UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2014

OR

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 000-30110

SBA COMMUNICATIONS CORPORATION

(Exact name of Registrant as specified in its charter)

Florida	65-0716501
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

5900 Broken Sound Parkway NW
Boca Raton, Florida	33487
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (561) 995-7670

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Class A Common Stock, $0.01 par value per share	The NASDAQ Stock Market LLC
	(NASDAQ Global Select Market)

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒   No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-Accelerated filer	☐	Smaller reporting company	☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)    Yes  ☐    No  ☒

Indicate the number of shares outstanding of each issuer’s classes of common stock, as of the latest practicable date: 129,006,538 sharesof Class A common stock as of July 25, 2014.

Table of Contents

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets as of June 30, 2014 (unaudited) and December 31, 2013	1
	Consolidated Statements of Operations (unaudited) for the three and six months ended June 30, 2014 and 2013	2
	Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three and six months ended June 30, 2014 and 2013	3
	Consolidated Statement of Shareholders’ Equity (unaudited) for the six months ended June 30, 2014	4
	Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2014 and 2013	5
	Condensed Notes to Consolidated Financial Statements (unaudited)	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Item3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	42
PART II – OTHER INFORMATION
ITEM 5.	Other Information	42
ITEM 6.	Exhibits	42
SIGNATURES		43

PART I – FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except par values)

	June 30,		December 31,
	2014		2013
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$	107,652	$	122,112
Restricted cash		36,419		47,305
Short-term investments		5,828		5,446
Accounts receivable, net of allowance of $833 and $686
at June 30, 2014 and December 31, 2013, respectively		72,782		71,339
Costs and estimated earnings in excess of billings on uncompleted contracts		25,704		27,864
Prepaid and other current assets		65,633		69,586
Total current assets		314,018		343,652
Property and equipment, net		2,691,302		2,578,444
Intangible assets, net		4,041,190		3,387,198
Deferred financing fees, net		75,241		73,042
Other assets		442,832		400,852
Total assets	$	7,564,583	$	6,783,188
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	27,502	$	24,302
Accrued expenses		76,431		86,131
Current maturities of long-term debt		1,080,200		481,886
Deferred revenue		91,020		94,658
Accrued interest		54,021		46,689
Other current liabilities		10,836		14,007
Total current liabilities		1,340,010		747,673
Long-term liabilities:
Long-term debt		5,778,891		5,394,721
Other long-term liabilities		286,394		283,828
Total long-term liabilities		6,065,285		5,678,549
Shareholders' equity:
Preferred stock - par value $.01, 30,000 shares authorized, no shares issued
or outstanding		—		—
Common stock - Class A, par value $.01, 400,000 shares authorized, 129,104 and
128,432 shares issued and outstanding at June 30, 2014 and
December 31, 2013, respectively		1,291		1,284
Additional paid-in capital		2,649,827		2,907,446
Accumulated deficit		(2,526,146)		(2,518,085)
Accumulated other comprehensive loss (income), net		34,316		(33,679)
Total shareholders' equity		159,288		356,966
Total liabilities and shareholders' equity	$	7,564,583	$	6,783,188

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

1

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,
	2014		2013		2014		2013
Revenues:
Site leasing	$	340,452	$	279,501	$	649,771	$	553,005
Site development		42,968		44,804		79,198		84,372
Total revenues		383,420		324,305		728,969		637,377
Operating expenses:
Cost of revenues (exclusive of depreciation, accretion, and
amortization shown below):
Cost of site leasing		75,382		67,784		145,122		135,885
Cost of site development		32,056		35,941		59,483		68,535
Selling, general, and administrative (1)		25,441		21,507		50,118		41,938
Acquisition related expenses		2,225		1,957		10,786		7,779
Asset impairment and decommission costs		3,994		6,493		7,562		10,215
Depreciation, accretion, and amortization		161,005		141,089		305,447		266,725
Total operating expenses		300,103		274,771		578,518		531,077
Operating income		83,317		49,534		150,451		106,300
Other income (expense):
Interest income		180		697		266		1,338
Interest expense		(71,498)		(63,117)		(137,525)		(122,582)
Non-cash interest expense		(8,293)		(12,144)		(18,596)		(29,509)
Amortization of deferred financing fees		(4,278)		(3,923)		(8,516)		(7,527)
Loss from extinguishment of debt, net		(8,236)		(5,618)		(10,187)		(5,760)
Other income, net		1,384		547		19,774		699
Total other expense		(90,741)		(83,558)		(154,784)		(163,341)
Loss before provision for income taxes		(7,424)		(34,024)		(4,333)		(57,041)
Provision for income taxes		(2,043)		(1,875)		(3,728)		(1,234)
Net loss	$	(9,467)	$	(35,899)	$	(8,061)	$	(58,275)
Net loss per common share	$	(0.07)	$	(0.28)	$	(0.06)	$	(0.46)
Weighted average number of common shares
Basic and diluted		128,950		127,713		128,756		127,387

(1)Includes non-cash compensation of $6,090 and $4,874 for thethree months ended June 30, 2014 and 2013, respectively, and $10,631 and $8,691 for the six months ended June 30, 2014 and 2013, respectively.

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

2

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVEINCOME (LOSS)

(unaudited) (in thousands)

	For the three months				For the six months
	ended June 30,				ended June 30,
	2014		2013		2014		2013
Net loss	$	(9,467)	$	(35,899)	$	(8,061)	$	(58,275)
Foreign currency translation adjustments		34,988		(18,518)		67,995		(16,964)
Comprehensive income (loss)	$	25,521	$	(54,417)	$	59,934	$	(75,239)

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

3

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

(unaudited) (in thousands)

								Accumulated
	Class A			Additional				Other
	Common Stock			Paid-In		Accumulated		Comprehensive
	Shares	Amount		Capital		Deficit		(Loss) Income		Total
BALANCE, December 31, 2013	128,432	$	1,284	$	2,907,446	$	(2,518,085)	$	(33,679)	$	356,966
Net loss	—		—		—		(8,061)		—		(8,061)
Common stock issued in connection with
stock purchase/option plans	533		5		5,619		—		—		5,624
Non-cash compensation	—		—		10,972		—		—		10,972
Settlement of convertible notes	2,742		28		1,987		—		—		2,015
Settlement of convertible note hedges	(2,604)		(26)		30		—		—		4
Settlement of common stock warrants	1		—		(276,227)		—		—		(276,227)
Foreign currency translation adjustments	—		—		—		—		67,995		67,995
BALANCE, June 30, 2014	129,104	$	1,291	$	2,649,827	$	(2,526,146)	$	34,316	$	159,288

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

4

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited) (in thousands)

	For the six months
	ended June 30,
	2014		2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(8,061)	$	(58,275)
Adjustments to reconcile net loss to net cash provided by operating
activities:
Depreciation, accretion, and amortization		305,447		266,725
Non-cash interest expense		18,596		29,509
Deferred income tax expense (benefit)		37		(1,396)
Non-cash asset impairment and decommission costs		5,263		7,426
Non-cash compensation expense		10,814		8,804
Amortization of deferred financing fees		8,516		7,527
Loss from extinguishment of debt, net		10,187		5,760
Other non-cash items reflected in the Statements of Operations		2,028		(1,208)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable and costs and estimated earnings in excess of
billings on uncompleted contracts, net		(656)		(20,276)
Prepaid and other assets		(16,397)		(33,656)
Accounts payable and accrued expenses		(2,044)		2,416
Accrued interest		7,331		4,401
Other liabilities		11,775		10,402
Net cash provided by operating activities		352,836		228,159
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions		(967,474)		(255,409)
Capital expenditures		(72,151)		(70,202)
Other investing activities		(4,916)		213
Net cash used in investing activities		(1,044,541)		(325,398)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under Revolving Credit Facility		275,000		125,000
Repayments under Revolving Credit Facility		(390,000)		(225,000)
Repayment of Term Loans		(295,500)		(507,000)
Proceeds from employee stock purchase/stock option plans		5,624		6,105
Proceeds from Term Loans, net of fees		1,483,450		—
Proceeds from settlement of convertible note hedges		4		182,853
Proceeds from issuance of Tower Securities		—		1,305,935
Repayment of BNDES Loans		(6,320)		—
Payment of deferred financing fees		(812)		(1,268)
Payment for purchase of noncontrolling interests		—		(6,008)
Payments for settlement of convertible debt		(121,289)		(794,996)
Payments for settlement of common stock warrants		(276,227)		(23,648)
Payment of restricted cash relating to SBA Tower Trust		—		(7,333)
Other financing activities		(14,935)		(1,642)
Net cash provided by financing activities		658,995		52,998
Effect of exchange rate changes on cash and cash equivalents		18,250		584
NET DECREASE IN CASH AND CASH EQUIVALENTS		(14,460)		(43,657)
CASH AND CASH EQUIVALENTS:
Beginning of period		122,112		233,099
End of period	$	107,652	$	189,442

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

5

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	For the six months
	ended June 30,
	2014		2013
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	129,961	$	118,155
Income taxes	$	4,354	$	3,249
SUPPLEMENTAL CASH FLOW INFORMATION OF NON-CASH ACTIVITIES:
Assets acquired through capital leases	$	947	$	690
Issuance of stock for settlement of convertible debt and warrants, net of hedges	$	283	$	18,134

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

6

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, 2013 for SBA Communications Corporation and its subsidiaries (the “Company”). These financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and, therefore, omit or condense certain footnotes and other information normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States. In the opinion of the Company’s management, all adjustments (consisting of normal recurring accruals) considered necessary for fair financial statement presentation have been made. The results of operations for an interim period may not give a true indication of the results for the year. Certain reclassifications have been made to prior year amounts or balances to conform to the presentation adopted in the current year.

The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in 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 amount of such estimates, when known, will vary from these estimates.

Foreign Currency Translation 

All assets and liabilities of foreign subsidiaries that do not utilize the United States dollar as its functional currency are translated at period-end rates of exchange, while revenues and expenses are translated at monthly weighted average rates of exchange for the year. Unrealized translation gains and losses are reported as foreign currency translation adjustments through other comprehensive income (loss) in shareholders’ equity.

2.FAIR VALUE MEASUREMENTS

Items Measured at Fair Value on a Recurring Basis— The Company’s earnouts related to acquisitions are measured at fair value on a recurring basis using Level 3 inputs. Level 3 valuations rely on unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. The Company determines the fair value of acquisition-related contingent consideration and any subsequent changes in fair value using a discounted probability-weighted approach using Level 3 inputs. The fair value of the earnouts is reviewed quarterly and is based on the payments the Company expects to make based on historical internal observations related to the anticipated performance of the underlying assets. The Company’s estimate of the fair value of its obligation if the performance targets contained in various acquisition agreements were met was $19.8 million and $30.1 million as of June 30, 2014 and December 31, 2013, respectively, which the Company recorded in accrued expenses on its Consolidated Balance Sheets. The maximum potential obligation related to the performance targets was $31.6 million as of June 30, 2014.

The following summarizes the activity of the accrued earnouts:

	2014		2013
	(in thousands)
Beginning balance, December 31,	$	30,063	$	9,840
Additions		5,375		534
Payments		(14,439)		(1,311)
Expirations		(274)		(1,786)
Change in Estimate		(1,373)		(280)
Foreign currency translation adjustments		427		18
Ending balance, June 30,	$	19,779	$	7,015

Items Measured at Fair Value on a Nonrecurring Basis— The Company’s long-lived assets, intangibles, and asset retirement obligations are measured at fair value on a nonrecurring basis using Level 3 inputs. The Company considers many factors and makes certain assumptions when making this assessment, including but not limited to: general market and economic conditions, historical operating results, geographic location, lease-up potential and expected timing of lease-up. The fair value of the long-lived assets, intangibles, and asset retirement obligations is calculated using a discounted cash flow model. During the threeand sixmonths ended June 30, 2014, the Company recognized an impairment charge of $4.0 million and $7.6 million, respectively. The impairment charge

7

includes the write off of $3.3 million and $5.6 million in carrying value of decommissioned towers and other third party decommission costs incurred related to the Company’s long-lived assets and intangibles for the threeand sixmonths ended June 30, 2014,  respectively.  During the three and six months ended June 30, 2013, the Company recognized an impairment charge of $6.5 million and $10.2 million, respectively. The impairment charge includes the write off of $6.1 million and $7.4 million in carrying value of decommissioned towers and other third party decommission costs incurred related to the Company’s long-lived assets and intangibles for the three and six months ended June 30, 2013, respectively. These write offs result from the Company’s analysis that the future cash flows from certain towers would not recover the carrying value of the investment in those towers. Impairment charges and the related impaired assets relate to the Company’s site leasing operating segment.

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. Short-term investments consisted of $5.6 million and $5.2 million in certificate of deposits, as of June 30, 2014 and December 31, 2013, respectively. The Company’s estimate of the fair value of its held-to-maturity investments in treasury and corporate bonds, including current portion, are based primarily upon Level 1 reported market values. As of June 30, 2014, the carrying value and fair value of the held-to-maturity investments, including current portion, were $1.2 million and $1.3 million, respectively. As of December 31, 2013, the carrying value and fair value of the held-to-maturity investments, including current portion, was $1.1 million and $1.3 million, respectively.

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 interest payments are based on Eurodollar rates that reset every month. The Company does not believe its credit risk has changed materially from the date the applicable Eurodollar Rate plus 187.5 basis points was set for the Revolving Credit Facility. The following table reflects fair values, principal balances, and carrying values of the Company’s debt instruments (see Note 11).

	As of June 30, 2014						As of December 31, 2013
	Fair Value		Principal Balance		Carrying Value		Fair Value		Principal Balance		Carrying Value
	(in thousands)
4.000% Convertible Senior Notes due 2014	$	1,266,140	$	378,370	$	370,200	$	1,479,859	$	499,944	$	468,394
8.250% Senior Notes due 2019		254,719		243,750		242,484		262,031		243,750		242,387
5.625% Senior Notes due 2019		528,750		500,000		500,000		514,375		500,000		500,000
5.750% Senior Notes due 2020		848,000		800,000		800,000		832,000		800,000		800,000
4.254% 2010-1 Tower Securities		680,564		680,000		680,000		689,717		680,000		680,000
5.101% 2010-2 Tower Securities		579,508		550,000		550,000		586,586		550,000		550,000
2.933% 2012-1Tower Securities		618,418		610,000		610,000		604,736		610,000		610,000
2.240% 2013-1C Tower Securities		422,510		425,000		425,000		408,442		425,000		425,000
3.722% 2013-2C Tower Securities		569,543		575,000		575,000		530,098		575,000		575,000
3.598% 2013-1D Tower Securities		332,251		330,000		330,000		318,856		330,000		330,000
Revolving Credit Facility		100,000		100,000		100,000		215,000		215,000		215,000
2011 Term Loan		—		—		—		180,980		180,529		180,234
2012-1 Term Loan		179,550		180,000		180,000		184,538		185,000		185,000
2012-2 Term Loan		—		—		—		110,383		109,971		109,745
2014 Term Loan		1,488,750		1,500,000		1,496,407		—		—		—
BNDES Loans		—		—		—		5,847		5,847		5,847
Totals	$	7,868,703	$	6,872,120	$	6,859,091	$	6,923,448	$	5,910,041	$	5,876,607

8

3.RESTRICTED CASH

Restricted cash consists of the following:

	As of		As of
	June 30, 2014		December 31, 2013		Included on Balance Sheet
		(in thousands)
Securitization escrow accounts	$	35,428	$	46,364	Restricted cash - current asset
Payment and performance bonds		991		941	Restricted cash - current asset
Surety bonds and workers compensation		9,342		8,991	Other assets - noncurrent
Total restricted cash	$	45,761	$	56,296

Pursuant to the terms of the Tower Securities (see Note 11), the Company is required to establish a securitization escrow account, held by an 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 and to reserve a portion of advance rents from tenants. The restricted cash in the controlled deposit account in excess of required reserve balances is subsequently released to the Borrowers (as defined in Note 11) monthly, provided that the Borrowers are in compliance with their debt service coverage ratio and that no event of default has occurred. All monies held by the indenture trustee are classified as restricted cash on the Company’s Consolidated Balance Sheets.

Payment and performance bonds relate primarily to collateral requirements for tower construction currently in process by the Company. Cash is pledged as collateral related to surety bonds issued for the benefit of the Company or its affiliates in the ordinary course of business and primarily relates to the Company’s tower removal obligations. As of June 30, 2014, the Company had $40.7 million in surety bonds and payment and performance bonds for which it was only required to post $3.1 million in collateral. As of December 31, 2013, the Company had $42.0 million in surety, payment and performance bonds for which it was only required to post $6.1 million in collateral. The Company periodically evaluates the collateral posted for its bonds to ensure that it meets the minimum requirements. As of June 30, 2014 and December 31, 2013, the Company had also pledged $2.6 million and $2.3 million, respectively, as collateral related to its workers compensation policy.

4.OTHER ASSETS

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

	As of		As of
	June 30, 2014		December 31, 2013
		(in thousands)
Restricted cash	$	9,342	$	8,991
Long-term investments		52,824		52,801
Prepaid land rent		128,153		119,047
Straight-line rent receivable		204,128		179,292
Other		48,385		40,721
Total other assets	$	442,832	$	400,852

5.ACQUISITIONS

The Company acquired 45 communication sites and related assets and liabilitiesand the rights to manage 4 additional communication sites during the three months ended June 30, 2014.These acquisitions were not significant to the Company and, accordingly, a preliminary estimate of the fair value of the assets acquired and liabilities assumed has not been presented. The Company evaluates all acquisitions after the applicable closing date of each transaction to determine whether any additional adjustments are needed to the allocation of the purchase price paid for the assets acquired and liabilities assumed by major balance sheet caption, as well as the separate recognition of intangible assets from goodwill if certain criteria are met.

9

The following table summarizes all of the Company’s cash acquisition capital expenditures:

	For the three months				For the six months
	ended June 30,				ended June 30,
	2014		2013		2014		2013
	(in thousands)
Towers and related intangible assets	$	29,315	$	35,112	$	948,045	$	230,865
Ground lease buyouts (1)		9,847		11,156		19,429		24,544
Total cash acquisition capital expenditures	$	39,162	$	46,268	$	967,474	$	255,409

(1) In addition, the Company paid $3.7 million and $3.1 million for ground lease extensions and term easements during the three months ended June 30, 2014 and 2013, respectively, and $5.0 million and $4.9 million for ground lease extensions during the six months ended June 30, 2014 and 2013, respectively. The Company recorded these amounts in prepaid rent on its Consolidated Balance Sheets.

Subsequent to June 30, 2014, the Company acquired 11 communication sites and related assets and liabilities and the rights to manage 1 additional communication site for $8.1 million in cash.

6.INTANGIBLE ASSETS, NET

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

	As of June 30, 2014						As of December 31, 2013
	Gross carrying		Accumulated		Net book		Gross carrying		Accumulated		Net book
	amount		amortization		value		amount		amortization		value
	(in thousands)
Current contract intangibles	$	3,864,470	$	(772,211)	$	3,092,259	$	3,154,616	$	(649,861)	$	2,504,755
Network location intangibles		1,317,793		(368,862)		948,931		1,209,142		(326,699)		882,443
Intangible assets, net	$	5,182,263	$	(1,141,073)	$	4,041,190	$	4,363,758	$	(976,560)	$	3,387,198

All intangible assets noted above are included in the Company’s site leasing segments. The Company amortizes its intangible assets using the straight-line method over an estimated economic life of15 years. Amortization expense relating to the intangible assets was $89.5 million and$71.6 millionfor the three months ended June 30, 2014  and2013, respectively, and $164.3 million and $133.6 million for the six months ended June 30, 2014 and 2013, respectively. These amounts are subject to changes in estimates resulting from purchase price adjustments.

7.PROPERTY AND EQUIPMENT, NET

Property and equipment, net (including assets held under capital leases) consists of the following:

	As of		As of
	June 30, 2014		December 31, 2013
	(in thousands)
Towers and related components	$	4,037,823	$	3,821,482
Construction-in-process		27,417		24,275
Furniture, equipment, and vehicles		44,725		40,274
Land, buildings, and improvements		390,254		364,830
		4,500,219		4,250,861
Less: accumulated depreciation		(1,808,917)		(1,672,417)
Property and equipment, net	$	2,691,302	$	2,578,444

Construction-in-process represents costs incurred related to towers that are under development and will be used in the Company’s operations. Depreciation expense was $71.7 million and$69.5 millionfor the three months ended June 30, 2014 and2013, respectively, and $140.7 million and $133.0 million for the six months ended June 30, 2014 and 2013, respectively. At June 30, 2014

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and December 31, 2013, non-cash capital expenditures that are included in accounts payable and accrued expenses were $13.3 million and $11.4 million, respectively.

8.COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

Costs and estimated earnings on uncompleted contracts consist of the following:

	As of		As of
	June 30, 2014		December 31, 2013
	(in thousands)
Costs incurred on uncompleted contracts	$	102,086	$	94,145
Estimated earnings		42,934		32,547
Billings to date		(126,344)		(108,070)
	$	18,676	$	18,622

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

	As of		As of
	June 30, 2014		December 31, 2013
	(in thousands)
Costs and estimated earnings in excess of
billings on uncompleted contracts	$	25,704	$	27,864
Other current liabilities (Billings in excess of costs and
estimated earnings on uncompleted contracts)		(7,028)		(9,242)
	$	18,676	$	18,622

Eight significant customers comprised 87.8%and 89.6% of thecosts and estimated earnings in excess of billings on uncompleted contracts, net of billings in excess of costs and estimated earnings on uncompleted contracts at June 30, 2014 and December 31, 2013, respectively.

9.CONCENTRATION OF CREDIT RISK

The Company’s credit risks consist primarily of accounts receivable with national, regional, and local wireless service providers and federal and state government agencies. The Company performs periodic credit evaluations of its customers’ financial condition and provides allowances for doubtful accounts, as required, based upon factors surrounding the credit risk of specific customers, historical trends, and other information. The Company generally does not require collateral on its lease agreements or site development contracts.  

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The following is a list of significant customers (representing at least 10% of segment revenues for the periods reported) and the percentage of total segment revenues for the specified time periods derived from such customers.