Item 16. FORM 10-K SUMMARY

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Item 16. FORM 10-K SUMMARY

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



SBA COMMUNICATIONS CORPORATION

By:	/s/ Jeffrey A. Stoops

	Jeffrey A. Stoops Chief Executive Officer and President

Date:	March 1, 2017

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Signature	Title	Date

/s/ Steven E. Bernstein	Chairman of the Board of Directors	March 1, 2017
Steven E. Bernstein

/s/ Jeffrey A. Stoops	Chief Executive Officer and President	March 1, 2017
Jeffrey A. Stoops	(Principal Executive Officer)

/s/ Brendan T. Cavanagh	Chief Financial Officer and Executive Vice President	March 1, 2017
Brendan T. Cavanagh	(Principal Financial Officer)

/s/ Brian D. Lazarus	Chief Accounting Officer and Senior Vice President	March 1, 2017
Brian D. Lazarus	(Principal Accounting Officer)

/s/ Brian C. Carr	Director	March 1, 2017
Brian C. Carr

/s/ Mary S. Chan	Director	March 1, 2017
Mary S. Chan

/s/ Duncan H. Cocroft	Director	March 1, 2017
Duncan H. Cocroft


/s/ George R. Krouse Jr.	Director	March 1, 2017
George R. Krouse Jr.

/s/ Jack Langer	Director	March 1, 2017
Jack Langer

/s/ Kevin L. Beebe	Director	March 1, 2017
Kevin L. Beebe

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

Table of Contents



	Page

Report of Independent Registered Public Accounting Firm	F-1

Consolidated Balance Sheets as of December 31, 2016 and 2015	F-2

Consolidated Statements of Operations for the years ended December 31, 2016, 2015 and 2014	F-3

Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2016, 2015 and 2014	F-4

Consolidated Statements of Shareholders’ Equity (Deficit) for the years ended December 31, 2016, 2015, and 2014	F-5

Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014	F-6

Notes to Consolidated Financial Statements	F-8

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of SBA Communications Corporation and Subsidiaries

We have audited the accompanying consolidated balance sheets of SBA Communications Corporation and Subsidiaries as of December 31, 2016 and 2015, and the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity (deficit) and cash flows for each of the three years in the period ended December 31, 2016. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of SBA Communications Corporation and Subsidiaries at December 31, 2016 and 2015, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2016, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), SBA Communications Corporation and Subsidiaries’ internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 1, 2017 expressed an unqualified opinion thereon.



/s/ Ernst & Young LLP
Certified Public Accountants

Boca Raton, Florida

March 1, 2017

F-1

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except par values)



	December 31,		December 31,
	2016		2015
ASSETS
Current assets:
Cash and cash equivalents	$	146,109	$	118,039
Restricted cash		36,786		25,353
Short-term investments		223		706
Accounts receivable, net		78,344		83,326
Costs and estimated earnings in excess of billings on uncompleted contracts		11,127		16,934
Prepaid expenses and other current assets		51,982		49,602
Total current assets		324,571		293,960
Property and equipment, net		2,792,076		2,782,353
Intangible assets, net		3,656,924		3,735,413
Other assets		587,374		501,254
Total assets	$	7,360,945	$	7,312,980

LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	28,320	$	27,105
Accrued expenses		61,129		63,755
Current maturities of long-term debt		627,157		20,000
Deferred revenue		101,098		97,083
Accrued interest		44,503		53,365
Other current liabilities		11,240		12,063
Total current liabilities		873,447		273,371
Long-term liabilities:
Long-term debt, net		8,148,426		8,432,070
Other long-term liabilities		334,993		313,683
Total long-term liabilities		8,483,419		8,745,753
Shareholders' deficit:
Preferred stock - par value $.01, 30,000 shares authorized, no shares issued or outst.		—		—
Common stock - Class A, par value $.01, 400,000 shares authorized, 121,004
and 125,743 shares issued and outstanding at December 31, 2016
and December 31, 2015, respectively		1,210		1,257
Additional paid-in capital		2,010,520		1,962,713
Accumulated deficit		(3,637,467)		(3,168,069)
Accumulated other comprehensive loss, net		(370,184)		(502,045)
Total shareholders' deficit		(1,995,921)		(1,706,144)
Total liabilities and shareholders' deficit	$	7,360,945	$	7,312,980

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

F-2

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)


	For the year ended December 31,
	2016		2015		2014
Revenues:
Site leasing	$	1,538,070	$	1,480,634	$	1,360,202
Site development		95,055		157,840		166,794
Total revenues		1,633,125		1,638,474		1,526,996
Operating expenses:
Cost of revenues (exclusive of depreciation, accretion, and
amortization shown below):
Cost of site leasing		342,215		324,655		301,313
Cost of site development		78,682		119,744		127,172
Selling, general, and administrative		143,349		114,951		103,317
Acquisition related adjustments and expenses		13,140		11,864		7,798
Asset impairment and decommission costs		30,242		94,783		23,801
Depreciation, accretion, and amortization		638,189		660,021		627,072
Total operating expenses		1,245,817		1,326,018		1,190,473
Operating income		387,308		312,456		336,523
Other income (expense):
Interest income		10,928		3,894		677
Interest expense		(329,171)		(322,366)		(292,600)
Non-cash interest expense		(2,203)		(1,505)		(27,112)
Amortization of deferred financing fees		(21,136)		(19,154)		(17,572)
Loss from extinguishment of debt, net		(52,701)		(783)		(26,204)
Other income (expense), net		94,278		(139,137)		10,628
Total other expense, net		(300,005)		(479,051)		(352,183)
Income (loss) before provision for income taxes		87,303		(166,595)		(15,660)
Provision for income taxes		(11,065)		(9,061)		(8,635)
Net income (loss)	$	76,238	$	(175,656)	$	(24,295)
Net income (loss) per common share:
Basic	$	0.61	$	(1.37)	$	(0.19)
Diluted	$	0.61	$	(1.37)	$	(0.19)
Weighted average common shares outstanding:
Basic		124,448		127,794		128,919
Diluted		125,144		127,794		128,919

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

F-3

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)





	For the year ended December 31,
	2016		2015		2014
Net income (loss)	$	76,238	$	(175,656)	$	(24,295)
Foreign currency translation adjustments		131,861		(319,559)		(148,807)
Comprehensive income (loss)	$	208,099	$	(495,215)	$	(173,102)

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

F-4

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)

(in thousands)



								Accumulated
	Class A			Additional				Other
	Common Stock			Paid-In		Accumulated		Comprehensive
	Shares	Amount		Capital		Deficit		Loss		Total

BALANCE, December 31, 2013	128,432	$	1,284	$	2,907,446	$	(2,518,085)	$	(33,679)	$	356,966
Net loss	—		—		—		(24,295)		—		(24,295)
Common stock issued in connection with
stock purchase/option plans	696		7		7,741		—		—		7,748
Non-cash stock compensation	—		—		22,999		—		—		22,999
Settlement of convertible notes	11,742		117		9,450		—		—		9,567
Settlement of convertible note hedges	(11,737)		(117)		124		—		—		7
Settlement of common stock warrants	1		—		(884,985)		—		—		(884,985)
Foreign currency translation adjustments	—		—		—		—		(148,807)		(148,807)
BALANCE, December 31, 2014	129,134		1,291		2,062,775		(2,542,380)		(182,486)		(660,800)
Net loss	—		—		—		(175,656)		—		(175,656)
Common stock issued in connection with
stock purchase/option plans	591		6		21,604		—		—		21,610
Non-cash stock compensation	—		—		29,208		—		—		29,208
Settlement of common stock warrants	—		—		(150,874)		—		—		(150,874)
Repurchase and retirement of common stock	(3,982)		(40)		—		(450,033)		—		(450,073)
Foreign currency translation adjustments	—		—		—		—		(319,559)		(319,559)
BALANCE, December 31, 2015	125,743		1,257		1,962,713		(3,168,069)		(502,045)		(1,706,144)
Net income	—		—		—		76,238		—		76,238
Common stock issued in connection with
stock purchase/option plans	602		6		14,404		—		—		14,410
Non-cash stock compensation	—		—		33,403		—		—		33,403
Repurchase and retirement of common stock	(5,341)		(53)		—		(545,636)		—		(545,689)
Foreign currency translation adjustments	—		—		—		—		131,861		131,861
BALANCE, December 31, 2016	121,004	$	1,210	$	2,010,520	$	(3,637,467)	$	(370,184)	$	(1,995,921)

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

F-5

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)



	For the year ended December 31,
	2016		2015		2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	76,238	$	(175,656)	$	(24,295)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, accretion, and amortization		638,189		660,021		627,072
Non-cash interest expense		2,203		1,505		27,112
Deferred income tax expense (benefit)		1,409		(5)		530
Non-cash asset impairment and decommission costs		25,693		89,406		18,384
Non-cash compensation expense		32,915		28,747		22,671
Amortization of deferred financing fees		21,136		19,154		17,572
(Gain) loss on remeasurement of U.S. denominated intercompany loan		(90,030)		178,854		22,965
Gain on sale of cost method investments		—		(38,326)		(12,461)
Loss from extinguishment of debt, net		52,701		783		26,204
Gain on foreign currency swap contract		—		—		(17,891)
Provision for doubtful accounts		22,516		896		365
Other non-cash items reflected in the Statements of Operations		(4,837)		(6,755)		(7,754)
Changes in operating assets and liabilities, net of acquisitions:
AR and costs and est. earnings in excess of billings on uncompleted contracts, net		(7,270)		15,975		(36,245)
Prepaid expenses and other assets		(40,289)		(62,934)		(62,185)
Accounts payable and accrued expenses		(10,516)		7,366		5,475
Other liabilities		22,467		3,999		66,821
Net cash provided by operating activities		742,525		723,030		674,340
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions		(276,835)		(609,530)		(1,585,222)
Capital expenditures		(139,982)		(208,707)		(211,251)
Proceeds from sale of investments		712		89,728		20,889
Other investing activities		(12,130)		(8,556)		11,457
Net cash used in investing activities		(428,235)		(737,065)		(1,764,127)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under Revolving Credit Facility		580,000		770,000		700,000
Repayments under Revolving Credit Facility		(190,000)		(895,000)		(790,000)
Repayment of Term Loans		(20,000)		(190,000)		(310,500)
Proceeds from Term Loans, net of fees		—		489,884		1,483,337
Payments on settlement of convertible debt		—		—		(499,721)
Payments for settlement of common stock warrants		—		(150,874)		(884,985)
Payment for the redemption of 8.25% Senior Notes		—		—		(253,805)
Payment for the redemption of 5.625% Senior Notes		(514,065)		—		—
Payment for the redemption of 5.75% Senior Notes		(825,795)		—		—
Proceeds from 2014 Senior Notes, net of fees		—		—		732,325
Proceeds from 2016 Senior Notes, net of fees		1,078,123		—		—
Proceeds from issuance of Tower Securities, net of fees		690,475		489,100		1,518,229
Repayment of Tower Securities		(550,000)		—		(680,000)
Repurchase and retirement of common stock, inclusive of fees		(545,689)		(450,073)		—
Other financing activities		8,394		12,714		(19,582)
Net cash (used in) provided by financing activities		(288,557)		75,751		995,298
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		13,618		(12,993)		13,977
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH		39,351		48,723		(80,512)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH:
Beginning of year		146,619		97,896		178,408
End of year	$	185,970	$	146,619	$	97,896

(continued)

F-6

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



	For the year ended December 31,
	2016		2015		2014

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	338,409	$	322,396	$	278,359
Income taxes	$	9,655	$	9,431	$	7,525

SUPPLEMENTAL CASH FLOW INFORMATION OF NON-CASH
ACTIVITIES:
Assets acquired through capital leases	$	1,386	$	2,627	$	1,290
Issuance of stock for settlement of convertible debt and warrants, net of hedges	$	—	$	—	$	229

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

F-7

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.GENERAL

SBA Communications Corporation (the “Company” or “SBAC”) was incorporated in the State of Florida in March 1997. The Company is a holding company that holds all of the outstanding capital stock of SBA Telecommunications, LLC (“Telecommunications”). Telecommunications is a holding company that holds the outstanding capital stock of SBA Senior Finance, LLC (“SBA Senior Finance”), and other operating subsidiaries which are not a party to any loan agreement. SBA Senior Finance is a holding company that holds, directly or indirectly, the equity interest in certain subsidiaries that issued the Tower Securities (see Note 12) and certain subsidiaries that were not involved in the issuance of the Tower Securities. With respect to the subsidiaries involved in the issuance of the Tower Securities, SBA Senior Finance is the sole member of SBA Holdings, LLC and SBA Depositor, LLC. SBA Holdings, LLC is the sole member of SBA Guarantor, LLC. SBA Guarantor, LLC directly or indirectly holds all of the capital stock of the companies referred to as the “Borrowers” under the Tower Securities. With respect to subsidiaries not involved in the issuance of the Tower Securities, SBA Senior Finance holds all of the membership interests in SBA Senior Finance II, LLC (“SBA Senior Finance II”) and certain non-operating subsidiaries. SBA Senior Finance II holds, directly or indirectly, all the capital stock of certain international subsidiaries and certain other tower companies (known as “Tower Companies”). SBA Senior Finance II also holds, directly or indirectly, all the capital stock and/or membership interests of certain other subsidiaries involved in providing services, including SBA Network Services, LLC (“Network Services”) as well as SBA Network Management, Inc. (“Network Management”) which manages and administers the operations of the Borrowers.

In October 2016, the Company announced its intention to take the necessary steps to qualify as a Real Estate Investment Trust (“REIT”) for U.S. federal income tax purposes. This is referred to as the REIT conversion. The Company believes that its business has been operated in a manner that complies with the REIT rules since January 1, 2016, and as a result, intends to make the election to be subject to tax as a REIT commencing with its taxable year ending December 31, 2016. Because the Company believes its business is currently operated in a manner that complies with the REIT rules, no further reorganization of its operations is necessary to complete the REIT conversion. As part of the REIT conversion, effective January 13, 2017, the Company completed the merger with its predecessor that was approved by its shareholders at a special meeting held on January 12, 2017, and as a result of the merger, the Company now holds, directly or indirectly through its subsidiaries, the assets held by its predecessor prior to the merger and conducts the existing businesses of its predecessor and its subsidiaries. Although the REIT rules do not require the completion of this merger, the Company completed the merger to facilitate its compliance with the REIT rules by ensuring the effective adoption of certain REIT-related ownership limitations and transfer restrictions related to our capital stock.

As of December 31, 2016, the Company owned and operated wireless towers in the United States and its territories. In addition, the Company owned towers in Brazil, Canada, Chile, Costa Rica, Ecuador, El Salvador, Guatemala, Nicaragua, and Panama. Space on these towers is leased primarily to wireless service providers. As of December 31, 2016, the Company owned and operated 26,197 towers of which 15,922 are domestic and 10,275 are international.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the preparation of the accompanying consolidated financial statements is as follows:

Principles of Consolidation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the Company and its majority and wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The significant estimates made by management relate to the allowance for doubtful accounts, the costs and revenue relating to the Company’s construction contracts, stock-based compensation assumptions, valuation allowance related to deferred tax assets, fair value of long-lived assets, the useful lives of towers and intangible assets, anticipated property tax assessments, fair value of investments and asset retirement obligations. Management develops estimates based on historical experience and on various assumptions about the future that are believed to be reasonable based on the information available. These estimates ultimately may differ from actual results and such differences could be material.

F-8

Cash and Cash Equivalents

Cash and cash equivalents consist primarily of cash in banks, money market funds, commercial paper, highly liquid short-term investments, and other marketable securities with an original maturity of three months or less at the time of purchase. These investments are carried at cost, which approximates fair value.

Restricted Cash

The Company classifies all cash pledged as collateral to secure certain obligations and all cash whose use is limited as restricted cash. This includes cash held in escrow to fund certain reserve accounts relating to the Tower Securities as well as for payment and performance bonds and surety bonds issued for the benefit of the Company in the ordinary course of business, as well as collateral associated with workers’ compensation plans (see Note 4).

Investments

Investment securities with original maturities of more than three months but less than one year at time of purchase are considered short-term investments. The Company’s short-term investments primarily consist of certificates of deposit with maturities of less than a year. Investment securities with maturities of more than a year are considered long-term investments and are classified in other assets on the accompanying Consolidated Balance Sheets. Long-term investments primarily consist of U.S. Treasuries, mutual funds, and preferred securities. Gross purchases and sales of the Company’s investments are presented within “Cash flows from investing activities” on the Company’s Consolidated Statements of Cash Flows.

The Company accounts for its investments in privately held companies under the cost-method as it does not exert significant influence. The Company evaluates its cost-method investments for impairment at least annually. The Company determines the fair value of its cost-method investments by considering available evidence, including general market conditions, the investee’s financial condition, near-term prospects, market comparables and subsequent rounds of financing. The Company measures and records its cost-method investments at fair value when they are deemed to be other-than-temporarily impaired. The Company did not recognize any impairment loss associated with its cost-method investments during the years ended December 31, 2016, 2015, and 2014.

During the years ended December 31, 2016 and 2015, the Company received proceeds related to the sale or maturity of investments of $0.7 million and $89.7 million, respectively, and recorded a gain of $38.3 million in the year ended December 31, 2015. During the year ended December 31, 2016, no gain or loss was recorded related to the sale or maturity of investments. The proceeds are reflected in Net cash used in investing activities on the Consolidated Statements of Cash Flows, and the related gain or loss on sale or maturity is reflected in Other income (expense), net in the accompanying Consolidated Statement of Operations. The aggregate carrying value of the Company’s investments was approximately $8.1 million and $8.8 million as of December 31, 2016 and 2015, respectively, and is classified within short-term investments and other assets on the Company’s consolidated balance sheets.

Property and Equipment

Property and equipment are recorded at cost or at estimated fair value (in the case of acquired properties), adjusted for asset impairment and estimated asset retirement obligations. Costs for self-constructed towers include direct materials and labor, indirect costs and capitalized interest. Approximately $1.0 million, $0.8 million, and $0.3 million of interest cost was capitalized in 2016, 2015 and 2014, respectively.

Depreciation on towers and related components is provided using the straight-line method over the estimated useful lives, not to exceed the minimum lease term of the underlying ground lease. The Company defines the minimum lease term as the shorter of the period from lease inception through the end of the term of all tenant lease obligations in existence at ground lease inception, including renewal periods, or the ground lease term, including renewal periods. If no tenant lease obligation exists at the date of ground lease inception, the initial term of the ground lease is considered the minimum lease term. Leasehold improvements are amortized on a straight-line basis over the shorter of the useful life of the improvement or the minimum lease term of the lease. For all other property and equipment, depreciation is provided using the straight-line method over the estimated useful lives.

The Company performs ongoing evaluations of the estimated useful lives of its property and equipment for depreciation purposes. The estimated useful lives are determined and continually evaluated based on the period over which services are expected to be rendered by the asset. If the useful lives of assets are reduced, depreciation may be accelerated in future years. Property and equipment under capital leases are amortized on a straight-line basis over the term of the lease or the remaining estimated life of the leased property, whichever is shorter, and the related amortization is included in depreciation expense. Expenditures for maintenance and repair are expensed as incurred.

F-9

Asset classes and related estimated useful lives are as follows:



Towers and related components	3 - 15 years
Furniture, equipment and vehicles	2 - 7 years
Buildings and improvements	5 - 30 years

Betterments, improvements, and significant repairs, which increase the value or extend the life of an asset, are capitalized and depreciated over the remaining estimated useful life of the respective asset. Changes in an asset’s estimated useful life are accounted for prospectively, with the book value of the asset at the time of the change being depreciated over the revised remaining useful life. There has been no material impact for changes in estimated useful lives for any years presented.

Deferred Financing Fees

Financing fees related to the issuance of debt have been deferred and are being amortized using the effective interest rate method over the expected duration of the related indebtedness (see Note 12).

In April 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-03, Interest—Imputation of Interest. The standard requires debt issuance costs to be presented on the balance sheet as a direct deduction from the related debt liability rather than as an asset. The Company adopted ASU 2015-03 effective January 1, 2016 and reclassified $90.2 million from deferred financing fees, net to long-term debt in the December 31, 2015 Consolidated Balance Sheet.

In August 2015, the FASB issued ASU 2015-15, Interest - Imputation of Interest - Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. The standard indicates the Securities and Exchange Commission (the “Commission”) staff would not object to presenting debt issuance costs for a line of credit arrangement as an asset in the balance sheet. The Company adopted ASU 2015-15 effective January 1, 2016 and has elected to continue to present debt issuance costs for its Revolving Credit Facility as an asset on the accompanying Consolidated Balance Sheet.

Deferred Lease Costs

The Company defers certain initial direct costs associated with the origination of tenant leases and lease amendments and amortizes these costs over the initial lease term or over the lease term remaining if related to a lease amendment. Such deferred costs were approximately $10.2 million, $10.9 million, and $12.4 million in 2016, 2015, and 2014, respectively. Amortization expense was $11.3 million, $9.0 million, and $6.8 million for the years ended December 31, 2016, 2015 and 2014, respectively, and is included in cost of site leasing on the accompanying Consolidated Statements of Operations. As of December 31, 2016 and 2015, unamortized deferred lease costs were $29.7 million and $30.6 million, respectively, and are included in other assets on the accompanying Consolidated Balance Sheets.

Intangible Assets

The Company classifies as intangible assets the fair value of current leases in place at the acquisition date of towers and related assets (referred to as the “Current contract intangibles”), and the fair value of future tenant leases anticipated to be added to the acquired towers (referred to as the “Network location intangibles”). These intangibles are estimated to have a useful life consistent with the useful life of the related tower assets, which is typically 15 years. For all intangible assets, amortization is provided using the straight-line method over the estimated useful lives as the benefit associated with these intangible assets is anticipated to be derived evenly over the life of the asset.

Impairment of Long-Lived Assets

The Company evaluates its individual long-lived and related assets with finite lives for indicators of impairment to determine when an impairment analysis should be performed. The Company evaluates its tower assets and Current contract intangibles at the tower level, which is the lowest level for which identifiable cash flows exists. The Company evaluates its Network location intangibles for impairment at the tower leasing business level whenever indicators of impairment are present. The Company has established a policy to at least annually evaluate its tower assets and Current contract intangibles for impairment.

The Company records an impairment charge when the Company believes an investment in towers or related assets has been impaired, such that future undiscounted cash flows would not recover the then current carrying value of the investment in the tower and related intangible. If the future undiscounted cash flows are lower than the carrying value of the investment in the tower and

F-10

related intangible, the Company calculates future discounted cash flows and compares those amounts to the carrying value. The Company records an impairment charge for any amounts lower than the carrying value. Estimates and assumptions inherent in the impairment evaluation include, but are not limited to, general market and economic conditions, historical operating results, geographic location, lease-up potential and expected timing of lease-up. In addition, the Company makes certain assumptions in determining an asset’s fair value for the purpose of calculating the amount of an impairment charge.

The Company recognized impairment charges of $30.2 million, $94.8 million, and $23.8 million for the years ended December 31, 2016, 2015 and 2014, respectively. Refer to Note 3 for further detail of these amounts.

Fair Value Measurements

The Company determines the fair market values of its financial instruments based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following three levels of inputs may be used to measure fair value:




Level 1	Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Revenue Recognition

Revenue from site leasing is recorded monthly and recognized on a straight-line basis over the current term of the related lease agreements, which are generally five to ten years. Receivables recorded related to the straight-lining of site leases are reflected in other assets on the Consolidated Balance Sheets. Rental amounts received in advance are recorded as deferred revenue on the Consolidated Balance Sheets.

Site development projects in which the Company performs consulting services include contracts on a time and materials basis or a fixed price basis. Time and materials based contracts are billed at contractual rates and revenue is recognized as the services are rendered. For those site development contracts in which the Company performs work on a fixed price basis, site development billing (and revenue recognition) is based on the completion of agreed upon phases of the project on a per site basis. Upon the completion of each phase on a per site basis, the Company recognizes the revenue related to that phase. Site development projects generally take from 3 to 12 months to complete. Amounts billed in advance (collected or uncollected) are recorded as deferred revenue on the Company’s Consolidated Balance Sheets.

Revenue from construction projects is recognized on the percentage-of-completion method of accounting, determined by the percentage of cost incurred to date compared to management’s estimated total cost for each contract. This method is used because management considers total cost to be the best available measure of progress on the contracts. These amounts are based on estimates, and the uncertainty inherent in the estimates initially is reduced as work on the contracts nears completion. The asset “costs and estimated earnings in excess of billings on uncompleted contracts” represents costs incurred and revenues recognized in excess of amounts billed. The liability “billings in excess of costs and estimated earnings on uncompleted contracts,” included within other current liabilities on the Company’s Consolidated Balance Sheets, represents billings in excess of costs incurred and revenues recognized. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined to be probable.

Allowance for Doubtful Accounts

The Company performs periodic credit evaluations of its customers. The Company monitors collections and payments from its customers and maintains a provision for estimated credit losses based upon historical experience, specific customer collection issues identified, and past due balances as determined based on contractual terms. Interest is charged on outstanding receivables from customers on a case by case basis in accordance with the terms of the respective contracts or agreements with those customers. Amounts determined to be uncollectible are written off against the allowance for doubtful accounts in the period in which uncollectibility is determined to be probable.

F-11

The following is a rollforward of the allowance for doubtful accounts:



	For the year ended December 31,
	2016		2015		2014

		(in thousands)
Beginning balance	$	1,681	$	889	$	686
Provision for doubtful accounts		22,516		896		365
Write-offs, net of recoveries		(614)		(72)		(135)
Currency translation adjustment		935		(32)		(27)
Ending balance	$	24,518	$	1,681	$	889

On June 20, 2016, Oi, S.A. (“Oi”), the Company’s largest customer in Brazil, filed a petition for judicial reorganization in Brazil. Prior to the filing of the reorganization petition, Oi was current in all payment obligations to the Company. These obligations related to periods ending on or before April 30, 2016. As a result of the relief provisions available in a judicial reorganization proceeding, obligations of Oi to the Company arising from the periods from May 1, 2016 to June 20, 2016 remain unpaid. Due to the uncertainty surrounding the recoverability of amounts owed by Oi relating to services provided prior to the date of Oi’s petition, the Company has recorded a $16.5 million bad debt provision (the “Oi reserve”) which covers amounts owed or potentially owed by Oi as of the filing date. Under Brazilian law governing judicial reorganizations, the contracts governing post-petition obligations such as tower rents remain unchanged, and debtors do not have the ability to reject or terminate the contracts other than pursuant to their original terms. Since the filing, the Company has received all rental payments due in connection with obligations of Oi accruing post-petition. The Oi reserve has been recorded in Selling, general, and administrative expense on the consolidated statement of operations.

Cost of Revenue

Cost of site leasing revenue includes ground lease rent, property taxes, amortization of deferred lease costs, maintenance and other tower operating expenses. All ground lease rental obligations due to be paid out over the lease term, including fixed escalations, are recorded on a straight-line basis over the minimum lease term. Liabilities recorded related to the straight-lining of ground leases are reflected in other long-term liabilities on the Consolidated Balance Sheets. Cost of site development revenue includes the cost of materials, salaries and labor costs, including payroll taxes, subcontract labor, vehicle expense and other costs directly and indirectly related to the projects. All costs related to site development projects are recognized as incurred.

Income Taxes

The Company recognizes deferred tax assets and liabilities for the estimated future tax consequences attributable to differences between the financial reporting and tax bases of existing assets and liabilities. Deferred tax assets and liabilities are measured using tax rates in effect for the year in which the temporary differences are expected to reverse. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets if it is "more-likely-than-not" that those assets will not be realized. The Company considers many factors when assessing the likelihood of future realization, including the Company's recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income, prudent and feasible tax planning strategies that are available, the carryforward periods available to the Company for tax reporting purposes and other relevant factors.

The Company began operating as a REIT for federal income tax purposes effective January 1, 2016. As a REIT, the Company generally is not subject to corporate level federal income tax on taxable income it distributes to its stockholders as long as it meets the organizational and operational requirements under the REIT rules. However, certain subsidiaries have made an election with the IRS to be treated as a taxable REIT subsidiary (“TRS”) in conjunction with the Company's REIT election. The TRS elections permit SBA to engage in certain business activities in which the REIT may not engage directly, so long as these activities are conducted in entities that elect to be treated as TRSs under the Internal Revenue Code. A TRS is subject to federal and state income taxes on the income from these activities. Additionally, the Company has included in TRSs our tower operations in most foreign jurisdictions; however, the REIT holds selected tower assets in Puerto Rico and USVI. Those operations will continue to be subject to foreign taxes in the jurisdiction in which such assets and operations are located regardless of whether they are included in a TRS.

For the tax year ended December 31, 2016, the Company will file separate federal tax returns for the REIT and TRS. The REIT had taxable income and utilized net operating losses (“NOLs”) to offset its distribution requirement. The TRS generated a NOL which will be carried forward to use in future years. Prior to the REIT conversion in 2016, the Company filed consolidated returns and had taxable income for the years ended December 31, 2015 and 2014 and utilized NOL carry-forwards. These NOL carry-forwards are retained by the REIT. The NOLs generated by the TRS in the current year are fully reserved by a valuation allowance.

F-12

The Company records a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company has not identified any tax exposures that require a reserve. To the extent that the Company records unrecognized tax exposures, any related interest and penalties will be recognized as interest expense in the Company’s Consolidated Statements of Operations.

The Company does not calculate U.S. taxes on undistributed earnings of foreign subsidiaries because substantially all such earnings are expected to be reinvested indefinitely.

Stock-Based Compensation

The Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors, including stock options, restricted stock units and employee stock purchases under employee stock purchase plans. The Company records compensation expense, for stock options and restricted stock units on a straight-line basis over the vesting period. Compensation expense for employee stock options is based on the estimated fair value of the options on the date of the grant using the Black-Scholes option-pricing model. Any stock options granted to non-employees would be valued using the Black-Scholes option-pricing model based on the market price of the underlying common stock on the “valuation date,” which for options to non-employees is the vesting date. Expense related to options granted to non-employees would be recognized on a straight-line basis over the shorter of the period over which services are to be received or the vesting period. Compensation expense for restricted stock units is based on the fair market value of the units awarded at the date of the grant.

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which the Company adopted as of January 1, 2016. The standard simplifies several aspects of the accounting for shared-based payment transactions including accounting for income taxes, forfeitures, statutory tax withholding requirements, classification of awards as either equity or a liability, and classification on the Consolidated Statement of Cash Flows. The financial statement impact of adopting this standard was not material for all periods presented.

Asset Retirement Obligations

The Company has entered into ground leases for the land underlying the majority of the Company’s towers. A majority of these leases require the Company to restore land interests to their original condition upon termination of the ground lease.

The Company recognizes asset retirement obligations in the period in which they are incurred, if a reasonable estimate of a fair value can be made, and accretes such liability through the obligation’s estimated settlement date. The associated asset retirement costs are capitalized as part of the carrying amount of the related tower fixed assets, and over time, the liability is accreted to its present value each period and the capitalized cost is depreciated over the estimated useful life of the tower.

The asset retirement obligation is included in other long-term liabilities on the Consolidated Balance Sheets. Upon settlement of the obligations, any difference between the cost to retire an asset and the recorded liability is recorded in the Consolidated Statements of Operations as a gain or loss. In determining the measurement of the asset retirement obligations, the Company considered the nature and scope of the contractual restoration obligations contained in the Company’s third party ground leases, the historical retirement experience as an indicator of future restoration probabilities, intent in renewing existing ground leases through lease termination dates, current and future value and timing of estimated restoration costs and the credit adjusted risk-free rate used to discount future obligations.

The following summarizes the activity of the asset retirement obligation liability:



	For the year ended December 31,
	2016		2015		2014

	(in thousands)
Beginning balance	$	6,309	$	5,856	$	5,312
Additions		1,091		781		599
Currency translation adjustment		121		(57)		(161)
Accretion expense		318		373		446
Removal		(290)		(50)		(188)
Revision in estimates		(1,107)		(594)		(152)
Ending balance	$	6,442	$	6,309	$	5,856

F-13

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity (net assets) of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, and is comprised of net income (loss) and other foreign currency adjustments.

Foreign Currency Translation

The functional currency for the Company’s Central American subsidiaries is the U.S. dollar. Monetary assets and liabilities of such subsidiaries which are not denominated in U.S. dollars are remeasured at exchange rates in effect at the balance sheet date, and revenues and expenses are remeasured at monthly average rates prevailing during the year. Unrealized translation gains and losses are reported as other income/expense in the Consolidated Statement of Operations.

All assets and liabilities of foreign subsidiaries that do not utilize the U.S. dollar as its functional currency are translated at period-end rates of exchange, while revenues and expenses are translated at monthly average rates of exchange prevailing during the year. Unrealized translation gains and losses are reported as foreign currency translation adjustments through accumulated other comprehensive loss in shareholders’ deficit.

Business Combinations

The Company accounts for business combinations under the acquisition method of accounting. The assets and liabilities acquired are recorded at fair market value at the date of each acquisition and the results of operations of the acquired assets are included with those of the Company from the dates of the respective acquisitions. The Company continues to evaluate all acquisitions for a period not to exceed one year after the applicable closing date of each transaction to determine whether any additional adjustments are needed to the allocation of the purchase price paid for the assets acquired and liabilities assumed as a result of information available at the acquisition date. The intangible assets represent the value associated with the current leases at the acquisition date (“Current contract intangibles”) and future tenant leases anticipated to be added to the towers (“Network location intangibles”) and were calculated using the discounted values of the current or future expected cash flows. The intangible assets are estimated to have a useful life consistent with the useful life of the related tower assets, which is typically 15 years.

In connection with certain acquisitions, the Company may agree to pay contingent consideration (or earnouts) in cash or stock if the communication sites or businesses that are acquired meet or exceed certain performance targets over a period of one to three years after they have been acquired. The Company accrues for contingent consideration in connection with acquisitions at fair value as of the date of the acquisition. All subsequent changes in fair value of contingent consideration payable in cash are recorded through Consolidated Statements of Operations.

In September 2015, the FASB issued ASU 2015-16 Business Combinations. The standard requires that the acquirer (1) recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, (2) record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date, and (3) to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The Company adopted this standard prospectively effective January 1, 2016. The financial statement impact of adopting this standard was not material for any period presented.

Cash Flows

In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments, which is intended to decrease the diversity in practice in how certain cash receipts and cash payments are presented in the Consolidated Statement of Cash Flows. The standard requires that (1) cash payments for debt prepayment or debt extinguishment costs be classified as cash outflows for financing activities, (2) contingent consideration payments made soon after the acquisition date of a business combination be classified as cash outflows for investing activities, and (3) contingent consideration payments not made soon after the acquisition date of a business combination be separated with cash payments up to the amount of the contingent consideration at the acquisition date be classified as financing activities and any excess be classified as operating activities. The Company adopted the standard retrospectively effective January 1, 2016. The financial statement impact of adopting this standard was not material for any period presented.

F-14

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows. The standard requires cash and cash equivalent balances to include restricted cash equivalents. The Company adopted this standard as of January 1, 2016. Prior year periods have been adjusted to conform to the current year presentation.

Intercompany Loans

On November 25, 2014, two wholly owned subsidiaries of the Company, Brazil Shareholder I, LLC, a Florida limited liability company, and SBA Torres Brasil, Limitada, a limitada existing under the laws of the Republic of Brazil, entered into an intercompany loan agreement where from time to time the entities may agree to lend/borrow amounts up to $750.0 million. As of December 31, 2016, the outstanding balance under this agreement was $433.3 million.

In accordance with ASC 830, the Company remeasures foreign denominated intercompany loans with the corresponding change in the balance being recorded in Other income (expenses), net in the Consolidated Statements of Operations as settlement is anticipated or planned in the foreseeable future. For the years ended December 31, 2016, 2015, and 2014, the Company recorded a $90.0 million gain, a $178.9 million loss, and a $23.0 million loss, respectively, on the remeasurement of intercompany loans due to changes in foreign exchange rates.

Recent Accounting Pronouncements Not Yet Adopted

In May 2014, the FASB released an updated standard regarding the recognition of revenue from contracts with customers, exclusive of those contracts within lease accounting. The core principle of the standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (1) identify the contracts with the customer; (2) identify the performance obligations in the contract; (3) determine the contract price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. This standard is effective in the first quarter of 2018. Early adoption is permitted but not before the first quarter of 2017. This standard is required to be applied retrospectively to each prior reporting period presented or with the cumulative effect being recognized at the date of initial application. The Company is evaluating the standard and does not expect a material financial statement impact upon adoption since the standard only affects our site development segment which represents approximately 6% of our total revenues.

In February 2016, the FASB issued ASU 2016-02, Leases. The standard requires lessees to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments for all leases with a term greater than 12 months. The accounting for lessors remains largely unchanged from existing guidance. This standard is effective for annual and interim periods beginning after December 15, 2018 and requires a modified retrospective transition approach for all leases existing at, or entered into after, the beginning of the earliest comparative period presented. Early adoption is permitted. The Company has established a cross functional project plan to assess the impact of the standard, expects this guidance to have a material impact on its consolidated balance sheet due to the addition of right-of-use assets and lease liabilities for all leases with a term greater than 12 months, and continues to assess additional impacts to its consolidated financial statements, including the consolidated statement of operations.

In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business. The standard provides guidance to help entities determine whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The standard is effective for annual and interim periods beginning after December 15, 2018 and early adoption is permitted. The standard is required to be applied prospectively. The Company is evaluating the standard, including the impact on its consolidated financial statements.

3.FAIR VALUE MEASUREMENTS

Items Measured at Fair Value on a Recurring Basis— The Company’s earnout liabilities related to acquisitions are measured at fair value on a recurring basis using Level 3 inputs and are recorded in Accrued expenses in the accompanying Consolidated Balance Sheets. Changes in estimate are recorded in Acquisition related adjustments and expenses in the accompanying Consolidated Statement of Operations. The Company determines the fair value of acquisition-related earnouts (contingent consideration) and any subsequent changes in fair value using a discounted probability-weighted approach using Level 3 inputs. Level 3 valuations rely on unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. The fair value of the earnouts is reviewed quarterly and is based on the payments the Company expects to make based on historical internal observations related to the anticipated performance of the underlying assets. The Company’s estimate of the fair value of its obligation contained in various acquisitions was $4.1 million and $7.2 million as of December 31, 2016 and 2015, respectively. The

F-15

maximum potential obligation related to the performance targets was $5.8 million and $10.2 million as of December 31, 2016 and 2015, respectively.

Items Measured at Fair Value on a Nonrecurring Basis— The Company’s long-lived assets, intangibles, and asset retirement obligations are measured at fair value on a nonrecurring basis using Level 3 inputs. The Company considers many factors and makes certain assumptions when making this assessment, including but not limited to: general market and economic conditions, historical operating results, geographic location, lease-up potential and expected timing of lease-up. The fair value of the long-lived assets, intangibles, and asset retirement obligations is calculated using a discounted cash flow model.

Asset impairment and decommission costs for all periods presented and the related impaired assets primarily relate to the Company’s site leasing operating segment. The following summarizes the activity of asset impairment and decommission costs (in thousands):



	For the year
	ended December 31,
	2016		2015		2014

Asset impairment (1)	$	19,217	$	10,287	$	3,042
Impairment of fiber assets (2)		—		56,733		—
Gain on sale of fiber assets (2)		(8,919)		—		—
Write-off of carrying value of decommissioned towers		12,967		21,231		15,342
Other third party decommission costs		4,549		5,378		5,417
Write-off and disposal of former corporate headquarters		2,345		1,154		—
Other disposal costs		83		—		—
Total asset impairment and decommission costs	$	30,242	$	94,783	$	23,801

(1)Represents impairment charges resulting from the Company’s analysis that the future cash flows from certain towers would not recover the carrying value of the investment in those towers.

(2)The impairment review of the fiber assets acquired in the 2012 Mobilitie transaction was triggered by a strategic decision made by the Company in 2015. The gain in 2016 related to the sale of these fiber assets.

Fair Value of Financial Instruments— The carrying values of cash and cash equivalents, accounts receivable, restricted cash, accounts payable, and short-term investments approximate their estimated fair values due to the short maturity of these instruments. Short-term investments consisted of $0.5 million in certificate of deposits as of December 31, 2015, and $0.2 million in Treasury securities as of December 31, 2016 and 2015. The Company’s estimate of the fair value of its held-to-maturity investments in treasury and corporate bonds, including current portion, are based primarily upon Level 1 reported market values. As of December 31, 2016, the carrying value and fair value of the long-term investments, including current portion, were $0.7 million. As of December 31, 2015, the carrying value and fair value of the long-term investments, including current portion, was $0.8 million and $0.9 million, respectively. These amounts are recorded in Other Assets in the accompanying Consolidated Balance Sheets.

The Company determines fair value of its debt instruments utilizing various Level 2 sources including quoted prices and indicative quotes (non-binding quotes) from brokers that require judgment to interpret market information including implied credit spreads for similar borrowings on recent trades or bid/ask prices. The fair value of the Revolving Credit Facility is considered to approximate the carrying value because the interest payments are based on Eurodollar rates that reset every month. The Company does not believe its credit risk has changed materially from the date the applicable Eurodollar Rate plus 137.5 to 200.0 basis points was set for the Revolving Credit Facility. Refer to Note 12 for the fair values, principal balances, and carrying values of the Company’s debt instruments.

F-16

4.RESTRICTED CASH

The cash, cash equivalents, and restricted cash balances on the consolidated statement of cash flows consists of the following:



	For the year ended December 31,
	2016		2015		2014

	(in thousands)
Cash and cash equivalents	$	146,109	$	118,039	$	39,443
Restricted cash - short term		36,786		25,353		52,519
Restricted cash - long term		3,075		3,227		5,934
Total cash, cash equivalents, and restricted cash	$	185,970	$	146,619	$	97,896

Restricted cash consists of the following:



	As of		As of
	December 31, 2016		December 31, 2015		Included on Balance Sheet

		(in thousands)
Securitization escrow accounts	$	36,607	$	25,135	Restricted cash - current asset
Payment and performance bonds		179		218	Restricted cash - current asset
Surety bonds and workers compensation		3,075		3,227	Other assets - noncurrent
Total restricted cash	$	39,861	$	28,580

Pursuant to the terms of the Tower Securities (see Note 12), the Company is required to establish a securitization escrow account, held by the indenture trustee, into which all rents and other sums due on the towers that secure the Tower Securities are directly deposited by the lessees. These restricted cash amounts are used to fund reserve accounts for the payment of (1) debt service costs, (2) ground rents, real estate and personal property taxes and insurance premiums related to towers, (3) trustee and servicing expenses, and (4) management fees. The restricted cash in the securitization escrow account in excess of required reserve balances is subsequently released to the Borrowers (as defined in Note 12) monthly, provided that the Borrowers are in compliance with their debt service coverage ratio and that no event of default has occurred. All monies held by the indenture trustee are classified as restricted cash on the Company’s Consolidated Balance Sheets.

Payment and performance bonds relate primarily to collateral requirements for tower construction currently in process by the Company. Cash is pledged as collateral related to surety bonds issued for the benefit of the Company or its affiliates in the ordinary course of business and primarily related to the Company’s tower removal obligations. As of December 31, 2016, the Company had $39.2 million in surety, payment and performance bonds for which it is only required to post $0.5 million in collateral. As of December 31, 2015, the Company had $38.6 million in surety, payment and performance bonds for which it is only required to post $0.7 million in collateral. The Company periodically evaluates the collateral posted for its bonds to ensure that it meets the minimum requirements. As of December 31, 2016 and 2015, the Company had also pledged $2.5 million as collateral related to its workers compensation policy.

5.OTHER ASSETS

The Company’s other assets are comprised of the following:



	As of		As of
	December 31, 2016		December 31, 2015

		(in thousands)
Long-term investments	$	7,884	$	8,140
Prepaid land rent		191,615		158,176
Straight-line rent receivable		302,893		267,682
Deferred lease costs, net		29,660		30,577
Deferred financing fees, net		2,979		3,919
Other		52,343		32,760
Total other assets	$	587,374	$	501,254

F-17

6.ACQUISITIONS

The following table summarizes the Company’s acquisition activity:



	For the year ended December 31,
	2016		2015		2014
Tower acquisitions (number of towers)		531		893		4,030

The following table summarizes the Company’s cash acquisition capital expenditures:



	For the year ended December 31,
	2016		2015		2014

		(in thousands)
Towers and related intangible assets	$	214,686	$	525,802	$	1,540,258
Land buyouts and other assets (1)		62,149		83,728		44,964
Total cash acquisition capital expenditures	$	276,835	$	609,530	$	1,585,222

	(1)		In addition, the Company paid $14.1 million, $16.3 million, and $10.8 million for ground lease extensions during the years ending 2016, 2015, and 2014, respectively. The Company recorded these amounts in prepaid rent on its Consolidated Balance Sheet.

During the year ended December 31, 2016, the Company acquired 531 completed towers and related assets and liabilities for $214.7 million in cash consisting of $72.8 million of property and equipment, $144.4 million of intangible assets, and $2.5 million of working capital adjustments.

During the year ended December 31, 2015, the Company acquired 893 completed towers and related assets and liabilities for $525.8 million in cash consisting of $176.3 million of property and equipment, $351.0 million of intangible assets, and $1.5 million of working capital adjustments.

On March 31, 2014, the Company acquired 2,007 towers in Brazil from Oi S.A. for an aggregate purchase price of $673.9 million in cash. The fair value of the assets acquired and liabilities assumed relating to the Oi S.A. acquisition is summarized below (in thousands):



Property and equipment	$	86,787
Intangible assets		587,111
Net assets acquired	$	673,898

For the year ended December 31, 2014, total revenue for this acquisition was $60.7 million.

On December 1, 2014, the Company acquired 1,641 towers in Brazil from Oi S.A. for an aggregate purchase price of $463.2 million in cash. The fair value of the assets acquired and liabilities assumed relating to the Oi S.A. acquisition is summarized below (in thousands):



Property and equipment	$	99,810
Intangible assets		363,352
Net assets acquired	$	463,162

For the year ended December 31, 2014, total revenue for this acquisition was $4.8 million.

During the year ended December 31, 2014, in addition to the Oi S.A. acquisitions, the Company acquired 382 completed towers and related assets and liabilities for $403.2 million in cash.

The Company evaluates all acquisitions after the applicable closing date of each transaction to determine whether any additional adjustments are needed to the allocation of the purchase price paid for the assets acquired and liabilities assumed by major balance sheet caption, as well as the separate recognition of intangible assets from goodwill if certain criteria are met.

F-18

The estimates of the fair value of the assets acquired and liabilities assumed at the date of an acquisition are subject to adjustment during the measurement period (up to one year from the particular acquisition date). The primary areas of the preliminary purchase price allocations that are not yet finalized relate to the fair value of certain tangible and intangible assets acquired and liabilities assumed, including contingent consideration and any related tax impact. The fair values of these net assets acquired are based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. During the measurement period, the Company will adjust assets and/or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in a revised estimated value of those assets and/or liabilities as of that date. The effect of material measurement period adjustments to the estimated fair values is recognized in the reporting period in which the adjustment amounts are determined and calculated as if the adjustments had been completed at the acquisition date. The impact of all changes that do not qualify as measurement period adjustments are included in current period earnings. If the actual results differ from the estimates and judgments used in these fair values, the amounts recorded in the consolidated financial statements could be subject to a possible impairment of the intangible assets, or require acceleration of the amortization expense of intangible assets in subsequent periods.

Subsequent to December 31, 2016, the Company acquired 42 towers and related assets for $17.3 million in cash.

Foreign Currency Forward Contract

On March 26, 2014, the Company settled two foreign currency contracts entered into during the quarter with an aggregate notional amount of R$1,525.0 million in order to hedge the purchase price of the Oi S.A. acquisition in Brazil, which closed on March 31, 2014. The Company realized a gain of $17.9 million related to these foreign currency forward contracts which is included in other income in the accompanying Consolidated Statement of Operations and Net cash used in investing activities on the Consolidated Statements of Cash Flows.

On September 29, 2014, the Company executed put and call option contracts settling on November 25, 2014 which created a “costless collar” based on the cost to purchase $1.17 billion Brazilian Reais with US Dollars. The options were intended to limit exposure to movements in the related exchange rates and were entered into in contemplation of the purchase of the Oi S.A. acquisition that closed on December 1, 2014. These options created a floor price for the purchase of Brazilian Reais of 2.4 and a ceiling price of 2.5665. Since the closing price was within the floor and ceiling price, no gain or loss was realized.

The Company measures its foreign currency forward contracts, which are recorded in Prepaid and other current assets, at fair value based on indicative prices in active markets (Level 2 inputs). These contracts do not qualify for hedge accounting and as such any gains and losses are reflected within Other Income, net in the accompanying Consolidated Statement of Operations. As of December 31, 2016, the Company does not have any pending forward contracts.

7.INTANGIBLE ASSETS, NET

The following table provides the gross and net carrying amounts for each major class of intangible assets:



	As of December 31, 2016						As of December 31, 2015
	Gross carrying		Accumulated		Net book		Gross carrying		Accumulated		Net book
	amount		amortization		value		amount		amortization		value

	(in thousands)
Current contract intangibles	$	4,141,968	$	(1,401,025)	$	2,740,943	$	3,904,864	$	(1,118,493)	$	2,786,371
Network location intangibles		1,515,348		(599,367)		915,981		1,446,293		(497,251)		949,042
Intangible assets, net	$	5,657,316	$	(2,000,392)	$	3,656,924	$	5,351,157	$	(1,615,744)	$	3,735,413

All intangible assets noted above are included in the Company’s site leasing segment. The Company amortizes its intangible assets using the straight-line method over 15 years. Amortization expense relating to the intangible assets above was $369.9 million, $363.1 million, and $338.4 million for the years ended December 31, 2016, 2015 and 2014, respectively.

F-19

Estimated amortization expense on the Company’s intangibles assets is as follows:



For the year ended December 31,	(in thousands)

2017	$	376,482
2018		376,393
2019		376,095
2020		375,253
2021		342,972

8.PROPERTY AND EQUIPMENT, NET

Property and equipment, net (including vehicles held under capital leases) consists of the following:



	As of		As of
	December 31, 2016		December 31, 2015

	(in thousands)
Towers and related components	$	4,563,756	$	4,370,664
Construction-in-process		38,926		32,730
Furniture, equipment, and vehicles		50,671		48,018
Land, buildings, and improvements		578,680		524,847
Total property and equipment		5,232,033		4,976,259
Less: accumulated depreciation		(2,439,957)		(2,193,906)
Property and equipment, net	$	2,792,076	$	2,782,353

Construction-in-process represents costs incurred related to towers that are under development and will be used in the Company’s operations. Depreciation expense was $268.1 million, $296.5 million, and $287.8 million for the years ended December 31, 2016, 2015, and 2014, respectively. At December 31, 2016 and 2015, non-cash capital expenditures that are included in accounts payable and accrued expenses were $7.0 million and $9.5 million, respectively.

9.COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

Costs and estimated earnings on uncompleted contracts consist of the following:



	As of		As of
	December 31, 2016		December 31, 2015

	(in thousands)
Costs incurred on uncompleted contracts	$	34,577	$	78,849
Estimated earnings		11,185		29,333
Billings to date		(36,027)		(95,055)
	$	9,735	$	13,127

These amounts are included in the accompanying Consolidated Balance Sheets under the following captions:



	As of		As of
	December 31, 2016		December 31, 2015

	(in thousands)
Costs and estimated earnings in excess of billings on uncompleted contracts	$	11,127	$	16,934
Billings in excess of costs and estimated earnings on
uncompleted contracts (included in Other current liabilities)		(1,392)		(3,807)
	$	9,735	$	13,127

F-20

At December 31, 2016 and 2015, eight significant customers comprised 81.6% and 95.9%, respectively, of the costs and estimated earnings in excess of billings on uncompleted contracts, net of billings in excess of costs and estimated earnings.

10.CONCENTRATION OF CREDIT RISK

The Company’s credit risks consist primarily of accounts receivable with national, regional, and local wireless service providers and federal and state government agencies. The Company performs periodic credit evaluations of its customers’ financial condition and provides allowances for doubtful accounts, as required, based upon factors surrounding the credit risk of specific customers, historical trends, and other information. The Company generally does not require collateral.

The following is a list of significant customers (representing at least 10% of revenue for any period reported) and the percentage of total revenue for the specified time periods derived from such customers:



	For the year ended December 31,
Percentage of Total Revenues	2016	2015	2014

AT&T Wireless (1)	25.7%	24.2%	23.0%
T-Mobile	17.0%	16.0%	15.5%
Sprint	16.1%	19.6%	23.4%
Verizon Wireless	15.2%	13.8%	12.0%

The Company’s site leasing and site development segments derive revenue from these customers. Client percentages of total revenue in each of the segments are as follows:



	For the year ended December 31,
Percentage of Domestic Site Leasing Revenue	2016	2015	2014

AT&T Wireless (1)	32.7%	31.9%	30.1%
Sprint	19.8%	22.3%	25.6%
T-Mobile	19.6%	19.0%	19.2%
Verizon Wireless	18.2%	16.3%	14.4%

	For the year ended December 31,
Percentage of International Site Leasing Revenue	2016	2015	2014

Oi S.A.	43.9%	48.8%	44.3%
Telefonica	26.4%	24.7%	28.8%



	For the year ended December 31,
Percentage of Site Development Revenue	2016	2015	2014

T-Mobile	28.4%	17.6%	8.5%
Verizon Wireless	16.5%	14.8%	10.1%
Sprint	11.7%	28.5%	36.7%
Ericsson, Inc.	5.0%	15.3%	16.8%

(1)Prior year amounts have been adjusted to reflect the merger of AT&T Wireless and Leap Wireless (Cricket Wireless).

Five significant customers comprised 59.3% of total gross accounts receivable at December 31, 2016 compared to five significant customers which comprised 62.1% of total gross accounts receivable at December 31, 2015.

F-21

11.ACCRUED EXPENSES

The Company’s accrued expenses are comprised of the following:



	As of		As of
	December 31, 2016		December 31, 2015

	(in thousands)
Accrued earnouts	$	4,128	$	7,230
Salaries and benefits		11,910		14,253
Real estate and property taxes		7,644		7,899
Other		37,447		34,373
Total accrued expenses	$	61,129	$	63,755

DEBT

The carrying and principal values of debt consist of the following (in thousands):



		As of						As of
		December 31, 2016						December 31, 2015
	Maturity Date	Principal Balance		Fair Value		Carrying Value		Principal Balance		Fair Value		Carrying Value
5.625% Senior Notes	Oct. 1, 2019	$	—	$	—	$	—	$	500,000	$	521,250	$	494,955
5.750% Senior Notes	July 15, 2020		—		—		—		800,000		832,000		791,243
2014 Senior Notes	July 15, 2022		750,000		763,125		736,992		750,000		744,375		735,010
2016 Senior Notes	Sep. 1, 2024		1,100,000		1,083,500		1,078,954		—		—		—
2010-2C Tower Securities	April 11, 2017		—		—		—		550,000		558,223		548,268
2012-1C Tower Securities	Dec. 11, 2017		610,000		610,165		607,157		610,000		611,879		604,229
2013-1C Tower Securities	April 10, 2018		425,000		423,381		422,768		425,000		416,959		421,099
2013-2C Tower Securities	April 11, 2023		575,000		563,322		567,545		575,000		565,541		566,523
2013-1D Tower Securities	April 10, 2018		330,000		334,521		328,225		330,000		332,676		326,918
2014-1C Tower Securities	Oct. 8, 2019		920,000		922,199		912,219		920,000		910,368		909,595
2014-2C Tower Securities	Oct. 8, 2024		620,000		608,921		612,641		620,000		608,084		611,853
2015-1C Tower Securities	Oct. 8, 2020		500,000		495,145		491,289		500,000		489,680		489,496
2016-1C Tower Securities	July 9, 2021		700,000		688,072		691,322		—		—		—
Revolving Credit Facility	Feb. 5, 2020		390,000		390,000		390,000		—		—		—
2014 Term Loan	Mar. 24, 2021		1,462,500		1,467,984		1,452,039		1,477,500		1,447,950		1,464,774
2015 Term Loan	June 10, 2022		492,500		494,347		484,432		497,500		486,306		488,107
Total debt		$	8,875,000	$	8,844,682	$	8,775,583	$	8,555,000	$	8,525,291	$	8,452,070
Less: current maturities of long-term debt							(627,157)						(20,000)
Total long-term debt, net of current maturities						$	8,148,426					$	8,432,070

The Company’s future principal payment obligations over the next five years (based on the outstanding debt as of December 31, 2016 and assuming the Tower Securities are repaid at their respective anticipated repayment dates) are as follows:



For the year ended December 31,	(in thousands)
2017	$	630,000
2018		775,000
2019		940,000
2020		910,000
2021		2,107,500

F-22

The table below reflects cash and non-cash interest expense amounts recognized by debt instrument for the years ended December 31, 2016, 2015, and 2014, respectively:



	For the year ended December 31,
	2016				2015				2014
	Cash		Non-cash		Cash		Non-cash		Cash		Non-cash
	Interest		Interest		Interest		Interest		Interest		Interest

	(in thousands)
4.0% Convertible Senior Notes	$	—	$	—	$	—	$	—	$	12,520	$	26,266
8.25% Senior Notes		—		—		—		—		12,513		121
5.625% Senior Notes		21,094		—		28,125		—		28,125		—
5.75% Senior Notes		28,494		—		46,000		—		46,000		—
2014 Senior Notes		36,563		689		36,563		655		18,281		315
2016 Senior Notes		20,258		348		—		—		—		—
2010 Tower Securities		15,213		—		28,230		—		51,237		—
2012-1C Tower Securities		18,107		—		18,111		—		18,085		—
2013 Tower Securities		43,217		—		43,217		—		43,217		—
2014 Tower Securities		51,138		—		51,138		—		10,796		—
2015-1C Tower Securities		15,939		—		3,453		—		—		—
2016-1C Tower Securities		9,898		—		—		—		—		—
Revolving Credit Facility		4,167		—		5,552		—		4,591		—
2011 Term Loan		—		—		—		—		696		7
2012-1 Term Loan		—		—		3,959		—		4,534		—
2012-2 Term Loan		—		—		—		—		424		4
2014 Term Loan		48,962		510		48,992		492		41,338		399
2015 Term Loan		16,487		656		9,243		358		—		—
Other		(366)		—		(217)		—		243		—
Total	$	329,171	$	2,203	$	322,366	$	1,505	$	292,600	$	27,112

Senior Credit Agreement

On February 7, 2014, SBA Senior Finance II entered into a Second Amended and Restated Credit Agreement with several banks and other financial institutions or entities from time to time parties to the Second Amended and Restated Credit Agreement to, among other things, incur the 2014 Term Loan and amend certain terms of the existing senior credit agreement (as amended, the “Senior Credit Agreement”).

Terms of the Senior Credit Agreement

The Senior Credit Agreement, as amended, requires SBA Senior Finance II to maintain specific financial ratios, including (1) a ratio of Consolidated Total Debt to Annualized Borrower EBITDA not to exceed 6.5 times for any fiscal quarter, (2) a ratio of Consolidated Total Debt and Net Hedge Exposure (calculated in accordance with the Senior Credit Agreement) to Annualized Borrower EBITDA for the most recently ended fiscal quarter not to exceed 6.5 times for 30 consecutive days and (3) a ratio of Annualized Borrower EBITDA to Annualized Cash Interest Expense (calculated in accordance with the Senior Credit Agreement) of not less than 2.0 times for any fiscal quarter. The Senior Credit Agreement contains customary affirmative and negative covenants that, among other things, limit the ability of SBA Senior Finance II and its subsidiaries to incur indebtedness, grant certain liens, make certain investments, enter into sale leaseback transactions, merge or consolidate, make certain restricted payments, enter into transactions with affiliates, and engage in certain asset dispositions, including a sale of all or substantially all of their property. As of December 31, 2016, SBA Senior Finance II was in compliance with the financial covenants contained in the Senior Credit Agreement. The Senior Credit Agreement is also subject to customary events of default. Pursuant to the Second Amended and Restated Guarantee and Collateral Agreement, amounts borrowed under the Revolving Credit Facility, the Term Loans and certain hedging transactions that may be entered into by SBA Senior Finance II or the Subsidiary Guarantors (as defined in the Senior Credit Agreement) with lenders or their affiliates are secured by a first lien on the membership interests of SBA Telecommunications, LLC, SBA Senior Finance, LLC and SBA Senior Finance II and on substantially all of the assets (other than leasehold, easement and fee interests in real property) of SBA Senior Finance II and the Subsidiary Guarantors.

F-23

The Senior Credit Agreement, as amended, permits SBA Senior Finance II, without the consent of the other lenders, to request that one or more lenders provide SBA Senior Finance II with increases in the Revolving Credit Facility or additional term loans provided that after giving effect to the proposed increase in Revolving Credit Facility commitments or incremental term loans the ratio of Consolidated Total Debt to Annualized Borrower EBITDA would not exceed 6.5 times. SBA Senior Finance II’s ability to request such increases in the Revolving Credit Facility or additional term loans is subject to its compliance with customary conditions set forth in the Senior Credit Agreement including compliance, on a pro forma basis, with the financial covenants and ratios set forth therein and, with respect to any additional term loan, an increase in the margin on existing term loans to the extent required by the terms of the Senior Credit Agreement. Upon SBA Senior Finance II’s request, each lender may decide, in its sole discretion, whether to increase all or a portion of its Revolving Credit Facility commitment or whether to provide SBA Senior Finance II with additional term loans and, if so, upon what terms.

Revolving Credit Facility under the Senior Credit Agreement

The Revolving Credit Facility is governed by the Senior Credit Agreement. The Revolving Credit Facility consists of a revolving loan under which up to $1.0 billion aggregate principal amount may be borrowed, repaid and redrawn, based upon specific financial ratios and subject to the satisfaction of other customary conditions to borrowing. Amounts borrowed under the Revolving Credit Facility accrue interest, at SBA Senior Finance II’s election, at either (i) the Eurodollar Rate plus a margin that ranges from 137.5 basis points to 200.0 basis points or (ii) the Base Rate plus a margin that ranges from 37.5 basis points to 100.0 basis points, in each case based on the ratio of Consolidated Total Debt to Annualized Borrower EBITDA, calculated in accordance with the Senior Credit Agreement. In addition, SBA Senior Finance II is required to pay a commitment fee of 0.25% per annum on the amount of unused commitment. If not earlier terminated by SBA Senior Finance II, the Revolving Credit Facility will terminate on, and SBA Senior Finance II will repay all amounts outstanding on or before, February 5, 2020. The proceeds available under the Revolving Credit Facility may be used for general corporate purposes. SBA Senior Finance II may, from time to time, borrow from and repay the Revolving Credit Facility. Consequently, the amount outstanding under the Revolving Credit Facility at the end of a period may not be reflective of the total amounts outstanding during such period.

During the year ended December 31, 2016, the Company borrowed $580.0 million and repaid $190.0 million of the outstanding balance under the Revolving Credit Facility. As of December 31, 2016, $390.0 million was outstanding under the Revolving Credit Facility.

Subsequent to December 31, 2016, the Company repaid $95.0 million of the outstanding balance under the Revolving Credit Facility.

Term Loans under the Senior Credit Agreement

Repricing Amendment to the Senior Credit Agreement

On January 20, 2017, the Company amended its Senior Credit Agreement, primarily to reduce the stated rate of interest applicable to its senior secured term loans. As amended, our senior secured term loans accrue interest, at SBA Senior Finance II’s election, at either the Base Rate plus 125 basis points (with a zero Base Rate floor) or the Eurodollar Rate plus 225 basis points (with a zero Eurodollar Rate floor).

2011 Term Loan

The 2011 Term Loan consisted of a senior secured term loan with an initial aggregate principal amount of $500.0 million with a maturity date of June 30, 2018. The 2011 Term Loan accrued interest, at SBA Senior Finance II’s election, at either the Base Rate plus a margin of 175 basis points (with a Base Rate floor of 2%) or Eurodollar Rate plus a margin of 275 basis points (with a Eurodollar Rate floor of 1%). The 2011 Term Loan was issued at 99.75% of par value. The Company incurred deferred financing fees of $4.9 million associated with this transaction which were being amortized through the maturity date.

During the year ended December 31, 2013, the Company repaid $312.0 million on the 2011 Term Loan.

On February 7, 2014, the Company repaid the remaining $180.5 million outstanding principal balance of the 2011 Term Loan. In connection with the prepayment, the Company expensed $1.1 million of net deferred financing fees and $0.3 million of discount related to the debt.

F-24

2012-1 Term Loan

The 2012-1 Term Loan consisted of a senior secured term loan with an initial aggregate principal amount of $200.0 million that was to mature on May 9, 2017. The 2012-1 Term Loan accrued interest, at SBA Senior Finance II’s election, at either the Base Rate plus a margin that ranged from 100 to 150 basis points or the Eurodollar Rate plus a margin that ranged from 200 to 250 basis points, in each case based on the ratio of Consolidated Total Debt to Annualized Borrower EBITDA (calculated in accordance with the Senior Credit Agreement). The 2012-1 Term Loan was issued at par. The Company incurred deferred financing fees of $2.7 million in relation to this transaction which were being amortized through the maturity date.

During the year ended December 31, 2015, the Company repaid the entire outstanding balance of $172.5 million on the 2012-1 Term Loan. Included in this amount was a prepayment of $160.0 million made on November 18, 2015. In connection with the prepayment, the Company expensed $0.8 million of net deferred financing fees.

2012-2 Term Loan

The 2012-2 Term Loan consisted of a senior secured term loan with an initial aggregate principal amount of $300.0 million with a maturity date of September 28, 2019. The 2012-2 Term Loan accrued interest, at SBA Senior Finance II’s election, at either the Base Rate plus 175 basis points (with a Base Rate floor of 2%) or Eurodollar Rate plus 275 basis points (with a Eurodollar Rate floor of 1%). The 2012-2 Term Loan was issued at 99.75% of par value. The Company incurred deferred financing fees of approximately $3.5 million in relation to this transaction which were being amortized through the maturity date.

During the year ended December 31, 2013, the Company repaid $190.0 million on the 2012-2 Term Loan.

On February 7, 2014, the Company repaid the remaining $110.0 million outstanding principal balance of the 2012-2 Term Loan. In connection with the prepayment, the Company expensed $1.0 million of net deferred financing fees and $0.2 million of discount related to the debt.

2014 Term Loan

The 2014 Term Loan consists of a senior secured term loan with an initial aggregate principal amount of $1.5 billion that matures on March 24, 2021. Prior to the reduction in the term loan interest rates as discussed above, the 2014 Term Loan accrued interest, at SBA Senior Finance II’s election, at either the Base Rate plus 150 basis points (with a Base Rate floor of 1.75%) or the Eurodollar Rate plus 250 basis points (with a Eurodollar Rate floor of 0.75%). The 2014 Term Loan was issued at 99.75% of par value. As of December 31, 2016, the 2014 Term Loan was accruing interest at 3.27% per annum. Principal payments on the 2014 Term Loan commenced on September 30, 2014 and are being made in quarterly installments on the last day of each March, June, September, and December in an amount equal to $3.8 million. SBA Senior Finance II has the ability to prepay any or all amounts under the 2014 Term Loan. The Company incurred deferred financing fees of approximately $12.9 million in relation to this transaction which are being amortized through the maturity date.

During the year ended December 31, 2016, the Company repaid $15.0 million of principal on the 2014 Term Loan. As of December 31, 2016, the 2014 Term Loan had a principal balance of $1.5 billion.

2015 Term Loan

The 2015 Term Loan consists of a senior secured term loan with an initial aggregate principal amount of $500.0 million that matures on June 10, 2022. Prior to the reduction in the term loan interest rates as discussed above, the 2015 Term Loan accrued interest, at SBA Senior Finance II’s election, at either the Base Rate plus 150 basis points (with a Base Rate floor of 1.75%) or the Eurodollar Rate plus 250 basis points (with a Eurodollar Rate floor of 0.75%). The 2015 Term Loan was issued at 99.0% of par value. As of December 31, 2016, the 2015 Term Loan was accruing interest at 3.27% per annum. Principal payments on the 2015 Term Loan commenced on September 30, 2015 and are being made in quarterly installments on the last day of each March, June, September, and December in an amount equal to $1.3 million. SBA Senior Finance II has the ability to prepay any or all amounts under the 2015 Term Loan. The Company incurred deferred financing fees of approximately $5.1 million in relation to this transaction which are being amortized through the maturity date.

During the year ended December 31, 2016, the Company repaid $5.0 million of principal on the 2015 Term Loan. As of December 31, 2016, the 2015 Term Loan had a principal balance of $492.5 million.

F-25

Secured Tower Revenue Securities

Tower Revenue Securities Terms

The mortgage loan underlying the 2012-1C Tower Securities, 2013 Tower Securities, 2014 Tower Securities, 2015-1C Tower Securities, and 2016-1C Tower Securities (together the “Tower Securities”) will be paid from the operating cash flows from the aggregate 10,535 tower sites owned by the Borrowers. The mortgage loan is secured by (i) mortgages, deeds of trust, and deeds to secure debt on a substantial portion of the tower sites, (ii) a security interest in the tower sites and substantially all of the Borrowers’ personal property and fixtures, (iii) the Borrowers’ rights under certain tenant leases, and (iv) all of the proceeds of the foregoing. For each calendar month, SBA Network Management, Inc., an indirect subsidiary (“Network Management”), is entitled to receive a management fee equal to 4.5% of the Borrowers’ operating revenues for the immediately preceding calendar month.

The Borrowers may prepay any of the mortgage loan components, in whole or in part, with no prepayment consideration, (i) within twelve months (in the case of the component corresponding to the Secured Tower Revenue Securities Series 2012-1C, Secured Tower Revenue Securities Series 2013-1C, Secured Tower Revenue Securities Series 2013-1D, Secured Tower Revenue Securities Series 2014-1C, Secured Tower Revenue Securities Series 2015-1C, and Secured Tower Revenue Securities Series 2016-1C) or eighteen months (in the case of the components corresponding to the Secured Tower Revenue Securities Series 2013-2C and Secured Tower Revenue Securities Series 2014-2C) of the anticipated repayment date of such mortgage loan component, (ii) with proceeds received as a result of any condemnation or casualty of any tower owned by the Borrowers or (iii) during an amortization period. In all other circumstances, the Borrowers may prepay the mortgage loan, in whole or in part, upon payment of the applicable prepayment consideration. The prepayment consideration is determined based on the class of the Tower Securities to which the prepaid mortgage loan component corresponds and consists of an amount equal to the excess, if any, of (1) the present value associated with the portion of the principal balance being prepaid, calculated in accordance with the formula set forth in the mortgage loan agreement, on the date of prepayment of all future installments of principal and interest required to be paid from the date of prepayment to and including the first due date within twelve months (in the case of the component corresponding to the Secured Tower Revenue Securities Series 2012-1C, Secured Tower Revenue Securities Series 2013-1C, Secured Tower Revenue Securities Series 2013-1D, Secured Tower Revenue Securities Series 2014-1C, Secured Tower Revenue Securities Series 2015-1C, and Secured Tower Revenue Securities Series 2016-1C) or eighteen months (in the case of the components corresponding to the Secured Tower Revenue Securities Series 2013-2C and Secured Tower Revenue Securities Series 2014-2C) of the anticipated repayment date of such mortgage loan component over (2) that portion of the principal balance of such class prepaid on the date of such prepayment.

To the extent that the mortgage loan components corresponding to the Tower Securities are not fully repaid by their respective anticipated repayment dates, the interest rate of each such component will increase by the greater of (i) 5% and (ii) the amount, if any, by which the sum of (x) the ten-year U.S. treasury rate plus (y) the credit-based spread for such component (as set forth in the mortgage loan agreement) plus (z) 5%, exceeds the original interest rate for such component.

Pursuant to the terms of the Tower Securities, all rents and other sums due on any of the towers owned by the Borrowers are directly deposited by the lessees into a controlled deposit account and are held by the indenture trustee. The monies held by the indenture trustee after the release date are classified as short-term restricted cash on the Consolidated Balance Sheets (see Note 4). However, if the Debt Service Coverage Ratio, defined as the net cash flow (as defined in the mortgage loan agreement) divided by the amount of interest on the mortgage loan, servicing fees and trustee fees that the Borrowers are required to pay over the succeeding twelve months, as of the end of any calendar quarter, falls to 1.30x or lower, then all cash flow in excess of amounts required to make debt service payments, to fund required reserves, to pay management fees and budgeted operating expenses and to make other payments required under the loan documents, referred to as “excess cash flow,” will be deposited into a reserve account instead of being released to the Borrowers. The funds in the reserve account will not be released to the Borrowers unless the Debt Service Coverage Ratio exceeds 1.30x for two consecutive calendar quarters. If the Debt Service Coverage Ratio falls below 1.15x as of the end of any calendar quarter, then an “amortization period” will commence and all funds on deposit in the reserve account will be applied to prepay the mortgage loan until such time that the Debt Service Coverage Ratio exceeds 1.15x for a calendar quarter. In addition, if any of the Tower Securities are not fully repaid by their respective anticipated repayment dates, the cash flow from the towers owned by the Borrowers will be trapped by the trustee for the Tower Securities and applied first to repay the interest, at the original interest rates, on the mortgage loan components underlying the Tower Securities, second to fund all reserve accounts and operating expenses associated with those towers, third to pay the management fees due to Network Management, fourth to repay principal of the Tower Securities and fifth to repay the additional interest discussed above. Furthermore, the advance rents reserve requirement states that the Borrowers are required to maintain an advance rents reserve at any time the monthly tenant Debt Service Coverage Ratio is equal to or less than 2:1 and for two calendar months after such coverage ratio again exceeds 2:1. The mortgage loan agreement, as amended, also includes covenants customary for mortgage loans subject to rated securitizations. Among other things, the Borrowers are prohibited from incurring other indebtedness for borrowed money or further encumbering their assets. As of December 31, 2016, the Borrowers met the required Debt Service Coverage Ratio as set forth in the mortgage loan agreement and were in compliance with all other covenants as set forth in the agreement.

F-26

2010 Tower Securities

On April 16, 2010, the Company, through a New York common law trust (the “Trust”), issued $680.0 million of 2010-1C Tower Securities (the “2010-1C Tower Securities”) and $550.0 million of 2010-2C Tower Securities (the “2010-2C Tower Securities”) (together the “2010 Tower Securities”). The 2010-1C Tower Securities had an annual interest rate of 4.254%, and the 2010-2C Tower Securities had an annual interest rate of 5.101%. The anticipated repayment date and the final maturity date for the 2010–1C Tower Securities were April 15, 2015 and April 16, 2040, respectively. The anticipated repayment date and the final maturity date for the 2010–2C Tower Securities were April 11, 2017 and April 9, 2042, respectively. The sole asset of the Trust consists of a non-recourse mortgage loan made in favor of those entities that are borrowers on the mortgage loan (“the Borrowers”). The Company incurred deferred financing fees of $8.1 million in relation to this transaction which were being amortized through the anticipated repayment date of each of the 2010 Tower Securities.

On October 15, 2014, the Company repaid in full the 2010-1C Tower Securities with proceeds from the 2014 Tower Securities (defined below). In connection with the prepayment, the Company expensed $1.1 million of net deferred financing fees.

On July 15, 2016, the Company repaid in full the 2010-2C Tower Securities with proceeds from the 2016-1C Tower Securities. Additionally, the Company expensed $1.0 million of deferred financing fees related to the redemption of the 2010-2C Tower Securities, which are reflected in loss from extinguishment of debt on the Consolidated Statement of Operations.

2012-1C Tower Securities

On August 9, 2012, the Company, through the Trust, issued $610.0 million of Secured Tower Revenue Securities Series 2012-1C (the “2012-1C Tower Securities”) which have an anticipated repayment date of December 11, 2017 and a final maturity date of December 9, 2042. The fixed interest rate of the 2012-1C Tower Securities is 2.933% per annum, payable monthly. The Company incurred deferred financing fees of $14.9 million in relation to this transaction which are being amortized through the anticipated repayment date of the 2012-1C Tower Securities.

2013 Tower Securities

On April 18, 2013, the Company, through the Trust, issued $425.0 million of 2.240% Secured Tower Revenue Securities Series 2013-1C which have an anticipated repayment date of April 10, 2018 and a final maturity date of April 9, 2043 (the “2013-1C Tower Securities”), $575.0 million of 3.722% Secured Tower Revenue Securities Series 2013-2C which have an anticipated repayment date of April 11, 2023 and a final maturity date of April 9, 2048 (the “2013-2C Tower Securities”), and $330.0 million of 3.598% Secured Tower Revenue Securities Series 2013-1D which have an anticipated repayment date of April 10, 2018 and a final maturity date of April 9, 2043 (the “2013-1D Tower Securities”) (collectively the “2013 Tower Securities”). The aggregate $1.33 billion of 2013 Tower Securities have a blended interest rate of 3.218% per annum, payable monthly. The Company incurred deferred financing fees of $25.5 million in relation to this transaction which are being amortized through the anticipated repayment date of each of the 2013 Tower Securities.

2014 Tower Securities

On October 15, 2014, the Company, through the Trust, issued $920.0 million of 2.898% Secured Tower Revenue Securities Series 2014-1C which have an anticipated repayment date of October 8, 2019 and a final maturity date of October 11, 2044 (the “2014-1C Tower Securities”) and $620.0 million of 3.869% Secured Tower Revenue Securities Series 2014-2C which have an anticipated repayment date of October 8, 2024 and a final maturity date of October 8, 2049 (the “2014-2C Tower Securities”) (collectively the “2014 Tower Securities”). The aggregate $1.54 billion of 2014 Tower Securities have a blended interest rate of 3.289% per annum, payable monthly. The Company has incurred deferred financing fees of $22.5 million in relation to this transaction which are being amortized through the anticipated repayment date of each of the 2014 Tower Securities.

2015-1C Tower Securities

On October 14, 2015, the Company, through the Trust, issued $500.0 million of Secured Tower Revenue Securities Series 2015-1C which have an anticipated repayment date of October 8, 2020 and a final maturity date of October 10, 2045 (the “2015-1C Tower Securities”). The fixed interest rate of the 2015-1C Tower Securities is 3.156% per annum, payable monthly. The Company incurred deferred financing fees of $11.2 million in relation to this transaction which are being amortized through the anticipated repayment date of the 2015-1C Tower Securities.

F-27

2016-1C Tower Securities

On July 7, 2016, the Company, through the Trust, issued $700.0 million of Secured Tower Revenue Securities Series 2016-1C which have an anticipated repayment date of July 9, 2021 and a final maturity date of July 10, 2046 (the “2016-1C Tower Securities”). The fixed interest rate of the 2016-1C Tower Securities is 2.877% per annum, payable monthly. Net proceeds from this offering were used to prepay the full $550.0 million outstanding on the 2010-2C Tower Securities and for general corporate purposes. The Company incurred deferred financing fees of $9.5 million in relation to this transaction which are being amortized through the anticipated repayment date of the 2016-1C Tower Securities.

In connection with the issuance of the 2016-1C Tower Securities, SBA Properties, LLC, SBA Sites, LLC, SBA Structures, LLC, SBA Infrastructure, LLC, SBA Monarch Towers III, LLC, SBA 2012 TC Assets PR, LLC, SBA 2012 TC Assets, LLC, SBA Towers IV, LLC, SBA Monarch Towers I, LLC, SBA Towers USVI, Inc., SBA Towers VII, LLC, SBA GC Towers, LLC, SBA Towers V, LLC, and SBA Towers VI, LLC (collectively, the “Borrowers”), each an indirect subsidiary of SBAC, and Midland Loan Services, a division of PNC Bank, National Association, as servicer, on behalf of the Trustee entered into the Second Loan and Security Agreement Supplement and Amendment pursuant to which, among other things, (i) the outstanding principal amount of the mortgage loan was increased by $700.0 million and (ii) the Borrowers became jointly and severally liable for the aggregate $4.7 billion borrowed under the mortgage loan corresponding to the 2012-1C Tower Securities, 2013 Tower Securities, 2014 Tower Securities, 2015-1C Tower Securities, and the newly issued 2016-1C Tower Securities.

4.0% Convertible Senior Notes due 2014

On April 24, 2009, the Company issued $500.0 million of its 4.0% Convertible Senior Notes (“4.0% Notes”). Interest was payable semi-annually on April 1 and October 1. As of December 31, 2014, the Company settled its conversion obligations and associated convertible note hedges. During the year ended December 31, 2015, the Company settled the remaining outstanding warrants for $150.9 million, representing approximately 2.1 million underlying shares.

Senior Notes

8.25% Senior Notes

On July 24, 2009, Telecommunications issued $375.0 million of unsecured senior notes which were due August 15, 2019 (the “8.25% Senior Notes”). The 8.25% Senior Notes had an interest rate of 8.25% per annum and were issued at a price of 99.152% of their face value. The 8.25% Senior Notes were repaid in full on August 15, 2014. In connection with the redemption of the 8.25% Senior Notes, the Company paid $10.1 million as a premium on redemption of the 8.25% Senior Notes and expensed $1.2 million and $3.3 million of debt discount and deferred financing fees, respectively.

5.75% Senior Notes

On July 13, 2012, Telecommunications issued $800.0 million of unsecured senior notes due July 15, 2020 (the “5.75% Senior Notes”). The 5.75% Senior Notes accrued interest at a rate of 5.75% and were issued at par. The Company incurred deferred financing fees of $14.0 million in relation to this transaction which were being amortized through the maturity date.

On August 15, 2016, the Company used proceeds from the 2016 Senior Notes to redeem the full $800.0 million in aggregate principal amount of the 5.75% Senior Notes and to pay $25.8 million for the call premium and accrued interest on the redemption of the notes. Additionally, the Company expensed $7.7 million of deferred financing fees related to the redemption of the notes. The call premium and the write-off of deferred financing fees are reflected in loss from extinguishment of debt on the Consolidated Statement of Operations.

SBAC is a holding company with no business operations of its own and its only significant asset is the outstanding capital stock of Telecommunications. Telecommunications is 100% owned by SBAC. SBAC had fully and unconditionally guaranteed the Senior Notes issued by Telecommunications.

5.625% Senior Notes

On September 28, 2012, the Company issued $500.0 million of unsecured senior notes due October 1, 2019 (the “5.625% Senior Notes”). The 5.625% Senior Notes accrued interest at a rate of 5.625% per annum and were issued at par. Interest on the 5.625%

F-28

Senior Notes was due semi-annually on April 1 and October 1 of each year. The Company incurred deferred financing fees of $8.6 million in relation to this transaction which were being amortized through the maturity date.

On October 1, 2016, the Company redeemed the 5.625% Senior Notes in full. On October 3, 2016, the Company repaid $500.0 million in outstanding principal, $14.1 million related to the call premium on the early redemption of the notes, and $14.1 million in accrued interest. Repayment was made using (1) the proceeds from the 2016 Senior Notes, (2) borrowings under the Revolving Credit Facility, and (3) cash on hand. In addition, the Company expensed $4.1 million of deferred financing fees related to the redemption of the notes. The call premium and the write-off of deferred financing fees are reflected in loss from extinguishment of debt on the Consolidated Statement of Operations.

2014 Senior Notes

On July 1, 2014, the Company issued $750.0 million of unsecured senior notes due July 15, 2022 (the “2014 Senior Notes”). The 2014 Senior Notes accrue interest at a rate of 4.875% per annum and were issued at 99.178% of par value. Interest on the 2014 Senior Notes is due semi-annually on January 15 and July 15 of each year. The Company incurred deferred financing fees of $11.6 million in relation to this transaction which are being amortized through the maturity date.

The 2014 Senior Notes are subject to redemption in whole or in part on or after July 15, 2017 at the redemption prices set forth in the indenture agreement plus accrued and unpaid interest. Prior to July 15, 2017, the Company may at its option redeem up to 35% of the aggregate principal amount of the 2014 Senior Notes originally issued at a redemption price of 104.875% of the principal amount of the 2014 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest with the net proceeds of certain equity offerings. If redeemed during the twelve-month period beginning on July 15, 2017, July 15, 2018, July 15, 2019, or July 15, 2020 until maturity, the redemption price will be 103.656%, 102.438%, 101.219% and 100.000%, respectively, of the principal amount of the 2014 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest.

2016 Senior Notes

On August 15, 2016, the Company issued $1.1 billion of unsecured senior notes due September 1, 2024. The 2016 Senior Notes accrue interest at a rate of 4.875% per annum and were issued at 99.178% of par value. Interest on the 2016 Senior Notes is due semi-annually on March 1 and September 1 of each year, beginning on March 1, 2017. The Company incurred deferred financing fees of $12.8 million in relation to this transaction which are being amortized through the maturity date. Net proceeds from this offering and cash on hand were used to redeem $800.0 million, the aggregate principal amount outstanding, of Telecommunications’ 5.75% Senior Notes and $250.0 million of our 5.625% Senior Notes and pay the associated call premiums.

The 2016 Senior Notes are subject to redemption in whole or in part on or after September 1, 2019 at the redemption prices set forth in the indenture agreement plus accrued and unpaid interest. Prior to September 1, 2019, the Company may at its option redeem up to 35% of the aggregate principal amount of the 2016 Senior Notes originally issued at a redemption price of 104.875% of the principal amount of the 2016 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest with the net proceeds of certain equity offerings. If redeemed during the twelve-month period beginning on September 1, 2019, September 1, 2020, September 1, 2021, or September 1, 2022 until maturity, the redemption price will be 103.656%, 102.438%, 101.219% and 100.000%, respectively, of the principal amount of the 2016 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest.

Indentures Governing Senior Notes

The Indentures governing the Senior Notes contain customary covenants, subject to a number of exceptions and qualifications, including restrictions on the ability of SBAC and Telecommunications to (1) incur additional indebtedness unless the Consolidated Indebtedness to Annualized Consolidated Adjusted EBITDA Ratio (as defined in the Indenture), pro forma for the additional indebtedness does not exceed, with respect to any fiscal quarter, 9.5x for SBAC, (2) merge, consolidate or sell assets, (3) make restricted payments, including dividends or other distributions, (4) enter into transactions with affiliates, and (5) enter into sale and leaseback transactions and restrictions on the ability of the Restricted Subsidiaries of SBAC (as defined in the Indentures) to incur liens securing indebtedness.

F-29

13.SHAREHOLDERS’ EQUITY

Stock Repurchases

On April 27, 2011, the Company’s Board of Directors authorized a stock repurchase plan. This plan authorized the Company to purchase, from time to time, up to $300.0 million of the Company’s outstanding Class A common stock through open market repurchases in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and/or in privately negotiated transactions at management’s discretion based on market and business conditions, applicable legal requirements and other factors. During the year ended December 31, 2014, the Company did not repurchase any shares in conjunction with the stock repurchase plan. During the year ended December 31, 2015, the Company repurchased 1.3 million shares of its Class A common stock at an average price of $114.96 with the remaining $150.0 million authorized under the $300.0 million stock repurchase plan, completing this plan. Shares purchased were retired.

On June 4, 2015, the Company’s Board of Directors authorized a new stock repurchase plan. This plan authorized the Company to purchase, from time to time, up to $1.0 billion of the Company’s outstanding Class A common stock through open market repurchases in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and/or in privately negotiated transactions at management’s discretion based on market and business conditions, applicable legal requirements and other factors. During the year ended December 31, 2015, the Company repurchased an additional 2.7 million shares of its Class A common stock under this stock repurchase plan for $300.0 million at a weighted average price per share of $112.04. During the year ended December 31, 2016, the Company repurchased 5.3 million shares of its Class A common stock under this stock repurchase program for $545.7 million, including commissions, at a weighted average price per share of $102.14. As of December 31, 2016, the Company had a remaining authorization to repurchase $154.4 million of Class A common stock under the $1.0 billion stock repurchase plan dated June 4, 2015. Subsequent to December 31, 2016, the Company repurchased 42,163 shares of its Class A common stock under the stock repurchase plan dated June 4, 2016 for $4.4 million at a weighted average price per share of $104.81. Shares purchased were retired.

On January 12, 2017, the Company’s Board of Directors authorized a new stock repurchase plan, replacing the plan authorized on June 4, 2015 which had a remaining authorization of $150.0 million. This plan authorizes the Company to purchase, from time to time, up to $1.0 billion of the Company’s outstanding Class A common stock through open market repurchases in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and/or in privately negotiated transactions at management’s discretion based on market and business conditions, applicable legal requirements and other factors. Shares purchased will be retired. The new plan has no time deadline and will continue until otherwise modified or terminated by the Company’s Board of Directors at any time in its sole discretion. As of the date of this filing, the Company had the full $1.0 billion authorization remaining under the current stock repurchase program.

Registration of Additional Shares

On May 20, 2010, the Company filed a registration statement on Form S-8 with the Securities and Exchange Commission registering 15.0 million shares of the Company’s Class A common stock issuable under the 2010 Performance and Equity Incentive Plan (see Note 14).

The Company filed shelf registration statements on Form S-4 with the Securities and Exchange Commission registering 4.0 million shares of its Class A common stock in 2007. These shares may be issued in connection with acquisitions of wireless communication towers or antenna sites and related assets or companies that own wireless communication towers, antenna sites, or related assets. During the years ended December 31, 2016, 2015 and 2014, the Company did not issue any shares of its Class A common stock pursuant to this registration statement in connection with acquisitions. At December 31, 2016, approximately 1.7 million shares remain available for issuance under this shelf registration statement.

On March 3, 2015, the Company filed with the Commission an automatic shelf registration statement for well-known seasoned issuers on Form S-3ASR. This registration statement enables the Company to issue shares of its Class A common stock, preferred stock or debt securities either separately or represented by warrants, or depositary shares as well as units that include any of these securities. Under the rules governing automatic shelf registration statements, the Company will file a prospectus supplement and advise the Commission of the amount and type of securities each time it issues securities under this registration statement. For the year ended December 31, 2016, the Company did not issue any securities under this automatic shelf registration statement.

F-30

14.STOCK-BASED COMPENSATION

The Company has two equity participation plans (the 2001 Equity Participation Plan and the 2010 Performance and Equity Incentive Plan, the “2010 Plan”) whereby options (both non-qualified and incentive stock options), restricted stock units, stock appreciation rights, and other equity and performance based instruments may be granted to directors, employees, and consultants. The options and restricted stock units generally vest from the date of grant on a straight-line basis over the vesting term and generally have a seven-year or a ten-year contractual life.

Upon the adoption of the 2010 Plan by the Company’s shareholders on May 6, 2010, the 2001 Equity Participation Plan was terminated and the Company is no longer eligible to issue shares pursuant to that plan. The 2010 Plan provides for the issuance of a maximum of 15.0 million shares of the Company’s Class A common stock, of which 8.8 million shares remain available for future issuance as of December 31, 2016. However, the aggregate number of shares that may be issued pursuant to restricted stock awards, restricted stock unit awards, stock bonus awards, performance awards, other stock-based awards, or other awards granted under the 2010 Plan will not exceed 7.5 million shares, of which 6.8 million shares remain available for future issuance as of December 31, 2016.

Stock Options

The Company records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes option-pricing model with the assumptions included in the table below. The Company uses a combination of historical data and historical volatility to establish the expected volatility. Historical data is used to estimate the expected option life. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the estimated life of the option. The following assumptions were used to estimate the fair value of options granted using the Black-Scholes option-pricing model:



	For the year ended December 31,
	2016	2015	2014

Risk free interest rate	1.11% - 1.43%	1.21% - 1.46%	1.15% - 1.37%
Dividend yield	0.0%	0.0%	0.0%
Expected volatility	20.0%	20.0%	22.0%
Expected lives	4.7 years	4.6 years	4.4 years

The following table summarizes the Company’s activities with respect to its stock option plans for the years ended December 31, 2016, 2015 and 2014 as follows (dollars and number of shares in thousands, except for per share data):



				Weighted-
		Weighted-		Average
		Average		Remaining
	Number	Exercise Price		Contractual	Aggregate
	of Shares	Per Share		Life (in years)	Intrinsic Value
Outstanding at December 31, 2013	2,979	$	48.30
Granted	1,121	$	95.51
Exercised	(780)	$	36.34
Canceled	(44)	$	81.21
Outstanding at December 31, 2014	3,276	$	66.85
Granted	1,076	$	124.24
Exercised	(495)	$	51.58
Canceled	(63)	$	93.74
Outstanding at December 31, 2015	3,794	$	84.66
Granted	1,357	$	96.64
Exercised	(603)	$	46.03
Canceled	(101)	$	105.37
Outstanding at December 31, 2016	4,447	$	93.09	4.6	$	66,625
Exercisable at December 31, 2016	1,633	$	77.54	3.3	$	47,345
Unvested at December 31, 2016	2,814	$	102.11	5.3	$	19,280

F-31

The weighted-average fair value of options granted during the years ended December 31, 2016, 2015 and 2014 was $19.19, $24.75, and $19.49, respectively.

The total intrinsic value for options exercised during the years ended December 31, 2016, 2015 and 2014 was $36.8 million, $33.0 million and $49.2 million, respectively. Cash received from option exercises under all plans for the years ended December 31, 2016, 2015 and 2014 was approximately $27.4 million, $25.4 million, and $28.3 million, respectively. No tax benefit was realized for the tax deductions from option exercises under all plans for the years ended December 31, 2016, 2015 and 2014, respectively.

The aggregate intrinsic value for stock options in the preceding table represents the total intrinsic value based on the Company’s closing stock price of $103.26 as of December 31, 2016. The amount represents the total intrinsic value that would have been received by the holders of the stock-based awards had these awards been exercised and sold as of that date.

Additional information regarding options outstanding and exercisable at December 31, 2016 is as follows:



	Options Outstanding				Options Exercisable
		Weighted Average	Weighted			Weighted
		Remaining	Average			Average
Range	Outstanding	Contractual Life	Exercise Price		Exercisable	Exercise Price
	(in thousands)	(in years)			(in thousands)
$0.00 - $40.00	92	0.6	$	35.06	92	$	35.06
$40.01 - $70.00	435	1.9	$	46.11	435	$	46.11
$70.01 - $100.00	2,897	4.9	$	91.00	851	$	84.18
$100.01 - $130.00	1,023	5.2	$	124.20	255	$	124.19
	4,447				1,633

The following table summarizes the activity of options outstanding that had not yet vested:



		Weighted-
		Average
	Number	Fair Value
	of Shares	Per Share
	(in thousands)
Unvested as of December 31, 2015	2,445	$	21.43
Shares granted	1,357	$	19.19
Vesting during period	(897)	$	20.64
Forfeited	(91)	$	20.82
Unvested as of December 31, 2016	2,814	$	20.62

As of December 31, 2016, the total unrecognized compensation expense related to unvested stock options outstanding under the Plans is $37.5 million. That cost is expected to be recognized over a weighted average period of 2.5 years.

The total fair value of options vested during 2016, 2015, and 2014 was $18.5 million, $15.1 million, and $11.5 million, respectively.

F-32

Restricted Stock Units

The following table summarized the Company’s restricted stock unit activity for the year ended December 31, 2016:



		Weighted-
		Average
		Grant Date
	Number of	Fair Value per
	Shares	Share
	(in thousands)
Outstanding at December 31, 2015	277	$	97.14
Granted	137	$	96.76
Vested	(114)	$	84.44
Forfeited/canceled	(9)	$	103.15
Outstanding at December 31, 2016	291	$	101.74

As of December 31, 2016, total unrecognized compensation expense related to unvested restricted stock units granted under the 2010 Plan was $19.9 million and is expected to be recognized over a weighted-average period of 2.5 years.

Employee Stock Purchase Plan

In 2008, the Board of Directors of the Company adopted the 2008 Employee Stock Purchase Plan (“2008 Purchase Plan”) which reserved 500,000 shares of Class A common stock for purchase. The 2008 Purchase Plan permits eligible employee participants to purchase Class A common stock at a price per share which is equal to 85% of the fair market value of Class A common stock on the last day of an offering period.

For the year ended December 31, 2016, 31,165 shares of Class A common stock were issued under the 2008 Purchase Plan, which resulted in cash proceeds to the Company of approximately $2.7 million, compared to the year ended December 31, 2015 when 26,898 shares of Class A common stock were issued under the 2008 Purchase Plan which resulted in cash proceeds to the Company of $2.6 million. At December 31, 2016, 273,174 shares remained available for issuance under the 2008 Purchase Plan. In addition, the Company recorded $0.5 million, $0.5 million, and $0.4 million of non-cash compensation expense relating to the shares issued under the 2008 Purchase Plans for each of the years ended December 31, 2016, 2015, and 2014.

Non-Cash Compensation Expense

The table below reflects a break out by category of the non-cash compensation expense amounts recognized on the Company’s Statements of Operations for the years ended December 31, 2016, 2015, and 2014, respectively:



		For the year ended December 31,
	2016		2015		2014
	(in thousands)
Cost of revenues	$	418	$	405	$	386
Selling, general and administrative		32,497		28,342		22,285
Total cost of non-cash compensation included
in loss before provision for income taxes		32,915		28,747		22,671
Amount of income tax recognized in earnings		—		—		—
Amount charged against loss	$	32,915	$	28,747	$	22,671

In addition, the Company capitalized $0.5 million, $0.5 million and $0.3 million of non-cash compensation for the years ended December 31, 2016, 2015 and 2014, respectively, to fixed assets.

F-33

15.INCOME TAXES

As discussed in Note 2, the Company began operating in compliance with REIT requirements for federal income tax purposes effective January 1, 2016. As a REIT, the Company must distribute at least 90 percent of its taxable income (including dividends paid to it by its TRSs) except to the extent offset by NOLs. In addition, the Company must meet a number of other organizational and operational requirements. It is management's intention to adhere to these requirements and maintain the Company's REIT status. Most states where SBA operates conform to the federal rules recognizing REITs. Certain subsidiaries have made an election with the Company to be treated as TRSs in conjunction with the Company's REIT election; the TRS elections permit SBA to engage in certain business activities in which the REIT may not engage directly. A TRS is subject to federal and state income taxes on the income from these activities. A provision for taxes of the TRSs and of foreign branches of the REIT are included in its consolidated financial statements.

Income (loss) before provision for income taxes by geographic area is as follows:



		For the year ended December 31,
	2016		2015		2014

	(in thousands)

Domestic	$	(28,671)	$	(22,698)	$	(16,623)
Foreign		115,974		(143,897)		963
Total	$	87,303	$	(166,595)	$	(15,660)

The provision for income taxes consists of the following components:



		For the year ended December 31,
	2016		2015		2014

	(in thousands)
Current provision:
State	$	1,535	$	2,752	$	1,099
Foreign		8,121		6,314		7,006
Total current		9,656		9,066		8,105

Deferred provision (benefit) for taxes:
Federal		170,177		(3,023)		1,458
State		22,992		(3,106)		(887)
Foreign		30,425		(40,636)		(472)
Change in valuation allowance		(222,185)		46,760		431
Total deferred		1,409		(5)		530
Total provision for income taxes	$	11,065	$	9,061	$	8,635

F-34

A reconciliation of the provision for income taxes at the statutory U.S. Federal tax rate (35%) and the effective income tax rate is as follows:



	For the year ended December 31,
	2016		2015		2014

	(in thousands)
Statutory federal expense (benefit)	$	30,555	$	(58,307)	$	(5,481)
Foreign tax rate differential		1,083		3,534		3,844
State and local tax expense (benefit)		3,941		(230)		138
Effect of REIT election		205,317		—		—
Permanent differences		(3,577)		4,892		5,644
Foreign dividend income		—		—		3,700
Foreign tax rate change		—		—		1,374
Foreign exchange rate changes		(5,822)		9,212		(799)
Other		1,753		3,200		(216)
Valuation allowance		(222,185)		46,760		431
Provision for income taxes	$	11,065	$	9,061	$	8,635

The components of the net deferred income tax asset (liability) accounts are as follows:



	As of December 31,
	2016			2015

	(in thousands)
Noncurrent deferred tax assets:
Net operating losses	$	50,143	$	369,924
Property, equipment, and intangible basis differences		2,583		28,226
Accrued liabilities		12,264		45,885
Non-cash compensation		19,908		14,913
Deferred revenue		3,904		43,608
Allowance for doubtful accounts		6,187		647
Currency translation		33,088		57,015
Other		1,032		4,357
Valuation allowance		(70,233)		(292,871)
Total noncurrent deferred tax assets, net (1)		58,876		271,704

Noncurrent deferred tax liabilities:
Property, equipment, and intangible basis differences		(65,459)		(242,763)
Straight-line rents		(18,081)		(28,058)
Deferred lease costs		(1,087)		(11,611)
Other		(922)		(14,448)
Total noncurrent deferred tax liabilities, net (1)	$	(26,673)	$	(25,176)

(1)Of these amounts, $774 and $27,447 are included in Other assets and Other long-term liabilities, respectively on the accompanying Consolidated Balance Sheets as of December 31, 2016. As of December 31, 2015, $619 and $25,795 are included in Other assets and Other long-term liabilities on the accompanying Consolidated Balance Sheet.

A deferred tax asset is reduced by a valuation allowance if based on the weight of all available evidence, it is more likely than not (a likelihood of more than 50%) that the value of such assets will not be realized. The valuation allowance should be sufficient to reduce the deferred tax asset to the amount that is more likely than not to be realized. The determination of whether a deferred tax asset is realizable is based on weighting all available evidence, including both positive and negative evidence. The realization of deferred tax assets, including carryforwards and deductible temporary differences, depends upon the existence of sufficient taxable income of the same character during the carryback or carryforward period. All sources of taxable income available to realize the deferred tax asset, including the future reversal of existing temporary differences, future taxable income exclusive of reversing temporary differences and carryforwards, taxable income in carryback years and tax-planning strategies, should be considered.

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The Company has recorded a valuation allowance for the majority of its deferred tax assets as management believes that it is not “more-likely-than-not” that the Company will generate sufficient taxable income in future periods to recognize the assets. Valuation allowances of $70.2 million and $292.9 million were being carried to offset net deferred income tax assets as of December 31, 2016 and 2015, respectively. The net change in the valuation allowance for the years ended December 31, 2016 and 2015 was $(222.6) million and $25.6 million, respectively. As a result of the REIT conversion, the Company has reversed net deferred tax assets and the related valuation allowance of the subsidiaries included in the REIT in the amount of $205.3 million.

The Company has available at December 31, 2016, a federal NOL carry-forward of approximately $1.2 billion. These NOL carry-forwards will expire between 2021 and 2036. As of December 31, 2016, $1.1 billion of the federal NOLs are attributes of the REIT. The Company may use these NOLs to offset its REIT taxable income, and thus any required distributions to shareholders may be reduced or eliminated until such time as the NOLs have been fully utilized. The Internal Revenue Code places limitations upon the future availability of NOLs based upon changes in the equity of the Company. If these occur, the ability of the Company to offset future income with existing NOLs may be limited. In addition, the Company has available at December 31, 2016, a foreign NOL carry-forward of $66.6 million and a net state operating tax loss carry-forward of approximately $502.0 million. These net operating tax loss carry-forwards begin to expire in 2017.

The U.S. tax losses generated in tax years 1999 through 2013 remain subject to adjustment, and tax years 2013 through 2016 are open to examination by the major jurisdictions in which the Company operates.

The Company does not expect to remit earnings from its foreign subsidiaries. Undistributed earnings of the Company’s foreign subsidiaries amounted to approximately $92.8 million at December 31, 2016. $60.3 million of these earnings are considered to be permanently reinvested; accordingly, no U.S. Federal and state income taxes have been provided thereon. It is not practicable to compute the potential deferred tax liability associated with these undistributed foreign earnings. Upon distribution of those earnings in the form of dividends or otherwise, the Company could be subject to both U.S. income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to various foreign countries.

As discussed in Note 2, the Company adopted ASU 2016-09 during 2016. Prior to 2016, no tax benefit was recognized in equity related to equity-based compensation as our excess tax benefits did not reduce taxes payable. During 2016, we recognized $27.327.3 million of excess tax deductions in our income tax provision that are ultimately offset with a valuation allowance at the TRS for no net benefit.

16.COMMITMENTS AND CONTINGENCIES

Leases

The Company is obligated under various non-cancelable operating leases for land, office space, equipment and site leases that expire at various times through December 2152. In addition, the Company is obligated under various non-cancelable capital leases for vehicles that expire at various times through August 2020.

The annual minimum lease payments under non-cancelable operating and capital leases for the next five years as of December 31, 2016 are as follows (in thousands):



For the year ended December 31,	Capital Leases		Operating Leases
2017	$	1,500	$	195,954
2018		1,149		199,780
2019		572		201,863
2020		169		203,323
2021		—		205,767
Total minimum lease payments		3,390
Less: amount representing interest		(172)
Present value of future payments		3,218
Less: current obligations		(1,715)
Long-term obligations	$	1,503

Future minimum rental payments under noncancelable ground leases include payments for certain renewal periods at the Company’s option because failure to renew could result in a loss of the applicable tower and related revenue from tenant leases,

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thereby making it reasonably assured that the Company will renew the lease. The majority of operating leases provide for renewal at varying escalations. Fixed rate escalations have been included in the table disclosed above.

Rent expense for operating leases was $253.7 million, $239.8 million and $223.4 million for the years ended December 31, 2016, 2015 and 2014, respectively. In addition, certain of the Company’s leases include contingent rent provisions which provide for the lessor to receive additional rent upon the attainment of certain tower operating results and/or lease-up. Contingent rent expense for the years ended December 31, 2016, 2015 and 2014 was $25.0 million, $24.4 million and $23.3 million, respectively.

Tenant Leases

The annual minimum tower lease income to be received for tower space and antenna rental under non-cancelable operating leases for the next five years as of December 31, 2016 are as follows:



For the year ended December 31,	(in thousands)
2017	$	1,361,056
2018		1,216,566
2019		1,034,418
2020		803,080
2021		516,152

The Company’s tenant leases provide for annual escalations and multiple renewal periods, at the tenant’s option. The tenant rental payments disclosed in the table above do not assume exercise of tenant renewal options, however, fixed rate escalations have been included.

Litigation

The Company is involved in various claims, lawsuits and proceedings arising in the ordinary course of business. While there are uncertainties inherent in the ultimate outcome of such matters and it is impossible to presently determine the ultimate costs that may be incurred, management believes the resolution of such uncertainties and the incurrence of such costs will not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity.

Contingent Purchase Obligations

From time to time, the Company agrees to pay additional consideration (or earnouts) for acquisitions if the towers or businesses that are acquired meet or exceed certain performance targets in the one to three years after they have been acquired. For the years ended December 31, 2016, 2015, and 2014 certain earnings targets associated with the acquired towers were achieved, and therefore, the Company paid in cash $5.7 million, $4.1 million, and $18.7 million, respectively. As of December 31, 2016, the Company’s estimate of its potential obligation if the performance targets contained in various acquisition agreements were met was $4.1 million which the Company recorded in accrued expenses. The maximum potential obligation related to the performance targets was $5.8 million and $10.2 million as of December 31, 2016 and 2015, respectively.

17.DEFINED CONTRIBUTION PLAN

The Company has a defined contribution profit sharing plan under Section 401(k) of the Internal Revenue Code that provides for voluntary employee contributions up to the limitations set forth in Section 402(g) of the Internal Revenue Code. Employees have the opportunity to participate following completion of three months of employment and must be 21 years of age. Employer matching begins immediately upon the employee’s participation in the plan.

The Company makes a discretionary matching contribution of 75% of an employee’s contributions up to a maximum of $4,000 annually. Company matching contributions were approximately $2.0 million, $2.1 million and $2.0 million for the years ended December 31, 2016, 2015 and 2014, respectively.

18.SEGMENT DATA

The Company operates principally in two business segments: site leasing and site development. The Company’s site leasing business includes two reportable segments, domestic site leasing and international site leasing. The Company’s business segments are

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strategic business units that offer different services. They are managed separately based on the fundamental differences in their operations. The site leasing segment includes results of the managed and sublease businesses. The site development segment includes the results of both consulting and construction related activities. The Company’s Chief Operating Decision Maker utilizes segment operating profit and operating income as his two measures of segment profit in assessing performance and allocating resources at the reportable segment level.

Revenues, cost of revenues (exclusive of depreciation, accretion and amortization), capital expenditures (including assets acquired through the issuance of shares of the Company’s Class A common stock) and identifiable assets pertaining to the segments in which the Company continues to operate are presented below:



	Domestic Site		Int'l Site		Site		Not Identified
	Leasing		Leasing		Development		by Segment		Total

For the year ended December 31, 2016	(in thousands)
Revenues	$	1,273,866	$	264,204	$	95,055	$	—	$	1,633,125
Cost of revenues (2)		260,941		81,274		78,682		—		420,897
Operating profit		1,012,925		182,930		16,373		—		1,212,228
Selling, general, and administrative		72,701		35,897		13,039		21,712		143,349
Acquisition related adjustments and expenses		6,233		6,907		—		—		13,140
Asset impairment and decommission costs		26,073		1,824		—		2,345		30,242
Depreciation, amortization and accretion		509,108		119,466		3,402		6,213		638,189
Operating income (loss)		398,810		18,836		(68)		(30,270)		387,308
Other expense (principally interest expense
and other expense)								(300,005)		(300,005)
Income before provision for income taxes										87,303
Cash capital expenditures (3)		310,256		102,282		1,955		3,710		418,203
For the year ended December 31, 2015
Revenues	$	1,236,758	$	243,876	$	157,840	$	—	$	1,638,474
Cost of revenues (2)		252,493		72,162		119,744		—		444,399
Operating profit		984,265		171,714		38,096		—		1,194,075
Selling, general, and administrative		67,413		16,196		12,247		19,095		114,951
Acquisition related adjustments and expenses		9,975		1,889		—		—		11,864
Asset impairment and decommission costs		93,977		806		—		—		94,783
Depreciation, amortization and accretion		534,436		118,886		3,662		3,037		660,021
Operating income (loss)		278,464		33,937		22,187		(22,132)		312,456
Other expense (principally interest expense
and other expense)								(479,051)		(479,051)
Loss before provision for income taxes										(166,595)
Cash capital expenditures (3)		709,337		94,693		3,495		13,339		820,864
For the year ended December 31, 2014
Revenues	$	1,157,293	$	202,909	$	166,794	$	—	$	1,526,996
Cost of revenues (2)		247,237		54,076		127,172		—		428,485
Operating profit		910,056		148,833		39,622		—		1,098,511
Selling, general, and administrative		67,611		16,762		9,074		9,870		103,317
Acquisition related adjustments and expenses		3,351		4,447		—		—		7,798
Asset impairment and decommission costs		21,538		2,263		—		—		23,801
Depreciation, amortization and accretion		515,150		104,447		2,453		5,022		627,072
Operating income (loss)		302,406		20,914		28,095		(14,892)		336,523
Other expense (principally interest expense
and other expense)								(352,183)		(352,183)
Loss before provision for income taxes										(15,660)
Cash capital expenditures (3)		547,774		1,221,786		3,851		24,352		1,797,763

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	Domestic Site		Int'l Site		Site		Not Identified
	Leasing		Leasing		Development		by Segment (1)		Total

	(in thousands)
Assets
As of December 31, 2016	$	5,396,394	$	1,839,703	$	43,769	$	81,079	$	7,360,945
As of December 31, 2015	$	5,587,476	$	1,564,496	$	56,631	$	104,377	$	7,312,980

(1)Assets not identified by segment consist primarily of general corporate assets.

(2)Excludes depreciation, amortization, and accretion.

(3)Includes cash paid for capital expenditures and acquisitions and vehicle capital lease additions.

19.QUARTERLY FINANCIAL DATA (unaudited)



	Quarter Ended
	December 31,		September 30,		June 30,		March 31,
	2016		2016		2016		2016
	(in thousands, except per share amounts)
Revenues	$	416,505	$	411,319	$	405,532	$	399,769
Operating income		107,430		108,210		74,066		97,602
Depreciation, accretion, and amortization		(158,554)		(160,111)		(159,723)		(159,801)
Loss from extinguishment of debt, net		(18,189)		(34,512)		—		—
Net income (loss)		5,256		(15,370)		32,711		53,641

Net income (loss) per common share - basic	$	0.04	$	(0.12)	$	0.26	$	0.43
Net income (loss) per common share - diluted		0.04		(0.12)		0.26		0.43

	Quarter Ended
	December 31,		September 30,		June 30,		March 31,
	2015		2015		2015		2015
	(in thousands, except per share amounts)
Revenues	$	406,941	$	410,735	$	410,704	$	410,094
Operating income		82,129		43,083		98,163		89,081
Depreciation, accretion, and amortization		(161,461)		(164,330)		(162,377)		(171,853)
Loss from extinguishment of debt, net		(783)		—		—		—
Net income (loss)		31,019		(155,946)		28,305		(79,034)

Net income (loss) per common share - basic	$	0.25	$	(1.23)	$	0.22	$	(0.61)
Net income (loss) per common share - diluted		0.24		(1.23)		0.22		(0.61)

Basic and diluted net income (loss) per share is computed by dividing net income by the weighted average number of shares for the period. Potentially dilutive instruments have been excluded from the computation of diluted loss per share as their impact would have been anti-dilutive.

Because net income (loss) per share amounts are calculated using the weighted average number of common and dilutive common shares outstanding during each quarter, the sum of the per share amounts for the four quarters may not equal the total loss per share amounts for the year.

20.EARNINGS PER SHARE

Basic earnings per share was computed by dividing net income from continuing operations attributable to common shareholders by the weighted-average number of shares of Common Stock outstanding for each respective period. Diluted earnings per share was calculated by dividing net income from continuing operations attributable to common shareholders by the weighted-average number

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of shares of Common Stock outstanding and any dilutive Common Stock equivalents, including unvested restricted stock and shares issuable upon exercise of stock options as determined under the “If-Converted” method and also Common Stock warrants as determined under the “Treasury Stock” method.

The following table sets forth basic and diluted net income per common share for the years ended December 31, 2016, 2015, and 2014 (in thousands, except per share data):



	For the year ended December 31,
	2016		2015		2014
Numerator:
Net income (loss)	$	76,238	$	(175,656)	$	(24,295)
Denominator:
Basic weighted-average shares outstanding		124,448		127,794		128,919
Dilutive impact of stock options and restricted shares		696		—		—
Diluted weighted-average shares outstanding		125,144		127,794		128,919
Net income (loss) per common share:
Basic	$	0.61	$	(1.37)	$	(0.19)
Diluted	$	0.61	$	(1.37)	$	(0.19)

For the year ended December 31, 2016, the diluted weighted average number of common shares outstanding excluded an additional 2.2 million shares issuable upon exercise of the Company’s stock options because the impact would be anti-dilutive.

For the year ended December 31, 2015, all potential common stock equivalents, including 3.8 million shares of stock options outstanding and 0.3 million shares of restricted stock units outstanding, were excluded as the effect would be anti-dilutive.

For the year ended December 31, 2014, all potential common stock equivalents, including 3.3 million shares of stock options outstanding and 0.3 million shares of restricted stock units outstanding, were excluded as the effect would be anti-dilutive.

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