20160331 Q1 10Q

PART I – FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except par values)



	March 31,		December 31,
	2016		2015
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$	103,266	$	118,039
Restricted cash		25,138		25,353
Short-term investments		708		706
Accounts receivable, net of allowance of $2,235 and $1,681
at March 31, 2016 and December 31, 2015, respectively		87,580		83,326
Costs and estimated earnings in excess of billings on uncompleted contracts		12,683		16,934
Prepaid expenses and other current assets		53,177		49,602
Total current assets		282,552		293,960
Property and equipment, net		2,802,662		2,782,353
Intangible assets, net		3,764,036		3,735,413
Other assets		522,394		501,254
Total assets	$	7,371,644	$	7,312,980

LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	20,716	$	27,105
Accrued expenses		56,657		63,755
Current maturities of long-term debt		20,000		20,000
Deferred revenue		87,283		97,083
Accrued interest		38,813		53,365
Other current liabilities		9,600		12,063
Total current liabilities		233,069		273,371
Long-term liabilities:
Long-term debt, net		8,452,270		8,432,070
Other long-term liabilities		316,865		313,683
Total long-term liabilities		8,769,135		8,745,753
Shareholders' deficit:
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, 125,512 and
125,743 shares issued and outstanding at March 31, 2016 and
December 31, 2015, respectively		1,255		1,257
Additional paid-in capital		1,973,974		1,962,713
Accumulated deficit		(3,164,437)		(3,168,069)
Accumulated other comprehensive loss, net		(441,352)		(502,045)
Total shareholders' deficit		(1,630,560)		(1,706,144)
Total liabilities and shareholders' deficit	$	7,371,644	$	7,312,980

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

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SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited) (in thousands, except per share amounts)


	For the three months
	ended March 31,
	2016		2015
Revenues:
Site leasing	$	374,450	$	369,727
Site development		25,319		40,367
Total revenues		399,769		410,094
Operating expenses:
Cost of revenues (exclusive of depreciation, accretion,
and amortization shown below):
Cost of site leasing		82,762		80,217
Cost of site development		19,833		30,893
Selling, general, and administrative (1)		30,406		29,884
Acquisition related adjustments and expenses		3,182		1,339
Asset impairment and decommission costs		6,183		6,822
Depreciation, accretion, and amortization		159,801		171,853
Total operating expenses		302,167		321,008
Operating income		97,602		89,086
Other income (expense):
Interest income		1,866		293
Interest expense		(83,804)		(77,654)
Non-cash interest expense		(455)		(280)
Amortization of deferred financing fees		(5,265)		(4,544)
Other income (expense), net		45,900		(82,968)
Total other expense		(41,758)		(165,153)
Income (loss) before provision for income taxes		55,844		(76,067)
Provision for income taxes		(2,205)		(2,963)
Net income (loss)	$	53,639	$	(79,030)
Net income (loss) per common share
Basic	$	0.43	$	(0.61)
Diluted	$	0.43	$	(0.61)
Weighted average number of common shares
Basic		125,398		129,235
Diluted		126,124		129,235

(1)

Includes non-cash compensation of $7,686 and $6,884 for the three months ended March 31, 2016 and 2015, respectively.

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

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SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited) (in thousands)



	For the three months
	ended March 31,

	2016		2015
Net income (loss)	$	53,639	$	(79,030)
Foreign currency translation adjustments		60,693		(174,450)
Comprehensive income (loss)	$	114,332	$	(253,480)

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

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SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ DEFICIT

(unaudited) (in thousands)



								Accumulated
	Class A			Additional				Other
	Common Stock			Paid-In		Accumulated		Comprehensive
	Shares	Amount		Capital		Deficit		Loss		Total

BALANCE, December 31, 2015	125,743	$	1,257	$	1,962,713	$	(3,168,069)	$	(502,045)	$	(1,706,144)
Net income	—		—		—		53,639		—		53,639
Common stock issued in connection with
stock purchase/option plans	276		3		3,328		—		—		3,331
Non-cash compensation	—		—		7,933		—		—		7,933
Settlement of common stock warrants	—		—		—		—		—		—
Repurchase and retirement of common stock	(507)		(5)		—		(50,007)		—		(50,012)
Foreign currency translation adjustments	—		—		—		—		60,693		60,693
BALANCE, March 31, 2016	125,512	$	1,255	$	1,973,974	$	(3,164,437)	$	(441,352)	$	(1,630,560)

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

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SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited) (in thousands)



	For the three months
	ended March 31,
	2016		2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	53,639	$	(79,030)
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:
Depreciation, accretion, and amortization		159,801		171,853
Non-cash interest expense		455		280
Deferred income tax (benefit) expense		(277)		557
Non-cash asset impairment and decommission costs		4,196		5,027
Non-cash compensation expense		7,785		6,988
Amortization of deferred financing fees		5,265		4,544
(Gain) loss on remeasurement of U.S. dollar denominated intercompany loan		(44,765)		83,995
Other non-cash items reflected in the Statements of Operations		(309)		(1,531)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable and costs and estimated earnings in excess of
billings on uncompleted contracts, net		90		4,445
Prepaid and other assets		(12,036)		(6,286)
Accounts payable and accrued expenses		(8,277)		3,834
Accrued interest		(14,552)		(15,212)
Other liabilities		(6,151)		(1,056)
Net cash provided by operating activities		144,864		178,408
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions		(91,832)		(53,279)
Capital expenditures		(36,060)		(68,100)
Other investing activities		(4,447)		(175)
Net cash used in investing activities		(132,339)		(121,554)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under Revolving Credit Facility		70,000		135,000
Repayments under Revolving Credit Facility		(50,000)		(25,000)
Repayment of Term Loans		(5,000)		(7,500)
Payments for settlement of common stock warrants		—		(135,236)
Repurchase and retirement of common stock, inclusive of fees		(50,012)		—
Other financing activities		1,689		1,207
Net cash used in financing activities		(33,323)		(31,529)
Effect of exchange rate changes on cash and cash equivalents		6,025		(2,397)

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(14,773)		22,928
CASH AND CASH EQUIVALENTS:
Beginning of period		118,039		39,443
End of period	$	103,266	$	62,371

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

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SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



	For the three months
	ended March 31,
	2016		2015

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	98,434	$	92,911
Income taxes	$	2,359	$	1,514

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:
Assets acquired through capital leases	$	273	$	1,464

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

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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, 2015 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 amounts, when known, may vary from these estimates.

Foreign Currency Translation

The functional currency for the Company’s Central American subsidiaries is the U.S. dollar. 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. Unrealized translation gains and losses are reported as Other income (expense), net in the Consolidated Statement of Operations.

All assets and liabilities of foreign subsidiaries that do not utilize the U.S. dollar as its functional currency are translated at period-end rates of exchange, while revenues and expenses are translated at monthly average rates of exchange prevailing during the period. Unrealized remeasurement gains and losses are reported as foreign currency translation adjustments through Accumulated other comprehensive loss in the accompanying Consolidated Statement of Shareholders’ Deficit.

Intercompany Loans

In accordance with ASC 830, the Company remeasures foreign denominated intercompany loans with the corresponding change in the balance being recorded in Other income (expense), net in the Consolidated Statements of Operations. For the three months ended March 31, 2016 and 2015, the Company recorded a $44.8 million gain and an $84.0 million loss on the remeasurement of intercompany loans, respectively.

New Accounting Pronouncements Recently Adopted

In April 2015, the Financial Accounting Standards Board ("FASB") issued ASU 2015-03, Interest—Imputation of Interest. The standard requires debt issuance costs to be presented on the balance sheet as a direct deduction from the related debt liability rather than as an asset. The Company adopted ASU 2015-03 effective January 1, 2016 and reclassified $90.2 million from deferred financing fees, net to long-term debt in the December 31, 2015 Consolidated Balance Sheet.

In August 2015, the FASB issued ASU 2015-15, Interest - Imputation of Interest - Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. The standard indicates the SEC staff would not object to presenting deferred debt issuance costs for a line of credit arrangement as an asset in the balance sheet. The Company adopted ASU 2015-15 effective January 1, 2016 and has elected to continue to present deferred debt issuance costs for its Revolving Credit Facility as an asset on the accompanying Consolidated Balance Sheet.

In September 2015, the FASB issued ASU 2015-16 Business Combinations. The standard requires that the acquirer (1) recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, (2) record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date, and (3) to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The Company adopted

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ASU 2015-16 effective January 1, 2016. The financial statement impact of adopting this standard was not material for all periods presented.

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which the Company adopted as of January 1, 2016. The standard simplifies several aspects of the accounting for shared-based payment transactions including accounting for income taxes, forfeitures, statutory tax withholding requirements, classification of awards as either equity or a liability, and classification on the statement of cash flows. The financial statement impact of adopting this standard was not material for all periods presented.

Recent Accounting Pronouncements Not Yet Adopted

In May 2014, the FASB released an updated standard regarding the recognition of revenue from contracts with customers, exclusive of those contracts within lease accounting. The core principle of the standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (1) identify the contracts with the customer; (2) identify the performance obligations in the contract; (3) determine the contract price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The new standard is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2017 for public companies. Under the proposal, the standard would be required to be adopted by public business entities in annual periods beginning on or after December 15, 2017. Early adoption is permitted but not before interim and annual reporting periods beginning after December 15, 2016. This standard is required to be applied (1) retrospectively to each prior reporting period presented, or (2) with the cumulative effect being recognized at the date of initial application. The Company is evaluating the standard and does not expect a material financial statement impact upon adoption.

In February 2016, the FASB issued ASU 2016-02, Leases. The standard amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. This standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018 and early adoption is permitted. The Company is evaluating the standard including the impact on its consolidated financial statements.

2.FAIR VALUE MEASUREMENTS

Items Measured at Fair Value on a Recurring Basis— The Company’s earnout liabilities related to acquisitions are measured at fair value on a recurring basis using Level 3 inputs and are recorded in Accrued expenses in the accompanying Consolidated Balance Sheets. Changes in estimate are recorded in Acquisition related adjustments and expenses in the accompanying Consolidated Statement of Operations. The Company determines the fair value of acquisition-related earnouts (contingent consideration) and any subsequent changes in fair value using a discounted probability-weighted approach 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 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 contained in various acquisitions was $5.0 million and $7.2 million as of March 31, 2016 and December 31, 2015, respectively. The maximum potential obligation related to the performance targets was $7.4 million and $10.2 million as of March 31, 2016 and December 31, 2015, respectively.

The following summarizes the activity of the accrued earnouts:



	For the three months ended March 31,
	2016		2015

	(in thousands)
Beginning balance	$	7,230	$	15,086
Additions		173		1,372
Payments		(1,360)		(1,234)
Change in estimate		(1,023)		(1,552)
Foreign currency translation adjustments		4		(319)
Ending balance	$	5,024	$	13,353

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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 three months ended March 31, 2016, the Company recognized impairment charges of $6.2 million which include the write off of $4.2 million in carrying value of decommissioned towers and $2.0 million of other third party decommission costs. During the three months ended March 31, 2015, the Company recognized impairment charges of $6.8 million which include the write off of $3.9 million in carrying value of decommissioned towers and $1.8 million of other third party decommission costs. In addition, for the three months ended March 31, 2015, the impairment charge includes $1.1 million in disposal costs related to the Company’s former corporate headquarters building. Asset impairment and decommission costs for all periods presented 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 $0.5 million in certificate of deposits as of March 31, 2016 and December 31, 2015, and $0.2 million in Treasury securities as of March 31, 2016 and December 31, 2015. 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 March 31, 2016, the carrying value and fair value of the held-to-maturity investments, including current portion, were $0.8 million and $0.9 million, respectively. As of December 31, 2015, the carrying value and fair value of the held-to-maturity investments, including current portion, were $0.8 million and $0.9 million, respectively. These amounts are recorded in Other assets in the accompanying Consolidated Balance Sheets.

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 137.5 to 200.0 basis points was set for the Revolving Credit Facility. Refer to Note 10 for the fair values, principal balances, and carrying values of the Company’s debt instruments.

3.RESTRICTED CASH

Restricted cash consists of the following:



	As of		As of
	March 31, 2016		December 31, 2015		Included on Balance Sheet

		(in thousands)
Securitization escrow accounts	$	24,910	$	25,135	Restricted cash - current asset
Payment and performance bonds		228		218	Restricted cash - current asset
Surety bonds and workers compensation		3,229		3,227	Other assets - noncurrent
Total restricted cash	$	28,367	$	28,580

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. Cash is pledged as collateral related to surety bonds issued for the benefit of the Company or its affiliates in the ordinary course of business and primarily related to the Company’s tower removal obligations. As of March 31, 2016 and December 31, 2015, the Company had $38.8 million and $38.6 million in surety, payment and performance bonds, respectively, for which it was only

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required to post $0.5 million and $0.7 million in collateral, respectively. The Company periodically evaluates the collateral posted for its bonds to ensure that it meets the minimum requirements. As of March 31, 2016 and December 31, 2015, the Company had also pledged $2.5 million and $2.5 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
	March 31, 2016		December 31, 2015

		(in thousands)
Long-term investments	$	8,095	$	8,140
Prepaid land rent		160,991		158,176
Straight-line rent receivable		278,670		267,682
Deferred lease costs, net		30,458		30,577
Deferred financing fees, net		3,680		3,919
Other		40,500		32,760
Total other assets	$	522,394	$	501,254

5.ACQUISITIONS

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



	For the three months
	ended March 31,
	2016		2015

	(in thousands)
Towers and related intangible assets	$	74,844	$	42,630
Land buyouts and other assets (1)		16,988		10,649
Total cash acquisition capital expenditures	$	91,832	$	53,279

(1)

In addition, the Company paid $3.6 million and $3.3 million for ground lease extensions and term easements on land underlying the Company’s towers during the three months ended March 31, 2016 and 2015, respectively. The Company recorded these amounts in prepaid rent on its Consolidated Balance Sheets.

During the three months ended March 31, 2016, the Company acquired 117 completed towers and related assets and liabilities for $74.8 million in cash consisting of $24.6 million of property and equipment, $45.8 million of intangible assets, and $4.4 million of working capital adjustments.

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.

Subsequent to March 31, 2016, the Company acquired 31 completed towers and related assets and liabilities for $32.5 million in cash.

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6.INTANGIBLE ASSETS, NET

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



	As of March 31, 2016						As of December 31, 2015
	Gross carrying		Accumulated		Net book		Gross carrying		Accumulated		Net book
	amount		amortization		value		amount		amortization		value

	(in thousands)
Current contract intangibles	$	4,003,832	$	(1,191,738)	$	2,812,094	$	3,904,864	$	(1,118,493)	$	2,786,371
Network location intangibles		1,475,428		(523,486)		951,942		1,446,293		(497,251)		949,042
Intangible assets, net	$	5,479,260	$	(1,715,224)	$	3,764,036	$	5,351,157	$	(1,615,744)	$	3,735,413

All intangible assets noted above are included in the Company’s site leasing segment. The Company amortizes its intangible assets using the straight-line method over 15 years. Amortization expense relating to the intangible assets above was $90.2 million and $91.4 million for the three months ended March 31, 2016 and 2015, respectively.

7.PROPERTY AND EQUIPMENT, NET

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



	As of		As of
	March 31, 2016		December 31, 2015

	(in thousands)
Towers and related components	$	4,435,036	$	4,370,664
Construction-in-process		35,579		32,730
Furniture, equipment, and vehicles		49,084		48,018
Land, buildings, and improvements		542,223		524,847
Total property and equipment		5,061,922		4,976,259
Less: accumulated depreciation		(2,259,260)		(2,193,906)
Property and equipment, net	$	2,802,662	$	2,782,353

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 $69.5 million and $80.4 million for the three months ended March 31, 2016 and 2015, respectively. At March 31, 2016 and December 31, 2015, non-cash capital expenditures that are included in accounts payable and accrued expenses were $5.2 million and $9.5 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
	March 31, 2016		December 31, 2015

	(in thousands)
Costs incurred on uncompleted contracts	$	65,088	$	78,849
Estimated earnings		24,958		29,333
Billings to date		(77,916)		(95,055)
	$	12,130	$	13,127

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



	As of		As of
	March 31, 2016		December 31, 2015

	(in thousands)
Costs and estimated earnings in excess of billings on uncompleted contracts	$	12,683	$	16,934
Billings in excess of costs and estimated earnings on
uncompleted contracts (included in Other current liabilities)		(553)		(3,807)
	$	12,130	$	13,127

Eight significant customers comprised 88.8% and 95.9% of the costs and estimated earnings in excess of billings on uncompleted contracts, net of billings in excess of costs and estimated earnings at March 31, 2016 and December 31, 2015, respectively.

9.ACCRUED EXPENSES

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



	As of		As of
	March 31, 2016		December 31, 2015

	(in thousands)
Accrued earnouts	$	5,024	$	7,230
Salaries and benefits		9,647		14,253
Real estate and property taxes		7,562		7,899
Other		34,424		34,373
Total accrued expenses	$	56,657	$	63,755

10.DEBT

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



		As of						As of
		March 31, 2016						December 31, 2015
	Maturity Date	Principal Balance		Fair Value		Carrying Value		Principal Balance		Fair Value		Carrying Value
5.625% Senior Notes	Oct. 1, 2019	$	500,000	$	517,500	$	495,258	$	500,000	$	521,250	$	494,955
5.750% Senior Notes	July 15, 2020		800,000		822,000		791,666		800,000		832,000		791,243
4.875% Senior Notes	July 15, 2022		750,000		755,625		735,497		750,000		744,375		735,010
2010-2C Tower Securities	April 11, 2017		550,000		554,169		548,594		550,000		558,223		548,268
2012-1C Tower Securities	Dec. 11, 2017		610,000		611,562		604,952		610,000		611,879		604,229
2013-1C Tower Securities	April 10, 2018		425,000		420,793		421,513		425,000		416,959		421,099
2013-2C Tower Securities	April 11, 2023		575,000		572,395		566,774		575,000		565,541		566,523
2013-1D Tower Securities	April 10, 2018		330,000		335,240		327,240		330,000		332,676		326,918
2014-1C Tower Securities	Oct. 8, 2019		920,000		912,410		910,243		920,000		910,368		909,595
2014-2C Tower Securities	Oct. 8, 2024		620,000		618,878		612,047		620,000		608,084		611,853
2015-1C Tower Securities	Oct. 8, 2020		500,000		501,330		489,725		500,000		489,680		489,496
Revolving Credit Facility	Feb. 5, 2020		20,000		20,000		20,000		—		—		—
2014 Term Loan	Mar. 24, 2021		1,473,750		1,466,381		1,461,581		1,477,500		1,447,950		1,464,774
2015 Term Loan	June 10, 2022		496,250		491,288		487,180		497,500		486,306		488,107
Total debt		$	8,570,000	$	8,599,571	$	8,472,270	$	8,555,000	$	8,525,291	$	8,452,070
Less: current maturities of long-term debt							(20,000)						(20,000)
Total long-term debt, net of current maturities						$	8,452,270					$	8,432,070

Table of Contents

The table below reflects cash and non-cash interest expense amounts recognized by debt instrument for the periods presented:



	For the three months ended March 31,
	2016				2015
	Cash		Non-cash		Cash		Non-cash
	Interest		Interest		Interest		Interest

	(in thousands)
5.625% Senior Notes	$	7,031	$	—	$	7,031	$	—
5.75% Senior Notes		11,500		—		11,500		—
4.875% Senior Notes		9,141		169		9,141		161
2010 Tower Securities		7,058		—		7,058		—
2012 Tower Securities		4,534		—		4,531		—
2013 Tower Securities		10,804		—		10,804		—
2014 Tower Securities		12,785		—		12,785		—
2015 Tower Securities		3,985		—		—		—
Revolving Credit Facility		833		—		1,571		—
2012-1 Term Loan		—		—		1,153		—
2014 Term Loan		12,138		125		12,125		119
2015 Term Loan		4,087		161		—		—
Other		(92)		—		(45)		—
Total	$	83,804	$	455	$	77,654	$	280

Revolving Credit Facility under the Senior Credit Agreement

The Revolving Credit Facility is governed by the Senior Credit Agreement. The Revolving Credit Facility consists of a revolving loan under which up to $1.0 billion aggregate principal amount may be borrowed, repaid and redrawn, subject to compliance with specific financial ratios and the satisfaction of other customary conditions to borrowing. Amounts borrowed under the Revolving Credit Facility accrue interest, at SBA Senior Finance II’s election, at either (i) the Eurodollar Rate plus a margin that ranges from 137.5 basis points to 200.0 basis points or (ii) the Base Rate plus a margin that ranges from 37.5 basis points to 100.0 basis points, in each case based on the ratio of Consolidated Total 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 0.25% per annum on the amount of unused commitment. If not earlier terminated by SBA Senior Finance II, the Revolving Credit Facility will terminate on, and SBA Senior Finance II will repay all amounts outstanding on or before, February 5, 2020. The proceeds available 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 a period may not be reflective of the total amounts outstanding during such period.

During the three months ended March 31, 2016, the Company borrowed $70.0 million and repaid $50.0 million of the outstanding balance under the Revolving Credit Facility. As of March 31, 2016, $20.0 million was outstanding under the Revolving Credit Facility. A


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


8051 Congress Avenue
Boca Raton, Florida	33487
(Address of principal executive offices)	(Zip Code)


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)


Large accelerated filer	☒	Accelerated filer	☐

Non-Accelerated filer	☐	Smaller reporting company	☐



		Page
PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements
	Consolidated Balance Sheets as of March 31, 2016 (unaudited) and December 31, 2015	1
	Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2016 and 2015	2
	Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three months ended March 31, 2016 and 2015	3
	Consolidated Statement of Shareholders’ Deficit (unaudited) for the three months ended March 31, 2016	4
	Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2016 and 2015	5
	Condensed Notes to Consolidated Financial Statements (unaudited)	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	32

PART II – OTHER INFORMATION

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33

Item 6.	Exhibits	33


SIGNATURES		34