Acquisition and new business initiatives related adjustments and expenses 1,272 1,267 — — 2,539 Asset impairment and decommission costs 8,815 805 — — 9,620 Depreciation, amortization and accretion 131,413 38,194 678 1,279 171,564 Operating income (loss) 134,911 13,363 2,593 ( 14,415 ) 136,452 Other expense (principally interest expense and other income (expense)) ( 88,871 ) ( 88,871 ) Income before income taxes 47,581 Cash capital expenditures (3) 113,200 18,411 883 624 133,118 ‎ 18 Table of Contents Domestic Site Int'l Site Site Leasing Leasing Development Other Total For the six months ended June 30, 2020 (in thousands) Revenues $ 774,361 $ 200,397 $ 49,534 $ — $ 1,024,292 Cost of revenues (2) 127,997 59,400 39,620 — 227,017 Operating profit 646,364 140,997 9,914 — 797,275 Selling, general, and administrative expenses 52,555 16,966 8,950 20,233 98,704 Acquisition and new business initiatives related adjustments and expenses 5,601 2,832 — — 8,433 Asset impairment and decommission costs 16,168 4,429 — — 20,597 Depreciation, amortization and accretion 268,375 88,623 1,213 3,074 361,285 Operating income (loss) 303,665 28,147 ( 249 ) ( 23,307 ) 308,256 Other expense (principally interest expense and other income (expense)) ( 479,774 ) ( 479,774 ) Loss before income taxes ( 171,518 ) Cash capital expenditures (3) 139,813 43,634 1,064 2,396 186,907 For the six months ended June 30, 2019 Revenues $ 732,017 $ 179,169 $ 82,254 $ — $ 993,440 Cost of revenues (2) 130,690 55,485 62,089 — 248,264 Operating profit 601,327 123,684 20,165 — 745,176 Selling, general, and administrative expenses 56,086 13,998 12,591 23,808 106,483 Acquisition and new business initiatives related adjustments and expenses 1,980 2,996 — — 4,976 Asset impairment and decommission costs 12,449 2,942 — — 15,391 Depreciation, amortization and accretion 261,657 76,989 1,240 2,716 342,602 Operating income (loss) 269,155 26,759 6,334 ( 26,524 ) 275,724 Other expense (principally interest expense and other income (expense)) ( 191,947 ) ( 191,947 ) Income before income taxes 83,777 Cash capital expenditures (3) 174,710 47,928 1,808 1,199 225,645 Domestic Site Int'l Site Site Leasing Leasing Development Other (1) Total Assets (in thousands) As of June 30, 2020 $ 5,996,130 $ 2,893,042 $ 50,702 $ 450,665 $ 9,390,539 As of December 31, 2019 $ 6,157,511 $ 3,381,448 $ 81,772 $ 139,210 $ 9,759,941 (1) Assets in Other consist primarily of general corporate assets and short-term investments. (2) Excludes depreciation, amortization, and accretion. (3) Includes cash paid for capital expenditures and acquisitions and financing leases. Other than Brazil, no foreign country represented a material amount of the Company’s total revenues in any of the periods presented. Site leasing revenue in Brazil was $ 115.3 million and $ 111.9 million for the six months ended June 30, 2020 and 2019, respectively. Total long-lived assets in Brazil were $ 1.0 billion and $ 1.4 billion as of June 30, 2020 and December 31, 2019, respectively. 15. EARNINGS PER SHARE Basic earnings per share was computed by dividing net income (loss) attributable to SBA Communications Corporation by the weighted-average number of shares of Common Stock outstanding for each respective period. Diluted earnings per share was calculated by dividing net income (loss) attributable to SBA Communications Corporation by the weighted-average number of shares of Common Stock outstanding adjusted for any dilutive Common Stock equivalents, including unvested RSUs, PSUs, and shares issuable upon exercise of stock options as determined under the “Treasury Stock” method. ‎ 19 Table of Contents The following table sets forth basic and diluted net income (loss) per common share attributable to common shareholders for the three and six months ended June 30, 2020 and 2019 (in thousands, except per share data): For the three months For the six months ended June 30, ended June 30, 2020 2019 2020 2019 Numerator: Net income (loss) attributable to SBA Communications Corporation $ 22,813 $ 31,973 $ ( 104,247 ) $ 57,962 Denominator: Basic weighted-average shares outstanding 111,738 113,205 111,823 112,958 Dilutive impact of stock options and restricted shares 1,896 1,735 — 1,685 Diluted weighted-average shares outstanding 113,634 114,940 111,823 114,643 Net income (loss) per common share attributable to SBA Communications Corporation: Basic $ 0.20 $ 0.28 $ ( 0.93 ) $ 0.51 Diluted $ 0.20 $ 0.28 $ ( 0.93 ) $ 0.51 For the three months ended June 30, 2020, the diluted weighted average number of common shares outstanding excluded an additional 3,467 shares issuable upon exercise of the Company’s stock options because the impact would be anti-dilutive. For the six months ended June 30, 2020, all potential common stock equivalents, including 3.3 million shares of stock options outstanding, 0.3 million shares of RSUs outstanding, and 0.1 million shares of PSUs outstanding, were excluded as the effect would be anti-dilutive. For the three and six months ended June 30, 2019, the diluted weighted average number of common shares outstanding excluded an additional 0.7 million shares issuable upon exercise of the Company’s stock options because the impact would be anti-dilutive. 16. REDEEMABLE NONCONTROLLING INTERESTS In August 2019, the Company acquired an additional interest of a previously unconsolidated joint venture in South Africa which operated under the name Atlas Tower South Africa (“Atlas SA”). As a result of the transaction, the Company has consolidated the results of the entity into its financial statements. As of June 30, 2020, the fair market value of the 6 % noncontrolling interest was $ 14.3 million. The fair value assigned to the redeemable noncontrolling interest is estimated using Level 3 inputs. In connection with the acquisition of the additional interest in Atlas SA, the parties agreed to both a put option exercisable by the noncontrolling interest holder and a call option exercisable by the Company. The put option allows the noncontrolling interest holder to sell its 6 % noncontrolling interest to the Company for an amount to be determined using a formulaic approach . The call option allows the Company to purchase the remaining 6 % minority interest using the same formulaic approach. Both the put and call options can be exercised on or after August 30, 2020 . As the put option is outside of the Company’s control, the estimated redemption value of the minority interest is presented as a redeemable noncontrolling interest outside of permanent equity on the Consolidated Balance Sheets. The Company allocates income and losses to the noncontrolling interest holder based on the applicable membership interest percentage. At each reporting period, the redeemable noncontrolling interest is recognized at the higher of (1) the initial carrying amount of the noncontrolling interest as adjusted for accumulated income or loss attributable to the noncontrolling interest holder, or (2) the contractually-defined redemption value as of the balance sheet date. Adjustments to the carrying amount of redeemable noncontrolling interest are charged against retained earnings (or additional paid-in capital if there are no retained earnings). The components of the redeemable noncontrolling interest are as follows (in thousands): For the three months ended For the six months ended June 30, 2020 June 30, 2020 Beginning balance $ 14,478 $ 16,052 Foreign currency translation adjustments 180 ( 1,004 ) Adjustment to fair value ( 614 ) ( 130 ) Net (loss) income attributable to noncontrolling interests 305 ( 569 ) Ending balance $ 14,349 $ 14,349 20 Table of Contents 17. DERIVATIVES AND HEDGING ACTIVITIES The Company enters into interest rate swaps to hedge the future interest expense from variable rate debt and reduce the Company’s exposure to fluctuations in interest rates. The Company has an interest rate swap which has been designated as a cash flow hedge. As of June 30, 2020, the hedge remains highly effective; therefore, subsequent changes in the fair value are recorded in Accumulated other comprehensive loss, net. The Company has interest rate swaps that are not designated as cash flow hedges. On a quarterly basis, the Company re-evaluates the fair value of the interest rate swaps using Level 2 inputs, and any changes in the fair value are recorded as gains or losses on the interest rate swap in Other income (expense), net. Additionally, the Company is exposed to counterparty credit risk to the extent that a counterparty fails to meet the terms of a contract. The Company’s exposure is limited to the current value of the contract at the time the counterparty fails to perform. The disclosures below provide additional information about the effects of these interest rate swaps on the Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Comprehensive Income (Loss), and Consolidated Statements of Shareholders’ Deficit. The cash flows associated with all of these activities are reported in Net cash provided by operating activities on the Consolidated Statements of Cash Flows. The table below outlines the effects of the Company’s interest rate swaps on the Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019. Fair Value as of Balance Sheet June 30, December 31, Location 2020 2019 Derivatives Designated as Hedging Instruments (in thousands) Interest rate swap agreement in a fair value liability position Other long-term liabilities $ 162,260 $ 42,698 Derivatives Not Designated as Hedging Instruments Interest rate swap agreements in a fair value asset position Other assets $ 116,451 $ 47,583 Interest rate swap agreements in a fair value liability position Other long-term liabilities $ 113,259 $ 47,583 The table below outlines the effects of the Company’s derivatives on the Consolidated Statements of Operations and Consolidated Statements of Shareholders’ Deficit for the three and six month periods ended June 30, 2020 and 2019. For the three months For the six months ended June 30, ended June 30, 2020 2019 2020 2019 Cash Flow Hedge - Interest Rate Swap Agreement (in thousands) Change in fair value recorded in Accumulated other comprehensive loss, net $ ( 17,326 ) $ — $ ( 125,208 ) $ — Amount recognized in Non-cash interest expense $ ( 2,822 ) $ — $ ( 5,646 ) $ — Derivatives Not Designated as Hedges - Interest Rate Swap Agreements Amount reclassified from Accumulated other comprehensive loss, net into Non-cash interest expense $ 4,642 $ — $ 9,285 $ — Change in fair value recorded in Other income (expense), net $ ( 774 ) $ — $ 3,192 $ — On August 6, 2020, the Company terminated an interest rate swap designated as a hedged instrument in exchange for a payment of $ 176.2 million. On the same date, the Company entered into an interest rate swap with $ 1.95 billion of notional value receiving interest at one month LIBOR for a fixed rate of 0.1239 % per annum settled monthly through the maturity date of the 2018 Term Loan. 18. CONCENTRATION OF CREDIT RISK The Company’s credit risks consist primarily of accounts receivable with national, regional, and local wireless service providers and federal and state government agencies. The Company performs periodic credit evaluations of its customers’ financial 21 Table of Contents condition and provides allowances for doubtful accounts, as required, based upon factors surrounding the credit risk of specific customers, historical trends, and other information. The Company generally does not require collateral. On April 1, 2020, T-Mobile finalized a merger with Sprint and now operates as T-Mobile. For the three months ended June 30, 2020, T-Mobile represented 40.4 % of the Company’s total domestic site leasing revenue and 53.0 % of the Company’s site development revenue. For the six months ended June 30, 2020, T-Mobile represented 40.8 % of the Company’s total domestic site leasing revenue and 53.8 % of the Company’s site development revenue.