10-Q 1 sbac-20220930x10q.htm 10-Q sbac-20220930x10q
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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, 2022

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: 107,965,538 shares of Class A common stock as of October 25, 2022.

Table of Contents

 

 

Page

PART I – FINANCIAL INFORMATION 

Item 1.

Financial Statements

 

Consolidated Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021

1 

Consolidated Statements of Operations (unaudited) for the three and nine months ended September 30, 2022 and 2021

2 

Consolidated Statements of Comprehensive Income (unaudited) for the three and nine months ended September 30, 2022 and 2021

3 

Consolidated Statement of Shareholders’ Deficit (unaudited) for the three and nine months ended September 30, 2022 and 2021

4 

Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2022 and 2021

6 

Condensed Notes to Consolidated Financial Statements (unaudited)

8 

Item 2.

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

21

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

38

Item 4.

Controls and Procedures

41

PART II – OTHER INFORMATION 

Item 6.

Exhibits

41

SIGNATURES

42

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,

2022

2021

ASSETS

(unaudited)

Current assets:

Cash and cash equivalents

$

201,211

$

367,278

Restricted cash

75,166

65,561

Accounts receivable, net

116,966

101,950

Costs and estimated earnings in excess of billings on uncompleted contracts

81,665

48,844

Prepaid expenses and other current assets

54,805

30,813

Total current assets

529,813

614,446

Property and equipment, net

2,658,366

2,575,487

Intangible assets, net

2,701,939

2,803,247

Operating lease right-of-use assets, net

2,325,009

2,268,470

Acquired and other right-of-use assets, net

989,685

964,405

Other assets

744,202

575,644

Total assets

$

9,949,014

$

9,801,699

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS,

AND SHAREHOLDERS' DEFICIT

Current Liabilities:

Accounts payable

$

51,314

$

34,066

Accrued expenses

96,176

68,070

Current maturities of long-term debt

663,181

24,000

Deferred revenue

216,927

184,380

Accrued interest

25,106

49,096

Current lease liabilities

255,609

238,497

Other current liabilities

30,066

18,222

Total current liabilities

1,338,379

616,331

Long-term liabilities:

Long-term debt, net

11,696,068

12,278,694

Long-term lease liabilities

2,017,760

1,981,353

Other long-term liabilities

221,022

191,475

Total long-term liabilities

13,934,850

14,451,522

Redeemable noncontrolling interests

40,615

17,250

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, 107,964 shares and

108,956 shares issued and outstanding at September 30, 2022 and December 31, 2021,

respectively

1,080

1,089

Additional paid-in capital

2,756,215

2,681,347

Accumulated deficit

(7,508,231)

(7,203,531)

Accumulated other comprehensive loss, net

(613,894)

(762,309)

Total shareholders' deficit

(5,364,830)

(5,283,404)

Total liabilities, redeemable noncontrolling interests, and shareholders' deficit

$

9,949,014

$

9,801,699

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,

2022

2021

2022

2021

Revenues:

Site leasing

$

587,302

$

535,492

$

1,726,967

$

1,564,814

Site development

88,282

53,813

220,393

148,882

Total revenues

675,584

589,305

1,947,360

1,713,696

Operating expenses:

Cost of revenues (exclusive of depreciation, accretion,

and amortization shown below):

Cost of site leasing

112,013

98,666

330,682

289,510

Cost of site development

65,540

41,357

165,809

116,172

Selling, general, and administrative expenses (1)

65,843

51,000

191,241

156,546

Acquisition and new business initiatives related

adjustments and expenses

6,844

5,730

18,776

17,525

Asset impairment and decommission costs

8,532

9,860

25,565

18,560

Depreciation, accretion, and amortization

173,825

170,916

524,541

530,266

Total operating expenses

432,597

377,529

1,256,614

1,128,579

Operating income

242,987

211,776

690,746

585,117

Other income (expense):

Interest income

2,858

945

6,878

2,124

Interest expense

(86,961)

(89,199)

(253,528)

(269,839)

Non-cash interest expense

(11,528)

(11,820)

(34,582)

(35,436)

Amortization of deferred financing fees

(4,955)

(4,934)

(14,758)

(14,690)

Loss from extinguishment of debt, net

(13,672)

Other (expense) income, net

(39,756)

(69,804)

2,262

(49,390)

Total other expense net

(140,342)

(174,812)

(293,728)

(380,903)

Income before income taxes

102,645

36,964

397,018

204,214

(Provision) benefit for income taxes

(2,883)

10,834

(39,797)

(15,494)

Net income

99,762

47,798

357,221

188,720

Net loss attributable to noncontrolling interests

247

929

Net income attributable to SBA Communications

Corporation

$

100,009

$

47,798

$

358,150

$

188,720

Net income per common share attributable to SBA

Communications Corporation:

Basic

$

0.93

$

0.44

$

3.32

$

1.72

Diluted

$

0.91

$

0.43

$

3.27

$

1.70

Weighted average number of common shares

Basic

107,916

109,577

107,950

109,487

Diluted

109,358

111,565

109,416

111,329

(1)Includes non-cash compensation of $24,945 and $16,589 for the three months ended September 30, 2022 and 2021, respectively, and $72,309 and $57,249 for the nine months ended September 30, 2022 and 2021, respectively.

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

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited) (in thousands)

For the three months

For the nine months

ended September 30,

ended September 30,

2022

2021

2022

2021

Net income

$

99,762

$

47,798

$

357,221

$

188,720

Adjustments related to interest rate swaps

53,336

9,898

162,491

58,251

Foreign currency translation adjustments

(40,757)

(51,415)

(14,277)

(31,181)

Comprehensive income

112,341

6,281

505,435

215,790

Comprehensive loss attributable to noncontrolling interests

247

1,130

Comprehensive income attributable to SBA

Communications Corporation

$

112,588

$

6,281

$

506,565

$

215,790

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, June 30, 2022

107,872 

$

1,079 

$

2,717,963 

$

(7,531,180)

$

(626,473)

$

(5,438,611)

Net income attributable to SBA

Communications Corporation

100,009 

100,009 

Common stock issued in connection with equity

awards and stock purchase plans, offset

by the impact of net share settlements

92 

1 

13,221 

13,222 

Non-cash stock compensation

26,017 

26,017 

Adjustments related to interest rate swaps