SBA COMMUNICATIONS CORP 10-Q

ITEM 1: FINANCIAL STATEMENTS SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except par values) June 30, December 31, 2024 2023 ASSETS (unaudited) Current assets: Cash and cash equivalents $ 220,508 $ 208,547 Restricted cash 58,474 38,129 Accounts receivable, net 88,650 182,746 Costs and estimated earnings in excess of billings on uncompleted contracts 19,810 16,252 Prepaid expenses and other current assets 72,564 38,593 Total current assets 460,006 484,267 Property and equipment, net 2,719,810 2,711,719 Intangible assets, net 2,314,238 2,455,597 Operating lease right-of-use assets, net 2,129,244 2,240,781 Acquired and other right-of-use assets, net 1,376,941 1,473,601 Other assets 785,939 812,476 Total assets $ 9,786,178 $ 10,178,441 LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND SHAREHOLDERS' DEFICIT Current liabilities: Accounts payable $ 50,738 $ 42,202 Accrued expenses 76,319 92,622 Current maturities of long-term debt 1,806,304 643,145 Deferred revenue 191,325 235,668 Accrued interest 57,928 57,496 Current lease liabilities 262,781 273,464 Other current liabilities 14,170 18,662 Total current liabilities 2,459,565 1,363,259 Long-term liabilities: Long-term debt, net 10,473,739 11,681,170 Long-term lease liabilities 1,755,101 1,865,686 Other long-term liabilities 373,697 404,161 Total long-term liabilities 12,602,537 13,951,017 Redeemable noncontrolling interests 40,817 35,047 Shareholders' deficit: Preferred stock - par value $ 0.01 , 30,000 shares authorized, no shares issued or outstanding — — Common stock - Class A, par value $ 0.01 , 400,000 shares authorized, 107,471 shares and 108,050 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively 1,075 1,080 Additional paid-in capital 2,930,332 2,894,060 Accumulated deficit ( 7,546,370 ) ( 7,450,824 ) Accumulated other comprehensive loss, net ( 701,778 ) ( 615,198 ) Total shareholders' deficit ( 5,316,741 ) ( 5,170,882 ) Total liabilities, redeemable noncontrolling interests, and shareholders' deficit $ 9,786,178 $ 10,178,441 The accompanying condensed notes are an integral part of these consolidated financial statements. 1 Table of Contents SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share amounts) For the three months For the six months ended June 30, ended June 30, 2024 2023 2024 2023 Revenues: Site leasing $ 626,457 $ 626,143 $ 1,254,733 $ 1,243,411 Site development 34,020 52,357 63,606 110,605 Total revenues 660,477 678,500 1,318,339 1,354,016 Operating expenses: Cost of revenues (exclusive of depreciation, accretion, and amortization shown below): Cost of site leasing 114,131 115,014 228,944 235,133 Cost of site development 27,137 39,236 50,315 83,421 Selling, general, and administrative expenses (1) 62,376 63,383 131,074 135,592 Acquisition and new business initiatives related adjustments and expenses 6,574 4,953 13,991 11,010 Asset impairment and decommission costs 31,610 32,867 75,258 59,257 Depreciation, accretion, and amortization 64,179 181,820 140,929 364,235 Total operating expenses 306,007 437,273 640,511 888,648 Operating income 354,470 241,227 677,828 465,368 Other income (expense): Interest income 7,046 4,683 14,360 7,498 Interest expense ( 97,530 ) ( 101,288 ) ( 193,921 ) ( 202,514 ) Non-cash interest expense ( 7,080 ) ( 7,518 ) ( 15,523 ) ( 21,757 ) Amortization of deferred financing fees ( 4,932 ) ( 5,044 ) ( 10,221 ) ( 10,032 ) Loss from extinguishment of debt, net — — ( 4,428 ) — Other (expense) income, net ( 104,859 ) 40,732 ( 149,511 ) 78,293 Total other expense, net ( 207,355 ) ( 68,435 ) ( 359,244 ) ( 148,512 ) Income before income taxes 147,115 172,792 318,584 316,856 Benefit (provision) for income taxes 12,337 29,178 ( 4,590 ) ( 14,331 ) Net income 159,452 201,970 313,994 302,525 Net loss attributable to noncontrolling interests 3,378 1,678 3,378 2,340 Net income attributable to SBA Communications Corporation $ 162,830 $ 203,648 $ 317,372 $ 304,865 Net income per common share attributable to SBA Communications Corporation: Basic $ 1.52 $ 1.88 $ 2.94 $ 2.82 Diluted $ 1.51 $ 1.87 $ 2.93 $ 2.79 Weighted-average number of common shares Basic 107,462 108,355 107,782 108,244 Diluted 107,679 108,884 108,148 109,078 (1) Includes non-cash compensation of $ 17,872 and $ 17,566 for the three months ended June 30, 2024 and 2023, respectively, and $ 38,645 and $ 43,094 for the six months ended June 30, 2024 and 2023, respectively. The accompanying condensed notes are an integral part of these consolidated financial statements. 2 Table of Contents SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) (in thousands) For the three months For the six months ended June 30, ended June 30, 2024 2023 2024 2023 Net income $ 159,452 $ 201,970 $ 313,994 $ 302,525 Adjustments related to interest rate swaps ( 8,237 ) 15,316 2,630 ( 7,072 ) Foreign currency translation adjustments ( 64,130 ) 25,029 ( 89,534 ) 41,555 Comprehensive income 87,085 242,315 227,090 337,008 Comprehensive loss attributable to noncontrolling interests 3,702 2,133 3,702 2,797 Comprehensive income attributable to SBA Communications Corporation $ 90,787 $ 244,448 $ 230,792 $ 339,805 The accompanying condensed notes are an integral part of these consolidated financial statements. ‎ 3 Table of Contents SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS ’ DEFICIT (unaudited) (in thousands) Accumulated Class A Additional Other Total Common Stock Paid-In Accumulated Comprehensive Shareholders' Shares Amount Capital Deficit Loss, Net Deficit BALANCE, March 31, 2024 107,880 $ 1,079 $ 2,915,215 $ ( 7,509,379 ) $ ( 629,735 ) $ ( 5,222,820 ) Net income attributable to SBA Communications Corporation — — — 162,830 — 162,830 Common stock issued in connection with equity awards and stock purchase plans, offset by the impact of net share settlements 31 — 3,950 — — 3,950 Non-cash stock compensation — — 19,109 — — 19,109 Adjustments related to interest rate swaps — — — — ( 8,237 ) ( 8,237 ) Repurchase and retirement of common stock ( 440 ) ( 4 ) — ( 93,858 ) — ( 93,862 ) Foreign currency translation adjustments attributable to SBA Communications Corporation — — — — ( 63,806 ) ( 63,806 ) Dividends and dividend equivalents on common stock — — — ( 105,963 ) — ( 105,963 ) Adjustment to redemption amount related to noncontrolling interests — — ( 7,942 ) — — ( 7,942 ) BALANCE, June 30, 2024 107,471 $ 1,075 $ 2,930,332 $ ( 7,546,370 ) $ ( 701,778 ) $ ( 5,316,741 ) Accumulated Class A Additional Other Total Common Stock Paid-In Accumulated Comprehensive Shareholders' Shares Amount Capital Deficit Loss, Net Deficit BALANCE, December 31, 2023 108,050 $ 1,080 $ 2,894,060 $ ( 7,450,824 ) $ ( 615,198 ) $ ( 5,170,882 ) Net income attributable to SBA Communications Corporation — — — 317,372 — 317,372 Common stock issued in connection with equity awards and stock purchase plans, offset by the impact of net share settlements 356 4 3,187 — — 3,191 Non-cash stock compensation — — 41,027 — — 41,027 Adjustments related to interest rate swaps — — — — 2,630 2,630 Repurchase and retirement of common stock ( 935 ) ( 9 ) — ( 200,010 ) — ( 200,019 ) Foreign currency translation adjustments attributable to SBA Communications Corporation — — — — ( 89,210 ) ( 89,210 ) Dividends and dividend equivalents on common stock — — — ( 212,908 ) — ( 212,908 ) Adjustment to redemption amount related to noncontrolling interests — — ( 7,942 ) — — ( 7,942 ) BALANCE, June 30, 2024 107,471 $ 1,075 $ 2,930,332 $ ( 7,546,370 ) $ ( 701,778 ) $ ( 5,316,741 ) ‎ 4 Table of Contents SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ DEFICIT (unaudited) (in thousands) Accumulated Class A Additional Other Total Common Stock Paid-In Accumulated Comprehensive Shareholders' Shares Amount Capital Deficit Loss, Net Deficit BALANCE, March 31, 2023 108,326 $ 1,083 $ 2,800,046 $ ( 7,473,913 ) $ ( 596,370 ) $ ( 5,269,154 ) Net income attributable to SBA Communications Corporation — — — 203,648 — 203,648 Common stock issued in connection with equity awards and stock purchase plans, offset by the impact of net share settlements 55 1 6,646 — — 6,647 Non-cash stock compensation — — 18,624 — — 18,624 Adjustments related to interest rate swaps — — — — 15,316 15,316 Foreign currency translation adjustments attributable to SBA Communications Corporation — — — — 25,484 25,484 Dividends and dividend equivalents on common stock — — — ( 92,573 ) — ( 92,573 ) Adjustment to redemption amount related to noncontrolling interests — — ( 322 ) — — ( 322 ) BALANCE, June 30, 2023 108,381 $ 1,084 $ 2,824,994 $ ( 7,362,838 ) $ ( 555,570 ) $ ( 5,092,330 ) Accumulated Class A Additional Other Total Common Stock Paid-In Accumulated Comprehensive Shareholders' Shares Amount Capital Deficit Loss, Net Deficit BALANCE, December 31, 2022 107,997 $ 1,080 $ 2,795,176 $ ( 7,482,061 ) $ ( 590,510 ) $ ( 5,276,315 ) Net income attributable to SBA Communications Corporation — — — 304,865 — 304,865 Common stock issued in connection with equity awards and stock purchase plans, offset by the impact of net share settlements 384 4 ( 8,073 ) — — ( 8,069 ) Non-cash stock compensation — — 45,326 — — 45,326 Adjustments related to interest rate swaps — — — — ( 7,072 ) ( 7,072 ) Foreign currency translation adjustments attributable to SBA Communications Corporation — — — — 42,012 42,012 Dividends and dividend equivalents on common stock — — — ( 185,642 ) — ( 185,642 ) Adjustment to redemption amount related to noncontrolling interests — — ( 7,435 ) — — ( 7,435 ) BALANCE, June 30, 2023 108,381 $ 1,084 $ 2,824,994 $ ( 7,362,838 ) $ ( 555,570 ) $ ( 5,092,330 ) The accompanying condensed notes are an integral part of these consolidated financial statements. ‎ 5 Table of Contents SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) For the six months ended June 30, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 313,994 $ 302,525 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, accretion, and amortization 140,929 364,235 Loss (gain) on remeasurement of U.S. denominated intercompany loans 144,474 ( 85,268 ) Non-cash compensation expense 40,067 44,456 Non-cash asset impairment and decommission costs 64,895 51,784 Loss from extinguishment of debt, net 4,428 — Deferred and non-cash income tax benefit ( 13,126 ) ( 258 ) Other non-cash items reflected in the Statements of Operations 31,997 44,089 Changes in operating assets and liabilities, net of acquisitions: Accounts receivable and costs and estimated earnings in excess of billings on uncompleted contracts, net 80,359 49,566 Prepaid expenses and other assets ( 5,671 ) ( 17,988 ) Operating lease right-of-use assets, net 70,045 75,226 Accounts payable and accrued expenses ( 23,375 ) ( 24,504 ) Accrued interest 643 1,066 Long-term lease liabilities ( 73,023 ) ( 68,967 ) Other liabilities ( 56,590 ) 62,139 Net cash provided by operating activities 720,046 798,101 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions ( 61,022 ) ( 39,737 ) Capital expenditures ( 107,844 ) ( 112,583 ) Purchase of investments ( 681,208 ) ( 627,310 ) Proceeds from sale of investments 651,650 606,801 Other investing activities ( 8,094 ) ( 85,517 ) Net cash used in investing activities ( 206,518 ) ( 258,346 ) CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings under Revolving Credit Facility 195,000 140,000 Repayments under Revolving Credit Facility ( 255,000 ) ( 410,000 ) Proceeds from issuance of Term Loans, net of fees 2,274,815 — Repayment of Term Loans ( 2,273,750 ) ( 12,000 ) Repurchase and retirement of common stock ( 200,019 ) — Payment of dividends on common stock ( 213,464 ) ( 186,070 ) Proceeds from employee stock purchase/stock option plans 21,302 19,308 Payments related to taxes on stock options and restricted stock units ( 18,061 ) ( 27,377 ) Other financing activities 1,242 1,251 Net cash used in financing activities ( 467,935 ) ( 474,888 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash ( 13,395 ) 1,359 NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 32,198 66,226 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH: Beginning of period 250,946 189,283 End of period $ 283,144 $ 255,509 The accompanying condensed notes are an integral part of these consolidated financial statements. 6 Table of Contents SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) For the six months ended June 30, 2024 2023 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 193,195 $ 201,424 Income taxes $ 17,214 $ 16,158 SUPPLEMENTAL CASH FLOW INFORMATION OF NON-CASH ACTIVITIES: Right-of-use assets obtained in exchange for new operating lease liabilities $ 16,133 $ 18,570 Operating lease modifications and reassessments $ 33,713 $ 13,556 Right-of-use assets obtained in exchange for new finance lease liabilities $ — $ 1,031 The accompanying condensed notes are an integral part of these consolidated financial statements. ‎ 7 Table of Contents SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION The accompanying consolidated financial statements should be read in conjunction with the Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for SBA Communications Corporation and its subsidiaries (the “Company”). These financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and, therefore, omit or condense certain footnotes and other information normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States. In the opinion of the Company’s management, all adjustments (consisting of normal recurring accruals 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. Certain reclassifications have been made to prior year amounts or balances to conform to the presentation adopted in the current year. 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. During the first quarter of 2024, the Company completed its assessment on the remaining estimated useful lives of its towers and intangible assets. The Company concluded through its assessment that, for U.S. GAAP purposes, it should modify its current estimates for asset lives based on its historical operating experience and the findings obtained by its independent consultant. The Company previously depreciated its towers on a straight-line basis over the shorter of the (i) term of the underlying ground lease (including renewal options) taking into account residual value or (ii) estimated useful life of a tower, which the Company had historically estimated to be 15 years. Based on its assessment, the Company revised the estimated useful lives of its towers and certain related intangible assets (which are amortized on a similar basis to its tower assets, as their useful lives correlate to the useful life of the towers) from 15 years to 30 years, effective January 1, 2024. The Company accounted for the change in estimated useful lives as a change in estimate under ASC 250 “Accounting Changes and Error Corrections.” The impact of the change in estimate was accounted for prospectively effective January 1, 2024, resulting in a reduction in depreciation and amortization expense of approximately $ 102.7 million ($ 93.0 million after tax, or an increase of $ 0.86 per diluted share) and $ 205.4 million ($ 186.0 million after tax, or an increase of $ 1.72 per diluted share) for the three and six months ended June 30, 2024, respectively. This change in useful lives is expected to reduce depreciation and amortization expense by approximately $ 411.5 million ($ 372.5 million after tax, or an increase of $ 3.44 per diluted share) for the year ended December 31, 2024. Foreign Currency Translation All assets and liabilities of foreign subsidiaries that do not utilize the U.S. dollar as its functional currency are translated at period-end exchange rates, while revenues and expenses are translated at monthly average exchange rates during the period. Unrealized translation gains and losses are reported as foreign currency translation adjustments through Accumulated other comprehensive loss, net in the Consolidated Statements of Shareholders’ Deficit. For foreign subsidiaries where the U.S. dollar is the functional currency, monetary assets and liabilities of such subsidiaries, which are not denominated in U.S. dollars, are remeasured at exchange rates in effect at the balance sheet date, and revenues and expenses are remeasured at monthly average rates prevailing during the year. Remeasurement gains and losses are reported as Other (expense) income, net in the Consolidated Statements of Operations. Intercompany Loans Subject to Remeasurement In accordance with 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 $ 66.2 million loss and a $ 27.8 million gain, net of taxes, on the remeasurement of intercompany loans for the three months ended June 30, 2024 and 2023, respectively, and a $ 94.7 million loss 8 Table of Contents and a $ 55.2 million gain, net of taxes, on the remeasurement of intercompany loans for the six months ended June 30, 2024 and 2023, respectively. During the six months ended June 30, 2024, the Company funded $ 9.3 million and $ 79.7 million was repaid under its intercompany loan agreements. As of June 30, 2024 and December 31, 2023, the aggregate amount outstanding under the intercompany loan agreements subject to remeasurement with the Company’s foreign subsidiaries was $ 1.2 billion and $ 1.3 billion, respectively. 2. FAIR VALUE MEASUREMENTS Items Measured at Fair Value on a Recurring Basis — The Company’s asset retirement obligations are measured at fair value on a recurring basis using Level 3 inputs and are recorded in Other long-term liabilities in the Consolidated Balance Sheets. The fair value of the asset retirement obligations is calculated using a discounted cash flow model. Refer to Note 16 for discussion of the Company’s redeemable 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 7.8 % - 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. The following summarizes the activity of asset impairment and decommission costs : For the three months For the six months ended June 30, ended June 30, 2024 2023 2024 2023 (in thousands) Asset impairment (1) $ 18,491 $ 24,363 $ 53,043 $ 46,696 Write-off of carrying value of decommissioned towers 7,440 849 11,545 2,802 Other (including tower and equipment decommission costs) 5,679 7,655 10,670 9,759 Total asset impairment and decommission costs $ 31,610 $ 32,867 $ 75,258 $ 59,257 (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 . The Company’s long-term investments were $ 19.2 million and $ 24.5 million as of June 30, 2024 and December 31, 2023, 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. The Company evaluates these investments for indicators of impairment. The Company considers impairment indicators such as negative changes in industry and market conditions, financial performance, business prospects, and other relevant events and factors. If indicators exist and the fair value of the investment is less than the carrying amount, an impairment charge will be recorded. The Company did no t recognize any impairment loss associated with its investments during the three and six months ended June 30, 2024 and 2023. 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, 2024 and December 31, 2023, the Company had $ 30.4 million and $ 1.0 million of short-term investments, respectively. For the six months ended June 30, 2024, the Company purchased and sold $ 0.7 billion of short-term investments. For the six months ended June 30, 2023, the Company purchased and sold $ 0.6 billion 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 9 Table of Contents applicable spread to the Eurodollar Rate and Term SOFR Rate was set for the Revolving Credit Facility ( 112.5 to 150.0 basis points). Refer to Note 10 for the fair values, principal balances, and carrying values of the Company’s debt instruments. For discussion of the Company’s derivatives and hedging activities, refer to Note 17. 3. CASH, CASH EQUIVALENTS, AND RESTRICTED CASH The cash, cash equivalents, and restricted cash balances on the Consolidated Statements of Cash Flows consist of the following: As of As of June 30, 2024 December 31, 2023 Included on Balance Sheet (in thousands) Cash and cash equivalents $ 220,508 $ 208,547 Cash and cash equivalents Securitization escrow accounts 51,790 31,852 Restricted cash - current asset Payment, performance bonds, and other 6,684 6,277 Restricted cash - current asset Surety bonds and workers compensation 4,162 4,270 Other assets - noncurrent Total cash, cash equivalents, and restricted cash $ 283,144 $ 250,946 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. 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 $ 6.5 million and $ 6.1 million held in escrow as of June 30, 2024 and December 31, 2023 related to the Company’s acquisition activities. Cash is pledged as collateral for 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, 2024 and December 31, 2023, the Company had $ 41.7 million and $ 42.0 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, 2024 and December 31, 2023, the Company had pledged $ 2.5 million and $ 2.4 million, respectively, as collateral related to its workers’ compensation policy. 4. COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS The Company’s costs and estimated earnings on uncompleted contracts are comprised of the following: As of As of June 30, 2024 December 31, 2023 (in thousands) Costs incurred on uncompleted contracts $ 62,098 $ 98,674 Estimated earnings 26,850 64,589 Billings to date ( 72,247 ) ( 152,608 ) $ 16,701 $ 10,655 ‎ 10 Table of Contents These amounts are included in the Consolidated Balance Sheets under the following captions: As of As of June 30, 2024 December 31, 2023 (in thousands) Costs and estimated earnings in excess of billings on uncompleted contracts $ 19,810 $ 16,252 Billings in excess of costs and estimated earnings on uncompleted contracts (included in Other current liabilities) ( 3,109 ) ( 5,597 ) $ 16,701 $ 10,655 At June 30, 2024 and December 31, 2023, the two largest customers comprised 90.5 % and 84.6 %, respectively, of the costs and estimated earnings in excess of billings on uncompleted contracts, net of billings in excess of costs and estimated earnings. 5. PREPAID EXPENSES AND OTHER CURRENT ASSETS AND OTHER ASSETS The Company’s prepaid expenses and other current assets are comprised of the following: As of As of June 30, 2024 December 31, 2023 (in thousands) Short-term investments $ 30,400 $ 1,046 Prepaid real estate taxes 2,353 3,522 Interest receivable 7,101 2,102 Prepaid taxes 11,548 9,064 Prepaid ground rent 3,449 3,712 Other current assets 17,713 19,147 Total prepaid expenses and other current assets $ 72,564 $ 38,593 The Company’s other assets are comprised of the following: As of As of June 30, 2024 December 31, 2023 (in thousands) Straight-line rent receivable $ 419,486 $ 415,100 Interest rate swap asset (1) 74,573 104,674 Loans receivable (2) 157,580 148,104 Deferred lease costs, net 8,806 8,713 Deferred tax asset - long term 61,597 67,473 Long-term investments 19,247 24,540 Other 44,650 43,872 Total other assets $ 785,939 $ 812,476 (1) Refer to Note 17 for more information on the Company’s interest rate swaps. (2) On March 17, 2023 (and as amended on August 25, 2023 and March 31, 2024), 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 $ 115.0 million in aggregate principal amount, consisting of a $ 73.0 million initial term loan and $ 42.0 million of delayed draw term loans. The final maturity date of the loans is January 31, 2025. The loans accrue interest at a variable rate, adjusting monthly, plus the applicable margin. The loans are collateralized by equity securities in the Investee. The funding of the loans is recorded in Other investing activities on the Consolidated Statements of Cash Flows. As of June 30, 2024, the outstanding principal balance of the loan was $ 107.4 million and was accruing interest at 10.079 %. ‎ 11 Table of Contents 6. ACQUISITIONS The following table summarizes the Company’s acquisition activity: For the three months For the six months ended June 30, ended June 30, 2024 2023 2024 2023 (in thousands) Acquisitions of towers and related assets $ 27,899 $ 9,571 $ 38,194 $ 22,351 Land buyouts and other assets (1) 13,718 10,237 22,828 17,386 Total cash acquisition capital expenditures $ 41,617 $ 19,808 $ 61,022 $ 39,737 (1) Excludes $ 3.7 million and $ 2.7 million spent to extend ground lease terms for the three months ended June 30, 2024 and 2023, respectively, and excludes $ 9.3 million and $ 7.9 million spent to extend ground lease terms for the six months ended June 30, 2024 and 2023, respectively. The Company recorded these amounts in prepaid ground rent within prepaid expenses and other current assets on its Consolidated Balance Sheets. During the six months ended June 30, 2024, the Company acquired 128 towers and related assets and liabilities consisting of $ 13.4 million of property and equipment, net, $ 24.3 million of intangible assets, net, $ 9.5 million of operating lease right-of-use assets, net, $ 3.4 million of acquisition related holdbacks, $ 5.3 million of long-term lease liabilities, and $ 0.2 million of other net liabilities assumed. During the six months ended June 30, 2024 , the Company concluded that for all of its tower acquisitions substantially all of the value is concentrated in a group of similar identifiable assets . Additionally, subsequent to June 30, 2024, the Company purchased or is under contract to purchase 106 communication sites which are expected to close prior to year-end at the time of this report for an aggregate consideration of $ 49.3 million in cash. The maximum potential obligation related to contingent consideration for closed acquisitions was $ 15.1 million and $ 17.9 million as of June 30, 2024 and December 31, 2023, respectively. No such amounts have been recorded on the Company’s Consolidated Balance Sheets. 7. PROPERTY AND EQUIPMENT, NET Property and equipment, net consists of the following: As of As of June 30, 2024 December 31, 2023 (in thousands) Towers and related assets (1) $ 5,829,692 $ 5,850,608 Construction-in-process (2) 125,799 105,627 Furniture, equipment, and vehicles 80,481 76,031 Land, buildings, and improvements 944,644 927,235 Total property and equipment 6,980,616 6,959,501 Less: accumulated depreciation ( 4,260,806 ) ( 4,247,782 ) Property and equipment, net $ 2,719,810 $ 2,711,719 (1) Includes amounts related to the Company’s data centers. (2) Construction-in-process represents costs incurred related to towers and other assets that are under development and will be used in the Company’s site leasing operations. Depreciation expense was $ 26.2 million and $ 69.0 million for the three months ended June 30, 2024 and 2023, respectively, and $ 63.6 million and $ 138.4 million for the six months ended June 30, 2024 and 2023, respectively. As a result of the Company’s revision of the estimated useful lives of its towers, the Company experienced decreased depreciation expense for the three and six months ended June 30, 2024. At June 30, 2024 and December 31, 2023, unpaid capital expenditures that are included in accounts payable and accrued expenses were $ 14.1 million and $ 6.5 million, respectively. ‎ 12 Table of Contents 8. INTANGIBLE ASSETS, NET The following table provides the gross and net carrying amounts for each major class of intangible assets: As of June 30, 2024 As of December 31, 2023 Gross carrying Accumulated Net book Gross carrying Accumulated Net book amount amortization value amount amortization value (in thousands) Current contract intangibles $ 5,096,739 $ ( 3,353,509 ) $ 1,743,230 $ 5,253,563 $ ( 3,394,009 ) $ 1,859,554 Network location intangibles 1,900,582 ( 1,329,574 ) 571,008 1,926,226 ( 1,330,183 ) 596,043 Intangible assets, net $ 6,997,321 $ ( 4,683,083 ) $ 2,314,238 $ 7,179,789 $ ( 4,724,192 ) $ 2,455,597 All intangible assets noted above are included in the Company’s site leasing segment. Amortization expense relating to the intangible assets above was $ 26.3 million and $ 101.3 million for the three months ended June 30, 2024 and 2023, respectively and $ 53.5 million and $ 203.1 million for the six months ended June 30, 2024 and 2023, respectively. As a result of the Company’s revision of the estimated useful lives of its towers, the Company experienced decreased amortization expense for the three and six months ended June 30, 2024. 9. ACCRUED EXPENSES The Company’s accrued expenses are comprised of the following: As of As of June 30, 2024 December 31, 2023 (in thousands) Salaries and benefits $ 17,009 $ 25,630 Real estate and property taxes 9,531 7,149 Unpaid capital expenditures 14,077 6,477 Acquisition related holdbacks 10,149 16,100 Other 25,553 37,266 Total accrued expenses $ 76,319 $ 92,622 10. DEBT The principal balances, fair values, and carrying values of debt consist of the following (in thousands): As of As of June 30, 2024 December 31, 2023 Maturity Date Principal ‎ Balance Fair Value Carrying ‎ Value Principal ‎ Balance Fair Value Carrying ‎ Value Revolving Credit Facility (1) Jan. 25, 2029 $ 120,000 $ 120,000 $ 120,000 $ 180,000 $ 180,000 $ 180,000 2018 Term Loan (2) Apr. 11, 2025 — — — 2,268,000 2,273,670 2,263,343 2024 Term Loan (2) Jan. 25, 2031 2,294,250 2,297,118 2,270,260 — — — 2014-2C Tower Securities (3) Oct. 8, 2024 620,000 615,350 619,684 620,000 606,540 619,145 2019-1C Tower Securities (3) Jan. 12, 2025 1,165,000 1,138,007 1,163,621 1,165,000 1,115,313 1,162,348 2020-1C Tower Securities (3) Jan. 9, 2026 750,000 680,460 747,677 750,000 682,350 746,937 2020-2C Tower Securities (3) Jan. 11, 2028 600,000 520,554 596,844 600,000 520,530 596,419 2021-1C Tower Securities (3) Nov. 9, 2026 1,165,000 1,016,556 1,159,242 1,165,000 1,015,437 1,158,059 2021-2C Tower Securities (3) Apr. 9, 2027 895,000 769,986 890,020 895,000 772,125 889,152 2021-3C Tower Securities (3) Oct. 9, 2031 895,000 684,684 887,809 895,000 686,581 887,365 2022-1C Tower Securities (3) Jan. 11, 2028 850,000 870,281 842,349 850,000 850,221 841,429 2020 Senior Notes Feb. 15, 2027 1,500,000 1,429,155 1,491,486 1,500,000 1,438,815 1,489,965 2021 Senior Notes Feb. 1, 2029 1,500,000 1,348,125 1,491,051 1,500,000 1,338,750 1,490,153 Total debt $ 12,354,250 $ 11,490,276 $ 12,280,043 $ 12,388,000 $ 11,480,332 $ 12,324,315 Less: current maturities of long-term debt ( 1,806,304 ) ( 643,145 ) Total long-term debt, net of current maturities $ 10,473,739 $ 11,681,170 (1) On January 25, 2024, the Company amended its Revolving Credit Facility to extend the maturity date to January 25, 2029 as 13 Table of Contents well as amend certain other terms and conditions under the Senior Credit Agreement. For further discussion of the amendments, refer to “Terms of the Senior Credit Agreement” below. (2) On January 25, 2024, the Company repaid its 2018 Term Loan and issued a new $ 2.3 billion Term Loan (“2024 Term Loan”) with a maturity date of January 25, 2031 . For further discussion of the amendments, refer to “Term Loan under the Senior Credit Agreement” below. (3) The maturity date represents the anticipated repayment date for each issuance. The table below reflects cash and non-cash interest expense amounts recognized by debt instrument for the periods presented: Interest For the three months ended June 30, For the six months ended June 30, Rates as of 2024 2023 2024 2023 June 30, Cash Non-cash Cash Non-cash Cash Non-cash Cash Non-cash 2024 Interest Interest Interest Interest Interest Interest Interest Interest (in thousands) Revolving Credit Facility 6.415 % $ 3,161 $ — $ 8,782 $ — $ 5,630 $ — $ 18,068 $ — 2018 Term Loan — — — 14,920 7,678 3,253 1,867 29,284 16,899 2024 Term Loan (1) 2.845 % 16,619 6,679 — — 29,598 11,626 — — 2014-2C Tower Securities 3.869 % 6,046 — 6,046 — 12,092 — 12,092 — 2019-1C Tower Securities 2.836 % 8,357 — 8,357 — 16,714 — 16,714 — 2020-1C Tower Securities 1.884 % 3,598 — 3,598 — 7,195 — 7,195 — 2020-2C Tower Securities 2.328 % 3,540 — 3,540 — 7,079 — 7,079 — 2021-1C Tower Securities 1.631 % 4,851 — 4,851 — 9,697 — 9,697 — 2021-2C Tower Securities 1.840 % 4,196 — 4,196 — 8,391 — 8,391 — 2021-3C Tower Securities 2.593 % 5,873 — 5,873 — 11,746 — 11,746 — 2022-1C Tower Securities 6.599 % 14,094 — 14,094 — 28,187 — 28,187 — 2020 Senior Notes 3.875 % 14,531 95 14,531 91 29,063 190 29,063 182 2021 Senior Notes 3.125 % 11,719 — 11,719 — 23,438 — 23,438 — Other 945 306 781 ( 251 ) 1,838 1,840 1,560 4,676 Total $ 97,530 $ 7,080 $ 101,288 $ 7,518 $ 193,921 $ 15,523 $ 202,514 $ 21,757 (1) The 2024 Term Loan has a blended rate of 2.845 %, which includes the impact of the interest rate swaps. Excluding the impact of the interest rate swap, the 2024 Term Loan was accruing interest at 7.350 % as of June 30, 2024. Refer to Note 17 for more information on the Company’s interest rate swap . Terms of the Senior Credit Agreement On January 25, 2024, the Company, through its wholly owned subsidiary, SBA Senior Finance II LLC (“SBA Senior Finance II”), amended and restated its Senior Credit Agreement to (1) issue a new $ 2.3 billion Term Loan and retire the 2018 Term Loan, (2) increase the total commitments under its Revolving Credit Facility from $ 1.5 billion to $ 1.75 billion, (3) extend the maturity date of its Revolving Credit Facility to January 25, 2029, and (4) amend certain other terms and conditions under the Senior Credit Agreement. On February 23, 2024, the Company, through its wholly owned subsidiary, SBA Senior Finance II, further increased the total commitments under the Revolving Credit Facility from $ 1.75 billion to $ 2.0 billion. As of June 30, 2024, SBA Senior Finance II was in compliance with the financial covenants contained in 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 $ 2.0 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 through the maturity date of January 25, 2029 . 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 Rate 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. 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 14 Table of Contents 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: Unused Interest Rate Commitment as of Fee as of June 30, 2024 (1) June 30, 2024 (2) Revolving Credit Facility 6.415 % 0.140 % (1) The rate reflected includes a 0.050 % reduction in the applicable spread as a result of meeting certain sustainability-linked targets as of December 31, 2023. (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, 2023. The table below summarizes the Company’s Revolving Credit Facility activity during the three and six months ended June 30, 2024 and 2023 (in thousands): For the three months For the six months ended June 30, ended June 30, 2024 2023 2024 2023 Beginning outstanding balance $ 195,000 $ 675,000 $ 180,000 $ 720,000 Borrowings 70,000 — 195,000 140,000 Repayments ( 145,000 ) ( 225,000 ) ( 255,000 ) ( 410,000 ) Ending outstanding balance $ 120,000 $ 450,000 $ 120,000 $ 450,000 Subsequent to June 30, 2024, the Company repaid $ 90.0 million and borrowed $ 20.0 million under the Revolving Credit Facility, and as of the date of this filing, $ 50.0 million was outstanding. Term Loan under the Senior Credit Agreement 2024 Term Loan On January 25, 2024, the Company, through its wholly owned subsidiary, SBA Senior Finance II, issued a term loan under the amended and restated Senior Credit Agreement. The 2024 Term Loan consists of a senior secured term loan with an initial aggregate principal amount of $ 2.3 billion that matures on January 25, 2031 . The 2024 Term Loan accrues interest, at SBA Senior Finance II's election, at either the Base Rate plus 100 basis points (with a zero Base Rate floor) or at Term SOFR plus 200 basis points (with a floor of 0 %). The 2024 Term Loan was issued at 99.75 % of par value. The proceeds from the 2024 Term Loan were used to retire the 2018 Term Loan and to pay related fees and expenses. In connection with the repayment, the Company expensed $ 3.3 million of net deferred financing fees and $ 1.2 million of discount related to the debt. Principal payments on the 2024 Term Loan will be made in quarterly installments on the last day of each March, June, September, and December in an amount equal to $ 5.75 million beginning on June 30, 2024. The Company incurred financing fees of approximately $ 19.4 million in relation to this transaction, which are being amortized through the maturity date. During the three and six months ended June 30, 2024, the Company repaid an aggregate of $ 5.75 million of principal on the 2024 Term Loan. As of June 30, 2024, the 2024 Term Loan had a principal balance of $ 2.3 billion. Secured Tower Revenue Securities As of June 30, 2024, 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 . 15 Table of Contents 11. SHAREHOLDERS’ EQUITY Common Stock Equivalents The Company has outstanding stock options, time-based restricted stock units (“RSUs”), and performance-based restricted stock units (“PSUs”) which were considered in the Company’s diluted earnings per share calculation (see Note 15). Registration of Additional Shares On February 29, 2024, the Company filed with the Securities and Exchange Commission an automatic shelf registration statement for well-known seasoned issuers on Form S-3ASR, which enables the Company to issue shares of its Class A common stock, preferred stock, debt securities, warrants, or depositary shares as well as units that include any of these securities. The Company will file a prospectus supplement containing the amount and type of securities each time it issues securities under its automatic shelf registration statement on Form S-3ASR. During the six months ended June 30, 2024, the Company did no t issue any securities under this automatic shelf registration statement. Stock Repurchases The Company’s Board of Directors authorizes the Company to purchase, from time to time, outstanding Class A common stock through open market repurchases in compliance with Rule 10b-18 under the Exchange Act, and/or in privately negotiated transactions at management’s discretion based on market and business conditions, applicable legal requirements, and other factors. Once authorized, the repurchase plan has no time deadline and will continue until otherwise modified or terminated by the Company’s Board of Directors at any time in its sole discretion. Shares repurchased are retired. On October 28, 2021, the Company’s Board of Directors authorized a $ 1.0 billion stock repurchase plan. As of the date of this filing, the Company had $ 204.7 million of authorization remaining under this plan. The following is a summary of the Company’s share repurchases: For the three months For the six months ended June 30, ended June 30, 2024 2023 2024 2023 Total number of shares purchased (in millions) (1) 0.4 — 0.9 — Average price per share (1) $ 213.30 $ — $ 213.85 $ — Total purchase price (in millions) (1) $ 93.9 $ — $ 200.0 $ — (1) Amounts reflected are based on the trade date and may differ from the Consolidated Statements of Cash Flows which reflects share repurchases based on the settlement date. Dividends For the six months ended June 30, 2024, the Company paid the following cash dividends: Payable to Shareholders of Record at the Close Cash Paid Aggregate Amount Date Declared of Business on Per Share Paid Date Paid February 26, 2024 March 14, 2024 $ 0.98 $ 108.1 million March 28, 2024 April 29, 2024 May 23, 2024 $ 0.98 $ 105.3 million June 18, 2024 Dividends paid in 2024 were ordinary taxable dividends. Subsequent to June 30, 2024, the Company declared the following cash dividends: Payable to Shareholders Cash to of Record at the Close be Paid Date Declared of Business on Per Share Date to be Paid July 28, 2024 August 22, 2024 $ 0.98 September 18, 2024 16 Table of Contents 12. STOCK-BASED COMPENSATION Stock Options The following table summarizes the Company’s activities with respect to its stock option plans for the six months ended June 30, 2024 as follows (dollars and shares in thousands, except for per share data): Weighted- Weighted-Average Average Remaining Number Exercise Price Contractual Aggregate of Shares Per Share Life (in years) Intrinsic Value Outstanding at December 31, 2023 1,340 $ 168.32 Exercised ( 175 ) $ 130.19 Forfeited/canceled ( 2 ) $ 197.91 Outstanding at June 30, 2024 1,163 $ 174.02 1.4 $ 27,996 Exercisable at June 30, 2024 1,140 $ 172.50 1.3 $ 27,996 Unvested at June 30, 2024 23 $ 252.81 8.6 $ — The total intrinsic value for options exercised during the six months ended June 30, 2024 was $ 15.0 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, 2024: RSUs PSUs (1) Weighted-Average Weighted-Average Number of Grant Date Fair Number of Grant Date Fair Shares Value per Share Shares Value per Share (in thousands) (in thousands) Outstanding at December 31, 2023 267 $ 269.08 368 $ 298.46 Granted 267 $ 216.02 59 $ 291.51 PSU adjustment (2) — $ — 11 $ 236.63 Vested ( 116 ) $ 270.65 ( 155 ) $ 236.32 Forfeited/canceled ( 9 ) $ 244.31 ( 2 ) $ 377.74 Outstanding at June 30, 2024 409 $ 234.49 281 $ 314.04 (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. 13. INCOME TAXES The primary reason for the difference between the Company’s effective tax rate and the U.S. statutory rate is the Company’s REIT election. A tax provision is recognized because U.S. taxable REIT subsidiary and certain foreign subsidiaries of the Company have profitable operations or are in a net deferred tax liability position. The Company elected to be taxed as a REIT commencing with its taxable year ended December 31, 2016. As a REIT, the Company generally will be entitled to a deduction for dividends that it pays, and therefore, not subject to U.S. federal corporate income tax on that portion of its net income that it distributes to its shareholders. As a REIT, the Company will continue to pay U.S. federal income tax on earnings, if any, from assets and operations held through its U.S. taxable REIT subsidiary. These assets and operations currently consist primarily of the Company’s site development services and its international operations. The Company’s international operations would continue to be subject, as applicable, to foreign taxes in the jurisdictions in which those operations are located. The Company may also be subject to a variety of taxes, including payroll taxes and state, local, and foreign income, property, and other taxes on its assets and operations. The Company’s determination as to the timing and amount of future dividend distributions will be based on a number of factors, including REIT distribution requirements, its existing federal net operating losses (“NOLs”) of approximately $ 382.3 million as of December 31, 2023, the Company’s financial condition, earnings, debt covenants, 17 Table of Contents and other possible uses of such funds. The Company may use these NOLs to offset its REIT taxable income, and thus any required distributions to shareholders may be reduced or eliminated until such time as the NOLs have been fully utilized . 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 2017 through 2019. The Company disagrees with the assessment and has filed an appeal with the higher appellate taxing authorities. 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 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 June 30, 2024, the Company estimates the aggregate range of reasonably possible losses in excess of amounts accrued to be between zero and $ 66.8 million. This range excludes penalties and interest, which as of such date would have been $ 80.7 million. 14. SEGMENT DATA The Company operates principally in two business segments: site leasing and site development. The Company’s site leasing business includes two reportable segments, domestic site leasing and international site leasing. The Company’s business segments are strategic business units that offer different services. They are managed separately based on the fundamental differences in their operations. The site leasing segment includes results of the managed and sublease businesses. The site development segment includes the results of both consulting and construction related activities. The Company’s Chief Operating Decision Maker utilizes segment operating profit and operating income as his two measures of segment profit in assessing performance and allocating resources at the reportable segment level. The Company has applied the aggregation criteria to operations within the international site leasing segment on a basis that is consistent with management’s review of information and performance evaluations of the individual markets in this region. 18 Table of Contents Revenues, cost of revenues (exclusive of depreciation, accretion and amortization), capital expenditures (including assets acquired through the issuance of shares of the Company’s Class A common stock) and identifiable assets pertaining to the segments in which the Company continues to operate are presented below. Domestic Site Int'l Site Site Leasing Leasing Development Other Total For the three months ended June 30, 2024 (in thousands) Revenues (1) $ 463,204 $ 163,253 $ 34,020 $ — $ 660,477 Cost of revenues (2) 65,489 48,642 27,137 — 141,268 Operating profit 397,715 114,611 6,883 — 519,209 Selling, general, and administrative expenses 33,608 15,775 2,944 10,049 62,376 Acquisition and new business initiatives related adjustments and expenses 3,089 3,485 — — 6,574 Asset impairment and decommission costs 13,825 17,362 — 423 31,610 Depreciation, amortization and accretion 33,870 27,457 1,038 1,814 64,179 Operating income (loss) 313,323 50,532 2,901 ( 12,286 ) 354,470 Other expense, net (principally interest expense and other income) ( 207,355 ) ( 207,355 ) Income before income taxes 147,115 Cash capital expenditures (3) 48,603 41,687 123 1,177 91,590 For the three months ended June 30, 2023 Revenues (1) $ 456,754 $ 169,389 $ 52,357 $ — $ 678,500 Cost of revenues (2) 64,434 50,580 39,236 — 154,250 Operating profit 392,320 118,809 13,121 — 524,250 Selling, general, and administrative expenses 28,445 18,413 4,471 12,054 63,383 Acquisition and new business initiatives related adjustments and expenses 2,573 2,380 — — 4,953 Asset impairment and decommission costs 30,465 2,244 — 158 32,867 Depreciation, amortization and accretion 117,353 61,892 936 1,639 181,820 Operating income (loss) 213,484 33,880 7,714 ( 13,851 ) 241,227 Other expense, net (principally interest expense and other income) ( 68,435 ) ( 68,435 ) Income before income taxes 172,792 Cash capital expenditures (3) 50,943 32,079 675 335 84,032 ‎ 19 Table of Contents Domestic Site Int'l Site Site Leasing Leasing Development Other Total For the six months ended June 30, 2024 (in thousands) Revenues (1) $ 924,703 $ 330,030 $ 63,606 $ — $ 1,318,339 Cost of revenues (2) 131,459 97,485 50,315 — 279,259 Operating profit 793,244 232,545 13,291 — 1,039,080 Selling, general, and administrative expenses 67,956 31,483 7,370 24,265 131,074 Acquisition and new business initiatives related adjustments and expenses 8,387 5,604 — — 13,991 Asset impairment and decommission costs 43,738 31,097 — 423 75,258 Depreciation, amortization and accretion 74,215 61,286 1,872 3,556 140,929 Operating income (loss) 598,948 103,075 4,049 ( 28,244 ) 677,828 Other expense, net (principally interest expense and other income) ( 359,244 ) ( 359,244 ) Income before income taxes 318,584 Cash capital expenditures (3) 89,624 77,289 182 1,771 168,866 For the six months ended June 30, 2023 Revenues (1) $ 911,588 $ 331,823 $ 110,605 $ — $ 1,354,016 Cost of revenues (2) 134,183 100,950 83,421 — 318,554 Operating profit 777,405 230,873 27,184 — 1,035,462 Selling, general, and administrative expenses 60,188 35,143 10,548 29,713 135,592 Acquisition and new business initiatives related adjustments and expenses 5,805 5,205 — — 11,010 Asset impairment and decommission costs 49,900 7,130 — 2,227 59,257 Depreciation, amortization and accretion 236,840 122,304 1,852 3,239 364,235 Operating income (loss) 424,672 61,091 14,784 ( 35,179 ) 465,368 Other expense, net (principally interest expense and other income) ( 148,512 ) ( 148,512 ) Income before income taxes 316,856 Cash capital expenditures (3) 95,578 55,112 1,070 1,591 153,351 Domestic Site Int'l Site Site Leasing Leasing Development Other (4) Total Assets (in thousands) As of June 30, 2024 $ 5,860,164 $ 3,502,379 $ 44,447 $ 379,188 $ 9,786,178 As of December 31, 2023 $ 5,876,648 $ 3,871,164 $ 66,001 $ 364,628 $ 10,178,441 (1) For the three months ended June 30, 2024 and 2023, site leasing revenue in Brazil was $ 93.1 million and $ 99.7 million, respectively. For the six months ended June 30, 2024 and 2023, site leasing revenue in Brazil was $ 190.5 million and $ 193.6 million, respectively. Other than Brazil, no foreign country represented more than 5 % of the Company’s total site leasing revenue in any of the periods presented. (2) Excludes depreciation, amortization, and accretion. (3) Includes cash paid for capital expenditures, acquisitions, and right-of-use assets. (4) Assets in Other consist primarily of general corporate assets and short-term investments. Total domestic long-lived assets were $ 5.4 billion as of June 30, 2024 and December 31, 2023. Total international long-lived assets were $ 3.1 billion and $ 3.4 billion as of June 30, 2024 and December 31, 2023. Total long-lived assets in Brazil were $ 1.8 billion and $ 2.1 billion as of June 30, 2024 and December 31, 2023, 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. 15. EARNINGS PER SHARE B asic earnings per share was computed by dividing net income attributable to SBA Communications Corporation by the weighted-average number of shares of Class A common stock outstanding for each respective period. Diluted earnings per share was calculated by dividing net income attributable to SBA Communications Corporation by the weighted-average number of shares of 20 Table of Contents 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, 2024 and 2023 (in thousands, except per share data): For the three months For the six months ended June 30, ended June 30, 2024 2023 2024 2023 Numerator: Net income attributable to SBA Communications Corporation $ 162,830 $ 203,648 $ 317,372 $ 304,865 Denominator: Basic weighted-average shares outstanding 107,462 108,355 107,782 108,244 Dilutive impact of stock options, RSUs, and PSUs 217 529 366 834 Diluted weighted-average shares outstanding 107,679 108,884 108,148 109,078 Net income per common share attributable to SBA Communications Corporation: Basic $ 1.52 $ 1.88 $ 2.94 $ 2.82 Diluted $ 1.51 $ 1.87 $ 2.93 $ 2.79 For the three and six months ended June 30, 2024 and 2023, the diluted weighted-average number of common shares outstanding excluded an immaterial number of shares issuable upon exercise of the Company’s stock options because the impact would be anti-dilutive. 16. REDEEMABLE NONCONTROLLING INTERESTS The Company allocates income and losses to its redeemable noncontrolling interest holders based on the applicable membership interest percentage. At each reporting period, the redeemable noncontrolling interest is recognized at the greater of (1) the initial carrying amount of the noncontrolling interest as adjusted for accumulated income or loss attributable to the noncontrolling interest holder or (2) the redemption value as of the balance sheet date. Adjustments to the carrying amount of redeemable noncontrolling interest are charged against retained earnings (or additional paid-in capital if there are no retained earnings ). The fair value of the redeemable noncontrolling interest is estimated using Level 3 inputs. The components of redeemable noncontrolling interests as of June 30, 2024 and December 31, 2023 are as follows (in thousands): June 30, December 31, 2024 2023 Beginning balance $ 35,047 $ 31,735 Net loss attributable to noncontrolling interests ( 3,378 ) ( 4,397 ) Foreign currency translation adjustments ( 324 ) ( 899 ) Contribution from joint venture partner 1,530 1,200 Adjustment to redemption amount 7,942 7,408 Ending balance $ 40,817 $ 35,047 17. DERIVATIVES AND HEDGING ACTIVITIES The Company enters into interest rate swaps to hedge the future interest expense from variable rate debt and reduce the Company’s exposure to fluctuations in interest rates. As of June 30, 2024, the Company has an interest rate swap agreement on its 2024 Term Loan which swaps $ 1.95 billion of notional value accruing interest at one month Term SOFR plus 200 basis points for an all-in fixed rate of 2.050 % per annum through March 31, 2025. Additionally, the Company has a forward-starting interest rate swap agreement which will swap $ 1.0 billion of notional value accruing interest at one month Term SOFR plus 200 basis points for an all-in fixed rate of 5.830 % per annum. The forward-starting swap has an effective start date of March 31, 2025 and a maturity date of April 11, 2028. 21 Table of Contents As of June 30, 2024, the hedges remain highly effective; therefore, changes in fair value are recorded in Accumulated other comprehensive loss, net. The table below outlines the effects of the Company’s interest rate swaps on the Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023. Fair Value as of Balance Sheet June 30, December 31, Location 2024 2023 Derivatives Designated as Hedging Instruments (in thousands) Interest rate swap agreements in a fair value asset position Other assets $ 74,573 $ 104,674 Interest rate swap agreement in a fair value liability position Other long-term liabilities $ — $ 19,573 Accumulated other comprehensive loss, net includes an aggregate $ 54.1 million gain and a $ 51.5 million gain as of June 30, 2024 and December 31, 2023, 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 . 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, 2024 and 2023. For the three months For the six months ended June 30, ended June 30, 2024 2023 2024 2023 Cash Flow Hedge - Interest Rate Swap Agreement (in thousands) Change in fair value recorded in Accumulated other comprehensive loss, net $ ( 14,816 ) $ 7,856 $ ( 10,528 ) $ ( 23,540 ) Derivatives Not Designated as Hedges - Interest Rate Swap Agreements Amount reclassified from Accumulated other comprehensive loss, net into Non-cash interest expense $ 6,579 $ 7,460 $ 13,158 $ 16,468