What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-08-03 compared with 2023-05-09 · 243 added, 106 removed, 542 unchanged (39% of the section changed)

33 unchanged sentences

Common stock - Class A, par value $ 0.01 , 400,000 shares authorized, 108,381 shares and

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

107,997 shares issued and outstanding at June 30, 2023 and December 31, 2022,

Additional paid-in capital

12 unchanged sentences

For the three months

ended March 31,

For the six months

ended June 30,

Site development

17 unchanged sentences

Amortization of deferred financing fees

Other income, net

Total other (expense) income, net

Other income (expense), net

Total other expense, net

Income before income taxes

Provision for income taxes

Benefit (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 $ 25,529 and $ 24,116 for the three months ended March 31, 2023 and 2022, respectively.

(1) Includes non-cash compensation of $ 17,566 and $ 23,248 for the three months ended June 30, 2023 and 2022, respectively, and $ 43,094 and $ 47,364 for the six months ended June 30, 2023 and 2022, respectively.

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

3 unchanged sentences

For the three months

ended March 31,

For the six months

ended June 30,

Adjustments related to interest rate swaps

10 unchanged sentences

Shareholders'

BALANCE, March 31, 2023

( 7,473,913 )

( 5,269,154 )

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, June 30, 2023

( 7,362,838 )

( 5,092,330 )

Comprehensive

Shareholders'

BALANCE, December 31, 2022

14 unchanged sentences

noncontrolling interests

BALANCE, June 30, 2023

( 7,362,838 )

( 5,092,330 )

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ DEFICIT

(unaudited) (in thousands)

Comprehensive

Shareholders'

BALANCE, March 31, 2022

1 unchanged sentence

( 5,425,147 )

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, June 30, 2022

( 7,531,180 )

( 5,438,611 )

Comprehensive

17 unchanged sentences

noncontrolling interests

BALANCE, March 31, 2022

BALANCE, June 30, 2022

( 7,531,180 )

4 unchanged sentences

(unaudited) (in thousands)

For the three months ended March 31,

For the six months ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

5 unchanged sentences

Non-cash asset impairment and decommission costs

Deferred and non-cash income tax provision

Deferred and non-cash income tax (benefit) provision

Other non-cash items reflected in the Statements of Operations

33 unchanged sentences

(unaudited) (in thousands)

For the three months ended March 31,

For the six months ended June 30,

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

22 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 income, net in the Consolidated Statements of Operations.

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, 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.

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 $ 27.8 million gain and a $ 43.1 million loss, net of taxes, on the remeasurement of intercompany loans for the three months ended June 30, 2023 and 2022, respectively, and a $ 55.2 million gain and a $ 29.8 million gain, net of taxes, on the remeasurement of intercompany loans for the six months ended June 30, 2023 and 2022, respectively, due to changes in foreign exchange rates.

During the six months ended June 30, 2023, the Company funded $ 4.2 million and repaid $ 95.8 million under its intercompany loan agreements.

As of June 30, 2023 and December 31, 2022, the aggregate amount outstanding under the intercompany loan agreements subject to remeasurement with the Company’s foreign subsidiaries was $ 1.4 billion and $ 1.5 billion, respectively.

Reference Rate Reform

The ICE Benchmark Administration Limited ceased publication of the one month LIBOR on June 30, 2023.

On June 21, 2023, the Company amended its interest rate swap to change from LIBOR as an interest rate benchmark to the replacement benchmark of Term SOFR effective on August 1, 2023.

The Company has elected the optional expedient which allows companies to change the reference rate and other critical terms related to the reference rate reform in derivative hedge documentation without having to dedesignate the hedging relationship, allowing the Company to continue applying hedge accounting to its cash flow hedge.

Subsequent to the second quarter, the Company amended its 2018 Term Loan and its Revolving Credit Facility to use Term SOFR as the benchmark rate.

The transition from LIBOR to Term SOFR did not have a material impact on the consolidated financial statements.

Refer to Notes 10 and 17 for further discussion of the 2018 Term Loan, Revolving Credit Facility, and the Company’s interest rate swap.

FAIR VALUE MEASUREMENTS

10 unchanged sentences

For the three months

ended March 31,

For the six months

ended June 30,

(in thousands)

Asset impairment (1)

Towers and related assets (1)

Operating lease right-of-use assets (1)(2)

Write-off of carrying value of decommissioned towers

Other (including third party decommission costs)

Other (including tower and equipment decommission costs)

Total asset impairment and decommission costs

(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.

As a result of increased churn, the Company experienced increased asset impairment charges for the three and six months ended June 30, 2023.

(2) Amounts relate to the recognition of impairment charges on our right-of-use assets recorded in accordance with ASC 842.

The Company’s long-term investments were $ 34.2 million and $ 40.7 million as of June 30, 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.

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

4 unchanged sentences

The Company’s estimate of its short-term investments is based primarily upon Level 1 reported market values.

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.

As of June 30, 2023 and December 31, 2022, the Company had $ 22.4 million and $ 1.3 million of short-term investments, respectively.

For the six months ended June 30, 2023, the Company purchased $ 627.3 million and sold $ 606.8 million of short-term investments.

For the six months ended June 30, 2022, the Company purchased $ 281.4 million and sold $ 241.4 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).

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 (or Term SOFR as amended July 3, 2023) 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.

2 unchanged sentences

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

March 31, 2023

June 30, 2023

December 31, 2022

11 unchanged sentences

Pursuant to the terms of the Tower Securities (see Note 10), the Company is required to establish a securitization escrow account, held by the indenture trustee, into which all rents and other sums due on the towers that secure the Tower Securities are directly deposited by the lessees.

These restricted cash amounts are used to fund reserve accounts for the payment of (1) debt service costs, (2) ground rents, real estate and personal property taxes and insurance premiums related to towers, (3) trustee and servicing

expenses, and (4) management fees.

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

1 unchanged sentence

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

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.

Other restricted cash includes $ 5.6 million and $ 6.0 million held in escrow as of June 30, 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 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.

As of June 30, 2023 and December 31, 2022, the Company had $ 41.8 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 March 31, 2023 and December 31, 2022, the Company had pledged $ 2.3 million as collateral related to its workers’ compensation policy.

As of June 30, 2023 and December 31, 2022, the Company had pledged $ 2.4 million and $ 2.3 million, respectively, 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:

March 31, 2023

June 30, 2023

December 31, 2022

4 unchanged sentences

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

March 31, 2023

June 30, 2023

December 31, 2022

3 unchanged sentences

uncompleted contracts (included in Other current liabilities)

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.

At June 30, 2023 and December 31, 2022, the two largest customers comprised 93.4 % 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:

March 31, 2023

June 30, 2023

December 31, 2022

3 unchanged sentences

Prepaid taxes

Prepaid ground rent

Other current assets

1 unchanged sentence

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

March 31, 2023

June 30, 2023

December 31, 2022

14 unchanged sentences

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 %.

As of June 30, 2023, the outstanding principal balance of the loan was $ 83.0 million and was accruing interest at 9.910 %.

On August 1, 2023, the Company funded an additional $ 5.0 million loan to the Investee.

The following table summarizes the Company’s acquisition activity:

For the three months

ended March 31,

For the six months

ended June 30,

(in thousands)

3 unchanged sentences

Total cash acquisition capital expenditures

(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.

(1) The six months ended June 30, 2022 includes $ 176.1 million of acquisitions related to the Company’s purchase of sites from Airtel Tanzania.

(2) Excludes $ 2.7 million spent to extend ground lease terms for the three months ended June 30, 2023 and 2022, and excludes $ 7.9 million and $ 6.5 million spent to extend ground lease terms for the six months ended June 30, 2023 and 2022,

respectively.

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

(3) The three and six months ended June 30, 2022 includes amounts paid related to the acquisition of a data center.

During the six months ended June 30, 2023, the Company acquired 23 towers and related assets and liabilities consisting of $ 2.6 million of property and equipment, net, $ 16.7 million of intangible assets, net, $ 3.4 million of operating lease right-of-use assets, net, $ 1.7 million of acquired and other right-of-use assets, net, $ 0.1 million of acquisition related holdbacks, $ 2.2 million of long-term lease liabilities, and $ 0.3 million of other net assets assumed.

During the six months ended June 30, 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 June 30, 2023, the Company purchased or is under contract to purchase 134 communication sites for an aggregate consideration of $ 72.9 million in cash.

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

The maximum potential obligation related to contingent consideration for acquisitions was $ 8.2 million and $ 10.1 million as of June 30, 2023 and December 31, 2022, respectively.

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

1 unchanged sentence

Property and equipment, net consists of the following:

March 31, 2023

June 30, 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 $ 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.

Depreciation expense was $ 69.0 million and $ 68.5 million for the three months ended June 30, 2023 and 2022, respectively, and $ 138.4 million and $ 136.7 million for the six months ended June 30, 2023 and 2022, respectively.

At June 30, 2023 and December 31, 2022, unpaid capital expenditures that are included in accounts payable and accrued expenses were $ 7.2 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 March 31, 2023

As of June 30, 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 $ 101.8 million and $ 100.6 million for the three months ended March 31, 2023 and 2022, respectively.

ACCRUED EXPENSES

Amortization expense relating to the intangible assets above was $ 101.3 million and $ 102.0 million for the three months ended June 30, 2023 and 2022, respectively, and $ 203.1 million and $ 202.6 million for the six months ended June 30, 2023 and 2022, respectively.

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

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

March 31, 2023

June 30, 2023

December 31, 2022

5 unchanged sentences

Total accrued expenses

The Company’s other current liabilities are comprised of the following:

June 30, 2023

December 31, 2022

(in thousands)

Billings in excess of costs and estimated earnings on uncompleted contracts

Taxes payable

Total other current liabilities

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

March 31, 2023

June 30, 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 March 31,

For the three months ended June 30,

For the six months ended June 30,

(in thousands)

12 unchanged sentences

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 6.600 % as of March 31, 2023.

(1) The 2018 Term Loan has a blended rate of 2.545 %, which includes the impact of the interest rate swaps entered into on August 4, 2020, and amended on June 21, 2023, 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 July 31, 2023 and then at Term SOFR plus 185 basis points (inclusive of a credit spread adjustment (“CSA”) of 0.10 %) for an all-in fixed rate of 1.900 % 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 6.950 % as of June 30, 2023.

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

Terms of the Senior Credit Agreement

On July 3, 2023, the Company, through its wholly owned subsidiary, SBA Senior Finance II LLC (“SBA Senior Finance II”), amended its Revolving Credit Facility to (1) replace LIBOR with Term SOFR as the benchmark interest rate and (2) amend certain other terms and conditions under the Senior Credit Agreement.

Revolving Credit Facility under the Senior Credit Agreement

The Revolving Credit Facility consists of a revolving loan under which up to $ 1.5 billion aggregate principal amount may be borrowed, repaid and redrawn, based upon specific financial ratios and subject to the satisfaction of other customary conditions to borrowing.

Amounts borrowed under the Revolving Credit Facility accrue interest, at SBA Senior Finance II’s election, at either (1) the Eurodollar Rate (or Term SOFR as amended July 3, 2023) plus a margin that ranges from 112.5 basis points to 150.0 basis points or (2) the Base Rate plus a margin that ranges from 12.5 basis points to 50.0 basis points, in each case based on the ratio of Consolidated Net Debt to Annualized Borrower EBITDA, calculated in accordance with the Senior Credit Agreement.

In addition, SBA Senior Finance II is required to pay a commitment fee of between 0.15 % and 0.25 % per annum on the amount of unused commitment.

If not earlier terminated by SBA Senior Finance II, the Revolving Credit Facility will terminate on, and SBA Senior Finance II will repay all amounts outstanding on or before, July 7, 2026.

Furthermore, the Revolving Credit Facility incorporates sustainability-linked targets which will adjust the Revolving Credit Facility’s applicable interest and commitment fee rates upward or downward based on how the Company performs against those targets.

Borrowings under the Revolving Credit Facility may be used for general corporate purposes.

SBA Senior Finance II may, from time to time, borrow from and repay the Revolving Credit Facility.

Consequently, the amount outstanding under the Revolving Credit Facility at the end of the period may not be reflective of the total amounts outstanding during such period .

The key terms of the Revolving Credit Facility are as follows:

1 unchanged sentence

Interest Rate

March 31, 2023 (1)

March 31, 2023 (2)

March 31, 2023

June 30, 2023 (1)

June 30, 2023 (2)

June 30, 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 months ended March 31, 2023 and 2022 (in thousands):

The table below summarizes the Company’s Revolving Credit Facility activity during the three and six months ended June 30, 2023 and 2022 (in thousands):

For the three months

ended March 31,

For the six months

ended June 30,

Beginning outstanding balance

Ending outstanding balance

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.

Subsequent to June 30, 2023, the Company repaid $ 90.0 million under the Revolving Credit Facility, and as of the date of this filing, $ 360.0 million was outstanding.

Term Loan under the Senior Credit Agreement

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.

On July 3, 2023, the Company, through its wholly owned subsidiary, SBA Senior Finance II, amended its 2018 Term Loan to replace LIBOR with Term SOFR as the benchmark interest rate.

As amended, the 2018 Term Loan accrues interest at Term SOFR plus 185 basis points (inclusive of a CSA of 0.10 %).

On June 21, 2023, the Company, through its wholly owned subsidiary, SBA Senior Finance II, amended its interest rate swap agreement for $ 1.95 billion of notional value to accrue interest at Term SOFR plus 175 basis points for an all-in fixed rate of 1.900 % from August 1, 2023 through the maturity date of the 2018 Term Loan.

During the three and six months ended June 30, 2023, 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, 2023, the 2018 Term Loan had a principal balance of $ 2.3 billion.

Secured Tower Revenue Securities

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.

As of June 30, 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 .

10 unchanged sentences

For the three months

ended March 31,

For the six months

ended June 30,

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

For the six months ended June 30, 2023, the Company paid the following cash dividends:

Payable to Shareholders

7 unchanged sentences

March 24, 2023

April 30, 2023

$ 92.1 million

June 21, 2023

Dividends paid in 2023 were ordinary taxable dividends.

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

Subsequent to June 30, 2023, the Company declared the following cash dividends:

Payable to Shareholders

3 unchanged sentences

Date to be Paid

April 30, 2023

June 21, 2023

July 30, 2023

August 24, 2023

September 20, 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.

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.

1 unchanged sentence

Treasury yield curve in effect at the time of grant for the estimated life of the option.

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):

The following assumptions were used to estimate the fair value of options granted using the Black-Scholes option-pricing model:

June 30, 2023

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 six months ended June 30, 2023 as follows (dollars and shares in thousands, except for per share data):

Weighted-Average

4 unchanged sentences

Forfeited/canceled

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.

Outstanding at June 30, 2023

Exercisable at June 30, 2023

Unvested at June 30, 2023

The weighted-average per share fair value of options granted during the six months ended June 30, 2023 was $ 58.95 .

The total intrinsic value for options exercised during the six months ended June 30, 2023 was $ 23.9 million.

Restricted Stock Units and Performance-Based Restricted Stock Units

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

The following table summarizes the Company’s RSU and PSU activity for the six months ended June 30, 2023:

Weighted-Average

9 unchanged sentences

Forfeited/canceled

Outstanding at March 31, 2023

Outstanding at June 30, 2023

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

2 unchanged sentences

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.

statutory rate are the Company’s REIT election and the Company’s release of the full valuation allowance on the net deferred tax assets of the U.S.

taxable REIT subsidiary (“TRS”).

The TRS has concluded that a full valuation allowance is appropriate for the current period.

The TRS has concluded that it is appropriate to release the full valuation allowance of $ 66.3 million in the current period.

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.

14 unchanged sentences

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 strongly disagrees with the assessment and has 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.

The Company will continue to vigorously contest the adjustments and expects 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) .

As of June 30, 2023, the Company estimates the aggregate range of reasonably possible losses in excess of amounts accrued to be between zero and $ 97.7 million (excluding penalties and interest, which as of such date would have been $ 94.2 million) .

The Company operates principally in two business segments:

10 unchanged sentences

Int'l Site

For the three months ended March 31, 2023

For the three months ended June 30, 2023

(in thousands)

11 unchanged sentences

Cash capital expenditures (3)

For the three months ended March 31, 2022

For the three months ended June 30, 2022

Cost of revenues (2)

6 unchanged sentences

Operating income (loss)

Other income, net (principally interest

Other expense, net (principally interest

expense and other income)

3 unchanged sentences

Int'l Site

For the six months ended June 30, 2023

(in thousands)

As of March 31, 2023

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, net (principally interest

expense and other income)

Income before income taxes

Cash capital expenditures (3)

For the six months ended June 30, 2022

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, net (principally interest

expense and other income)

Income before income taxes

Cash capital expenditures (3)

Domestic Site

Int'l Site

(in thousands)

As of June 30, 2023

As of December 31, 2022

(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.

(1) For the three months ended June 30, 2023 and 2022, site leasing revenue in Brazil was $ 99.7 million and $ 73.8 million, respectively.

For the six months ended June 30, 2023 and 2022, site leasing revenue in Brazil was $ 193.6 million and $ 139.1 million, respectively.

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

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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.

Total domestic long-lived assets were $ 5.7 billion and $ 5.9 billion as of June 30, 2023 and December 31, 2022, respectively.

Total international long-lived assets were $ 3.6 billion and $ 3.5 billion as of June 30, 2023 and December 31, 2022.

Total long-lived assets in Brazil were $ 2.2 billion and $ 2.0 billion as of June 30, 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.

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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 months ended March 31, 2023 and 2022 (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 and six months ended June 30, 2023 and 2022 (in thousands, except per share data):

For the three months

ended March 31,

For the six months

ended June 30,

Net income attributable to SBA

5 unchanged sentences

Communications Corporation:

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.

For the three and six months ended June 30, 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

3 unchanged sentences

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

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

The components of redeemable noncontrolling interests as of June 30, 2023 and December 31, 2022 are as follows (in thousands):

Beginning balance

1 unchanged sentence

Foreign currency translation adjustments

Contribution from joint venture partner

Adjustment to redemption amount

3 unchanged sentences

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.

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 March 31, 2023, the hedge remains highly effective;

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

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.

1 unchanged sentence

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 $ 97.2 million gain and a $ 119.6 million gain as of March 31, 2023 and December 31, 2022, respectively.

The Company concluded that the amendment to the interest rate swap qualifies for the relief provided by ASU 2021-01 and ASU 2022-06 and as such, has not dedesignated its cash flow hedge.

Refer to Note 1 for further discussion of the expedient adopted under ASU 2021-01 and ASU 2022-06.

As of June 30, 2023, the hedge remains highly effective;

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

As of June 30, 2023 and December 31, 2022, the interest rate swap had a fair value of $ 159.3 million and $ 182.9 million, respectively, and is recorded in Other assets on the Consolidated Balance Sheets.

Accumulated other comprehensive loss, net includes an aggregate $ 112.5 million gain and a $ 119.6 million gain as of June 30, 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.

1 unchanged sentence

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 .

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 months ended March 31, 2023 and 2022.

For the three months

ended March 31,

For the six months

ended June 30,

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