What changed in this filing

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Item 1. Financial Statements

2023-11-07 compared with 2023-08-03 · 159 added, 139 removed, 646 unchanged (32% 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, 108,120 shares and

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

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

Additional paid-in capital

12 unchanged sentences

For the three months

For the six months

ended June 30,

For the nine months

ended September 30,

Site development

17 unchanged sentences

Amortization of deferred financing fees

Other income (expense), net

Other (expense) income, net

Total other expense, net

Income before income taxes

Benefit (provision) 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 $ 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.

(1) Includes non-cash compensation of $ 20,615 and $ 24,945 for the three months ended September 30, 2023 and 2022, respectively, and $ 63,709 and $ 72,309 for the nine months ended September 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

For the six months

ended June 30,

For the nine months

ended September 30,

Adjustments related to interest rate swaps

10 unchanged sentences

Shareholders'

BALANCE, March 31, 2023

BALANCE, June 30, 2023

( 7,362,838 )

7 unchanged sentences

Adjustments related to interest rate swaps

Repurchase and retirement of common stock

Foreign currency translation adjustments

4 unchanged sentences

noncontrolling interests

BALANCE, June 30, 2023

BALANCE, September 30, 2023

( 7,421,725 )

12 unchanged sentences

Adjustments related to interest rate swaps

Repurchase and retirement of common stock

Foreign currency translation adjustments

4 unchanged sentences

noncontrolling interests

BALANCE, June 30, 2023

BALANCE, September 30, 2023

( 7,421,725 )

5 unchanged sentences

Shareholders'

BALANCE, March 31, 2022

BALANCE, June 30, 2022

( 7,531,180 )

13 unchanged sentences

noncontrolling interests

BALANCE, June 30, 2022

BALANCE, September 30, 2022

( 7,508,231 )

15 unchanged sentences

attributable to SBA Communications

Dividends and dividend equivalents

on common stock

Dividends on common stock

Adjustment to redemption amount related to

noncontrolling interests

BALANCE, June 30, 2022

BALANCE, September 30, 2022

( 7,508,231 )

4 unchanged sentences

(unaudited) (in thousands)

For the six months ended June 30,

For the nine months ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

20 unchanged sentences

Purchase of investments

( 1,005,143 )

Proceeds from sale of investments

19 unchanged sentences

(unaudited) (in thousands)

For the six months ended June 30,

For the nine months ended September 30,

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

13 unchanged sentences

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.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.

The significant estimates made by management relate to the allowance for doubtful accounts, the costs and revenue relating to the Company’s construction contracts, stock-based compensation assumptions, valuation allowance related to deferred tax assets, fair value of long-lived assets, the useful lives of towers and intangible assets, anticipated property tax assessments, incremental borrowing rate for lease accounting, fair value of investments, and asset retirement obligations.

Management develops estimates based on historical experience and on various assumptions about the future that are believed to be reasonable based on the information available.

These estimates ultimately may differ from actual results and such differences could be material.

The Company is in the process of reviewing the remaining estimated useful lives of its towers and intangible assets and is considering whether it should modify its current estimates for asset lives based on its historical operating experience.

The Company has retained an independent consultant to assist in completing this review and analysis.

If the Company concludes that a revision in the estimated useful lives of its towers and intangible assets is appropriate based on its review and analysis, the Company will account for any changes in the useful lives as a change in accounting estimate under Accounting Standards Codification (ASC) 250 Accounting Changes and Error Corrections, which will be recorded prospectively beginning in the period of change.

The Company expects to conclude its analysis in 2024.

Foreign Currency Translation

7 unchanged sentences

Intercompany Loans Subject to Remeasurement

In accordance with Accounting Standards Codification (ASC) 830, the Company remeasures foreign denominated intercompany loans with the corresponding change in the balance being recorded in Other income (expense), net in the Consolidated 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.

In accordance with 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 $ 31.2 million loss and a $ 25.5 million loss, net of taxes, on the remeasurement of intercompany loans for the three months ended September 30, 2023 and 2022, respectively, and a $ 24.1 million gain and a $ 4.3 million gain, net of taxes, on the remeasurement of intercompany loans for the nine months ended September 30, 2023 and 2022, respectively.

During the nine months ended September 30, 2023, the Company funded $ 4.2 million and repaid $ 148.4 million under its intercompany loan agreements.

As of September 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 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 de-designate the hedging relationship, allowing the Company to continue applying hedge accounting to its cash flow hedge.

On July 3, 2023, 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.

8 unchanged sentences

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 6.5 % - 8.8 %.

The DCF analysis used discount rates ranging from 6.5 % - 8.8 %.

Asset impairment and decommission costs for all periods presented and the related impaired assets primarily relate to the Company’s site leasing operating segment.

1 unchanged sentence

For the three months

For the six months

ended June 30,

For the nine months

ended September 30,

(in thousands)

5 unchanged sentences

(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, the Company experienced increased asset impairment charges for the three and six months ended June 30, 2023.

As a result of increased churn, the Company experienced increased asset impairment charges for the three and nine months ended September 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.

The Company’s long-term investments were $ 31.6 million and $ 40.7 million as of September 30, 2023 and December 31, 2022, respectively, and are recorded in Other assets on the Consolidated Balance Sheets.

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

1 unchanged sentence

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.

If indicators exist and the fair value of the investment is less than the carrying amount, an impairment charge will be recorded.

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 short 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, 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.

As of September 30, 2023 and December 31, 2022, the Company had $ 1.1 million and $ 1.3 million of short-term investments, respectively.

For the nine months ended September 30, 2023, the Company purchased and sold $ 1.0 billion of short-term investments.

For the nine months ended September 30, 2022, the Company purchased $ 501.6 million and sold $ 481.6 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:

June 30, 2023

September 30, 2023

December 31, 2022

15 unchanged sentences

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

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.

Other restricted cash includes $ 5.7 million and $ 6.0 million held in escrow as of September 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 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.

As of September 30, 2023 and December 31, 2022, the Company had $ 42.0 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 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.

As of September 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:

June 30, 2023

September 30, 2023

December 31, 2022

4 unchanged sentences

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

June 30, 2023

September 30, 2023

December 31, 2022

3 unchanged sentences

uncompleted contracts (included in Other current liabilities)

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.

At September 30, 2023 and December 31, 2022, the two largest customers comprised 92.8 % 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:

June 30, 2023

September 30, 2023

December 31, 2022

2 unchanged sentences

Prepaid real estate taxes

Interest receivable

Prepaid taxes

3 unchanged sentences

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

June 30, 2023

September 30, 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”).

(2) On March 17, 2023 (and as amended on August 25, 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 final maturity date of the loans is January 31, 2027.

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

1 unchanged sentence

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

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.

As of September 30, 2023, the outstanding principal balance of the loan was $ 93.0 million and was accruing interest at 10.067 %.

The following table summarizes the Company’s acquisition activity:

For the three months

For the six months

ended June 30,

For the nine months

ended September 30,

(in thousands)

3 unchanged sentences

Total cash acquisition capital expenditures

(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.

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

(2) Excludes $ 6.7 million and $ 4.3 million spent to extend ground lease terms for the three months ended September 30, 2023 and 2022, respectively, and excludes $ 15.0 million and $ 10.6 million spent to extend ground lease terms for the nine months ended September 30, 2023 and 2022, respectively.

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

(3) The nine months ended September 30, 2022 includes amounts paid related to the acquisition of a data center.

During the nine months ended September 30, 2023, the Company acquired 68 towers and related assets and liabilities consisting of $ 11.0 million of property and equipment, net, $ 49.0 million of intangible assets, net, $ 13.4 million of operating lease right-of-use assets, net, $ 2.8 million of acquired and other right-of-use assets, net, $ 2.4 million of acquisition related holdbacks, $ 11.3 million of long-term lease liabilities, and $ 0.9 million of other net assets assumed.

During the nine months ended September 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 September 30, 2023, the Company purchased or is under contract to purchase 215 communication sites for an aggregate consideration of $ 74.0 million in cash.

The Company anticipates that these acquisitions will be consummated by the end of the second quarter of 2024.

The maximum potential obligation related to contingent consideration for acquisitions was $ 18.4 million and $ 10.1 million as of September 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:

June 30, 2023

September 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 $ 69.0 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.

Depreciation expense was $ 68.2 million and $ 68.3 million for the three months ended September 30, 2023 and 2022, respectively, and $ 206.6 million and $ 205.0 million for the nine months ended September 30, 2023 and 2022, respectively.

September 30, 2023 and December 31, 2022, unpaid capital expenditures that are included in accounts payable and accrued expenses were $ 7.1 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 June 30, 2023

As of September 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 $ 101.3 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.

Amortization expense relating to the intangible assets above was $ 100.4 million for the three months ended September 30, 2023 and 2022, and $ 303.5 million and $ 303.0 million for the nine months ended September 30, 2023 and 2022, respectively.

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

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

June 30, 2023

September 30, 2023

December 31, 2022

6 unchanged sentences

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

June 30, 2023

September 30, 2023

December 31, 2022

4 unchanged sentences

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

June 30, 2023

September 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 June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

September 30,

(in thousands)

13 unchanged sentences

(1) The 2018 Term Loan has a blended rate of 2.651 %, 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.

Excluding the impact of the interest rate swap, the 2018 Term Loan was accruing interest at 7.170 % as of September 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.

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 replace LIBOR with Term SOFR as the benchmark interest rate and make related changes.

Revolving Credit Facility under the Senior Credit Agreement

10 unchanged sentences

Interest Rate

June 30, 2023 (1)

June 30, 2023 (2)

June 30, 2023

September 30, 2023 (1)

September 30, 2023 (2)

September 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 and six months ended June 30, 2023 and 2022 (in thousands):

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

For the three months

For the six months

ended June 30,

For the nine months

ended September 30,

Beginning outstanding balance

Ending outstanding balance

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.

Subsequent to September 30, 2023, the Company repaid $ 85.0 million under the Revolving Credit Facility, and as of the date of this filing, $ 285.0 million was outstanding.

Term Loan under the Senior Credit Agreement

1 unchanged sentence

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.

On June 21, 2023, the Company, through its wholly owned subsidiary, SBA Senior Finance II, amended its interest rate swap agreement which swapped $ 1.95 billion of notional value accruing interest at Term SOFR plus 185 basis points (inclusive of a CSA of 0.10 %) 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 nine months ended September 30, 2023, 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, 2023, the 2018 Term Loan had a principal balance of $ 2.3 billion.

Secured Tower Revenue Securities

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.

As of September 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

For the six months

ended June 30,

For the nine months

ended September 30,

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

Average price paid per share (1)

Total price paid (in millions) (1)

Average price per share (1)

Total purchase price (in millions) (1)

Subsequent to September 30, 2023, the Company made the following share repurchases:

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

Average price per share (1)

Total purchase price (in millions) (1)

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

For the nine months ended September 30, 2023, the Company paid the following cash dividends:

Payable to Shareholders

10 unchanged sentences

June 21, 2023

July 30, 2023

August 24, 2023

$ 92.1 million

September 20, 2023

Dividends paid in 2023 were ordinary taxable dividends.

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

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

Payable to Shareholders

3 unchanged sentences

Date to be Paid

July 30, 2023

August 24, 2023

September 20, 2023

November 1, 2023

November 16, 2023

December 14, 2023

STOCK-BASED COMPENSATION

5 unchanged sentences

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

June 30, 2023

September 30, 2023

Risk free interest rate

2 unchanged sentences

Expected lives

The following table summarizes the Company’s activities with respect to its stock option plans for the six months ended June 30, 2023 as follows (dollars and shares in thousands, except for per share data):

The following table summarizes the Company’s activities with respect to its stock option plans for the nine months ended September 30, 2023 as follows (dollars and shares in thousands, except for per share data):

Weighted-Average

4 unchanged sentences

Forfeited/canceled

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.

Outstanding at September 30, 2023

Exercisable at September 30, 2023

Unvested at September 30, 2023

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

The total intrinsic value for options exercised during the nine months ended September 30, 2023 was $ 24.2 million.

Restricted Stock Units and Performance-Based Restricted Stock Units

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

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

Weighted-Average

9 unchanged sentences

Forfeited/canceled

Outstanding at June 30, 2023

Outstanding at September 30, 2023

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

4 unchanged sentences

taxable REIT subsidiary (“TRS”).

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

The TRS concluded that it was appropriate to release the full valuation allowance of $ 66.3 million during the second quarter of 2023.

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.

3 unchanged sentences

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.

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

These assets and operations currently consist primarily of the Company’s site development services and its international operations.

13 unchanged sentences

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 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) .

As of September 30,

2023, the Company estimates the aggregate range of reasonably possible losses in excess of amounts accrued to be between zero and $ 94.3 million.

This range excludes penalties and interest, which as of such date would have been $ 95.5 million.

The Company operates principally in two business segments:

10 unchanged sentences

Int'l Site

For the three months ended June 30, 2023

For the three months ended September 30, 2023

(in thousands)

11 unchanged sentences

Cash capital expenditures (3)

For the three months ended June 30, 2022

For the three months ended September 30, 2022

Cost of revenues (2)

12 unchanged sentences

Int'l Site

For the six months ended June 30, 2023

For the nine months ended September 30, 2023

(in thousands)

11 unchanged sentences

Cash capital expenditures (3)

For the six months ended June 30, 2022

For the nine months ended September 30, 2022

Cost of revenues (2)

13 unchanged sentences

(in thousands)

As of June 30, 2023

As of September 30, 2023

As of December 31, 2022

(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.

(1) For the three months ended September 30, 2023 and 2022, site leasing revenue in Brazil was $ 100.0 million and $ 70.7 million, respectively.

For the nine months ended September 30, 2023 and 2022, site leasing revenue in Brazil was $ 293.6 million and $ 209.8 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 unchanged sentences

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

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.

Total domestic long-lived assets were $ 5.6 billion and $ 5.9 billion as of September 30, 2023 and December 31, 2022, respectively.

Total international long-lived assets were $ 3.4 billion and $ 3.5 billion as of September 30, 2023 and December 31, 2022.

Total long-lived assets in Brazil were $ 2.1 billion and $ 2.0 billion as of September 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.

3 unchanged sentences

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

For the three months

For the six months

ended June 30,

For the nine months

ended September 30,

Net income attributable to SBA

5 unchanged sentences

Communications Corporation:

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.

For the three and nine months ended September 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 June 30, 2023 and December 31, 2022 are as follows (in thousands):

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

September 30,

Beginning balance

7 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.

On the same date, the Company entered into an interest rate swap 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.

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.

2 unchanged sentences

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 .

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.

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 de-designated 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;

As of September 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.

As of September 30, 2023 and December 31, 2022, the interest rate swap had a fair value of $ 143.3 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 $ 103.0 million gain and a $ 119.6 million gain as of September 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 and six months ended June 30, 2023 and 2022.

For the three months

For the six months

ended June 30,

For the nine months

ended September 30,

Cash Flow Hedge - Interest Rate Swap Agreement

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