SBA Communications Corporation (Nasdaq: SBAC) ("SBA" or the
"Company") today reported results for the quarter ended December
31, 2022.
Highlights of the fourth quarter include:
- Net income of $102.6 million or $0.94 per share
- AFFO per share increased 11.0% over the prior year
period
- Total revenue of $686.1 million, representing a 15.3% growth
over the prior year period
- Portfolio growth of 15.0% for the year, including 2,792
sites added during the quarter
- Refinanced the 2018-1C Tower Securities making the next
scheduled debt maturity October 2024
In addition, the Company announced today that its Board of
Directors has declared a quarterly cash dividend of $0.85 per share
of the Company’s Class A Common Stock, an increase of approximately
20% over the dividend paid in the fourth quarter. The distribution
is payable March 24, 2023 to the shareholders of record at the
close of business on March 10, 2023.
“We had a very solid finish to 2022, producing record annual
results on a number of metrics and positioning us well for 2023,”
commented Jeffrey A. Stoops, President and Chief Executive Officer.
“The US market remains active, with our largest US customers
expected to all stay relatively busy with additional network
deployment in 2023. We believe domestic activity will remain solid
through 2023 and perhaps beyond, given the size and scope of our
customers’ 5G deployment plans and our belief that much 5G work
remains to be done on our assets. International results were strong
as well in the fourth quarter, and gross leasing demand is expected
to remain solid internationally. Last year was a remarkable year in
terms of portfolio growth and balance sheet management. We grew our
portfolio materially by 15%, providing us with additional growth
assets in several markets. We were still able to end the year with
our balance sheet in great shape, below the low end of our target
net debt/Adjusted EBITDA leverage ratio as we used AFFO to reduce
floating-rate debt in a materially higher interest rate
environment. All of these favorable results allowed us to increase
AFFO per share by double-digit percentages in the fourth quarter
and for the full 2022 fiscal year over comparable prior periods. We
are extremely confident and excited about our future, so much so
that we have just approved an increase to our quarterly dividend of
approximately 20%. While a substantial increase, this dividend on
an annual basis represents only approximately 27% of our AFFO in
our 2023 Outlook, leaving us substantial capital for additional
investment in portfolio growth and stock repurchases and/or
additional floating-rate leverage reduction while interest rates
remain higher. We believe we offer our shareholders very favorable
prospects for additional value creation.”
Operating Results
The table below details select financial results for the three
months ended December 31, 2022 and comparisons to the prior year
period.
% Change
excluding
Q4 2022
Q4 2021
$ Change
% Change
FX (1)
Consolidated
($ in millions, except per
share amounts)
Site leasing revenue
$
609.6
$
539.4
$
70.2
13.0%
12.6%
Site development revenue
76.5
55.9
20.6
36.9%
36.9%
Tower cash flow (1)
485.9
434.1
51.8
11.9%
11.5%
Net income
102.6
48.9
53.7
109.8%
47.2%
Earnings per share - diluted
0.94
0.44
0.50
113.6%
49.2%
Adjusted EBITDA (1)
460.7
409.1
51.6
12.6%
12.2%
AFFO (1)
340.7
310.8
29.9
9.6%
8.9%
AFFO per share (1)
3.12
2.81
0.31
11.0%
10.3%
(1)
See the reconciliations and other
disclosures under “Non-GAAP Financial Measures” later in this press
release
Total revenues in the fourth quarter of 2022 were $686.1 million
compared to $595.3 million in the prior year period, an increase of
15.3%. Site leasing revenue in the fourth quarter of 2022 of $609.6
million was comprised of domestic site leasing revenue of $452.9
million and international site leasing revenue of $156.7 million.
Domestic cash site leasing revenue in the fourth quarter of 2022
was $443.0 million compared to $421.7 million in the prior year
period, an increase of 5.1%. International cash site leasing
revenue in the fourth quarter of 2022 was $157.5 million compared
to $108.1 million in the prior year period, an increase of 45.7%,
or 43.8% on a constant currency basis. Site development revenues in
the fourth quarter of 2022 were $76.5 million compared to $55.9
million in the prior year period, an increase of 36.9%.
Site leasing operating profit in the fourth quarter of 2022 was
$494.6 million, an increase of 11.8% over the prior year period.
Site leasing contributed 96.3% of the Company’s total operating
profit in the fourth quarter of 2022. Domestic site leasing segment
operating profit in the fourth quarter of 2022 was $386.8 million,
an increase of 5.1% over the prior year period. International site
leasing segment operating profit in the fourth quarter of 2022 was
$107.8 million, an increase of 44.8% from the prior year
period.
Tower Cash Flow in the fourth quarter of 2022 of $485.9 million
was comprised of Domestic Tower Cash Flow of $376.6 million and
International Tower Cash Flow of $109.3 million. Domestic Tower
Cash Flow in the fourth quarter of 2022 increased 5.1% over the
prior year period and International Tower Cash Flow increased 44.3%
over the prior year period, or increased 42.0% on a constant
currency basis. Tower Cash Flow Margin was 80.9% in the fourth
quarter of 2022, as compared to 81.9% for the prior year
period.
Net income in the fourth quarter of 2022 was $102.6 million, or
$0.94 per share, and included a $8.6 million gain, net of taxes, on
the currency-related remeasurement of U.S. dollar denominated
intercompany loans with foreign subsidiaries. Net income in the
fourth quarter of 2021 was $48.9 million, or $0.44 per share, and
included a $15.9 million loss, net of taxes, on the
currency-related remeasurement of U.S. dollar denominated
intercompany loans with foreign subsidiaries.
Adjusted EBITDA in the fourth quarter of 2022 was $460.7
million, a 12.6% increase over the prior year period. Adjusted
EBITDA Margin in the fourth quarter of 2022 was 68.1% compared to
69.8% in the prior year period.
Net Cash Interest Expense in the fourth quarter of 2022 was
$97.0 million compared to $81.8 million in the prior year period,
an increase of 18.6%.
AFFO in the fourth quarter of 2022 was $340.7 million, a 9.6%
increase over the prior year period. AFFO per share in the fourth
quarter of 2022 was $3.12, an 11.0% increase over the prior year
period.
Investing Activities
During the fourth quarter of 2022, SBA acquired 2,642
communication sites for total cash consideration of $736.7 million,
including 2,632 sites from Grupo TorreSur in Brazil for
approximately $725.0 million in cash. SBA also built 162 towers
during the fourth quarter of 2022. As of December 31, 2022, SBA
owned or operated 39,311 communication sites, 17,416 of which are
located in the United States and its territories and 21,895 of
which are located internationally. In addition, the Company spent
$15.9 million to purchase land and easements and to extend lease
terms. Total cash capital expenditures for the fourth quarter of
2022 were $823.5 million, consisting of $13.8 million of
non-discretionary cash capital expenditures (tower maintenance and
general corporate) and $809.7 million of discretionary cash capital
expenditures (new tower builds, tower augmentations, acquisitions,
and purchasing land and easements).
Subsequent to the fourth quarter of 2022, the Company purchased
or is under contract to purchase 31 communication sites for an
aggregate consideration of $23.2 million in cash. The Company
anticipates that these acquisitions will be consummated by the end
of the second quarter of 2023.
Financing Activities and
Liquidity
SBA ended the fourth quarter of 2022 with $13.0 billion of total
debt, $10.0 billion of total secured debt, $187.0 million of cash
and cash equivalents, short-term restricted cash, and short-term
investments, and $12.8 billion of Net Debt. SBA’s Net Debt and Net
Secured Debt to Annualized Adjusted EBITDA Leverage Ratios were
6.9x and 5.3x, respectively.
During the fourth quarter, the Company, through an existing
trust, issued $850.0 million of Secured Tower Revenue Securities
Series 2022-1C, which have an anticipated repayment date of January
11, 2028 and a final maturity date of November 9, 2052 (“the
2022-1C Tower Securities”). The fixed interest rate on the 2022-1C
Tower Securities is 6.599% per annum, payable monthly. Net proceeds
from this offering were used to repay the entire aggregate
principal amount of the 2018-1C Tower Securities ($640.0 million),
repay amounts outstanding under the Revolving Credit Facility, and
for general corporate purposes.
As of the date of this press release, the Company had $585.0
million outstanding under its $1.5 billion Revolving Credit
Facility.
The Company did not repurchase any shares of its Class A common
stock during the fourth quarter of 2022. As of the date of this
filing, the Company has $504.7 million of authorization remaining
under its approved repurchase plan.
In the fourth quarter of 2022, the Company declared and paid a
cash dividend of $76.7 million.
Outlook
The Company is providing its initial full year 2023 Outlook for
anticipated results. The Outlook provided is based on a number of
assumptions that the Company believes are reasonable at the time of
this press release. Information regarding potential risks that
could cause the actual results to differ from these forward-looking
statements is set forth below and in the Company’s filings with the
Securities and Exchange Commission.
The Company’s full year 2023 Outlook assumes the acquisitions of
only those communication sites under contract and anticipated to
close at the time of this press release. The Company may spend
additional capital in 2023 on acquiring revenue producing assets
not yet identified or under contract, the impact of which is not
reflected in the 2023 guidance. The Outlook also does not
contemplate any additional repurchases of the Company’s stock or
new debt financings during 2023, although the Company may
ultimately spend capital to repurchase additional stock or issue
new debt during the remainder of the year.
The Company’s Outlook assumes an average foreign currency
exchange rate of 5.20 Brazilian Reais to 1.0 U.S. Dollar, 1.33
Canadian Dollars to 1.0 U.S. Dollar, 2,330 Tanzanian shillings to
1.0 U.S. Dollar, and 18.20 South African Rand to 1.0 U.S. Dollar
for the full year 2023. When compared to 2022 actual foreign
currency exchange rates, these 2023 foreign currency rate
assumptions negatively impacted the 2023 full year Outlook by
approximately $11.0 million for leasing revenue, $7.7 million for
Tower Cash Flow, $6.7 million for Adjusted EBITDA, and $6.0 million
for AFFO.
(in millions, except per share
amounts)
Full Year 2023
Site leasing revenue (1)
$
2,469.0
to
$
2,489.0
Site development revenue
$
205.0
to
$
225.0
Total revenues
$
2,674.0
to
$
2,714.0
Tower Cash Flow (2)
$
1,971.0
to
$
1,991.0
Adjusted EBITDA (2)
$
1,845.0
to
$
1,865.0
Net cash interest expense (3)
$
377.0
to
$
382.0
Non-discretionary cash capital
expenditures (4)
$
53.0
to
$
63.0
AFFO (2)
$
1,366.0
to
$
1,406.0
AFFO per share (2) (5)
$
12.46
to
$
12.83
Discretionary cash capital expenditures
(6)
$
283.0
to
$
303.0
(1)
The Company’s Outlook for site leasing
revenue includes revenue associated with pass through reimbursable
expenses.
(2)
See the reconciliation of this non-GAAP
financial measure presented below under “Non-GAAP Financial
Measures.”
(3)
Net cash interest expense is defined as
interest expense less interest income. Net cash interest expense
does not include amortization of deferred financing fees or
non-cash interest expense.
(4)
Consists of tower maintenance and general
corporate capital expenditures.
(5)
Outlook for AFFO per share is calculated
by dividing the Company’s outlook for AFFO by an assumed weighted
average number of diluted common shares of 109.6 million. Outlook
does not include the impact of any potential future repurchases of
the Company’s stock during 2023.
(6)
Consists of new tower builds, tower
augmentations, communication site acquisitions and ground lease
purchases. Does not include expenditures for acquisitions of
revenue producing assets not under contract at the date of this
press release.
Conference Call Information
SBA Communications Corporation will host a conference call on
Tuesday, February 21, 2023 at 5:00 PM (EST) to discuss the
quarterly results. The call may be accessed as follows:
When:
Tuesday, February 21, 2023 at 5:00 PM
(EST)
Dial-in Number:
(877) 692-8955
Access Code:
5549447
Conference Name:
SBA Fourth quarter 2022 results
Replay Available:
February 21, 2023 at 11:00 PM to March 7,
2023 at 12:00 AM (TZ: Eastern)
Replay Number:
(866) 207-1041 – Access Code: 5924322
Internet Access:
www.sbasite.com
Information Concerning Forward-Looking
Statements
This press release and our earnings call include forward-looking
statements, including statements regarding the Company’s
expectations or beliefs regarding (i) customer activity and demand
for the Company’s wireless communications infrastructure in 2023
and beyond, both domestically and internationally, (ii) the impact
of customer 5G deployment plans and level of 5G deployment that
remains to be done on the Company’s towers, (iii) the Company’s
outlook for financial and operational performance in 2023, the
assumptions it made and the drivers contributing to its full year
guidance, (iv) the timing of closing for currently pending
acquisitions, (vi) the Company’s tower portfolio growth for 2023
and positioning for, and terms of, future growth, (vii) foreign
exchange rates and their impact on the Company’s financial and
operational guidance and the Company’s 2023 Outlook.
The Company wishes to caution readers that these forward-looking
statements may be affected by the risks and uncertainties in the
Company’s business as well as other important factors may have
affected and could in the future affect the Company’s actual
results and could cause the Company’s actual results for subsequent
periods to differ materially from those expressed in any
forward-looking statement made by or on behalf of the Company. With
respect to the Company’s expectations regarding all of these
statements, including its financial and operational guidance, such
risk factors include, but are not limited to: (1) the impact of
recent macro-economic conditions, including increasing interest
rates, inflation and financial market volatility on (a) the ability
and willingness of wireless service providers to maintain or
increase their capital expenditures, (b) the Company’s business and
results of operations, and on foreign currency exchange rates and
(c) consumer demand for wireless services, (2) the economic climate
for the wireless communications industry in general and the
wireless communications infrastructure providers in particular in
the United States, Brazil, South Africa, Tanzania, and in other
international markets; (3) the Company’s ability to accurately
identify and manage any risks associated with its acquired sites,
to effectively integrate such sites into its business and to
achieve the anticipated financial results; (4) the Company’s
ability to secure and retain as many site leasing tenants as
planned at anticipated lease rates; (5) the Company’s ability to
manage expenses and cash capital expenditures at anticipated
levels; (6) the impact of continued consolidation among wireless
service providers in the U.S. and internationally, on the Company’s
leasing revenue and the ability of Dish to compete as a nationwide
carrier; (7) the Company’s ability to successfully manage the risks
associated with international operations, including risks
associated with foreign currency exchange rates; (8) the Company’s
ability to secure and deliver anticipated services business at
contemplated margins; (9) the Company’s ability to acquire land
underneath towers on terms that are accretive; (10) the Company’s
ability to obtain future financing at commercially reasonable rates
or at all; (11) the Company’s ability to achieve the new builds
targets included in its anticipated annual portfolio growth goals,
which will depend, among other things, on obtaining zoning and
regulatory approvals, availability of labor and supplies, and other
factors beyond the Company’s control that could affect the
Company’s ability to build additional towers in 2023; and (12) the
Company’s ability to meet its total portfolio growth, which will
depend, in addition to the new build risks, on the Company’s
ability to identify and acquire sites at prices and upon terms that
will provide accretive portfolio growth, competition from third
parties for such acquisitions and our ability to negotiate the
terms of, and acquire, these potential tower portfolios on terms
that meet our internal return criteria.
With respect to its expectations regarding the ability to close
pending acquisitions, these factors also include satisfactorily
completing due diligence, the amount and quality of due diligence
that the Company is able to complete prior to closing of any
acquisition, the ability to receive required regulatory approval,
the ability and willingness of each party to fulfill their
respective closing conditions and their contractual obligations and
the availability of cash on hand or borrowing capacity under the
Revolving Credit Facility to fund the consideration, its ability to
accurately anticipate the future performance of the acquired towers
and any challenges or costs associated with the integration of such
towers. With respect to the repurchases under the Company’s stock
repurchase program, the amount of shares repurchased, if any, and
the timing of such repurchases will depend on, among other things,
the trading price of the Company’s common stock, which may be
positively or negatively impacted by the repurchase program, market
and business conditions, the availability of stock, the Company’s
financial performance or determinations following the date of this
announcement in order to use the Company’s funds for other
purposes. Furthermore, the Company’s forward-looking statements and
its 2023 outlook assumes that the Company continues to qualify for
treatment as a REIT for U.S. federal income tax purposes and that
the Company’s business is currently operated in a manner that
complies with the REIT rules and that it will be able to continue
to comply with and conduct its business in accordance with such
rules. In addition, these forward-looking statements and the
information in this press release is qualified in its entirety by
cautionary statements and risk factor disclosures contained in the
Company’s Securities and Exchange Commission filings, including the
Company’s most recently filed Annual Report on Form 10-K.
This press release contains non-GAAP financial measures.
Reconciliation of each of these non-GAAP financial measures and the
other Regulation G information is presented below under “Non-GAAP
Financial Measures.”
This press release will be available on our website at
www.sbasite.com.
About SBA Communications
Corporation
SBA Communications Corporation is a first choice provider and
leading owner and operator of wireless communications
infrastructure in North, Central, and South America, South Africa,
the Philippines, and Tanzania. By “Building Better Wireless,” SBA
generates revenue from two primary businesses – site leasing and
site development services. The primary focus of the Company is the
leasing of antenna space on its multi-tenant communication sites to
a variety of wireless service providers under long-term lease
contracts. For more information please visit: www.sbasite.com.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(unaudited) (in thousands,
except per share amounts)
For the three months
For the year
ended December 31,
ended December 31,
2022
2021
2022
2021
Revenues:
Site leasing
$
609,608
$
539,396
$
2,336,575
$
2,104,087
Site development
76,486
55,866
296,879
204,747
Total revenues
686,094
595,262
2,633,454
2,308,834
Operating expenses:
Cost of revenues (exclusive of
depreciation, accretion, and amortization shown below):
Cost of site leasing
114,999
97,008
445,685
386,391
Cost of site development
57,155
42,921
222,965
159,093
Selling, general, and administrative
expenses (1)
70,613
63,483
261,853
220,029
Acquisition and new business initiatives
related adjustments and expenses
8,031
10,095
26,807
27,621
Asset impairment and decommission
costs
17,596
14,484
43,160
33,044
Depreciation, accretion, and
amortization
183,036
169,895
707,576
700,161
Total operating expenses
451,430
397,886
1,708,046
1,526,339
Operating income
234,664
197,376
925,408
782,495
Other income (expense):
Interest income
3,255
1,324
10,133
3,448
Interest expense
(100,256
)
(83,081
)
(353,784
)
(352,919
)
Non-cash interest expense
(11,528
)
(11,651
)
(46,109
)
(47,085
)
Amortization of deferred financing
fees
(5,077
)
(4,899
)
(19,835
)
(19,589
)
Loss from extinguishment of debt, net
(437
)
(25,829
)
(437
)
(39,502
)
Other income (expense), net
8,207
(24,892
)
10,467
(74,284
)
Total other expense net
(105,836
)
(149,028
)
(399,565
)
(529,931
)
Income before income taxes
128,828
48,348
525,843
252,564
(Provision) benefit for income taxes
(26,248
)
554
(66,044
)
(14,940
)
Net income
102,580
48,902
459,799
237,624
Net loss attributable to noncontrolling
interests
701
—
1,630
—
Net income attributable to SBA
Communications Corporation
$
103,281
$
48,902
$
461,429
$
237,624
Net income per common share attributable
to SBA
Communications Corporation:
Basic
$
0.96
$
0.45
$
4.27
$
2.17
Diluted
$
0.94
$
0.44
$
4.22
$
2.14
Weighted-average number of common
shares
Basic
107,978
108,855
107,957
109,328
Diluted
109,298
110,727
109,386
111,177
(1)
Includes non-cash compensation of $25,110
and $24,670 for the three months ended December 31, 2022 and
2021, respectively, and $97,419 and
$81,919 for the year ended December 31, 2022 and 2021,
respectively.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands, except par
values)
December 31,
December 31,
2022
2021
ASSETS
(unaudited)
Current assets:
Cash and cash equivalents
$
143,708
$
367,278
Restricted cash
41,959
65,561
Accounts receivable, net
184,368
101,950
Costs and estimated earnings in excess of
billings on uncompleted contracts
79,549
48,844
Prepaid expenses and other current
assets
33,149
30,813
Total current assets
482,733
614,446
Property and equipment, net
2,713,727
2,575,487
Intangible assets, net
2,776,472
2,803,247
Operating lease right-of-use assets,
net
2,381,955
2,268,470
Acquired and other right-of-use assets,
net
1,507,781
964,405
Other assets
722,373
575,644
Total assets
$
10,585,041
$
9,801,699
LIABILITIES, REDEEMABLE NONCONTROLLING
INTERESTS,
AND SHAREHOLDERS' DEFICIT
Current Liabilities:
Accounts payable
$
51,427
$
34,066
Accrued expenses
101,484
68,070
Current maturities of long-term debt
24,000
24,000
Deferred revenue
154,553
184,380
Accrued interest
54,173
49,096
Current lease liabilities
262,365
238,497
Other current liabilities
48,762
18,222
Total current liabilities
696,764
616,331
Long-term liabilities:
Long-term debt, net
12,844,162
12,278,694
Long-term lease liabilities
2,040,628
1,981,353
Other long-term liabilities
248,067
191,475
Total long-term liabilities
15,132,857
14,451,522
Redeemable noncontrolling interests
31,735
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, 107,997 shares and 108,956 shares issued
and outstanding at December 31, 2022 and December 31, 2021,
respectively
1,080
1,089
Additional paid-in capital
2,795,176
2,681,347
Accumulated deficit
(7,482,061
)
(7,203,531
)
Accumulated other comprehensive loss,
net
(590,510
)
(762,309
)
Total shareholders' deficit
(5,276,315
)
(5,283,404
)
Total liabilities, redeemable
noncontrolling interests, and shareholders' deficit
$
10,585,041
$
9,801,699
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited) (in
thousands)
For the three months
ended December 31,
2022
2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
102,580
$
48,902
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, accretion, and
amortization
183,036
169,895
(Gain) loss on remeasurement of U.S.
denominated intercompany loans
(11,794
)
23,703
Non-cash compensation expense
25,769
25,227
Non-cash asset impairment and decommission
costs
17,605
13,855
Loss from extinguishment of debt, net
437
24,046
Deferred income tax provision
(benefit)
17,369
(5,799
)
Other non-cash items reflected in the
Statements of Operations
20,674
17,832
Changes in operating assets and
liabilities, net of acquisitions:
Accounts receivable and costs and
estimated earnings in excess of billings on uncompleted contracts,
net
(47,456
)
(31,866
)
Prepaid expenses and other assets
1,700
(2,654
)
Operating lease right-of-use assets,
net
30,702
27,604
Accounts payable and accrued expenses
6,971
(3,684
)
Accrued interest
29,067
22,619
Long-term lease liabilities
(33,379
)
(29,407
)
Other liabilities
(54,647
)
(1,707
)
Net cash provided by operating
activities
288,634
298,566
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions
(757,371
)
(69,950
)
Capital expenditures
(66,095
)
(43,287
)
Sale of investments, net
20,103
(384
)
Other investing activities
1,020
(31,817
)
Net cash used in investing activities
(802,343
)
(145,438
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under Revolving Credit
Facility
310,000
350,000
Repayment of Senior Notes
—
(1,113,409
)
Proceeds from issuance of Tower
Securities, net of fees
839,885
1,771,568
Repayment of Tower Securities
(640,000
)
(575,000
)
Repurchase and retirement of common
stock
—
(298,235
)
Payment of dividends on common stock
(76,664
)
(63,124
)
Proceeds from employee stock
purchase/stock option plans
4,558
13,536
Payments related to taxes on net
settlement of stock options and restricted stock units
(53
)
(62,879
)
Other financing activities
(7,132
)
8,195
Net cash provided by financing
activities
430,594
30,652
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
(7,476
)
(2,553
)
NET CHANGE IN CASH, CASH EQUIVALENTS, AND
RESTRICTED CASH
(90,591
)
181,227
CASH, CASH EQUIVALENTS, AND RESTRICTED
CASH:
Beginning of period
279,874
254,399
End of period
$
189,283
$
435,626
Selected Capital
Expenditure Detail
For the three
For the year
months ended
ended
December 31, 2022
December 31, 2022
(in thousands)
Construction and related costs
$
31,186
$
103,461
Augmentation and tower upgrades
21,142
60,656
Non-discretionary capital
expenditures:
Tower maintenance
11,593
41,568
General corporate
2,174
8,758
Total non-discretionary capital
expenditures
13,767
50,326
Total capital expenditures
$
66,095
$
214,443
Communication Site
Portfolio Summary
Domestic
International
Total
Sites owned at September 30, 2022
17,401
19,118
36,519
Sites acquired during the fourth
quarter
10
2,632
2,642
Sites built during the fourth quarter
7
155
162
Sites decommissioned/reclassified during
the fourth quarter
(2
)
(10
)
(12
)
Sites owned at December 31, 2022
17,416
21,895
39,311
Segment Operating
Profit and Segment Operating Profit Margin
Domestic site leasing and International
site leasing are the two segments within our site leasing business.
Segment operating profit is a key business metric and one of our
two measures of segment profitability. The calculation of Segment
operating profit for each of our segments is set forth below.
Domestic Site Leasing
Int'l Site Leasing
Site Development
For the three months
For the three months
For the three months
ended December 31,
ended December 31,
ended December 31,
2022
2021
2022
2021
2022
2021
(in thousands)
Segment revenue
$
452,928
$
432,205
$
156,680
$
107,191
$
76,486
$
55,866
Segment cost of revenues (excluding
depreciation, accretion, and amort.)
(66,151
)
(64,285
)
(48,848
)
(32,723
)
(57,155
)
(42,921
)
Segment operating profit
$
386,777
$
367,920
$
107,832
$
74,468
$
19,331
$
12,945
Segment operating profit margin
85.4
%
85.1
%
68.8
%
69.5
%
25.3
%
23.2
%
Non-GAAP Financial Measures
The press release contains non-GAAP financial measures including
(i) Cash Site Leasing Revenue, Tower Cash Flow, and Tower Cash Flow
Margin; (ii) Adjusted EBITDA, Annualized Adjusted EBITDA, and
Adjusted EBITDA Margin; (iii) Funds from Operations (“FFO”),
Adjusted Funds from Operations (“AFFO”), and AFFO per share; (iv)
Net Debt, Net Secured Debt, Leverage Ratio, and Secured Leverage
Ratio (collectively, our “Non-GAAP Debt Measures”); and (v) certain
financial metrics after eliminating the impact of changes in
foreign currency exchange rates (collectively, our “Constant
Currency Measures”).
We have included these non-GAAP financial measures because we
believe that they provide investors additional tools in
understanding our financial performance and condition.
Specifically, we believe that:
(1) Cash Site Leasing Revenue and Tower Cash Flow are useful
indicators of the performance of our site leasing operations;
(2) Adjusted EBITDA is useful to investors or other interested
parties in evaluating our financial performance. Adjusted EBITDA is
the primary measure used by management (1) to evaluate the economic
productivity of our operations and (2) for purposes of making
decisions about allocating resources to, and assessing the
performance of, our operations. Management believes that Adjusted
EBITDA helps investors or other interested parties meaningfully
evaluate and compare the results of our operations (1) from period
to period and (2) to our competitors, by excluding the impact of
our capital structure (primarily interest charges from our
outstanding debt) and asset base (primarily depreciation,
amortization and accretion) from our financial results. Management
also believes Adjusted EBITDA is frequently used by investors or
other interested parties in the evaluation of REITs. In addition,
Adjusted EBITDA is similar to the measure of current financial
performance generally used in our debt covenant calculations.
Adjusted EBITDA should be considered only as a supplement to net
income computed in accordance with GAAP as a measure of our
performance;
(3) FFO, AFFO and AFFO per share, which are metrics used by our
public company peers in the communication site industry, provide
investors useful indicators of the financial performance of our
business and permit investors an additional tool to evaluate the
performance of our business against those of our two principal
competitors. FFO, AFFO, and AFFO per share are also used to address
questions we receive from analysts and investors who routinely
assess our operating performance on the basis of these performance
measures, which are considered industry standards. We believe that
FFO helps investors or other interested parties meaningfully
evaluate financial performance by excluding the impact of our asset
base (primarily depreciation, amortization and accretion and asset
impairment and decommission costs). We believe that AFFO and AFFO
per share help investors or other interested parties meaningfully
evaluate our financial performance as they include (1) the impact
of our capital structure (primarily interest expense on our
outstanding debt) and (2) sustaining capital expenditures and
exclude the impact of (1) our asset base (primarily depreciation,
amortization and accretion and asset impairment and decommission
costs) and (2) certain non-cash items, including straight-lined
revenues and expenses related to fixed escalations and rent free
periods and the non-cash portion of our reported tax provision.
GAAP requires rental revenues and expenses related to leases that
contain specified rental increases over the life of the lease to be
recognized evenly over the life of the lease. In accordance with
GAAP, if payment terms call for fixed escalations, or rent free
periods, the revenue or expense is recognized on a straight-lined
basis over the fixed, non-cancelable term of the contract. We only
use AFFO as a performance measure. AFFO should be considered only
as a supplement to net income computed in accordance with GAAP as a
measure of our performance and should not be considered as an
alternative to cash flows from operations or as residual cash flow
available for discretionary investment. We believe our definition
of FFO is consistent with how that term is defined by the National
Association of Real Estate Investment Trusts (“NAREIT”) and that
our definition and use of AFFO and AFFO per share is consistent
with those reported by the other communication site companies;
(4) Our Non-GAAP Debt Measures provide investors a more complete
understanding of our net debt and leverage position as they include
the full principal amount of our debt which will be due at maturity
and, to the extent that such measures are calculated on Net Debt
are net of our cash and cash equivalents, short-term restricted
cash, and short-term investments; and
(5) Our Constant Currency Measures provide management and
investors the ability to evaluate the performance of the business
without the impact of foreign currency exchange rate
fluctuations.
In addition, Tower Cash Flow, Adjusted EBITDA, and our Non-GAAP
Debt Measures are components of the calculations used by our
lenders to determine compliance with certain covenants under our
Senior Credit Agreement and indentures relating to our 2020 Senior
Notes and 2021 Senior Notes. These non-GAAP financial measures are
not intended to be an alternative to any of the financial measures
provided in our results of operations or our balance sheet as
determined in accordance with GAAP.
Financial Metrics
after Eliminating the Impact of Changes In Foreign Currency
Exchange Rates
We eliminate the impact of changes in
foreign currency exchange rates for each of the financial metrics
listed in the table below by dividing the current period’s
financial results by the average monthly exchange rates of the
prior year period, and by eliminating the impact of the
remeasurement of our intercompany loans. The table below provides
the reconciliation of the reported growth rate year-over-year of
each of such measures to the growth rate after eliminating the
impact of changes in foreign currency exchange rates to such
measure.
Fourth quarter
2022 year
Foreign
Growth excluding
over year
currency
foreign
growth rate
impact
currency impact
Total site leasing revenue
13.0%
0.4%
12.6%
Total cash site leasing revenue
13.3%
0.4%
12.9%
Int'l cash site leasing revenue
45.7%
1.9%
43.8%
Total site leasing segment operating
profit
11.8%
0.4%
11.4%
Int'l site leasing segment operating
profit
44.8%
2.3%
42.5%
Total site leasing tower cash flow
11.9%
0.4%
11.5%
Int'l site leasing tower cash flow
44.3%
2.3%
42.0%
Net income
109.8%
62.6%
47.2%
Earnings per share - diluted
113.6%
64.4%
49.2%
Adjusted EBITDA
12.6%
0.4%
12.2%
AFFO
9.6%
0.7%
8.9%
AFFO per share
11.0%
0.7%
10.3%
Cash Site Leasing
Revenue, Tower Cash Flow, and Tower Cash Flow Margin
The table below sets forth the
reconciliation of Cash Site Leasing Revenue and Tower Cash Flow to
their most comparable GAAP measurement and Tower Cash Flow Margin,
which is calculated by dividing Tower Cash Flow by Cash Site
Leasing Revenue.
Domestic Site Leasing
Int'l Site Leasing
Total Site Leasing
For the three months
For the three months
For the three months
ended December 31,
ended December 31,
ended December 31,
2022
2021
2022
2021
2022
2021
(in thousands)
Site leasing revenue
$
452,928
$
432,205
$
156,680
$
107,191
$
609,608
$
539,396
Non-cash straight-line leasing revenue
(9,949
)
(10,525
)
816
895
(9,133
)
(9,630
)
Cash site leasing revenue
442,979
421,680
157,496
108,086
600,475
529,766
Site leasing cost of revenues (excluding
depreciation, accretion, and amortization)
(66,151
)
(64,285
)
(48,848
)
(32,723
)
(114,999
)
(97,008
)
Non-cash straight-line ground lease
expense
(242
)
1,023
643
360
401
1,383
Tower Cash Flow
$
376,586
$
358,418
$
109,291
$
75,723
$
485,877
$
434,141
Tower Cash Flow Margin
85.0
%
85.0
%
69.4
%
70.1
%
80.9
%
81.9
%
Forecasted Tower
Cash Flow for Full Year 2023
The table below sets forth the
reconciliation of forecasted Tower Cash Flow set forth in the
Outlook section to its most comparable GAAP measurement for the
full year 2023:
Full Year 2023
(in millions)
Site leasing revenue
$
2,469.0
to
$
2,489.0
Non-cash straight-line leasing revenue
(23.0
)
to
(18.0
)
Cash site leasing revenue
2,446.0
to
2,471.0
Site leasing cost of revenues (excluding
depreciation, accretion, and amortization)
(469.5
)
to
(479.5
)
Non-cash straight-line ground lease
expense
(5.5
)
to
(0.5
)
Tower Cash Flow
$
1,971.0
to
$
1,991.0
Adjusted EBITDA,
Annualized Adjusted EBITDA, and Adjusted EBITDA Margin
The table below sets forth the
reconciliation of Adjusted EBITDA to its most comparable GAAP
measurement.
For the three months
ended December 31,
2022
2021
(in thousands)
Net income
$
102,580
$
48,902
Non-cash straight-line leasing revenue
(9,133
)
(9,630
)
Non-cash straight-line ground lease
expense
401
1,383
Non-cash compensation
25,769
25,227
Loss from extinguishment of debt, net
437
25,829
Other (income) expense, net
(8,207
)
24,892
Acquisition and new business initiatives
related adjustments and expenses
8,031
10,095
Asset impairment and decommission
costs
17,596
14,484
Interest income
(3,255
)
(1,324
)
Total interest expense (1)
116,861
99,631
Depreciation, accretion, and
amortization
183,036
169,895
Provision (benefit) for taxes (2)
26,604
(331
)
Adjusted EBITDA
$
460,720
$
409,053
Annualized Adjusted EBITDA (3)
$
1,842,880
$
1,636,212
(1)
Total interest expense includes interest
expense, non-cash interest expense, and amortization of deferred
financing fees.
(2)
For the three months ended December 31,
2022 and 2021, these amounts included $356 and $223, respectively,
of franchise and gross receipts taxes reflected in the Statements
of Operations in selling, general and administrative expenses.
(3)
Annualized Adjusted EBITDA is calculated
as Adjusted EBITDA for the most recent quarter multiplied by
four.
The calculation of Adjusted EBITDA Margin
is as follows:
For the three months
ended December 31,
2022
2021
(in thousands)
Total revenues
$
686,094
$
595,262
Non-cash straight-line leasing revenue
(9,133
)
(9,630
)
Total revenues minus non-cash
straight-line leasing revenue
$
676,961
$
585,632
Adjusted EBITDA
$
460,720
$
409,053
Adjusted EBITDA Margin
68.1
%
69.8
%
Forecasted Adjusted
EBITDA for Full Year 2023
The table below sets forth the
reconciliation of the forecasted Adjusted EBITDA set forth in the
Outlook section to its most comparable GAAP measurement for the
full year 2023:
Full Year 2023
(in millions)
Net income
$
545.5
to
$
590.5
Non-cash straight-line leasing revenue
(23.0
)
to
(18.0
)
Non-cash straight-line ground lease
expense
(5.5
)
to
(0.5
)
Non-cash compensation
103.5
to
98.5
Other income, net
(19.0
)
to
(19.0
)
Acquisition and new business initiatives
related adjustments and expenses
16.5
to
11.5
Asset impairment and decommission
costs
37.5
to
32.5
Interest income
(15.5
)
to
(10.5
)
Total interest expense (1)
450.5
to
440.5
Depreciation, accretion, and
amortization
719.0
to
709.0
Provision for taxes (2)
35.5
to
30.5
Adjusted EBITDA
$
1,845.0
to
$
1,865.0
(1)
Total interest expense includes interest
expense, non-cash interest expense, and amortization of deferred
financing fees.
(2)
Includes projections for franchise taxes
and gross receipts taxes, which will be reflected in the Statement
of Operations in Selling, general, and administrative expenses.
Funds from
Operations (“FFO”), Adjusted Funds from Operations (“AFFO”), and
AFFO per share
The table below sets forth the
reconciliations of FFO and AFFO to their most comparable GAAP
measurement.
For the three months
ended December 31,
(in thousands, except per share
amounts)
2022
2021
Net income
$
102,580
$
48,902
Real estate related depreciation,
amortization, and accretion
181,962
168,870
Asset impairment and decommission
costs
17,596
14,484
FFO
$
302,138
$
232,256
Adjustments to FFO:
Non-cash straight-line leasing revenue
(9,133
)
(9,630
)
Non-cash straight-line ground lease
expense
401
1,383
Non-cash compensation
25,769
25,227
Adjustment for non-cash portion of tax
benefit
17,368
(5,799
)
Non-real estate related depreciation,
amortization, and accretion
1,074
1,025
Amortization of deferred financing costs
and debt discounts and non-cash interest expense
16,605
16,550
Loss from extinguishment of debt, net
437
25,829
Other (income) expense, net
(8,207
)
24,892
Acquisition and new business initiatives
related adjustments and expenses
8,031
10,095
Non-discretionary cash capital
expenditures
(13,767
)
(11,050
)
AFFO
$
340,716
$
310,778
Adjustments for joint venture partner
interest
(790
)
—
AFFO attributable to SBA Communications
Corporation
$
339,926
$
310,778
Weighted average number of common shares
(1)
109,298
110,727
AFFO per share
$
3.12
$
2.81
AFFO per share attributable to SBA
Communications Corporation
$
3.11
$
2.81
(1)
For purposes of the AFFO per share
calculation, the basic weighted average number of common shares has
been adjusted to include the dilutive effect of stock options and
restricted stock units.
Forecasted AFFO for
the Full Year 2023
The table below sets forth the
reconciliation of the forecasted AFFO and AFFO per share set forth
in the Outlook section to its most comparable GAAP measurement for
the full year 2023:
(in millions, except per share
amounts)
Full Year 2023
Net income
$
545.5
to
$
590.5
Real estate related depreciation,
amortization, and accretion
709.0
to
704.0
Asset impairment and decommission
costs
37.5
to
32.5
FFO
$
1,292.0
to
$
1,327.0
Adjustments to FFO:
Non-cash straight-line leasing revenue
(23.0
)
to
(18.0
)
Non-cash straight-line ground lease
expense
(5.5
)
to
(0.5
)
Non-cash compensation
103.5
to
98.5
Adjustment for non-cash portion of tax
provision
2.0
to
2.0
Non-real estate related depreciation,
amortization, and accretion
10.0
to
5.0
Amortization of deferred financing costs
and debt discounts and non-cash interest expense
52.5
to
52.5
Other income, net
(19.0
)
to
(19.0
)
Acquisition and new business initiatives
related adjustments and expenses
16.5
to
11.5
Non-discretionary cash capital
expenditures
(63.0
)
to
(53.0
)
AFFO
$
1,366.0
to
$
1,406.0
Adjustments for joint venture partner
interest
(6.0
)
to
(6.0
)
AFFO attributable to SBA Communications
Corporation
$
1,360.0
to
$
1,400.0
Weighted average number of common shares
(1)
109.6
to
109.6
AFFO per share
$
12.46
to
$
12.83
AFFO per share attributable to SBA
Communications Corporation
$
12.41
to
$
12.77
(1)
Our assumption for weighted average number
of common shares does not contemplate any additional repurchases of
the Company’s stock during 2023.
Net Debt, Net
Secured Debt, Leverage Ratio, and Secured Leverage Ratio
Net Debt is calculated using the notional
principal amount of outstanding debt. Under GAAP policies, the
notional principal amount of the Company's outstanding debt is not
necessarily reflected on the face of the Company's financial
statements.
The Net Debt and Leverage calculations are
as follows:
December 31,
2022
(in thousands)
2014-2C Tower Securities
$
620,000
2019-1C Tower Securities
1,165,000
2020-1C Tower Securities
750,000
2020-2C Tower Securities
600,000
2021-1C Tower Securities
1,165,000
2021-2C Tower Securities
895,000
2021-3C Tower Securities
895,000
2022-1C Tower Securities
850,000
Revolving Credit Facility
720,000
2018 Term Loan
2,292,000
Total secured debt
9,952,000
2020 Senior Notes
1,500,000
2021 Senior Notes
1,500,000
Total unsecured debt
3,000,000
Total debt
$
12,952,000
Leverage
Ratio
Total debt
$
12,952,000
Less: Cash and cash equivalents,
short-term restricted cash and short-term investments
(186,998
)
Net debt
$
12,765,002
Divided by: Annualized Adjusted EBITDA
$
1,842,880
Leverage Ratio
6.9x
Secured Leverage
Ratio
Total secured debt
$
9,952,000
Less: Cash and cash equivalents,
short-term restricted cash and short-term investments
(186,998
)
Net Secured Debt
$
9,765,002
Divided by: Annualized Adjusted EBITDA
$
1,842,880
Secured Leverage Ratio
5.3x
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230221005726/en/
Mark DeRussy, CFA Capital Markets 561-226-9531 Lynne Hopkins
Media Relations 561-226-9431
SBA Communications (NASDAQ:SBAC)
過去 株価チャート
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SBA Communications (NASDAQ:SBAC)
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