What changed in this filing

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Item 1. Financial Statements

2020-11-05 compared with 2020-08-06 · 193 added, 169 removed, 627 unchanged (37% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS (in thousands, except par values)

September 30,

Current assets:

3 unchanged sentences

Costs and estimated earnings in excess of billings on uncompleted contracts

Short-term investments

Prepaid expenses and other current assets

23 unchanged sentences

Common stock - Class A, par value $ 0.01 , 400,000 shares authorized, 111,443 shares and

111,775 shares issued and outstanding at June 30, 2020 and December 31, 2019,

111,775 shares issued and outstanding at September 30, 2020 and December 31, 2019,

Additional paid-in capital

12 unchanged sentences

For the three months

For the six months

ended June 30,

For the nine months

ended September 30,

Site development

18 unchanged sentences

Loss from extinguishment of debt, net

Other (expense) income, net

Other expense, net

Total other expense, net

7 unchanged sentences

Weighted average number of common shares

(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.

(1) Includes non-cash compensation of $ 16,606 and $ 12,281 for the three months ended September 30, 2020 and 2019, respectively, and $ 50,291 and $ 59,017 for the nine months ended September 30, 2020 and 2019, respectively.

The accompanying condensed notes are an integral part of these consolidated financial statements.

3 unchanged sentences

For the three months

For the six months

ended June 30,

For the nine months

ended September 30,

Net income (loss)

Unrealized loss on interest rate swaps

Adjustments related to interest rate swaps

Foreign currency translation adjustments

10 unchanged sentences

Equity (Deficit)

BALANCE, March 31, 2020

BALANCE, June 30, 2020

( 5,972,657 )

( 4,304,992 )

Net income (loss) attributable to SBA

Net income attributable to SBA

Communications Corporation

3 unchanged sentences

Non-cash stock compensation

Unrealized loss on interest rate swaps

Adjustments related to interest rate swaps

Repurchase and retirement of common stock

Foreign currency translation adjustments

3 unchanged sentences

noncontrolling interests

BALANCE, June 30, 2020

BALANCE, September 30, 2020

( 6,177,879 )

3 unchanged sentences

Equity (Deficit)

BALANCE, March 31, 2019

BALANCE, June 30, 2019

( 5,193,942 )

( 3,339,346 )

Net income (loss) attributable to SBA

Net income attributable to SBA

Communications Corporation

3 unchanged sentences

Non-cash stock compensation

Unrealized loss on interest rate swaps

Adjustments related to interest rate swaps

Repurchase and retirement of common stock

1 unchanged sentence

attributable to SBA Communications

BALANCE, June 30, 2019

Dividends on common stock

BALANCE, September 30, 2019

( 5,387,091 )

9 unchanged sentences

( 3,667,007 )

Net income (loss) attributable to SBA

Net loss attributable to SBA

Communications Corporation

3 unchanged sentences

Non-cash stock compensation

Unrealized loss on interest rate swaps

Adjustments related to interest rate swaps

Repurchase and retirement of common stock

4 unchanged sentences

noncontrolling interests

BALANCE, June 30, 2020

BALANCE, September 30, 2020

( 6,177,879 )

6 unchanged sentences

( 3,376,823 )

Net income (loss) attributable to SBA

Net income attributable to SBA

Communications Corporation

4 unchanged sentences

Common stock issued in connection with

Unrealized loss on interest rate swaps

Adjustments related to interest rate swaps

Repurchase and retirement of common stock

3 unchanged sentences

related to leases

BALANCE, June 30, 2019

Dividends on common stock

BALANCE, September 30, 2019

( 5,387,091 )

4 unchanged sentences

(unaudited) (in thousands)

For the six months ended June 30,

For the nine months ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

2 unchanged sentences

Depreciation, accretion, and amortization

Non-cash asset impairment and decommission costs

Non-cash compensation expense

Amortization of deferred financing fees

Loss (gain) on remeasurement of U.S.

Loss on remeasurement of U.S.

dollar denominated intercompany loans

Non-cash compensation expense

Non-cash asset impairment and decommission costs

Loss from extinguishment of debt

Deferred income tax (benefit) expense

23 unchanged sentences

Repayment of Senior Notes

Proceeds from issuance of Tower Securities, net of fees

Repayment of Tower Securities

( 1,200,000 )

Termination of interest rate swap

Proceeds from employee stock purchase/stock option plans, net of taxes

12 unchanged sentences

(in thousands)

For the six months ended June 30,

For the nine months ended September 30,

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

5 unchanged sentences

Common stock issued in connection with acquisitions

Consolidation of an equity method investment

The accompanying condensed notes are an integral part of these consolidated financial statements.

12 unchanged sentences

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.

Unrealized remeasurement gains and losses are reported as foreign currency translation adjustments through Accumulated other comprehensive loss, net in the Consolidated Statement of Shareholders’ Deficit.

For foreign subsidiaries where the U.S.

3 unchanged sentences

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.

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.

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 Statements of Operations as settlement is anticipated or planned in the foreseeable future.

The Company recorded a $ 25.4 million loss and a $ 21.0 million loss, net of taxes, on the remeasurement of intercompany loans for the three months ended September 30, 2020 and 2019, respectively, and a $ 198.6 million loss and a $ 16.3 million loss, net of taxes, on the remeasurement of intercompany loans for the nine months ended September 30, 2020 and 2019, respectively, due to changes in foreign exchange rates.

As of September 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 $ 935.3 million and $ 899.7 million, respectively.

Credit Losses

2 unchanged sentences

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,

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 amendment requires entities to consider forward-looking information to estimate expected credit losses over the lifetime of the asset, 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.

The Company is exposed to credit losses which are subject to this standard primarily through the site development business segment which provides consulting and construction related services.

The Company’s expected credit 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 the amount of accounts receivable that may not be collected considers 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.

6 unchanged sentences

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.

As of September 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.

FAIR VALUE MEASUREMENTS

1 unchanged sentence

The fair value of the asset retirement obligations is calculated using a discounted cash flow model.

Refer to Note 16 for discussion of the Company’s redeemable non-controlling interests.

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.

5 unchanged sentences

For the three months

For the six months

ended June 30,

For the nine months

ended September 30,

Asset impairment (1)

3 unchanged sentences

(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.

The Company’s long term investments were $ 60.0 million and $ 13.3 million as of September 30, 2020 and December 31, 2019, respectively, which are classified within other assets on the Consolidated Balance Sheets.

These investments are accounted for under the cost and equity method.

The Company periodically reviews these investments for impairment.

The Company considers impairment indicators such as negative changes in industry and market conditions, financial performance, business prospects, and other relevant events and factors.

If indicators exist and the fair value of the investment is below the carrying amount, the investment could be impaired.

The estimation of the fair value of the investment involves the use of Level 3 inputs.

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

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.

September 30, 2020 and December 31, 2019, the Company had $ 4.9 million and $ 0.5 million of short-term investments, which are classified within prepaid expenses and other current assets on the Consolidated Balance Sheets.

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.

5 unchanged sentences

The cash, cash equivalents, and restricted cash balances on the Consolidated Statements of Cash Flows consist of the following:

June 30, 2020

September 30, 2020

December 31, 2019

9 unchanged sentences

Total cash, cash equivalents, and restricted cash

(1) Increase is due to the timing of customer payments.

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.

4 unchanged sentences

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.

As of September 30, 2020 and December 31, 2019, the Company had $ 41.6 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.

As of September 30, 2020 and December 31, 2019, the Company had also pledged $ 2.3 million as collateral related to its workers’ compensation policy.

COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

The Company’s costs and estimated earnings on uncompleted contracts are comprised of the following:

June 30, 2020

September 30, 2020

December 31, 2019

4 unchanged sentences

These amounts are included in the Consolidated Balance Sheets under the following captions:

June 30, 2020

September 30, 2020

December 31, 2019

3 unchanged sentences

uncompleted contracts (included in Other current liabilities)

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.

At September 30, 2020 and December 31, 2019, eight customers comprised 98.4 % 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.

PREPAID EXPENSES AND OTHER CURRENT ASSETS AND OTHER ASSETS

The Company’s prepaid expenses and other current assets are comprised of the following:

June 30, 2020

September 30, 2020

December 31, 2019

5 unchanged sentences

The Company’s other assets are comprised of the following:

June 30, 2020

September 30, 2020

December 31, 2019

5 unchanged sentences

Deferred tax asset - long term

Long-term investments

Total other assets

2 unchanged sentences

For the three months

For the six months

ended June 30,

For the nine months

ended September 30,

(in thousands)

2 unchanged sentences

Total cash acquisition capital expenditures

(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

months ended June 30, 2020 and 2019, respectively.

(1) The nine months ended September 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 $ 2.3 million and $ 7.0 million for ground lease extensions and term easements on land underlying the Company’s towers during the three months ended September 30, 2020 and 2019, respectively, and paid $ 5.9 million and $ 13.1 million for ground lease extensions and term easements on land underlying the Company’s towers during the nine months ended September 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.

Includes amounts paid related to the acquisition of data centers for the nine months ended September 30, 2020 and 2019.

During the nine months ended September 30, 2020, the Company allocated the purchase price of 129 acquired towers and related assets and liabilities consisting of $ 16.7 million of property and equipment, $ 100.3 million of intangible assets, and $ 4.4 million of other net assets and liabilities assumed.

All acquisitions in the three and nine months ended September 30, 2020 were accounted for as asset acquisitions.

Subsequent to September 30, 2020, the Company acquired 54 towers and related assets for $ 14.6 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 $ 24.9 million and $ 29.7 million as of September 30, 2020 and December 31, 2019, respectively.

PROPERTY AND EQUIPMENT, NET

Property and equipment, net consists of the following:

June 30, 2020

September 30, 2020

December 31, 2019

10 unchanged sentences

(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.

Depreciation expense was $ 71.8 million and $ 71.4 million for the three months ended September 30, 2020 and 2019, respectively, and $ 215.0 million and $ 210.1 million for the nine months ended September 30, 2020 and 2019, respectively.

At September 30, 2020 and December 31, 2019, unpaid capital expenditures that are included in accounts payable and accrued expenses were $ 7.0 million and $ 14.7 million, respectively.

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 September 30, 2020

As of December 31, 2019

10 unchanged sentences

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.

Amortization expense relating to the intangible assets above was $ 108.2 million and $ 103.5 million for the three months ended September 30, 2020 and 2019, respectively, and $ 326.2 million and $ 307.3 million for the nine months ended September 30, 2020 and 2019, respectively.

ACCRUED EXPENSES

The Company’s accrued expenses are comprised of the following:

June 30, 2020

September 30, 2020

December 31, 2019

5 unchanged sentences

The principal values, fair values, and carrying values of debt consist of the following (in thousands):

June 30, 2020

September 30, 2020

December 31, 2019

9 unchanged sentences

2019-1C Tower Securities (1)

2020-1C Tower Securities (1)

2020-2C Tower Securities (1)

2014 Senior Notes

6 unchanged sentences

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,

June 30, 2020

For the three months ended September 30,

For the nine months ended September 30,

September 30,

(in thousands)

8 unchanged sentences

2019-1C Tower Securities

2020-1C Tower Securities

2020-2C Tower Securities

2014 Senior Notes

2 unchanged sentences

2020 Senior Notes

(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.

(1) The 2018 Term Loan has a blended rate of 1.878 % which includes the impact of the interest rate swap entered into on August 4, 2020 which swapped $ 1.95 billion of notional value accruing interest at one month LIBOR plus 175 basis points for a fixed rate of 1.874 % per annum through the maturity date of the 2018 Term Loan.

Excluding the impact of the interest rate swap, the 2018 Term Loan was accruing interest at 1.900 % as of September 30, 2020.

Refer to Note 17 for more information on the Company’s interest rate swap.

(2) The 2014-1C Tower Securities, which was repaid September 13, 2019, accrued interest at 2.898 %.

1 unchanged sentence

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.

During the three months ended September 30, 2020, no amounts were borrowed or repaid under the Revolving Credit Facility.

During the nine months ended September 30, 2020, the Company borrowed $ 515.0 million and repaid $ 1.0 billion of the outstanding balance under the Revolving Credit Facility.

As of September 30, 2020, the Company had no amount outstanding under the $ 1.25 billion Revolving Credit Facility.

In addition, SBA Senior Finance II LLC, the Company’s wholly owned subsidiary (“SBA Senior Finance II”) was required to pay a commitment fee of 0.20 % per annum on the amount of the unused commitment.

As of September 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.

During the three and nine months ended September 30, 2020, the Company repaid an aggregate of $ 6.0 million and $ 18.0 million, respectively, of principal on the 2018 Term Loan.

As of September 30, 2020, the 2018 Term Loan had a principal balance of $ 2.3 billion.

On August 4, 2020, the Company, through its wholly owned subsidiary, SBA Senior Finance II, terminated its existing $ 1.95 billion cash flow hedge on a portion of its 2018 Term Loan in exchange for a payment of $ 176.2 million.

On the same date, the Company entered into an interest rate swap for $ 1.95 billion of notional value accruing interest at one month LIBOR plus 175 basis points for a fixed rate of 1.874 % per annum through the maturity date of the 2018 Term Loan.

Refer to Note 17 for more information on the Company’s interest rate swaps.

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.

As of September 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

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.

1 unchanged sentence

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.

The Company has incurred deferred financing fees of $ 14.0 million 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.

3 unchanged sentences

2020 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”).

2 unchanged sentences

Interest on the 2020 Senior Notes is due semi-annually on February 15 and August 15 of each year, beginning on August 15, 2020.

The Company incurred financing fees of $ 18.0 million in relation to these transactions, which are being amortized through the maturity date.

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.

5 unchanged sentences

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).

Registration of Additional Shares

On August 6, 2020, the Company filed a registration statement on Form S-8 with the Securities and Exchange Commission registering 3.4 million shares of the Company’s Class A common stock, consisting of 3.0 million shares of Common Stock issuable under the 2020 Performance and Equity Incentive Plan (the “2020 Plan”) and 400,000 shares of Common Stock subject to awards granted under the 2010 Performance and Equity Incentive Plan (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.

Stock Repurchases

2 unchanged sentences

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.

On November 2, 2020, the Company’s Board of Directors authorized a new $ 1.0 billion stock repurchase plan, replacing the prior plan authorized on July 29, 2019 which had a remaining authorization of $ 124.3 million.

As of the date of this filing, the Company had the full $ 1.0 billion of authorization remaining under the new plan.

The following is a summary of the Company’s share repurchases:

For the three months

For the six months

ended June 30,

For the nine months

ended September 30,

Total number of shares purchased (in millions) (1)

2 unchanged sentences

(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.

As of June 30, 2020, the Company paid the following cash dividends:

For the nine months ended September 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.

Subsequent to September 30, 2020, the Company made the following share repurchases :

Total number of shares purchased (in millions) (1)

Average price paid per share (1)

Total price paid (in millions) (1)

(1) Amounts are calculated based on the trade date.

As of September 30, 2020, the Company paid the following cash dividends:

Payable to Shareholders

9 unchanged sentences

June 18, 2020

Subsequent to June 30, 2020, the Company declared the following cash dividends:

August 3, 2020

August 25, 2020

$ 52.0 million

September 21, 2020

Subsequent to September 30, 2020, the Company declared the following cash dividends:

Payable to Shareholders

3 unchanged sentences

Date to be Paid

August 3, 2020

August 25, 2020

September 22, 2020

November 2, 2020

November 19, 2020

December 17, 2020

STOCK-BASED COMPENSATION

9 unchanged sentences

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.

On February 25, 2020, the Company’s 2010 Plan expired by its terms.

On May 14, 2020, the Company’s shareholders approved the 2020 Plan which provides for the issuance of up to 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 September 30, 2020), plus 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

The Company uses a combination of historical data and historical volatility to establish the expected volatility, as well as to estimate the expected option life.

The risk-free rate is based on the U.S.

1 unchanged sentence

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

For the nine months ended

September 30,

Risk free interest rate

3 unchanged sentences

Expected lives

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):

The following table summarizes the Company’s activities with respect to its stock option plans for the nine months ended September 30, 2020 as follows (dollars and shares in thousands, except for per share data):

Weighted-Average

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Forfeited/canceled

Outstanding at June 30, 2020

Exercisable at June 30, 2020

Unvested at June 30, 2020

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.

Outstanding at September 30, 2020

Exercisable at September 30, 2020

Unvested at September 30, 2020

The weighted-average per share fair value of options granted during the nine months ended September 30, 2020 was $ 41.09 .

The total intrinsic value for options exercised during the nine months ended September 30, 2020 was $ 231.1 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:

The following table summarizes the Company’s RSU and PSU activity for the nine months ended September 30, 2020:

Weighted-Average

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Forfeited/canceled

Outstanding at June 30, 2020

Outstanding at September 30, 2020

(1) PSUs represent the target number of shares granted that are issuable at the end of the three year performance period.

3 unchanged sentences

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.

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.

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federal income tax on earnings, if any, from assets and operations held through its TRSs.

These assets and operations currently consist

primarily of the Company’s site development services and its international operations.

These assets and operations currently consist 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.

14 unchanged sentences

Int'l Site

For the three months ended June 30, 2020

For the three months ended September 30, 2020

(in thousands)

11 unchanged sentences

Cash capital expenditures (2)

For the three months ended June 30, 2019

For the three months ended September 30, 2019

Cost of revenues (1)

12 unchanged sentences

Int'l Site

For the six months ended June 30, 2020

For the nine months ended September 30, 2020

(in thousands)

11 unchanged sentences

Cash capital expenditures (2)

For the six months ended June 30, 2019

For the nine months ended September 30, 2019

Cost of revenues (1)

13 unchanged sentences

(in thousands)

As of June 30, 2020

As of September 30, 2020

As of December 31, 2019

(1) Assets in Other consist primarily of general corporate assets and short-term investments.

(1) Excludes depreciation, amortization, and accretion.

(2) Includes cash paid for capital expenditures and acquisitions and financing leases.

(3) Assets in Other consist primarily of general corporate assets and short-term investments.

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.

Site leasing revenue in Brazil was $ 167.8 million and $ 168.6 million for the nine months ended September 30, 2020 and 2019, respectively.

Total long-lived assets in Brazil were $ 0.9 billion and $ 1.4 billion as of September 30, 2020 and December 31, 2019, respectively.

EARNINGS PER SHARE

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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.

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):

The following table sets forth basic and diluted net income (loss) per common share attributable to common shareholders for the three and nine months ended September 30, 2020 and 2019 (in thousands, except per share data):

For the three months

For the six months

ended June 30,

For the nine months

ended September 30,

Net income (loss) attributable to SBA

1 unchanged sentence

Basic weighted-average shares outstanding

Dilutive impact of stock options and restricted shares

Dilutive impact of stock options, RSUs, and PSUs

Diluted weighted-average shares outstanding

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Communications Corporation:

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.

For the three months ended September 30, 2020, the diluted weighted average number of common shares outstanding excluded an additional 1,520 shares issuable upon the vesting of the Company’s RSUs and PSUs because the impact would be anti-dilutive.

For the nine months ended September 30, 2020, all potential common stock equivalents, including 3.2 million shares of stock options, 0.3 million shares of RSUs, and 0.1 million shares of PSUs, each issuable upon exercise or vesting, were excluded as the effect would be anti-dilutive.

For the three and nine months ended September 30, 2019, the diluted weighted average number of common shares outstanding excluded an additional 8,091 and 18,277 shares, respectively, issuable upon exercise of the Company’s stock options because the impact would be anti-dilutive.

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.

During the third quarter of 2020, the Company noticed its intent to exercise its call option to acquire the remaining 6 % interest in a joint venture in South Africa, operated under the name Atlas Tower South Africa, which the Company expects to close in the fourth quarter of 2020.

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).

At each reporting period, the redeemable noncontrolling interest was 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 were charged against retained earnings (or additional paid-in capital if there were 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

For the nine months ended

September 30, 2020

Beginning balance

1 unchanged sentence

Adjustment to fair value

Net (loss) income attributable to noncontrolling interests

Net income (loss) attributable to noncontrolling interests

Ending balance

1 unchanged sentence

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;

The Company designated this interest rate swap as a cash flow hedge as it is expected to be highly effective at offsetting changes in cash flows of the LIBOR based component interest payments of its 2018 Term Loan.

As of September 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.

As of September 30, 2020, the interest rate swap has a fair value of $ 7.7 million.

On August 4, 2020, the Company also terminated its existing interest rate swaps, which were previously de-designated as cash flow hedges.

There was no cash transferred in connection with the termination of these swaps.

The Company reclassifies the fair value of its interest rate swaps recorded in Accumulated other comprehensive loss, net on their de-designation date to non-cash interest expense on the Consolidated Statements of Operations over their respective remaining terms which range from 2023 to 2025 .

Accumulated other comprehensive loss, net includes an aggregate of $ 156.5 million and $ 42.1 million of accumulated derivative net losses as of September 30, 2020 and December 31, 2019, respectively.

Additionally, the Company is exposed to counterparty credit risk to the extent that a counterparty fails to meet the terms of a contract.

1 unchanged sentence

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.

The cash flows associated with these activities are reported in Net cash provided by operating activities on the Consolidated Statements of Cash Flows with the exception of the termination of interest rate swaps which are recorded in Net cash used in financing activities.

The table below outlines the effects of the Company’s interest rate swaps on the Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019.

Fair Value as of

Balance Sheet

September 30,

Derivatives Designated as Hedging Instruments

(in thousands)

Interest rate swap agreements in a fair value asset position

Interest rate swap agreement in a fair value liability position

4 unchanged sentences

Other long-term liabilities

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,

For the nine months

ended September 30,

Cash Flow Hedge - Interest Rate Swap Agreement

6 unchanged sentences

Change in fair value recorded in Other income (expense), net

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.

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

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 performs periodic credit evaluations of its customers’ financial 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.

For the three months ended September 30, 2020, T-Mobile represented 40.2 % of the Company’s total domestic site leasing revenue and 67.6 % of the Company’s site development revenue.

For the nine months ended September 30, 2020, T-Mobile represented 40.6 % of the Company’s total domestic site leasing revenue and 59.7 % of the Company’s site development revenue.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements