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, 2022 2021 ASSETS (unaudited) Current assets: Cash and cash equivalents $ 183,067 $ 367,278 Restricted cash 64,495 65,561 Accounts receivable, net 115,137 101,950 Costs and estimated earnings in excess of billings on uncompleted contracts 54,781 48,844 Prepaid expenses and other current assets 77,419 30,813 Total current assets 494,899 614,446 Property and equipment, net 2,677,983 2,575,487 Intangible assets, net 2,800,562 2,803,247 Operating lease right-of-use assets, net 2,355,881 2,268,470 Acquired and other right-of-use assets, net 1,002,785 964,405 Other assets 679,827 575,644 Total assets $ 10,011,937 $ 9,801,699 LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND SHAREHOLDERS' DEFICIT Current Liabilities: Accounts payable $ 41,455 $ 34,066 Accrued expenses 85,697 68,070 Current maturities of long-term debt 662,720 24,000 Deferred revenue 199,829 184,380 Accrued interest 50,841 49,096 Current lease liabilities 256,572 238,497 Other current liabilities 21,086 18,222 Total current liabilities 1,318,200 616,331 Long-term liabilities: Long-term debt, net 11,817,504 12,278,694 Long-term lease liabilities 2,047,385 1,981,353 Other long-term liabilities 227,578 191,475 Total long-term liabilities 14,092,467 14,451,522 Redeemable noncontrolling interests 39,881 17,250 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, 107,872 shares and 108,956 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively 1,079 1,089 Additional paid-in capital 2,717,963 2,681,347 Accumulated deficit ( 7,531,180 ) ( 7,203,531 ) Accumulated other comprehensive loss, net ( 626,473 ) ( 762,309 ) Total shareholders' deficit ( 5,438,611 ) ( 5,283,404 ) Total liabilities, redeemable noncontrolling interests, and shareholders' deficit $ 10,011,937 $ 9,801,699 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, 2022 2021 2022 2021 Revenues: Site leasing $ 580,233 $ 524,095 $ 1,139,665 $ 1,029,197 Site development 71,773 51,433 132,111 95,069 Total revenues 652,006 575,528 1,271,776 1,124,266 Operating expenses: Cost of revenues (exclusive of depreciation, accretion, and amortization shown below): Cost of site leasing 111,515 95,350 218,670 190,718 Cost of site development 54,497 40,409 100,269 74,815 Selling, general, and administrative expenses (1) 63,274 53,945 125,398 105,546 Acquisition and new business initiatives related adjustments and expenses 6,829 6,794 11,933 11,795 Asset impairment and decommission costs 8,521 3,797 17,033 8,700 Depreciation, accretion, and amortization 176,392 175,469 350,716 359,350 Total operating expenses 421,028 375,764 824,019 750,924 Operating income 230,978 199,764 447,757 373,342 Other income (expense): Interest income 1,517 547 4,020 1,179 Interest expense ( 84,315 ) ( 90,544 ) ( 166,566 ) ( 180,639 ) Non-cash interest expense ( 11,529 ) ( 11,812 ) ( 23,054 ) ( 23,615 ) Amortization of deferred financing fees ( 4,922 ) ( 4,865 ) ( 9,804 ) ( 9,755 ) Loss from extinguishment of debt, net — ( 2,020 ) — ( 13,672 ) Other (expense) income, net ( 66,141 ) 108,849 42,019 20,410 Total other (expense) income, net ( 165,390 ) 155 ( 153,385 ) ( 206,092 ) Income before income taxes 65,588 199,919 294,372 167,250 Benefit (provision) for income taxes 3,563 ( 47,250 ) ( 36,914 ) ( 26,328 ) Net income 69,151 152,669 257,458 140,922 Net loss attributable to noncontrolling interests 365 — 682 — Net income attributable to SBA Communications Corporation $ 69,516 $ 152,669 $ 258,140 $ 140,922 Net income per common share attributable to SBA Communications Corporation: Basic $ 0.64 $ 1.40 $ 2.39 $ 1.29 Diluted $ 0.64 $ 1.37 $ 2.36 $ 1.27 Weighted average number of common shares Basic 107,850 109,412 107,966 109,441 Diluted 109,347 111,301 109,443 111,210 (1) Includes non-cash compensation of $ 23,248 and $ 21,077 for the three months ended June 30, 2022 and 2021, respectively, and $ 47,364 and $ 40,661 for the six months ended June 30, 2022 and 2021, 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 (unaudited) (in thousands) For the three months For the six months ended June 30, ended June 30, 2022 2021 2022 2021 Net income $ 69,151 $ 152,669 $ 257,458 $ 140,922 Adjustments related to interest rate swaps 23,833 5,565 109,155 48,352 Foreign currency translation adjustments ( 59,021 ) 63,869 26,485 20,235 Comprehensive income 33,963 222,103 393,098 209,509 Comprehensive loss attributable to noncontrolling interests 444 — 878 — Comprehensive income attributable to SBA Communications Corporation $ 34,407 $ 222,103 $ 393,976 $ 209,509 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 Deficit BALANCE, March 31, 2022 107,806 $ 1,078 $ 2,688,835 $ ( 7,523,696 ) $ ( 591,364 ) $ ( 5,425,147 ) Net income attributable to SBA Communications Corporation — — — 69,516 — 69,516 Common stock issued in connection with equity awards and stock purchase plans, offset by the impact of net share settlements 66 1 9,010 — — 9,011 Non-cash stock compensation — — 24,406 — — 24,406 Adjustments related to interest rate swaps — — — — 23,833 23,833 Foreign currency translation adjustments attributable to SBA Communications Corporation — — — — ( 58,942 ) ( 58,942 ) Dividends and dividend equivalents on common stock — — — ( 77,000 ) — ( 77,000 ) Adjustment to redemption amount related to noncontrolling interests — — ( 4,288 ) — — ( 4,288 ) BALANCE, June 30, 2022 107,872 $ 1,079 $ 2,717,963 $ ( 7,531,180 ) $ ( 626,473 ) $ ( 5,438,611 ) Accumulated Class A Additional Other Total Common Stock Paid-In Accumulated Comprehensive Shareholders' Shares Amount Capital Deficit Loss Deficit BALANCE, December 31, 2021 108,956 $ 1,089 $ 2,681,347 $ ( 7,203,531 ) $ ( 762,309 ) $ ( 5,283,404 ) Net income attributable to SBA Communications Corporation — — — 258,140 — 258,140 Common stock issued in connection with equity awards and stock purchase plans, offset by the impact of net share settlements 216 2 10,576 — — 10,578 Non-cash stock compensation — — 49,549 — — 49,549 Adjustments related to interest rate swaps — — — — 109,155 109,155 Repurchase and retirement of common stock ( 1,300 ) ( 12 ) — ( 431,654 ) — ( 431,666 ) Foreign currency translation adjustments attributable to SBA Communications Corporation — — — — 26,681 26,681 Dividends and dividend equivalents on common stock — — — ( 154,135 ) — ( 154,135 ) Adjustment to redemption amount related to noncontrolling interests — — ( 23,509 ) — — ( 23,509 ) BALANCE, June 30, 2022 107,872 $ 1,079 $ 2,717,963 $ ( 7,531,180 ) $ ( 626,473 ) $ ( 5,438,611 ) ‎ 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 Deficit BALANCE, March 31, 2021 109,331 $ 1,093 $ 2,610,472 $ ( 6,848,313 ) $ ( 808,429 ) $ ( 5,045,177 ) Net income attributable to SBA Communications Corporation — — — 152,669 — 152,669 Common stock issued in connection with equity awards and stock purchase plans, offset by the impact of net share settlements 203 2 25,093 — — 25,095 Non-cash stock compensation — — 21,975 — — 21,975 Adjustments related to interest rate swaps — — — — 5,565 5,565 Foreign currency translation adjustments attributable to SBA Communications Corporation — — — — 63,869 63,869 Dividends and dividend equivalents on common stock — — — ( 63,738 ) — ( 63,738 ) BALANCE, June 30, 2021 109,534 $ 1,095 $ 2,657,540 $ ( 6,759,382 ) $ ( 738,995 ) $ ( 4,839,742 ) Accumulated Class A Additional Other Total Common Stock Paid-In Accumulated Comprehensive Shareholders' Shares Amount Capital Deficit Loss Deficit BALANCE, December 31, 2020 109,819 $ 1,098 $ 2,586,130 $ ( 6,604,028 ) $ ( 807,582 ) $ ( 4,824,382 ) Net income attributable to SBA Communications Corporation — — — 140,922 — 140,922 Common stock issued in connection with equity awards and stock purchase plans, offset by the impact of net share settlements 368 4 27,106 — — 27,110 Non-cash stock compensation — — 42,787 — — 42,787 Adjustments related to interest rate swaps — — — — 48,352 48,352 Repurchase and retirement of common stock ( 653 ) ( 7 ) — ( 168,915 ) — ( 168,922 ) Foreign currency translation adjustments attributable to SBA Communications Corporation — — — — 20,235 20,235 Dividends and dividend equivalents on common stock — — — ( 127,361 ) — ( 127,361 ) Adjustment to redemption amount related to noncontrolling interests — — 1,517 — — 1,517 BALANCE, June 30, 2021 109,534 $ 1,095 $ 2,657,540 $ ( 6,759,382 ) $ ( 738,995 ) $ ( 4,839,742 ) 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, 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 257,458 $ 140,922 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, accretion, and amortization 350,716 359,350 Gain on remeasurement of U.S. denominated intercompany loans ( 45,928 ) ( 25,044 ) Non-cash compensation expense 48,648 42,066 Non-cash asset impairment and decommission costs 16,966 8,289 Loss from extinguishment of debt, net — 12,672 Deferred income tax provision 23,012 14,159 Other non-cash items reflected in the Statements of Operations 35,962 37,829 Changes in operating assets and liabilities, net of acquisitions: Accounts receivable and costs and estimated earnings in excess of billings on uncompleted contracts, net ( 8,078 ) 6,582 Prepaid expenses and other assets ( 14,805 ) ( 2,595 ) Operating lease right-of-use assets, net 69,180 56,995 Accounts payable and accrued expenses ( 3,064 ) 3,099 Accrued interest 1,752 12,042 Long-term lease liabilities ( 62,990 ) ( 54,772 ) Other liabilities ( 4,232 ) 26,688 Net cash provided by operating activities 664,597 638,282 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions ( 353,578 ) ( 1,129,851 ) Capital expenditures ( 90,971 ) ( 55,375 ) Purchase of investments ( 281,624 ) ( 755,176 ) Proceeds from sale of investments 242,622 755,063 Other investing activities ( 2,144 ) 585 Net cash used in investing activities ( 485,695 ) ( 1,184,754 ) CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings under Revolving Credit Facility 330,000 810,000 Repayments under Revolving Credit Facility ( 150,000 ) ( 1,105,000 ) Proceeds from issuance of Senior Notes, net of fees — 1,485,512 Repayment of Senior Notes — ( 757,500 ) Proceeds from issuance of Tower Securities, net of fees — 1,152,631 Repayment of Tower Securities — ( 760,000 ) Repurchase and retirement of common stock ( 431,666 ) ( 168,922 ) Payment of dividends on common stock ( 153,438 ) ( 126,893 ) Proceeds from employee stock purchase/stock option plans 20,240 36,122 Payments related to taxes on stock options and restricted stock units ( 9,622 ) ( 8,982 ) Other financing activities 18,482 ( 11,574 ) Net cash (used in) provided by financing activities ( 376,004 ) 545,394 Effect of exchange rate changes on cash, cash equivalents, and restricted cash 12,454 ( 2,920 ) NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 184,648 ) ( 3,998 ) CASH, CASH EQUIVALENTS, AND RESTRICTED CASH: Beginning of period 435,626 342,808 End of period $ 250,978 $ 338,810 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 (unaudited) (in thousands) For the six months ended June 30, 2022 2021 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 167,803 $ 169,509 Income taxes $ 14,060 $ 15,766 SUPPLEMENTAL CASH FLOW INFORMATION OF NON-CASH ACTIVITIES: Right-of-use assets obtained in exchange for new operating lease liabilities $ 115,089 $ 22,397 Operating lease modifications and reassessments $ 23,621 $ 9,049 Right-of-use assets obtained in exchange for new finance lease liabilities $ 2,392 $ 1,765 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, 2021 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 translation 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. 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. Remeasurement 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 Statements of Operations as settlement is anticipated or planned in the foreseeable future. The Company recorded a $ 43.1 million loss and a $ 73.6 million gain, net of taxes, on the remeasurement of intercompany loans for the three months ended June 30, 2022 and 2021, respectively, and a $ 29.8 million gain and a $ 16.6 million gain, net of taxes, on the remeasurement of intercompany loans for the six months ended June 30, 2022 and 2021, respectively, due to changes in foreign exchange rates. During the six months ended June 30, 2022, the Company repaid $ 108.4 million of the intercompany loans. As of June 30, 2022 and December 31, 2021, the aggregate amount outstanding under the intercompany loan agreements subject to remeasurement with the Company’s foreign subsidiaries was $ 814.5 million and $ 872.9 million, respectively. 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. 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. 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. 8 Table of Contents 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, 2022 2021 2022 2021 Asset impairment (1) $ 6,884 $ 2,211 $ 14,674 $ 5,366 Write-off of carrying value of decommissioned towers 1,733 1,264 2,325 2,592 Other (including third party decommission costs) ( 96 ) 322 34 742 Total asset impairment and decommission costs $ 8,521 $ 3,797 $ 17,033 $ 8,700 (1) Represents impairment charges resulting from the Company’s regular analysis of whether the anticipated future discounted cash flows from certain towers are sufficient to recover the carrying value of the investment in those towers . The Company’s long-term investments were $ 42.1 million and $ 47.9 million as of June 30, 2022 and December 31, 2021, respectively, and are recorded in Other assets on the Consolidated Balance Sheets. Some of these investments provide for the Company to increase their investment in the future through call options exercisable by the Company and put options exercisable by the investee. These put and call options are recorded at fair market value. The estimation of the fair value of the investment involves the use of Level 3 inputs. The Company evaluates these investments for indicators of 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. 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 is based primarily upon Level 1 reported market values. As of June 30, 2022 and December 31, 2021, the Company had $ 40.8 million and $ 0.8 million of short-term investments, respectively. For the six months ended June 30, 2022, the Company purchased $ 281.4 million and sold $ 241.4 million of short-term investments. For the six months ended June 30, 2021, the Company purchased and sold $ 755.1 million 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 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 150.0 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, 2022 December 31, 2021 Included on Balance Sheet (in thousands) Cash and cash equivalents $ 183,067 $ 367,278 Cash and cash equivalents Securitization escrow accounts 64,331 64,764 Restricted cash - current asset Payment and performance bonds 164 797 Restricted cash - current asset Surety bonds and workers compensation 3,416 2,787 Other assets - noncurrent Total cash, cash equivalents, and restricted cash $ 250,978 $ 435,626 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 9 Table of Contents subsequently released to the Borrowers 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, 2022 and December 31, 2021, the Company had $ 42.3 million in surety and payment and performance bonds 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, 2022 and December 31, 2021, the Company had 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, 2022 December 31, 2021 (in thousands) Costs incurred on uncompleted contracts $ 101,209 $ 75,967 Estimated earnings 35,098 28,851 Billings to date ( 93,074 ) ( 61,628 ) $ 43,233 $ 43,190 These amounts are included in the Consolidated Balance Sheets under the following captions: As of As of June 30, 2022 December 31, 2021 (in thousands) Costs and estimated earnings in excess of billings on uncompleted contracts $ 54,781 $ 48,844 Billings in excess of costs and estimated earnings on uncompleted contracts (included in Other current liabilities) ( 11,548 ) ( 5,654 ) $ 43,233 $ 43,190 At June 30, 2022 and December 31, 2021, the eight largest customers comprised 97.4 % and 98.8 %, respectively, of the costs and estimated earnings in excess of billings on uncompleted contracts, net of billings in excess of costs and estimated earnings. 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, 2022 December 31, 2021 (in thousands) Short-term investments $ 40,798 $ 778 Prepaid real estate taxes 2,011 3,331 Prepaid taxes 9,232 11,096 Other current assets 25,378 15,608 Total prepaid expenses and other current assets $ 77,419 $ 30,813 ‎ 10 Table of Contents The Company’s other assets are comprised of the following: As of As of June 30, 2022 December 31, 2021 (in thousands) Straight-line rent receivable $ 368,836 $ 348,519 Interest rate swap asset (1) 147,036 60,324 Loans receivable 40,095 37,376 Deferred lease costs, net 6,906 6,345 Deferred tax asset - long term 29,126 51,918 Long-term investments 42,122 47,889 Other 45,706 23,273 Total other assets $ 679,827 $ 575,644 (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, 2022 2021 2022 2021 (in thousands) Acquisitions of towers and related intangible assets (1)(2) $ 78,665 $ 67,255 $ 286,528 $ 168,885 Acquisition of right-of-use assets (3) 2,220 1,783 2,220 947,698 Land buyouts and other assets (4)(5) 57,512 8,137 64,830 13,268 Total cash acquisition capital expenditures $ 138,397 $ 77,175 $ 353,578 $ 1,129,851 (1) During the six months ended June 30, 2022, the Company closed on 1,445 sites under the previously announced deal with Airtel Tanzania for $ 176.1 million. Legal title has been fully transferred for 1,105 of the towers. The remaining 340 towers are pending post-closing site level documentation and due diligence and continue to be accounted for as acquired and other right-of-use assets, net on the consolidated balance sheet until transfer of title for these towers is completed, which the Company anticipates to be in tranches through the end of the second quarter of 2023. Upon legal transfer, these assets will be reclassified to tower related assets. During this period of time, the Company has all the economic rights and obligations related to these towers. (2) The six months ended June 30, 2021 includes $ 77.1 million of acquisitions completed during the fourth quarter of 2020 which were not funded until the first quarter of 2021. (3) During the six months ended June 30, 2021, the Company acquired the exclusive right to lease and operate utility transmission structures, which included existing wireless tenant licenses from PG&E for $ 955.8 million. The difference between the purchase price and the cash acquisition amount is due to working capital adjustments. The Company accounted for the payment with respect to these sites as a right-of-use asset, which is recorded in Acquired and other right of use assets, net on its Consolidated Balance Sheets. The payments associated with the right of use of these structures has been fully funded and will be recognized over 70 years. (4) In addition, the Company paid $ 2.7 million and $ 3.6 million for ground lease extensions and term easements on land underlying the Company’s towers during the three months ended June 30, 2022 and 2021, respectively, and paid $ 6.5 million and $ 6.4 million for ground lease extensions and term easements on land underlying the Company’s towers during the six months ended June 30, 2022 and 2021, respectively. The Company recorded these amounts in prepaid rent on its Consolidated Balance Sheets. (5) Includes amounts paid related to the acquisition of a data center in Brazil during the second quarter of 2022. During the six months ended June 30, 2022, the Company acquired 2,017 towers and related assets and liabilities consisting of $ 106.9 million of property and equipment, net $ 141.6 million of intangible assets, net, $ 101.0 million of operating lease right-of-use assets, net, $ 45.7 million of acquired and other right-of-use assets, net and $ 108.7 million of other net liabilities assumed. All acquisitions in the six months ended June 30, 2022 were accounted for as asset acquisitions except for one acquisition, purchased for $ 49.9 million in cash which was accounted for as a business combination. Subsequent to June 30, 2022, the Company purchased or is under contract to purchase approximately 200 communication sites for an aggregate consideration of approximately $ 85.0 million in cash. Additionally, the Company is under contract to purchase 11 Table of Contents approximately 2,600 sites from Grupo TorreSur in Brazil for $ 725.0 million. The Company anticipates that these acquisitions will be consummated by the end of the fourth quarter of 2022. The maximum potential obligation related to contingent consideration for acquisitions were $ 11.4 million and $ 11.6 million as of June 30, 2022 and December 31, 2021, respectively. No such amounts have been recorded on the Company’s Consolidated Balance Sheet. 7. PROPERTY AND EQUIPMENT, NET Property and equipment, net consists of the following: As of As of June 30, 2022 December 31, 2021 (in thousands) Towers and related components (1) $ 5,524,977 $ 5,323,803 Construction-in-process (2) 64,625 47,565 Furniture, equipment, and vehicles 63,015 59,939 Land, buildings, and improvements 866,675 848,051 Total property and equipment 6,519,292 6,279,358 Less: accumulated depreciation ( 3,841,309 ) ( 3,703,871 ) Property and equipment, net $ 2,677,983 $ 2,575,487 (1) Includes amounts related to our data centers. (2) Construction-in-process represents costs incurred related to towers and other assets that are under development and will be used in the Company’s site leasing operations. Depreciation expense was $ 68.5 million and $ 73.2 million for the three months ended June 30, 2022 and 2021, respectively, and $ 136.7 million and $ 144.9 million for the six months ended June 30, 2022 and 2021, respectively. At June 30, 2022 and December 31, 2021, unpaid capital expenditures that are included in accounts payable and accrued expenses were $ 12.7 million and $ 7.3 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, 2022 As of December 31, 2021 Gross carrying Accumulated Net book Gross carrying Accumulated Net book amount amortization value amount amortization value (in thousands) Current contract intangibles $ 5,058,077 $ ( 2,920,387 ) $ 2,137,690 $ 4,890,427 $ ( 2,749,594 ) $ 2,140,833 Network location intangibles 1,839,451 ( 1,176,579 ) 662,872 1,783,640 ( 1,121,226 ) 662,414 Intangible assets, net $ 6,897,528 $ ( 4,096,966 ) $ 2,800,562 $ 6,674,067 $ ( 3,870,820 ) $ 2,803,247 All intangible assets noted above are included in the Company’s site leasing segment. Amortization expense relating to the intangible assets above was $ 102.0 million and $ 103.2 million for the three months ended June 30, 2022 and 2021, respectively, and $ 202.6 million and $ 212.9 million for the six months ended June 30, 2022 and 2021, respectively. ‎ 12 Table of Contents 9. ACCRUED EXPENSES The Company’s accrued expenses are comprised of the following: As of As of June 30, 2022 December 31, 2021 (in thousands) Salaries and benefits $ 20,082 $ 24,962 Real estate and property taxes 9,702 8,336 Unpaid capital expenditures 12,687 7,295 Acquisition related holdbacks 19,169 957 Other 24,057 26,520 Total accrued expenses $ 85,697 $ 68,070 10. DEBT The principal values, fair values, and carrying values of debt consist of the following (in thousands): As of As of June 30, 2022 December 31, 2021 Maturity Date Principal ‎ Balance Fair Value Carrying ‎ Value Principal ‎ Balance Fair Value Carrying ‎ Value Revolving Credit Facility Jul. 7, 2026 $ 530,000 $ 530,000 $ 530,000 $ 350,000 $ 350,000 $ 350,000 2018 Term Loan Apr. 11, 2025 2,304,000 2,217,600 2,294,353 2,316,000 2,289,945 2,304,697 2014-2C Tower Securities (1) Oct. 8, 2024 620,000 614,656 617,592 620,000 641,793 617,095 2018-1C Tower Securities (1) Mar. 9, 2023 640,000 638,336 638,720 640,000 650,163 637,812 2019-1C Tower Securities (1) Jan. 12, 2025 1,165,000 1,125,029 1,158,644 1,165,000 1,174,728 1,157,446 2020-1C Tower Securities (1) Jan. 9, 2026 750,000 704,318 744,762 750,000 746,498 744,052 2020-2C Tower Securities (1) Jan. 11, 2028 600,000 558,750 595,178 600,000 605,268 594,774 2021-1C Tower Securities (1) Nov. 9, 2026 1,165,000 1,066,756 1,154,774 1,165,000 1,144,846 1,153,700 2021-2C Tower Securities (1) Apr. 9, 2027 895,000 817,430 886,762 895,000 883,213 886,116 2021-3C Tower Securities (1) Oct. 9, 2031 895,000 801,106 886,222 895,000 902,446 885,976 2020 Senior Notes Feb. 15, 2027 1,500,000 1,366,485 1,485,581 1,500,000 1,550,790 1,484,178 2021 Senior Notes Feb. 1, 2029 1,500,000 1,228,545 1,487,636 1,500,000 1,446,975 1,486,848 Total debt $ 12,564,000 $ 11,669,011 $ 12,480,224 $ 12,396,000 $ 12,386,665 $ 12,302,694 Less: current maturities of long-term debt ( 662,720 ) ( 24,000 ) Total long-term debt, net of current maturities $ 11,817,504 $ 12,278,694 (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: Interest For the three months ended June 30, For the six months ended June 30, Rates as of 2022 2021 2022 2021 June 30, Cash Non-cash Cash Non-cash Cash Non-cash Cash Non-cash 2022 Interest Interest Interest Interest Interest Interest Interest Interest (in thousands) Revolving Credit Facility 3.050 % $ 3,603 $ — $ 1,573 $ — $ 5,882 $ — $ 3,721 $ — 2018 Term Loan (1) 2.111 % 11,616 11,440 11,067 11,438 22,527 22,879 22,064 22,872 2013-2C Tower Securities 3.722 % — — 5,396 — — — 10,792 — 2014-2C Tower Securities 3.869 % 6,046 — 6,046 — 12,092 — 12,092 — 2017-1C Tower Securities 3.168 % — — 3,115 — — — 9,201 — 2018-1C Tower Securities 3.448 % 5,570 — 5,570 — 11,141 — 11,141 — 2019-1C Tower Securities 2.836 % 8,357 — 8,357 — 16,714 — 16,714 — 2020-1C Tower Securities 1.884 % 3,598 — 3,598 — 7,195 — 7,195 — 2020-2C Tower Securities 2.328 % 3,540 — 3,540 — 7,079 — 7,079 — 2021-1C Tower Securities 1.631 % 4,851 — 2,550 — 9,697 — 2,550 — 2021-2C Tower Securities 1.840 % 4,196 — — — 8,391 — — — 2021-3C Tower Securities 2.593 % 5,873 — — — 11,746 — — — 2016 Senior Notes 4.875 % — — 13,406 289 — — 26,813 575 2017 Senior Notes 4.000 % — — — — — — 2,333 — 2020 Senior Notes 3.875 % 14,531 89 14,531 85 29,063 175 29,063 168 2021 Senior Notes 3.125 % 11,719 — 11,719 — 23,438 — 19,792 — Other 815 — 76 — 1,601 — 89 — Total $ 84,315 $ 11,529 $ 90,544 $ 11,812 $ 166,566 $ 23,054 $ 180,639 $ 23,615 (1) The 2018 Term Loan has a blended rate of 2.111 %, 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 3.420 % as of June 30, 2022. Refer to Note 17 for more information on the Company’s interest rate swap. Revolving Credit Facility under the Senior Credit Agreement During the three months ended June 30, 2022, the Company repaid $ 150.0 million of the outstanding balance under the Revolving Credit Facility. During the six months ended June 30, 2022, the Company borrowed $ 330.0 million and repaid $ 150.0 million of the outstanding balance under the Revolving Credit Facility. As of June 30, 2022, there was $ 530.0 million outstanding under the Revolving Credit Facility accruing interest at 3.050 %. 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 0.19 % per annum on the amount of the unused commitment. These rates include a 0.05 % reduction in the applicable spread and a 0.01 % reduction in the commitment fee as a result of meeting certain sustainability-linked targets as of December 31, 2021. As of June 30, 2022, SBA Senior Finance II was in compliance with the financial covenants contained in the Senior Credit Agreement. Subsequent to June 30, 2022, the Company repaid an additional $ 50.0 million under the Revolving Credit Facility, and as of the date of this filing, $ 480.0 million was outstanding. Term Loan under the Senior Credit Agreement During the three and six months ended June 30, 2022, 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, 2022, the 2018 Term Loan had a principal balance of $ 2.3 billion. Secured Tower Revenue Securities As of June 30, 2022, 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 consists of a non-recourse mortgage loan made in favor of the Borrowers . 14 Table of Contents 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. On October 28, 2021, the Company’s Board of Directors authorized a new $ 1.0 billion stock repurchase plan, replacing the prior plan authorized on November 2, 2020, which had a remaining authorization of $ 125.1 million. As of the date of this filing, the Company had $ 504.7 million 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, ended June 30, 2022 2021 2022 2021 Total number of shares purchased (in millions) (1) — — 1.3 0.7 Average price paid per share (1) $ — $ — $ 332.00 $ 258.33 Total price paid (in millions) (1) $ — $ — $ 431.6 $ 168.9 (1) Amounts reflected are based on the trade date and differ from the Consolidated Statements of Cash Flows which reflects share repurchases based on the settlement date . Dividends For the six months ended June 30, 2022, 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 27, 2022 March 10, 2022 $ 0.71 $ 76.9 million March 25, 2022 April 24, 2022 May 19, 2022 $ 0.71 $ 76.6 million June 14, 2022 Dividends paid in 2022 were ordinary taxable dividends. Subsequent to June 30, 2022, 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 July 31, 2022 August 25, 2022 $ 0.71 September 20, 2022 ‎ 15 Table of Contents 12. STOCK-BASED COMPENSATION 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 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, 2022 Risk free interest rate 2.53 % Dividend yield 0.9 % Expected volatility 27 % Expected lives 4.3 years The following table summarizes the Company’s activities with respect to its stock option plans for the six months ended June 30, 2022 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, 2021 1,899 $ 157.76 Granted 10 $ 328.99 Exercised ( 118 ) $ 141.65 Forfeited/canceled ( 2 ) $ 172.19 Outstanding at June 30, 2022 1,789 $ 159.75 2.9 $ 286,824 Exercisable at June 30, 2022 1,519 $ 154.42 2.7 $ 251,659 Unvested at June 30, 2022 270 $ 189.83 4.0 $ 35,165 The weighted-average per share fair value of options granted during the six months ended June 30, 2022 was $ 82.28 . The total intrinsic value for options exercised during the six months ended June 30, 2022 was $ 23.7 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, 2022: RSUs PSUs (1) 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, 2021 243 $ 230.20 298 $ 304.46 Granted 98 $ 330.33 140 $ 391.19 Vested ( 115 ) $ 218.91 — $ — Forfeited/canceled ( 6 ) $ 277.55 ( 3 ) $ 320.41 Outstanding at June 30, 2022 220 $ 279.29 435 $ 332.30 (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 more likely than not that its deferred tax assets will not be realized and has 16 Table of Contents 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 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 $ 654.7 million as of December 31, 2021, 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. ‎ 17 Table of Contents 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, 2022 (in thousands) Revenues (1) $ 442,084 $ 138,149 $ 71,773 $ — $ 652,006 Cost of revenues (2) 65,768 45,747 54,497 — 166,012 Operating profit 376,316 92,402 17,276 — 485,994 Selling, general, and administrative expenses 26,225 15,073 5,212 16,764 63,274 Acquisition and new business initiatives related adjustments and expenses 2,789 4,040 — — 6,829 Asset impairment and decommission costs 7,089 1,432 — — 8,521 Depreciation, amortization and accretion 122,570 51,597 619 1,606 176,392 Operating income (loss) 217,643 20,260 11,445 ( 18,370 ) 230,978 Other expense (principally interest expense and other expense) ( 165,390 ) ( 165,390 ) Income before income taxes 65,588 Cash capital expenditures (3) 94,427 95,294 1,728 1,629 193,078 For the three months ended June 30, 2021 Revenues (1) $ 418,829 $ 105,266 $ 51,433 $ — $ 575,528 Cost of revenues (2) 63,948 31,402 40,409 — 135,759 Operating profit 354,881 73,864 11,024 — 439,769 Selling, general, and administrative expenses 29,201 9,521 3,994 11,229 53,945 Acquisition and new business initiatives related adjustments and expenses 4,596 2,198 — — 6,794 Asset impairment and decommission costs 2,690 961 — 146 3,797 Depreciation, amortization and accretion 128,034 44,744 1,017 1,674 175,469 Operating income (loss) 190,360 16,440 6,013 ( 13,049 ) 199,764 Other income (principally interest expense and other expense) 155 155 Income before income taxes 199,919 Cash capital expenditures (3) 88,051 18,728 721 1,246 108,746 ‎ 18 Table of Contents Domestic Site Int'l Site Site Leasing Leasing Development Other Total For the six months ended June 30, 2022 (in thousands) Revenues (1) $ 875,070 $ 264,595 $ 132,111 $ — $ 1,271,776 Cost of revenues (2) 131,573 87,097 100,269 — 318,939 Operating profit 743,497 177,498 31,842 — 952,837 Selling, general, and administrative expenses 49,598 30,567 10,734 34,499 125,398 Acquisition and new business initiatives related adjustments and expenses 6,388 5,545 — — 11,933 Asset impairment and decommission costs 12,572 4,461 — — 17,033 Depreciation, amortization and accretion 245,704 100,478 1,207 3,327 350,716 Operating income (loss) 429,235 36,447 19,901 ( 37,826 ) 447,757 Other expense (principally interest expense and other expense) ( 153,385 ) ( 153,385 ) Income before income taxes 294,372 Cash capital expenditures (3) 133,972 307,065 2,694 3,210 446,941 For the six months ended June 30, 2021 Revenues (1) $ 822,407 $ 206,790 $ 95,069 $ — $ 1,124,266 Cost of revenues (2) 129,069 61,649 74,815 — 265,533 Operating profit 693,338 145,141 20,254 — 858,733 Selling, general, and administrative expenses 57,257 17,281 9,783 21,225 105,546 Acquisition and new business initiatives related adjustments and expenses 7,928 3,867 — — 11,795 Asset impairment and decommission costs 6,561 1,993 — 146 8,700 Depreciation, amortization and accretion 267,025 87,865 1,162 3,298 359,350 Operating income (loss) 354,567 34,135 9,309 ( 24,669 ) 373,342 Other expense (principally interest expense and other expense) ( 206,092 ) ( 206,092 ) Income before income taxes 167,250 Cash capital expenditures (3) 1,147,729 35,675 1,591 1,996 1,186,991 Domestic Site Int'l Site Site Leasing Leasing (1) Development Other (4) Total Assets (in thousands) As of June 30, 2022 $ 6,481,640 $ 3,072,702 $ 107,402 $ 350,193 $ 10,011,937 As of December 31, 2021 $ 6,628,156 $ 2,870,503 $ 87,410 $ 215,630 $ 9,801,699 (1) For the three months ended June 30, 2022 and 2021, site leasing revenue in Brazil was $ 73.8 million and $ 58.4 million, respectively. For the six months ended June 30, 2022 and 2021, site leasing revenue in Brazil was $ 139.1 million and $ 113.8 million, respectively. Other than Brazil, no foreign country represented a material amount of the Company’s total revenues in any of the periods presented. Total long-lived assets in Brazil were $ 0.9 billion as of June 30, 2022 and December 31, 2021. (2) Excludes depreciation, amortization, and accretion. (3) Includes cash paid for capital expenditures, acquisitions, and right-of-use assets. (4) Assets in Other consist primarily of general corporate assets and short-term investments. 15. EARNINGS PER SHARE B asic earnings per share was computed by dividing net income 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 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 per common share attributable to common shareholders for the three and six months ended June 30, 2022 and 2021 (in thousands, except per share data): For the three months For the six months ended June 30, ended June 30, 2022 2021 2022 2021 Numerator: Net income attributable to SBA Communications Corporation $ 69,516 $ 152,669 $ 258,140 $ 140,922 Denominator: Basic weighted-average shares outstanding 107,850 109,412 107,966 109,441 Dilutive impact of stock options, RSUs, and PSUs 1,497 1,889 1,477 1,769 Diluted weighted-average shares outstanding 109,347 111,301 109,443 111,210 Net income per common share attributable to SBA Communications Corporation: Basic $ 0.64 $ 1.40 $ 2.39 $ 1.29 Diluted $ 0.64 $ 1.37 $ 2.36 $ 1.27 For the three and six months ended June 30, 2022 and 2021, the diluted weighted-average number of common shares outstanding excluded an immaterial number of shares issuable upon exercise of the Company’s stock options because the impact would be anti-dilutive. 16. REDEEMABLE NONCONTROLLING INTERESTS The Company allocates income and losses to its redeemable noncontrolling interest holders based on the applicable membership interest percentage. At each reporting period, the redeemable noncontrolling interest is recognized at the greater 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 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 fair value of the redeemable noncontrolling interest is estimated using Level 3 inputs. The components of redeemable noncontrolling interests as of June 30, 2022 are as follows (in thousands): June 30, December 31, 2022 2021 Beginning balance $ 17,250 $ 15,194 Net loss attributable to noncontrolling interests ( 682 ) — Foreign currency translation adjustments ( 196 ) — Purchase of noncontrolling interests — ( 18,000 ) Contribution from joint venture partner — 17,250 Adjustment to redemption amount 23,509 2,806 Ending balance $ 39,881 $ 17,250 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. On August 4, 2020, the Company, through its wholly owned subsidiary, SBA Senior Finance II, terminated an 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. 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 June 30, 2022, the hedge remains highly effective; therefore, changes in fair value are recorded in Accumulated other comprehensive loss, net. As of June 30, 2022 and December 31, 2021, the interest rate swap had a fair value of $ 147.0 million and $ 60.3 million, respectively, and is recorded in Other assets on the Consolidated Balance Sheets. 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 20 Table of Contents 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 term end dates, which range from 2023 to 2025 . Accumulated other comprehensive loss, net includes an aggregate $ 61.3 million gain and a $ 47.8 million loss as of June 30, 2022 and December 31, 2021, respectively. 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 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 derivatives on the Consolidated Statements of Operations and Consolidated Statements of Shareholders’ Deficit for the three and six month periods ended June 30, 2022 and 2021. For the three months For the six months ended June 30, ended June 30, 2022 2021 2022 2021 Cash Flow Hedge - Interest Rate Swap Agreement (in thousands) Change in fair value recorded in Accumulated other comprehensive loss, net $ 12,611 $ ( 5,657 ) $ 86,712 $ 25,909 Derivatives Not Designated as Hedges - Interest Rate Swap Agreements Amount reclassified from Accumulated other comprehensive loss, net into Non-cash interest expense $ 11,222 $ 11,222 $ 22,443 $ 22,443