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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2020

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: 001-16853

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.)

8051 Congress Avenue

Boca Raton, Florida

33487

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code (561995-7670

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

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Class A Common Stock, $0.01 par value per share

SBAC

The NASDAQ Stock Market LLC

(NASDAQ Global Select Market)

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  x    No  ¨

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).    Yes  x   No  ¨

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

Large Accelerated Filer

x

Accelerated Filer

¨

Non-Accelerated filer

¨

Smaller Reporting Company

¨

Emerging Growth Company

¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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

Indicate the number of shares outstanding of each issuer’s classes of common stock, as of the latest practicable date: 111,624,887 shares of Class A common stock as of April 27, 2020.

Table of Contents

 

 

Page

PART I – FINANCIAL INFORMATION 

Item 1.

Financial Statements

 

Consolidated Balance Sheets as of March 31, 2020 (unaudited) and December 31, 2019

1

Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2020 and 2019

2

Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three months ended March 31, 2020 and 2019

3

Consolidated Statement of Shareholders’ Deficit (unaudited) for the three months ended March 31, 2020 and 2019

4

Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2020 and 2019

5

Condensed Notes to Consolidated Financial Statements (unaudited)

7

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

20

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

32

Item 4.

Controls and Procedures

35

PART II – OTHER INFORMATION 

Item 1A.

Risk Factors

35

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

36

Item 5.

Other Information

36

Item 6.

Exhibits

37

SIGNATURES

38

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,

2020

2019

ASSETS

(unaudited)

Current assets:

Cash and cash equivalents

$

184,137 

$

108,309 

Restricted cash

43,012 

30,243 

Accounts receivable, net

107,200 

132,125 

Costs and estimated earnings in excess of billings on uncompleted contracts

18,823 

26,313 

Prepaid expenses and other current assets

41,886 

37,281 

Total current assets

395,058 

334,271 

Property and equipment, net

2,697,778 

2,794,602 

Intangible assets, net

3,294,369 

3,626,773 

Right-of-use assets, net

2,420,363 

2,572,217 

Other assets

551,934 

432,078 

Total assets

$

9,359,502 

$

9,759,941 

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS,

AND SHAREHOLDERS' DEFICIT

Current Liabilities:

Accounts payable

$

26,939 

$

31,846 

Accrued expenses

54,175 

67,618 

Current maturities of long-term debt

522,691 

522,090 

Deferred revenue

133,548 

113,507 

Accrued interest

32,697 

49,269 

Current lease liabilities

231,385 

247,015 

Other current liabilities

18,117 

16,948 

Total current liabilities

1,019,552 

1,048,293 

Long-term liabilities:

Long-term debt, net

10,050,737 

9,812,335 

Long-term lease liabilities

2,153,917 

2,279,400 

Other long-term liabilities

438,048 

270,868 

Total long-term liabilities

12,642,702 

12,362,603 

Redeemable noncontrolling interests

14,478 

16,052 

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, 111,559 shares and

111,775 shares issued and outstanding at March 31, 2020 and December 31, 2019,

respectively

1,116 

1,118 

Additional paid-in capital

2,471,886 

2,461,335 

Accumulated deficit

(5,943,386)

(5,560,695)

Accumulated other comprehensive loss, net

(846,846)

(568,765)

Total shareholders' deficit

(4,317,230)

(3,667,007)

Total liabilities, redeemable noncontrolling interests, and shareholders' deficit

$

9,359,502 

$

9,759,941 

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

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

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

For the three months

ended March 31,

2020

2019

Revenues:

Site leasing

$

492,356

$

452,183

Site development

24,711

41,110

Total revenues

517,067

493,293

Operating expenses:

Cost of revenues (exclusive of depreciation, accretion,

and amortization shown below):

Cost of site leasing

95,799

92,714

Cost of site development

19,715

31,101

Selling, general, and administrative expenses (1)

49,617

50,959

Acquisition and new business initiatives related

adjustments and expenses

3,799

2,437

Asset impairment and decommission costs

14,355

5,771

Depreciation, accretion, and amortization

182,579

171,038

Total operating expenses

365,864

354,020

Operating income

151,203

139,273

Other income (expense):

Interest income

885

1,800

Interest expense

(95,851)

(98,667)

Non-cash interest expense

(2,406)

(641)

Amortization of deferred financing fees

(5,139)

(5,061)

Loss from extinguishment of debt, net

(16,864)

Other income (expense), net

(226,299)

(508)

Total other expense, net

(345,674)

(103,077)

(Loss) income before income taxes

(194,471)

36,196

Benefit (provision) for income taxes

66,538

(10,207)

Net (loss) income

(127,933)

25,989

Net loss attributable to noncontrolling interests

875

Net (loss) income attributable to SBA Communications

Corporation

$

(127,058)

$

25,989

Net (loss) income per common share attributable to SBA

Communications Corporation:

Basic

$

(1.14)

$

0.23

Diluted

$

(1.14)

$

0.23

Weighted average number of common shares

Basic

111,908

112,708

Diluted

111,908

114,344

(1)Includes non-cash compensation of $15,553 and $22,605 for the three months ended March 31, 2020 and 2019, respectively.

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

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited) (in thousands)

For the three months

ended March 31,

2020

2019

Net (loss) income

$

(127,933)

$

25,989 

Unrealized loss on interest rate swaps

(103,240)

(15,312)

Foreign currency translation adjustments

(174,841)

(4,544)

Comprehensive (loss) income

(406,014)

6,133 

Comprehensive loss attributable to noncontrolling interests

2,058 

Comprehensive (loss) income attributable to SBA

Communications Corporation

$

(403,956)

$

6,133 

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


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, December 31, 2019

111,775 

$

1,118 

$

2,461,335 

$

(5,560,695)

$

(568,765)

$

(3,667,007)

Net loss attributable to SBA

Communications Corporation

(127,058)

(127,058)

Common stock issued in connection with equity

awards and stock purchase plans, offset

by the impact of net share settlements

621 

6 

(5,625)

(5,619)

Non-cash stock compensation

16,660 

16,660 

Unrealized loss on interest rate swaps

(103,240)

(103,240)

Repurchase and retirement of common stock

(837)

(8)

(203,322)

(203,330)

Foreign currency translation adjustments

(174,841)

(174,841)

Dividends on common stock

(52,311)

(52,311)

Adjustment to fair value related to

noncontrolling interests

(484)

(484)

BALANCE, March 31, 2020

111,559 

$

1,116 

$

2,471,886 

$

(5,943,386)

$

(846,846)

$

(4,317,230)

Accumulated

Class A

Additional

Other

Total

Common Stock

Paid-In

Accumulated

Comprehensive

Shareholders'

Shares

Amount

Capital

Deficit

Loss

Deficit

BALANCE, December 31, 2018

112,433 

$

1,124 

$

2,270,326 

$

(5,136,368)

$

(511,905)

$

(3,376,823)

Net income attributable to SBA

Communications Corporation

25,989 

25,989 

Common stock issued in connection with equity

awards and stock purchase plans, offset

by the impact of net share settlements

762 

8 

63,467 

63,475 

Non-cash stock compensation

23,722