What changed in this filing

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Item 1. Financial Statements

2023-05-09 compared with 2022-11-03 · 136 added, 244 removed, 512 unchanged (43% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS (in thousands, except par values)

September 30,

Current assets:

29 unchanged sentences

Common stock - Class A, par value $ 0.01 , 400,000 shares authorized, 108,326 shares and

108,956 shares issued and outstanding at September 30, 2022 and December 31, 2021,

107,997 shares issued and outstanding at March 31, 2023 and December 31, 2022,

Additional paid-in capital

12 unchanged sentences

For the three months

For the nine months

ended September 30,

ended March 31,

Site development

17 unchanged sentences

Amortization of deferred financing fees

Loss from extinguishment of debt, net

Other (expense) income, net

Total other expense net

Other income, net

Total other (expense) income, net

Income before income taxes

(Provision) benefit for income taxes

Provision for income taxes

Net loss attributable to noncontrolling interests

3 unchanged sentences

Weighted-average number of common shares

(1) Includes non-cash compensation of $ 24,945 and $ 16,589 for the three months ended September 30, 2022 and 2021, respectively, and $ 72,309 and $ 57,249 for the nine months ended September 30, 2022 and 2021, respectively.

(1) Includes non-cash compensation of $ 25,529 and $ 24,116 for the three months ended March 31, 2023 and 2022, respectively.

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

3 unchanged sentences

For the three months

For the nine months

ended September 30,

ended March 31,

Adjustments related to interest rate swaps

10 unchanged sentences

Shareholders'

BALANCE, June 30, 2022

( 7,531,180 )

( 5,438,611 )

Net income attributable to SBA

Communications Corporation

Common stock issued in connection with equity

awards and stock purchase plans, offset

by the impact of net share settlements

Non-cash stock compensation

Adjustments related to interest rate swaps

Foreign currency translation adjustments

attributable to SBA Communications

Dividends and dividend equivalents

on common stock

Adjustment to redemption amount related to

noncontrolling interests

BALANCE, September 30, 2022

( 7,508,231 )

( 5,364,830 )

Comprehensive

Shareholders'

BALANCE, December 31, 2022

8 unchanged sentences

Adjustments related to interest rate swaps

Repurchase and retirement of common stock

Foreign currency translation adjustments

4 unchanged sentences

noncontrolling interests

BALANCE, September 30, 2022

BALANCE, March 31, 2023

( 7,473,913 )

( 5,269,154 )

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ DEFICIT

(unaudited) (in thousands)

Comprehensive

Shareholders'

BALANCE, June 30, 2021

BALANCE, December 31, 2021

( 7,203,531 )

12 unchanged sentences

on common stock

BALANCE, September 30, 2021

( 6,890,822 )

( 4,958,305 )

Comprehensive

Shareholders'

BALANCE, December 31, 2020

( 6,604,028 )

( 4,824,382 )

Net income attributable to SBA

Communications Corporation

Common stock issued in connection with equity

awards and stock purchase plans, offset

by the impact of net share settlements

Non-cash stock compensation

Adjustments related to interest rate swaps

Repurchase and retirement of common stock

Foreign currency translation adjustments

attributable to SBA Communications

Dividends on common stock

Adjustment to redemption amount related to

noncontrolling interests

BALANCE, September 30, 2021

BALANCE, March 31, 2022

( 7,523,696 )

4 unchanged sentences

(unaudited) (in thousands)

For the nine months ended September 30,

For the three months ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

1 unchanged sentence

Depreciation, accretion, and amortization

(Gain) loss on remeasurement of U.S.

Gain on remeasurement of U.S.

denominated intercompany loans

1 unchanged sentence

Non-cash asset impairment and decommission costs

Loss from extinguishment of debt, net

Deferred income tax provision (benefit)

Deferred and non-cash income tax provision

Other non-cash items reflected in the Statements of Operations

10 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES:

( 1,187,754 )

Capital expenditures

3 unchanged sentences

Net cash used in investing activities

( 1,277,822 )

CASH FLOWS FROM FINANCING ACTIVITIES:

1 unchanged sentence

Repayments under Revolving Credit Facility

( 1,190,000 )

Proceeds from issuance of Senior Notes, net of fees

Repayment of Senior Notes

Proceeds from issuance of Tower Securities, net of fees

Repayment of Tower Securities

Repurchase and retirement of common stock

3 unchanged sentences

Other financing activities

Net cash (used in) provided by financing activities

Net cash used in financing activities

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

7 unchanged sentences

(unaudited) (in thousands)

For the nine months ended September 30,

For the three months ended March 31,

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

10 unchanged sentences

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.

In the opinion of the Company’s management, all adjustments (consisting of normal recurring accruals and deferrals) 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.

9 unchanged sentences

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 (expense) income, net in the Consolidated Statements of Operations.

Remeasurement gains and losses are reported as Other income, 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 (expense) income, net in the Consolidated Statements of Operations as settlement is anticipated or planned in the foreseeable future.

The Company recorded a $ 25.5 million loss and a $ 45.0 million loss, net of taxes, on the remeasurement of intercompany loans for the three months ended September 30, 2022 and 2021, respectively, and a $ 4.3 million gain and a $ 28.4 million loss, net of taxes, on the remeasurement of intercompany loans for the nine months ended September 30, 2022 and 2021, respectively, due to changes in foreign exchange rates.

During the nine months ended September 30, 2022, the Company funded $ 86.2 million and repaid $ 101.7 million of the intercompany loans.

As of September 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 $ 855.5 million and $ 872.9 million, respectively.

Additionally, subsequent to September 30, 2022, the Company funded $ 680.0 million to its Brazilian subsidiary through an intercompany loan to complete its previously announced acquisition with Grupo TorreSur (GTS).

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

The Company recorded a $ 27.4 million gain and a $ 72.9 million gain, net of taxes, on the remeasurement of intercompany loans for the three months ended March 31, 2023 and 2022, respectively, due to changes in foreign exchange rates.

During the three months ended March 31, 2023, the Company repaid $ 45.8 million under its intercompany loan agreements.

As of March 31, 2023 and December 31, 2022, the aggregate amount outstanding under the intercompany loan agreements subject to remeasurement with the Company’s foreign subsidiaries was $ 1.5 billion.

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.

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.

Refer to Note 16 for discussion of the Company’s redeemable noncontrolling interests.

Items Measured at Fair Value on a Nonrecurring Basis — The Company estimates the fair value of assets subject to impairment using a discounted cash flow (“DCF”) (Level 3 input) analysis.

Determining fair value requires the exercise of significant judgments, including the amount and timing of expected future cash flows, long-term growth rates, discount rates and relevant comparable earnings and trading multiples.

The cash flows employed in the DCF analysis are based on estimates of future revenues, earnings, and cash flows after considering factors such as tower location demographics, timing of additions of new tenants, lease rates, rate and term of renewal, attrition, ongoing cash requirements, and market multiples.

Each of the assumptions are applied based on the specific facts and circumstances of the identified assets at the lowest level of identifiable cash flows.

The DCF analysis used an average discount rate ranging from 7.2 % - 8.7 %.

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):

The following summarizes the activity of asset impairment and decommission costs :

For the three months

For the nine months

ended September 30,

ended March 31,

(in thousands)

Asset impairment (1)

2 unchanged sentences

Total asset impairment and decommission costs

(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 $ 44.0 million and $ 47.9 million as of September 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.

(1) Represents impairment charges resulting from the Company’s regular analysis of whether the anticipated future cash flows from certain towers are sufficient to recover the carrying value of the investment in those towers .

As a result of increased churn from Sprint, the Company experienced increased asset impairment charges for the three months ended March 31, 2023.

The Company’s long-term investments were $ 37.1 million and $ 40.7 million as of March 31, 2023 and December 31, 2022, respectively, and are recorded in Other assets on the Consolidated Balance Sheets.

Some of these investments provide for the Company to increase its 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.

3 unchanged sentences

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 September 30, 2022 and December 31, 2021, the Company had $ 21.1 million and $ 0.8 million of short-term investments, respectively.

For the nine months ended September 30, 2022, the Company purchased $ 501.6 million and sold $ 481.6 million of short-term investments.

For the nine months ended September 30, 2021, the Company purchased $ 755.4 million and sold $ 755.3 million of short-term investments.

As of March 31, 2023 and December 31, 2022, the Company had $ 1.9 million and $ 1.3 million of short-term investments, respectively.

For the three months ended March 31, 2023, the Company purchased $ 213.3 million and sold $ 213.0 million of short-term investments.

For the three months ended March 31, 2022, the Company purchased and sold $ 30.2 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.

4 unchanged sentences

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

September 30, 2022

March 31, 2023

December 31, 2022

13 unchanged sentences

expenses, and (4) management fees.

The restricted cash in the securitization escrow account in excess of required reserve balances is subsequently released to the Borrowers monthly, provided that the Borrowers are in compliance with their debt service coverage ratio and that no event of default has occurred.

The restricted cash in the securitization escrow account in excess of required reserve balances is subsequently released to the Borrowers (as defined in Note 10) monthly, provided that the Borrowers are in compliance with their debt service coverage ratio and that no event of default has occurred.

All monies held by the indenture trustee are classified as restricted cash on the Company’s Consolidated Balance Sheets.

Payment and performance bonds relate primarily to collateral requirements for tower construction currently in process by the Company.

Other restricted cash includes $ 5.5 million held in escrow as of September 30, 2022, related to the Company’s acquisition activities.

Other restricted cash includes $ 5.8 million and $ 6.0 million held in escrow as of March 31, 2023 and December 31, 2022, respectively, related to the Company’s acquisition activities.

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 September 30, 2022 and December 31, 2021, the Company had $ 42.6 million and $ 42.3 million in surety and payment and performance bonds, respectively, for which no collateral was required to be posted.

As of March 31, 2023 and December 31, 2022, the Company had $ 41.5 million and $ 42.3 million in surety and 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 September 30, 2022 and December 31, 2021, the Company had pledged $ 2.3 million as collateral related to its workers’ compensation policy.

As of March 31, 2023 and December 31, 2022, the Company had 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:

September 30, 2022

March 31, 2023

December 31, 2022

4 unchanged sentences

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

September 30, 2022

March 31, 2023

December 31, 2022

3 unchanged sentences

uncompleted contracts (included in Other current liabilities)

At September 30, 2022 and December 31, 2021, the eight largest customers comprised 99.8 % 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.

At March 31, 2023 and December 31, 2022, the two largest customers comprised 95.0 % and 96.7 %, respectively, of the costs and estimated earnings in excess of billings on uncompleted contracts, net of billings in excess of costs and estimated earnings.

PREPAID EXPENSES AND OTHER CURRENT ASSETS AND OTHER ASSETS

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

September 30, 2022

March 31, 2023

December 31, 2022

6 unchanged sentences

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

September 30, 2022

March 31, 2023

December 31, 2022

8 unchanged sentences

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

(2) On March 17, 2023, the Company entered into a loan with one of its unconsolidated joint ventures (“the Investee”).

As part of the loan agreement, the Investee may borrow up to $ 120.0 million in aggregate principal amount, consisting of a $ 73.0 million initial term loan and $ 47.0 million of delayed draw term loans.

The final maturity date of the loans is November 30, 2024.

The loans accrue interest at a variable rate, adjusting monthly, plus the applicable margin.

Interest on the loans is received monthly.

The funding of the loans is recorded in Other investing activities on the Consolidated Statements of Cash Flows.

As of March 31, 2023, the outstanding principal balance of the loan was $ 78.0 million and was accruing interest at 9.49 %.

The following table summarizes the Company’s acquisition activity:

For the three months

For the nine months

ended September 30,

ended March 31,

(in thousands)

3 unchanged sentences

Total cash acquisition capital expenditures

(1) During the nine months ended September 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 1,234 of the towers.

The remaining 211 towers are pending post-closing 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 nine months ended September 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 nine months ended September 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 $ 969.9 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 assets will be amortized over 70 years.

(4) In addition, the Company paid $ 4.3 million and $ 4.1 million for ground lease extensions and term easements on land underlying the Company’s towers during the three months ended September 30, 2022 and 2021, respectively, and paid $ 10.6 million and $ 11.3 million for ground lease extensions and term easements on land underlying the Company’s towers during the nine months ended September 30, 2022 and 2021, respectively.

The Company recorded these amounts in prepaid rent on its Consolidated Balance Sheets.

(5) The nine months ended September 30, 2022 includes amounts paid related to the acquisition of a data center in Brazil during the second quarter of 2022.

During the nine months ended September 30, 2022, the Company acquired 2,148 towers and related assets and liabilities consisting of $ 117.9 million of property and equipment, net, $ 194.5 million of intangible assets, net, $ 119.7 million of operating lease right-of-use assets, net, $ 36.6 million of acquired and other right-of-use assets, net, $ 24.3 million of acquisition related holdbacks, $ 101.4 million of long-term lease liabilities, and $ 1.0 million of other net assets assumed.

All acquisitions in the nine months ended September 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.

On October 11, 2022, the Company completed the previously announced acquisition of 2,632 sites from GTS in Brazil for $ 725.0 million in cash, net of working capital adjustments.

The Company used borrowings under the Revolving Credit Facility and cash on hand to fund the acquisition.

Additionally, subsequent to September 30, 2022, the Company purchased or is under contract to purchase approximately 34 communication sites for an aggregate consideration of approximately $ 28.5 million in cash.

The Company anticipates that these acquisitions will be consummated by the end of the first quarter of 2023.

The maximum potential obligation related to contingent consideration for acquisitions were $ 10.5 million and $ 11.6 million as of September 30, 2022 and December 31, 2021, respectively.

No such amounts have been recorded on the Company’s Consolidated Balance Sheet.

(1) The three months ended March 31, 2022 includes $ 176.1 million of acquisitions related to the Company’s purchase of sites from Airtel Tanzania.

(2) Excludes $ 5.1 million and $ 3.8 million spent to extend ground lease terms for the three months ended March 31, 2023 and 2022, respectively.

The Company recorded these amounts in prepaid rent within prepaid and other current assets on its Consolidated Balance Sheets.

During the three months ended March 31, 2023, the Company acquired 14 towers and related assets and liabilities consisting of $ 1.6 million of property and equipment, net, $ 8.9 million of intangible assets, net, $ 1.0 million of operating lease right of use assets, net, $ 0.8 million of acquired and other right-of-use assets, net, $ 0.1 million of acquisition related holdbacks, $ 0.5 million of long-term lease liabilities, and $ 1.1 million of other net assets assumed.

In the three months ended March 31, 2023 , the Company concluded that for all of its acquisitions substantially all of the value of its tower acquisition is concentrated in a group of similar identifiable assets .

Additionally, subsequent to March 31, 2023, the Company purchased or is under contract to purchase 66 communication sites for an aggregate consideration of $ 63.7 million in cash.

The Company anticipates that these acquisitions will be consummated by the end of the fourth quarter of 2023.

The maximum potential obligation related to contingent consideration for acquisitions was $ 9.9 million and $ 10.1 million as of March 31, 2023 and December 31, 2022, respectively.

No such amounts have been recorded on the Company’s Consolidated Balance Sheets.

PROPERTY AND EQUIPMENT, NET

Property and equipment, net consists of the following:

September 30, 2022

March 31, 2023

December 31, 2022

11 unchanged sentences

(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 $ 68.3 million and $ 66.2 million for the three months ended September 30, 2022 and 2021, respectively, and $ 205.0 million and $ 206.0 million for the nine months ended September 30, 2022 and 2021, respectively.

At September 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.

Depreciation expense was $ 69.4 million and $ 68.1 million for the three months ended March 31, 2023 and 2022, respectively.

At March 31, 2023 and December 31, 2022, unpaid capital expenditures that are included in accounts payable and accrued expenses were $ 8.8 million and $ 7.5 million, respectively.

INTANGIBLE ASSETS, NET

The following table provides the gross and net carrying amounts for each major class of intangible assets:

As of September 30, 2022

As of March 31, 2023

As of December 31, 2022

12 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 $ 100.4 million and $ 100.3 million for the three months ended September 30, 2022 and 2021, respectively, and $ 303.0 million and $ 313.2 million for the nine months ended September 30, 2022 and 2021, respectively.

Amortization expense relating to the intangible assets above was $ 101.8 million and $ 100.6 million for the three months ended March 31, 2023 and 2022, respectively.

ACCRUED EXPENSES

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

September 30, 2022

March 31, 2023

December 31, 2022

6 unchanged sentences

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

September 30, 2022

March 31, 2023

December 31, 2022

16 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 September 30,

For the nine months ended September 30,

September 30,

For the three months ended March 31,

(in thousands)

10 unchanged sentences

2022-1C Tower Securities

2021-3C Tower Securities

2020 Senior Notes

2021 Senior Notes

2020 Senior Notes

2021 Senior Notes

(1) The 2018 Term Loan has a blended rate of 2.569 %, 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 4.870 % as of September 30, 2022.

Excluding the impact of the interest rate swap, the 2018 Term Loan was accruing interest at 6.600 % as of March 31, 2023.

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

3 unchanged sentences

Interest Rate

September 30, 2022 (1)

September 30, 2022 (2)

September 30, 2022

March 31, 2023 (1)

March 31, 2023 (2)

March 31, 2023

Revolving Credit Facility

2 unchanged sentences

(2) The rate reflected includes a 0.010 % reduction in the applicable commitment fee as a result of meeting certain sustainability-linked targets as of December 31, 2022.

The table below summarizes the Company’s revolving credit facility activity during the three and nine months ended September 30, 2022 and 2021 (in thousands):

The table below summarizes the Company’s Revolving Credit Facility activity during the three months ended March 31, 2023 and 2022 (in thousands):

For the three months

For the nine months

ended September 30,

ended March 31,

Beginning outstanding balance

( 1,190,000 )

Ending outstanding balance

Subsequent to September 30, 2022, the Company borrowed $ 625.0 million and repaid $ 40.0 million under the Revolving Credit Facility, and as of the date of this filing, $ 995.0 million was outstanding.

Subsequent to March 31, 2023, the Company repaid $ 80.0 million under the Revolving Credit Facility, and as of the date of this filing, $ 595.0 million was outstanding.

Term Loan under the Senior Credit Agreement

During the three and nine months ended September 30, 2022, 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, 2022, the 2018 Term Loan had a principal balance of $ 2.3 billion.

During the three months ended March 31, 2023, the Company repaid an aggregate of $ 6.0 million of principal on the 2018 Term Loan.

As of March 31, 2023, the 2018 Term Loan had a principal balance of $ 2.3 billion.

Secured Tower Revenue Securities

As of September 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.

As of March 31, 2023, 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 .

6 unchanged sentences

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.

On October 28, 2021, the Company’s Board of Directors authorized a $ 1.0 billion stock repurchase plan, replacing the prior plan.

As of the date of this filing, the Company had $ 504.7 million of authorization remaining under the new plan.

1 unchanged sentence

For the three months

For the nine months

ended September 30,

ended March 31,

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

2 unchanged sentences

(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.

For the nine months ended September 30, 2022, the Company paid the following cash dividends:

For the three months ended March 31, 2023, the Company paid the following cash dividends:

Payable to Shareholders

7 unchanged sentences

March 24, 2023

April 24, 2022

$ 76.6 million

June 14, 2022

July 31, 2022

August 25, 2022

$ 76.7 million

September 20, 2022

Dividends paid in 2023 were ordinary taxable dividends.

Subsequent to September 30, 2022, the Company declared the following cash dividends:

Subsequent to March 31, 2023, the Company declared the following cash dividends:

Payable to Shareholders

3 unchanged sentences

Date to be Paid

October 30, 2022

November 17, 2022

December 15, 2022

April 30, 2023

June 21, 2023

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 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.

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.

1 unchanged sentence

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:

September 30, 2022

Risk free interest rate

Dividend yield

Expected volatility

Expected lives

The following table summarizes the Company’s activities with respect to its stock option plans for the nine months ended September 30, 2022 as follows (dollars and shares in thousands, except for per share data):

There were no options granted during the three months ended March 31, 2023.

The following table summarizes the Company’s activities with respect to its stock option plans for the three months ended March 31, 2023 as follows (dollars and shares in thousands, except for per share data):

Weighted-Average

4 unchanged sentences

Forfeited/canceled

Outstanding at September 30, 2022

Exercisable at September 30, 2022

Unvested at September 30, 2022

The weighted-average per share fair value of options granted during the nine months ended September 30, 2022 was $ 82.28 .

The total intrinsic value for options exercised during the nine months ended September 30, 2022 was $ 40.3 million.

Outstanding at March 31, 2023

Exercisable at March 31, 2023

Unvested at March 31, 2023

The total intrinsic value for options exercised during the three months ended March 31, 2023 was $ 19.0 million.

Restricted Stock Units and Performance-Based Restricted Stock Units

The following table summarizes the Company’s RSU and PSU activity for the nine months ended September 30, 2022:

The following table summarizes the Company’s RSU and PSU activity for the three months ended March 31, 2023:

Weighted-Average

7 unchanged sentences

Outstanding at December 31, 2022

PSU adjustment (2)

Forfeited/canceled

Outstanding at September 30, 2022

Outstanding at March 31, 2023

(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.

(2) PSU adjustment represents the net PSUs awarded above or below their target grants resulting from the achievement of performance targets established at the grant date.

The primary reasons for the difference between the Company’s effective tax rate and the U.S.

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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 .

The Company is subject to income tax and other taxes in the geographic areas where it holds assets or operates, and the Company periodically receives notifications of audits, assessments, or other actions by taxing authorities.

In certain jurisdictions, taxing authorities may issue notices and assessments that may not be reflective of the actual tax liability for which the Company will ultimately be liable.

In the process of responding to assessments of taxes that the Company believes are not reflective of the Company’s actual tax liability, the Company avails itself of both administrative and judicial remedies.

The Company evaluates the circumstances of each notification or assessment based on the information available and, in those instances in which the Company does not anticipate a successful defense of positions taken in its tax filings, a liability is recorded in the appropriate amount based on the underlying assessment.

In connection with a current assessment in Brazil, the taxing authorities have issued income tax deficiencies related to purchase accounting adjustments for tax years 2016 through 2019 .

The Company strongly disagrees with the assessment and have filed an appeal with the higher appellate taxing authorities as the Company believes the proposed adjustments are without merit.

The Company estimates that there is a more likely than not probability that the Company’s position will be sustained upon appeal.

Accordingly, no liability has been recorded.

The Company will continue to vigorously contest the adjustments and expect to exhaust all administrative and judicial remedies necessary to resolve the matters, which could be a lengthy process.

There can be no assurance that these matters will be resolved in the Company’s favor, and an adverse outcome, or any future tax examinations involving similar assertions, could have a material effect on the Company’s results of operations or cash flows in any one period.

As of March 31, 2023,

the Company estimates the aggregate range of reasonably possible losses in excess of amounts accrued to be between zero and $ 93.1 million (excluding penalties and interest, which as of such date would have been $ 86.9 million) .

The Company operates principally in two business segments:

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Int'l Site

For the three months ended September 30, 2022

(in thousands)

Cost of revenues (2)

Operating profit

Selling, general, and administrative expenses

Acquisition and new business initiatives

related adjustments and expenses

Asset impairment and decommission costs

Depreciation, amortization and accretion

Operating income (loss)

Other expense (principally interest

expense and other expense)

Income before income taxes

Cash capital expenditures (3)

For the three months ended September 30, 2021

Cost of revenues (2)

Operating profit

Selling, general, and administrative expenses

Acquisition and new business initiatives

related adjustments and expenses

Asset impairment and decommission costs

Depreciation, amortization and accretion

Operating income (loss)

Other expense (principally interest

expense and other expense)

Income before income taxes

Cash capital expenditures (3)

Domestic Site

Int'l Site

For the nine months ended September 30, 2022

For the three months ended March 31, 2023

(in thousands)

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Operating income (loss)

Other expense (principally interest

expense and other expense)

Other expense, net (principally interest

expense and other income)

Income before income taxes

Cash capital expenditures (3)

For the nine months ended September 30, 2021

For the three months ended March 31, 2022

Cost of revenues (2)

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Operating income (loss)

Other expense (principally interest

expense and other expense)

Other income, net (principally interest

expense and other income)

Income before income taxes

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(in thousands)

As of September 30, 2022

As of March 31, 2023

As of December 31, 2022

(1) For the three months ended September 30, 2022 and 2021, site leasing revenue in Brazil was $ 70.7 million and $ 60.7 million, respectively.

For the nine months ended September 30, 2022 and 2021, site leasing revenue in Brazil was $ 209.8 million and $ 174.5 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 September 30, 2022 and December 31, 2021.

(1) For the three months ended March 31, 2023 and 2022, site leasing revenue in Brazil was $ 93.8 million and $ 65.2 million, respectively.

Other than Brazil, no foreign country represented more than 5 % of the Company’s total revenues in any of the periods presented.

(2) Excludes depreciation, amortization, and accretion.

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

Total domestic long-lived assets were $ 5.8 billion and $ 5.9 billion as of March 31, 2023 and December 31, 2022, respectively.

Total international long-lived assets were $ 3.5 billion as of March 31, 2023 and December 31, 2022.

Total long-lived assets in Brazil were $ 2.1 billion and $ 2.0 billion as of March 31, 2023 and December 31, 2022, respectively.

Long-lived assets include property and equipment, net, intangible assets, net, operating lease right-of-use assets, net, and acquired and other right-of-use assets, net.

Other than Brazil, no foreign country represented more than 5 % of the Company’s total long-lived assets in any of the periods presented.

EARNINGS PER SHARE

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Diluted earnings per share was calculated by dividing net income attributable to SBA Communications Corporation by the weighted-average number of shares of Class A common stock outstanding adjusted for any dilutive Class A 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 per common share attributable to common shareholders for the three and nine months ended September 30, 2022 and 2021 (in thousands, except per share data):

The following table sets forth basic and diluted net income per common share attributable to common shareholders for the three months ended March 31, 2023 and 2022 (in thousands, except per share data):

For the three months

For the nine months

ended September 30,

ended March 31,

Net income attributable to SBA

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Communications Corporation:

For the three and nine months ended September 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.

For the three months ended March 31, 2023 and 2022, 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.

REDEEMABLE NONCONTROLLING INTERESTS

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The fair value of the redeemable noncontrolling interest is estimated using Level 3 inputs.

The components of redeemable noncontrolling interests as of September 30, 2022 are as follows (in thousands):

September 30,

The components of redeemable noncontrolling interests as of March 31, 2023 and December 31, 2022 are as follows (in thousands):

Beginning balance

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Foreign currency translation adjustments

Purchase of noncontrolling interests

Contribution from joint venture partner

Adjustment to redemption amount

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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, 2022, the hedge remains highly effective;

As of March 31, 2023, the hedge remains highly effective;

therefore, changes in fair value are recorded in Accumulated other comprehensive loss, net.

As of September 30, 2022 and December 31, 2021, the interest rate swap had a fair value of $ 189.2 million and $ 60.3 million, respectively, and is recorded in Other assets on the Consolidated Balance Sheets.

As of March 31, 2023 and December 31, 2022, the interest rate swap had a fair value of $ 151.5 million and $ 182.9 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.

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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 term end dates, which range from 2023 to 2025 .

Accumulated other comprehensive loss, net includes an aggregate $ 114.7 million gain and a $ 47.8 million loss as of September 30, 2022 and December 31, 2021, respectively.

Accumulated other comprehensive loss, net includes an aggregate $ 97.2 million gain and a $ 119.6 million gain as of March 31, 2023 and December 31, 2022, 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 nine months ended September 30, 2022 and 2021.

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

For the three months

For the nine months

ended September 30,

ended March 31,

Cash Flow Hedge - Interest Rate Swap Agreement

5 unchanged sentences

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