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Table of Contents

 

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, 2023

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 checkmark 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: 108,339,393 shares of Class A common stock as of April 26, 2023.


Table of Contents

Table of Contents

 

 

Page

PART I – FINANCIAL INFORMATION 

Item 1.

Financial Statements

 

Consolidated Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022

1 

Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2023 and 2022

2 

Consolidated Statements of Comprehensive Income (unaudited) for the three months ended March 31, 2023 and 2022

3 

Consolidated Statement of Shareholders’ Deficit (unaudited) for the three months ended March 31, 2023 and 2022

4 

Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2023 and 2022

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

31

Item 4.

Controls and Procedures

34

PART II – OTHER INFORMATION 

Item 6.

Exhibits

34

SIGNATURES

35


Table of Contents

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,

2023

2022

ASSETS

(unaudited)

Current assets:

Cash and cash equivalents

$

152,772

$

143,708

Restricted cash

36,615

41,959

Accounts receivable, net

183,134

184,368

Costs and estimated earnings in excess of billings on uncompleted contracts

58,815

79,549

Prepaid expenses and other current assets

40,214

33,149

Total current assets

471,550

482,733

Property and equipment, net

2,709,784

2,713,727

Intangible assets, net

2,693,883

2,776,472

Operating lease right-of-use assets, net

2,376,609

2,381,955

Acquired and other right-of-use assets, net

1,518,648

1,507,781

Other assets

771,055

722,373

Total assets

$

10,541,529

$

10,585,041

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS,

AND SHAREHOLDERS' DEFICIT

Current Liabilities:

Accounts payable

$

53,553

$

51,427

Accrued expenses

92,797

101,484

Current maturities of long-term debt

24,000

24,000

Deferred revenue

145,399

154,553

Accrued interest

28,215

54,173

Current lease liabilities

270,308

262,365

Other current liabilities

24,511

48,762

Total current liabilities

638,783

696,764

Long-term liabilities:

Long-term debt, net

12,797,828

12,844,162

Long-term lease liabilities

2,033,167

2,040,628

Other long-term liabilities

302,721

248,067

Total long-term liabilities

15,133,716

15,132,857

Redeemable noncontrolling interests

38,184

31,735

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, 108,326 shares and

107,997 shares issued and outstanding at March 31, 2023 and December 31, 2022,

respectively

1,083

1,080

Additional paid-in capital

2,800,046

2,795,176

Accumulated deficit

(7,473,913)

(7,482,061)

Accumulated other comprehensive loss, net

(596,370)

(590,510)

Total shareholders' deficit

(5,269,154)

(5,276,315)

Total liabilities, redeemable noncontrolling interests, and shareholders' deficit

$

10,541,529

$

10,585,041

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

ended March 31,

2023

2022

Revenues:

Site leasing

$

617,268

$

559,432

Site development

58,248

60,338

Total revenues

675,516

619,770

Operating expenses:

Cost of revenues (exclusive of depreciation, accretion,

and amortization shown below):

Cost of site leasing

120,119

107,155

Cost of site development

44,185

45,773

Selling, general, and administrative expenses (1)

72,209

62,124

Acquisition and new business initiatives related

adjustments and expenses

6,057

5,104

Asset impairment and decommission costs

26,390

8,512

Depreciation, accretion, and amortization

182,415

174,323

Total operating expenses

451,375

402,991

Operating income

224,141

216,779

Other income (expense):

Interest income

2,816

2,502

Interest expense

(101,226)

(82,252)

Non-cash interest expense

(14,239)

(11,526)

Amortization of deferred financing fees

(4,988)

(4,881)

Other income, net

37,558

108,161

Total other (expense) income, net

(80,079)

12,004

Income before income taxes

144,062

228,783

Provision for income taxes

(43,508)

(40,477)

Net income

100,554

188,306

Net loss attributable to noncontrolling interests

663

317

Net income attributable to SBA Communications

Corporation

$

101,217

$

188,623

Net income per common share attributable to SBA

Communications Corporation:

Basic

$

0.94

$

1.75

Diluted

$

0.93

$

1.72

Weighted-average number of common shares

Basic

108,132

108,086

Diluted

109,271

109,544

(1)Includes non-cash compensation of $25,529 and $24,116 for the three months ended March 31, 2023 and 2022, 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

ended March 31,

2023

2022

Net income

$

100,554

$

188,306

Adjustments related to interest rate swaps

(22,389)

85,322

Foreign currency translation adjustments

16,529

85,506

Comprehensive income

94,694

359,134

Comprehensive loss attributable to noncontrolling interests

663

434

Comprehensive income attributable to SBA

Communications Corporation

$

95,357

$

359,568

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, 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

101,217 

101,217 

Common stock issued in connection with equity

awards and stock purchase plans, offset

by the impact of net share settlements

329 

3 

(14,719)

(14,716)

Non-cash stock compensation

26,701 

26,701 

Adjustments related to interest rate swaps

(22,389)

(22,389)

Foreign currency translation adjustments

attributable to SBA Communications

Corporation

16,529 

16,529 

Dividends and dividend equivalents

on common stock

(93,069)

(93,069)

Adjustment to redemption amount related to

noncontrolling interests

(7,112)

(7,112)

BALANCE, March 31, 2023

108,326 

$

1,083 

$

2,800,046 

$

(7,473,913)

$

(596,370)

$

(5,269,154)

Accumulated

Class A

Additional

Other

Total

Common Stock

Paid-In

Accumulated

Comprehensive

Shareholders'

Shares

Amount

Capital

Deficit

Loss, Net

Deficit

BALANCE, December 31, 2021

108,956 

$

1,089 

$

2,681,347 

$

(7,203,531)

$

(762,309)

$

(5,283,404)

Net income attributable to SBA

Communications Corporation

188,623 

188,623 

Common stock issued in connection with equity

awards and stock purchase plans, offset

by the impact of net share settlements

150 

2 

1,566 

1,568 

Non-cash stock compensation

25,143 

25,143 

Adjustments related to interest rate swaps

85,322 

85,322 

Repurchase and retirement of common stock

(1,300)

(13)

(431,654)