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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 September 30, 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: 111,114,641 shares of Class A common stock as of October 31, 2020.

Table of Contents

 

 

Page

PART I – FINANCIAL INFORMATION 

Item 1.

Financial Statements

 

Consolidated Balance Sheets as of September 30, 2020 (unaudited) and December 31, 2019

1 

Consolidated Statements of Operations (unaudited) for the three and nine months ended September 30, 2020 and 2019

2 

Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three and nine months ended September 30, 2020 and 2019

3 

Consolidated Statement of Shareholders’ Deficit (unaudited) for the three and nine months ended September 30, 2020 and 2019

4 

Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2020 and 2019

6 

Condensed Notes to Consolidated Financial Statements (unaudited)

8 

Item 2.

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

25

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

44

Item 4.

Controls and Procedures

47

PART II – OTHER INFORMATION 

Item 1A.

Risk Factors

47

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

48

Item 5.

Other Information

48

Item 6.

Exhibits

49

SIGNATURES

50

PART I – FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (in thousands, except par values)

September 30,

December 31,

2020

2019

ASSETS

(unaudited)

Current assets:

Cash and cash equivalents

$

271,874 

$

108,309 

Restricted cash

61,572 

30,243 

Accounts receivable, net

68,042 

132,125 

Costs and estimated earnings in excess of billings on uncompleted contracts

27,109 

26,313 

Prepaid expenses and other current assets

29,994 

37,281 

Total current assets

458,591 

334,271 

Property and equipment, net

2,668,004 

2,794,602 

Intangible assets, net

3,063,498 

3,626,773 

Right-of-use assets, net

2,340,035 

2,572,217 

Other assets

504,554 

432,078 

Total assets

$

9,034,682 

$

9,759,941 

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS,

AND SHAREHOLDERS' DEFICIT

Current Liabilities:

Accounts payable

$

29,230 

$

31,846 

Accrued expenses

62,523 

67,618 

Current maturities of long-term debt

24,000 

522,090 

Deferred revenue

155,799 

113,507 

Accrued interest

33,885 

49,269 

Current lease liabilities

229,177 

247,015 

Other current liabilities

16,634 

16,948 

Total current liabilities

551,248 

1,048,293 

Long-term liabilities:

Long-term debt, net

10,692,710 

9,812,335 

Long-term lease liabilities

2,080,916 

2,279,400 

Other long-term liabilities

181,012 

270,868 

Total long-term liabilities

12,954,638 

12,362,603 

Redeemable noncontrolling interests

15,194 

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, 111,443 shares and

111,775 shares issued and outstanding at September 30, 2020 and December 31, 2019,

respectively

1,114 

1,118 

Additional paid-in capital

2,563,979 

2,461,335 

Accumulated deficit

(6,177,879)

(5,560,695)

Accumulated other comprehensive loss, net

(873,612)

(568,765)

Total shareholders' deficit

(4,486,398)

(3,667,007)

Total liabilities, redeemable noncontrolling interests, and shareholders' deficit

$

9,034,682 

$

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

For the nine months

ended September 30,

ended September 30,

2020

2019

2020

2019

Revenues:

Site leasing

$

486,765

$

468,572

$

1,461,523

$

1,379,758

Site development

36,175

38,975

85,708

121,229

Total revenues

522,940

507,547

1,547,231

1,500,987

Operating expenses:

Cost of revenues (exclusive of depreciation, accretion,

and amortization shown below):

Cost of site leasing

92,722

92,993

280,120

279,167

Cost of site development

28,797

30,516

68,417

92,606

Selling, general, and administrative expenses (1)

48,152

42,272

146,856

148,755

Acquisition and new business initiatives related

adjustments and expenses

4,124

4,692

12,557

9,669

Asset impairment and decommission costs

8,506

8,240

29,103

23,631

Depreciation, accretion, and amortization

180,302

174,987

541,587

517,590

Total operating expenses

362,603

353,700

1,078,640

1,071,418

Operating income

160,337

153,847

468,591

429,569

Other income (expense):

Interest income

756

1,311

2,340

4,692

Interest expense

(89,791)

(96,567)

(281,329)

(292,681)

Non-cash interest expense

(8,323)

(662)

(13,066)

(1,954)

Amortization of deferred financing fees

(4,883)

(5,157)

(15,211)

(15,333)

Loss from extinguishment of debt, net

(2,599)

(457)

(19,463)

(457)

Other expense, net

(42,262)

(33,551)

(300,144)

(21,296)

Total other expense, net

(147,102)

(135,083)

(626,873)

(327,029)

Income (loss) before income taxes

13,235

18,764

(158,282)

102,540

Benefit (provision) for income taxes

9,441

3,002

76,143

(22,813)

Net income (loss)

22,676

21,766

(82,139)

79,727

Net (income) loss attributable to noncontrolling interests

(108)

(87)

461

(87)

Net income (loss) attributable to SBA Communications

Corporation

$

22,568

$

21,679

$

(81,678)

$

79,640

Net income (loss) per common share attributable to SBA

Communications Corporation:

Basic

$

0.20

$

0.19

$

(0.73)

$

0.70

Diluted

$

0.20

$

0.19

$

(0.73)

$

0.69

Weighted average number of common shares

Basic

111,783

113,037

111,809

112,985

Diluted

113,703

115,184

111,809

114,824

(1)Includes non-cash compensation of $16,606 and $12,281 for the three months ended September 30, 2020 and 2019, respectively, and $50,291 and $59,017 for the nine months ended September 30, 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

For the nine months

ended September 30,

ended September 30,

2020

2019

2020

2019

Net income (loss)

$

22,676 

$

21,766 

$

(82,139)

$

79,727 

Adjustments related to interest rate swaps

1,557 

(10,811)

(114,366)

(62,404)

Foreign currency translation adjustments

(7,196)

(55,047)

(191,389)

(46,469)

Comprehensive income (loss)

17,037 

(44,092)

(387,894)

(29,146)

Comprehensive (income) loss attributable to noncontrolling interests

(204)

(87)

1,369 

(87)

Comprehensive income (loss) attributable to SBA

Communications Corporation

$

16,833 

$

(44,179)

$

(386,525)

$

(29,233)

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

Equity (Deficit)

BALANCE, June 30, 2020

111,918 

$

1,119 

$

2,534,423 

$

(5,972,657)

$

(867,877)

$

(4,304,992)

Net income attributable to SBA

Communications Corporation

22,568 

22,568 

Common stock issued in connection with equity

awards and stock purchase plans, offset

by the impact of net share settlements

105 

1