Item 1. FINANCIAL STATEMENTS

Item 1. FINANCIAL STATEMENTS

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Payable to Shareholders

Cash to

of Record at the Close

be Paid

Date Declared

of Business on

Per Share

Date to be Paid

April 24, 2022

May 19, 2022

June 14, 2022

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (in thousands, except par values)



	March 31,		December 31,
	2022		2021
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$	263,569	$	367,278
Restricted cash		69,781		65,561
Accounts receivable, net		121,583		101,950
Costs and estimated earnings in excess of billings on uncompleted contracts		48,028		48,844
Prepaid expenses and other current assets		36,462		30,813
Total current assets		539,423		614,446
Property and equipment, net		2,674,679		2,575,487
Intangible assets, net		2,909,789		2,803,247
Operating lease right-of-use assets, net		2,362,287		2,268,470
Acquired and other right-of-use assets, net		1,017,508		964,405
Other assets		638,414		575,644
Total assets	$	10,142,100	$	9,801,699
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS,
AND SHAREHOLDERS' DEFICIT
Current Liabilities:
Accounts payable	$	40,583	$	34,066
Accrued expenses		80,628		68,070
Current maturities of long-term debt		662,264		24,000
Deferred revenue		195,553		184,380
Accrued interest		23,710		49,096
Current lease liabilities		254,448		238,497
Other current liabilities		21,367		18,222
Total current liabilities		1,278,553		616,331
Long-term liabilities:
Long-term debt, net		11,969,068		12,278,694
Long-term lease liabilities		2,050,790		1,981,353
Other long-term liabilities		232,799		191,475
Total long-term liabilities		14,252,657		14,451,522
Redeemable noncontrolling interests		36,037		17,250
Shareholders' deficit:
Preferred stock - par value $0.01, 30,000 shares authorized, no shares issued or outstanding		—		—
Common stock - Class A, par value $0.01, 400,000 shares authorized, 107,806 shares and
108,956 shares issued and outstanding at March 31, 2022 and December 31, 2021,
respectively		1,078		1,089
Additional paid-in capital		2,688,835		2,681,347
Accumulated deficit		(7,523,696)		(7,203,531)
Accumulated other comprehensive loss, net		(591,364)		(762,309)
Total shareholders' deficit		(5,425,147)		(5,283,404)
Total liabilities, redeemable noncontrolling interests, and shareholders' deficit	$	10,142,100	$	9,801,699

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

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited) (in thousands, except per share amounts)


	For the three months
	ended March 31,
	2022		2021
Revenues:
Site leasing	$	559,432	$	505,103
Site development		60,338		43,636
Total revenues		619,770		548,739
Operating expenses:
Cost of revenues (exclusive of depreciation, accretion,
and amortization shown below):
Cost of site leasing		107,155		95,368
Cost of site development		45,773		34,406
Selling, general, and administrative expenses (1)		62,124		51,601
Acquisition and new business initiatives related
adjustments and expenses		5,104		5,001
Asset impairment and decommission costs		8,512		4,903
Depreciation, accretion, and amortization		174,323		183,881
Total operating expenses		402,991		375,160
Operating income		216,779		173,579
Other income (expense):
Interest income		2,502		632
Interest expense		(82,252)		(90,095)
Non-cash interest expense		(11,526)		(11,804)
Amortization of deferred financing fees		(4,881)		(4,891)
Loss from extinguishment of debt, net		—		(11,652)
Other income (expense), net		108,161		(88,436)
Total other income (expense), net		12,004		(206,246)
Income (loss) before income taxes		228,783		(32,667)
(Provision) benefit for income taxes		(40,477)		20,922
Net income (loss)		188,306		(11,745)
Net loss attributable to noncontrolling interests		317		—
Net income (loss) attributable to SBA Communications
Corporation	$	188,623	$	(11,745)
Net income (loss) per common share attributable to SBA
Communications Corporation:
Basic	$	1.75	$	(0.11)
Diluted	$	1.72	$	(0.11)
Weighted average number of common shares
Basic		108,086		109,469
Diluted		109,544		109,469

(1)Includes non-cash compensation expense of $24,116 and $19,584 for the three months ended March 31, 2022 and 2021, respectively.

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

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited) (in thousands)



	For the three months
	ended March 31,

	2022		2021

Net income (loss)	$	188,306	$	(11,745)
Adjustments related to interest rate swaps		85,322		42,787
Foreign currency translation adjustments		85,506		(43,634)
Comprehensive income (loss)		359,134		(12,592)
Comprehensive loss attributable to noncontrolling interests		434		—
Comprehensive income (loss) attributable to SBA
Communications Corporation	$	359,568	$	(12,592)

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

‎

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS**’ DEFICIT**

(unaudited) (in thousands)



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

BALANCE, December 31, 2021	108,956	$	1,089	$	2,681,347	$	(7,203,531)	$	(762,309)	$	(5,283,404)
Net income attributable to SBA
Communications Corporation	—		—		—		188,623		—		188,623
Common stock issued in connection with equity
awards and stock purchase plans, offset
by the impact of net share settlements	150		2		1,566		—		—		1,568
Non-cash stock compensation	—		—		25,143		—		—		25,143
Adjustments related to interest rate swaps	—		—		—		—		85,322		85,322
Repurchase and retirement of common stock	(1,300)		(13)		—		(431,654)		—		(431,667)
Foreign currency translation adjustments
attributable to SBA Communications
Corporation	—		—		—		—		85,623		85,623
Dividends and dividend equivalents
on common stock	—		—		—		(77,134)		—		(77,134)
Adjustment to redemption amount related to
noncontrolling interests	—		—		(19,221)		—		—		(19,221)
BALANCE, March 31, 2022	107,806	$	1,078	$	2,688,835	$	(7,523,696)	$	(591,364)	$	(5,425,147)



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

BALANCE, December 31, 2020	109,819	$	1,098	$	2,586,130	$	(6,604,028)	$	(807,582)	$	(4,824,382)
Net loss attributable to SBA
Communications Corporation	—		—		—		(11,745)		—		(11,745)
Common stock issued in connection with equity
awards and stock purchase plans, offset
by the impact of net share settlements	166		2		2,013		—		—		2,015
Non-cash stock compensation	—		—		20,812		—		—		20,812
Adjustments related to interest rate swaps	—		—		—		—		42,787		42,787
Repurchase and retirement of common stock	(654)		(7)		—		(168,916)		—		(168,923)
Foreign currency translation adjustments
attributable to SBA Communications
Corporation	—		—		—		—		(43,634)		(43,634)
Dividends and dividend equivalents
on common stock	—		—		—		(63,624)		—		(63,624)
Adjustment to redemption amount related to
noncontrolling interests	—		—		1,517		—		—		1,517
BALANCE, March 31, 2021	109,331	$	1,093	$	2,610,472	$	(6,848,313)	$	(808,429)	$	(5,045,177)

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

‎

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited) (in thousands)



	For the three months ended March 31,
	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	188,306	$	(11,745)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, accretion, and amortization		174,323		183,881
(Gain) loss on remeasurement of U.S. denominated intercompany loans		(109,644)		86,251
Non-cash compensation expense		24,747		20,422
Non-cash asset impairment and decommission costs		8,366		4,791
Loss from extinguishment of debt, net		—		10,652
Deferred income tax provision (benefit)		34,262		(26,837)
Other non-cash items reflected in the Statements of Operations		16,896		17,413
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable and costs and estimated earnings in excess of
billings on uncompleted contracts, net		(9,812)		(4,523)
Prepaid expenses and other assets		(2,201)		3,517
Operating lease right-of-use assets, net		33,682		29,865
Accounts payable and accrued expenses		(7,002)		(4,667)
Accrued interest		(25,384)		(27,347)
Long-term lease liabilities		(31,038)		(26,393)
Other liabilities		(3,019)		30,218
Net cash provided by operating activities		292,482		285,498
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions		(215,181)		(1,052,676)
Capital expenditures		(38,008)		(24,536)
Purchase of investments		(30,393)		(755,013)
Proceeds from sale of investments		30,214		755,000
Other investing activities		(2,513)		641
Net cash used in investing activities		(255,881)		(1,076,584)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under Revolving Credit Facility		330,000		710,000
Repayments under Revolving Credit Facility		—		(500,000)
Proceeds from issuance of Senior Notes, net of fees		—		1,485,670
Repayment of Senior Notes		—		(757,500)
Repurchase and retirement of common stock		(431,667)		(168,923)
Payment of dividends on common stock		(76,873)		(63,412)
Proceeds from employee stock purchase/stock option plans		10,836		10,838
Payments related to taxes on stock options and restricted stock units		(9,228)		(8,823)
Other financing activities		25,182		(6,507)
Net cash (used in) provided by financing activities		(151,750)		701,343
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		15,961		(10,880)
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH		(99,188)		(100,623)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH:
Beginning of period		435,626		342,808
End of period	$	336,438	$	242,185

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

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited) (in thousands)



	For the three months ended March 31,
	2022		2021

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	107,594	$	118,430
Income taxes	$	5,696	$	6,387

SUPPLEMENTAL CASH FLOW INFORMATION OF NON-CASH ACTIVITIES:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	41,038	$	11,890
Operating lease modifications and reassessments	$	12,445	$	6,181
Right-of-use assets obtained in exchange for new finance lease liabilities	$	674	$	1,033

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

‎

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

**1.**BASIS OF PRESENTATION

The accompanying consolidated financial statements should be read in conjunction with the Annual Report on Form 10-K for the fiscal year ended December 31, 2021 for SBA Communications Corporation and its subsidiaries (the “Company”). These financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and, therefore, omit or condense certain footnotes and other information normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States. In the opinion of the Company’s management, all adjustments (consisting of normal recurring accruals) considered necessary for fair financial statement presentation have been made. The results of operations for an interim period may not give a true indication of the results for the year. Certain reclassifications have been made to prior year amounts or balances to conform to the presentation adopted in the current year.

The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. While the Company believes that such estimates are fair when considered in conjunction with the consolidated financial statements and accompanying notes, the actual amounts, when known, may vary from these estimates.

Foreign Currency Translation

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

For foreign subsidiaries where the U.S. dollar is the functional currency, 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. Remeasurement gains and losses are reported as other income (expense), net in the Consolidated Statements of Operations.

Intercompany Loans Subject to Remeasurement

In accordance with Accounting Standards Codification (ASC) 830, the Company remeasures foreign denominated intercompany loans with the corresponding change in the balance being recorded in Other income (expense), net in the Consolidated Statements of Operations as settlement is anticipated or planned in the foreseeable future. The Company recorded a $72.9 million gain and a $57.0 million loss, net of taxes, on the remeasurement of intercompany loans for the three months ended March 31, 2022 and 2021, respectively, due to changes in foreign exchange rates. During the three months ended March 31, 2022, the Company repaid $36.5 million of the intercompany loans. As of March 31, 2022 and December 31, 2021, the aggregate amount outstanding under the intercompany loan agreements subject to remeasurement with the Company’s foreign subsidiaries was $870.3 million and $872.9 million, respectively. Subsequent to March 31, 2022, the Company repaid $64.9 million of the intercompany loan.

**2.**FAIR VALUE MEASUREMENTS

Items Measured at Fair Value on a Recurring Basis— The Company’s asset retirement obligations are measured at fair value on a recurring basis using Level 3 inputs and are recorded in Other long-term liabilities in the Consolidated Balance Sheets. The fair value of the asset retirement obligations is calculated using a discounted cash flow model.

Refer to Note 16 for discussion of the Company’s redeemable non-controlling interests.

Items Measured at Fair Value on a Nonrecurring Basis— The Company’s long-lived and intangible assets 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 and intangible assets 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 three months
	ended March 31,
	2022		2021

Asset impairment (1)	$	7,790	$	3,156
Write-off of carrying value of decommissioned towers		590		1,327
Other (including third party decommission costs)		132		420
Total asset impairment and decommission costs	$	8,512	$	4,903

(1)Represents impairment charges resulting from the Company’s regular analysis of whether the anticipated future discounted cash flows from certain towers are sufficient to recover the carrying value of the investment in those towers.

The Company’s long-term investments were $45.6 million and $47.9 million as of March 31, 2022 and December 31, 2021, respectively, and are recorded in Other assets on the Consolidated Balance Sheets. Some of these investments provide for the Company to increase their investment in the future through call options exercisable by the Company and put options exercisable by the investee. These put and call options are recorded at fair market value. The estimation of the fair value of the investment involves the use of Level 3 inputs. The Company evaluates these investments for indicators of impairment. The Company considers impairment indicators such as negative changes in industry and market conditions, financial performance, business prospects, and other relevant events and factors. If indicators exist and the fair value of the investment is below the carrying amount, the investment could be impaired.

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 shorter maturity of these instruments. The Company’s estimate of its short-term investments is based primarily upon Level 1 reported market values. As of March 31, 2022 and December 31, 2021, the Company had $0.8 million of short-term investments. For the three months ended March 31, 2022, the Company purchased and sold $30.2 million of short-term investments. For the three months ended March 31, 2021, the Company purchased and sold $755.0 million of short-term investments.

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 Company does not believe its credit risk has changed materially from the date the applicable Eurodollar Rate was set for the Revolving Credit Facility (112.5 to 150.0 basis points). Refer to Note 10 for the fair values, principal balances, and carrying values of the Company’s debt instruments.

For discussion of the Company’s derivatives and hedging activities, refer to Note 17.

**3.**CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

The cash, cash equivalents, and restricted cash balances on the Consolidated Statements of Cash Flows consist of the following:



	As of		As of
	March 31, 2022		December 31, 2021		Included on Balance Sheet

	(in thousands)
Cash and cash equivalents	$	263,569	$	367,278	Cash and cash equivalents
Securitization escrow accounts		68,983		64,764	Restricted cash - current asset
Payment and performance bonds		798		797	Restricted cash - current asset
Surety bonds and workers compensation		3,088		2,787	Other assets - noncurrent
Total cash, cash equivalents, and restricted cash	$	336,438	$	435,626

Pursuant to the terms of the Tower Securities (see Note 10), 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 10) 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 March 31, 2022 and December 31, 2021, the Company had $42.4 million and $42.3 million in surety and payment and performance bonds, respectively, for which no collateral was required to be posted. The Company periodically evaluates the collateral posted for its bonds to ensure that it meets the minimum requirements. As of March 31, 2022 and December 31, 2021, the Company had pledged $2.3 million as collateral related to its workers’ compensation policy.

**4.**COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

The Company’s costs and estimated earnings on uncompleted contracts are comprised of the following:



	As of		As of
	March 31, 2022		December 31, 2021

	(in thousands)
Costs incurred on uncompleted contracts	$	81,293	$	75,967
Estimated earnings		31,476		28,851
Billings to date		(72,420)		(61,628)
	$	40,349	$	43,190

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



	As of		As of
	March 31, 2022		December 31, 2021

	(in thousands)
Costs and estimated earnings in excess of billings on uncompleted contracts	$	48,028	$	48,844
Billings in excess of costs and estimated earnings on
uncompleted contracts (included in Other current liabilities)		(7,679)		(5,654)
	$	40,349	$	43,190

At March 31, 2022 and December 31, 2021, the eight largest customers comprised 98.2% and 98.8%, respectively, of the costs and estimated earnings in excess of billings on uncompleted contracts, net of billings in excess of costs and estimated earnings.

**5.**PREPAID EXPENSES AND OTHER CURRENT ASSETS AND OTHER ASSETS

The Company’s prepaid expenses and other current assets are comprised of the following:



	As of		As of
	March 31, 2022		December 31, 2021

		(in thousands)
Prepaid real estate taxes	$	3,517	$	3,331
Prepaid taxes		10,093		11,096
Other current assets		22,852		16,386
Total prepaid expenses and other current assets	$	36,462	$	30,813

‎

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



	As of		As of
	March 31, 2022		December 31, 2021

		(in thousands)
Straight-line rent receivable	$	362,370	$	348,519
Interest rate swap asset (1)		134,425		60,324
Loans receivable		40,063		37,376
Deferred lease costs, net		6,379		6,345
Deferred tax asset - long term		20,296		51,918
Long-term investments		45,617		47,889
Other		29,264		23,273
Total other assets	$	638,414	$	575,644

(1)Refer to Note 17 for more information on the Company’s interest rate swaps.

**6.**ACQUISITIONS

The following table summarizes the Company’s acquisition activity:



	For the three months
	ended March 31,
	2022		2021


Acquisitions of towers and related intangible assets (1)	$	207,863	$	101,630
Acquisition of right-of-use assets (2)		—		945,915
Land buyouts and other assets (3)		7,318		5,131
Total cash acquisition capital expenditures	$	215,181	$	1,052,676

(1)During the three months ended March 31, 2022, the Company closed on 1,445 sites under the previously announced deal with Airtel Tanzania for $176.1 million. Legal title was fully transferred at closing for 963 of the towers. The remaining 482 towers are pending post-closing site level documentation and due diligence and were initially accounted for as acquired and other right-of-use assets, net on the consolidated balance sheet until transfer of title for these towers is completed, which the Company anticipates to be in tranches through the end of the second quarter of 2023. Upon legal transfer, these assets will be reclassified to tower related assets. During this period of time, the Company has all the economic rights and obligations related to these towers.

(2)During the three months ended March 31, 2021, the Company acquired the exclusive right to lease and operate 697 utility transmission structures, which included existing wireless tenant licenses from PG&E for $954.0 million. The difference between the purchase price and the cash acquisition amount is due to working capital adjustments. The Company accounted for the payment with respect to these sites as a right-of-use asset, which is recorded in Acquired and other right of use assets, net on its Consolidated Balance Sheets. The payments associated with the right of use of these structures has been fully funded and will be recognized over 70 years.

(3)In addition, the Company paid $3.8 million and $2.8 million for ground lease extensions and term easements on land underlying the Company’s towers during the three months ended March 31, 2022 and 2021, respectively. The Company recorded these amounts in prepaid rent on its Consolidated Balance Sheets.

During the three months ended March 31, 2022, the Company acquired 1,807 towers and related assets and liabilities consisting of $74.9 million of property and equipment, net $83.2 million of intangible assets, net, $36.3 million of operating lease right-of-use assets, net, $58.3 million of acquired and other right-of-use assets, net, and $44.9 million of other net liabilities assumed. All acquisitions in the three months ended March 31, 2022 were accounted for as asset acquisitions.

Subsequent to March 31, 2022, the Company purchased, or is under contract to purchase, 358 communication sites and one data center for an aggregate consideration of $177.1 million in cash.

The maximum potential obligation related to contingent consideration for acquisitions were $11.4 million and $11.6 million as of March 31, 2022 and December 31, 2021, respectively. No such amounts are recorded on the Company’s Consolidated Balance Sheet.

**7.**PROPERTY AND EQUIPMENT, NET

Property and equipment, net consists of the following:



	As of		As of
	March 31, 2022		December 31, 2021

	(in thousands)
Towers and related components (1)	$	5,492,277	$	5,323,803
Construction-in-process (2)		54,487		47,565
Furniture, equipment, and vehicles		61,981		59,939
Land, buildings, and improvements		856,639		848,051
Total property and equipment		6,465,384		6,279,358
Less: accumulated depreciation		(3,790,705)		(3,703,871)
Property and equipment, net	$	2,674,679	$	2,575,487

(1)Includes amounts related to our data centers.

(2)Construction-in-process represents costs incurred related to towers and other assets that are under development and will be used in the Company’s site leasing operations.

Depreciation expense was $68.1 million and $71.5 million for the three months ended March 31, 2022 and 2021, respectively. At March 31, 2022 and December 31, 2021, unpaid capital expenditures that are included in accounts payable and accrued expenses were $9.2 million and $7.3 million, respectively.

**8.**INTANGIBLE ASSETS, NET

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



	As of March 31, 2022						As of December 31, 2021
	Gross carrying		Accumulated		Net book		Gross carrying		Accumulated		Net book
	amount		amortization		value		amount		amortization		value

	(in thousands)
Current contract intangibles	$	5,113,444	$	(2,881,988)	$	2,231,456	$	4,890,427	$	(2,749,594)	$	2,140,833
Network location intangibles		1,836,202		(1,157,869)		678,333		1,783,640		(1,121,226)		662,414
Intangible assets, net	$	6,949,646	$	(4,039,857)	$	2,909,789	$	6,674,067	$	(3,870,820)	$	2,803,247

All intangible assets noted above are included in the Company’s site leasing segment. Amortization expense relating to the intangible assets above was $100.6 million and $109.8 million for the three months ended March 31, 2022 and 2021, respectively.

**9.**ACCRUED EXPENSES

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



	As of		As of
	March 31, 2022		December 31, 2021

	(in thousands)
Salaries and benefits	$	14,421	$	24,962
Real estate and property taxes		8,843		8,336
Unpaid capital expenditures		9,176		7,295
Holdbacks		18,234		957
Other		29,954		26,520
Total accrued expenses	$	80,628	$	68,070

‎

**10.**DEBT

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



		As of						As of
		March 31, 2022						December 31, 2021
	Maturity Date	Principal‎Balance		Fair Value		Carrying‎Value		Principal‎Balance		Fair Value		Carrying‎Value
Revolving Credit Facility	Jul. 7, 2026	$	680,000	$	680,000	$	680,000	$	350,000	$	350,000	$	350,000
2018 Term Loan	Apr. 11, 2025		2,310,000		2,275,350		2,299,522		2,316,000		2,289,945		2,304,697
2014-2C Tower Securities (1)	Oct. 8, 2024		620,000		622,065		617,343		620,000		641,793		617,095
2018-1C Tower Securities (1)	Mar. 9, 2023		640,000		640,960		638,264		640,000		650,163		637,812
2019-1C Tower Securities (1)	Jan. 12, 2025		1,165,000		1,137,529		1,158,043		1,165,000		1,174,728		1,157,446
2020-1C Tower Securities (1)	Jan. 9, 2026		750,000		715,215		744,406		750,000		746,498		744,052
2020-2C Tower Securities (1)	Jan. 11, 2028		600,000		575,178		594,975		600,000		605,268		594,774
2021-1C Tower Securities (1)	Nov. 9, 2026		1,165,000		1,087,283		1,154,213		1,165,000		1,144,846		1,153,700
2021-2C Tower Securities (1)	Apr. 9, 2027		895,000		835,053		886,383		895,000		883,213		886,116
2021-3C Tower Securities (1)	Oct. 9, 2031		895,000		841,944		886,045		895,000		902,446		885,976
2020 Senior Notes	Feb. 15, 2027		1,500,000		1,462,320		1,484,876		1,500,000		1,550,790		1,484,178
2021 Senior Notes	Feb. 1, 2029		1,500,000		1,358,955		1,487,262		1,500,000		1,446,975		1,486,848
Total debt		$	12,720,000	$	12,231,852	$	12,631,332	$	12,396,000	$	12,386,665	$	12,302,694
Less: current maturities of long-term debt							(662,264)						(24,000)
Total long-term debt, net of current maturities						$	11,969,068					$	12,278,694

(1)The maturity date represents the anticipated repayment date for each issuance.

The table below reflects cash and non-cash interest expense amounts recognized by debt instrument for the periods presented:



	Interest	For the three months ended March 31,
	Rates as of	2022				2021
	March 31,	Cash		Non-cash		Cash		Non-cash
	2022	Interest		Interest		Interest		Interest

		(in thousands)
Revolving Credit Facility	1.619%	$	2,279	$	—	$	2,148	$	—
2018 Term Loan (1)	1.926%		10,910		11,438		10,997		11,434
2013-2C Tower Securities	3.722%		—		—		5,396		—
2014-2C Tower Securities	3.869%		6,046		—		6,046		—
2017-1C Tower Securities	3.168%		—		—		6,085		—
2018-1C Tower Securities	3.448%		5,570		—		5,570		—
2019-1C Tower Securities	2.836%		8,357		—		8,357		—
2020-1C Tower Securities	1.884%		3,598		—		3,598		—
2020-2C Tower Securities	2.328%		3,540		—		3,540		—
2021-1C Tower Securities	1.631%		4,846		—		—		—
2021-2C Tower Securities	1.840%		4,196		—		—		—
2021-3C Tower Securities	2.593%		5,873		—		—		—
2016 Senior Notes	4.875%		—		—		13,406		286
2017 Senior Notes	4.000%		—		—		2,333		—
2020 Senior Notes	3.875%		14,531		88		14,531		84
2021 Senior Notes	3.125%		11,719		—		8,073		—
Other			787		—		15		—
Total		$	82,252	$	11,526	$	90,095	$	11,804

(1)The 2018 Term Loan has a blended rate of 1.926%, which includes the impact of the interest rate swap entered into on August 4, 2020, which swapped $1.95 billion of notional value accruing interest at one month LIBOR plus 175 basis points for a fixed rate of 1.874% per annum through the maturity date of the 2018 Term Loan. Excluding the impact of the interest rate swap, the 2018 Term Loan was accruing interest at 2.210% as of March 31, 2022. Refer to Note 17 for more information on the Company’s interest rate swap.

Revolving Credit Facility under the Senior Credit Agreement

During the three months ended March 31, 2022, the Company borrowed $330.0 million of the outstanding balance under the Revolving Credit Facility. As of March 31, 2022, there was $680.0 million outstanding under the Revolving Credit Facility accruing interest at 1.619%. In addition, SBA Senior Finance II LLC, the Company’s wholly owned subsidiary (“SBA Senior Finance II”), was required to pay a commitment fee of 0.15% per annum on the amount of the unused commitment. Subsequent to March 31, 2022, the Company received a 0.05% reduction in the applicable spread and a 0.01% reduction in the commitment fee as a result of meeting certain sustainability-linked targets as of December 31, 2021. As of March 31, 2022, SBA Senior Finance II was in compliance with the financial covenants contained in the Senior Credit Agreement.

Subsequent to March 31, 2022, the Company repaid an additional $110.0 million under the Revolving Credit Facility, and as of the date of this filing, $570.0 million was outstanding.

Term Loan under the Senior Credit Agreement

During the three months ended March 31, 2022, the Company repaid an aggregate of $6.0 million of principal on the 2018 Term Loan. As of March 31, 2022, the 2018 Term Loan had a principal balance of $2.3 billion.

Secured Tower Revenue Securities

As of March 31, 2022, the entities that are borrowers on the mortgage loan (the “Borrowers”) met the debt service coverage ratio required by the mortgage loan agreement and were in compliance with all other covenants as set forth in the agreement. The sole asset of the Trust consists of a non-recourse mortgage loan made in favor of the Borrowers.

**11.**SHAREHOLDERS’ EQUITY

Common Stock Equivalents

The Company has outstanding stock options, time-based restricted stock units (“RSUs”), and performance-based restricted stock units (“PSUs”) which were considered in the Company’s diluted earnings per share calculation (see Note 15).

Stock Repurchases

The Company’s Board of Directors authorizes the Company to purchase, from time to time, outstanding Class A common stock through open market repurchases in compliance with Rule 10b-18 under the Exchange Act, and/or in privately negotiated transactions at management’s discretion based on market and business conditions, applicable legal requirements, and other factors. Once authorized, the repurchase 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. Shares repurchased are retired. On October 28, 2021, the Company’s Board of Directors authorized a new $1.0 billion stock repurchase plan, replacing the prior plan authorized on November 2, 2020, which had a remaining authorization of $125.1 million. As of the date of this filing, the Company had $504.7 million of authorization remaining under the new plan.

The following is a summary of the Company’s share repurchases:


	For the three months
	ended March 31,
	2022		2021

Total number of shares purchased (in millions) (1)		1.3		0.7
Average price paid per share (1)	$	332.00	$	258.33
Total price paid (in millions) (1)	$	431.6	$	168.9

(1)Amounts reflected are based on the trade date and could differ from the Consolidated Statements of Cash Flows which reflects share repurchases based on the settlement date.

‎

Dividends

For the three months ended March 31, 2022, the Company paid the following cash dividends:



	Payable to Shareholders
	of Record at the Close	Cash Paid	Aggregate Amount
Date Declared	of Business on	Per Share	Paid	Date Paid

February 27, 2022	March 10, 2022	$0.71	$76.9 million	March 25, 2022

Dividends paid in 2022 were ordinary taxable dividends.

Subsequent to March 31, 2022, the Company declared the following cash dividends:

**12.**STOCK-BASED COMPENSATION

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, as well as 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 three
									months ended
									March 31, 2022

Risk free interest rate									2.53%
Dividend yield									0.9%
Expected volatility									27%
Expected lives									4.3 years

There were no options granted during the three months ended March 31, 2021.

The following table summarizes the Company’s activities with respect to its stock option plans for the three months ended March 31, 2022 as follows (dollars and 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, 2021	1,899	$	157.76
Granted	10	$	328.99
Exercised	(59)	$	143.16
Forfeited/canceled	(1)	$	174.28
Outstanding at March 31, 2022	1,849	$	159.13	3.1	$	341,859
Exercisable at March 31, 2022	1,572	$	153.68	3.0	$	299,265
Unvested at March 31, 2022	277	$	190.14	4.2	$	42,594

The weighted-average per share fair value of options granted during the three months ended March 31, 2022 was $82.28. The total intrinsic value for options exercised during the three months ended March 31, 2022 was $11.0 million.

Restricted Stock Units and Performance-Based Restricted Stock Units

The following table summarizes the Company’s RSU and PSU activity for the three months ended March 31, 2022:



	RSUs			PSUs (1)
		Weighted-Average			Weighted-Average
	Number of	Grant Date Fair		Number of	Grant Date Fair
	Shares	Value per Share		Shares	Value per Share
	(in thousands)			(in thousands)
Outstanding at December 31, 2021	243	$	230.20	298	$	304.46
Granted	93	$	330.78	139	$	391.19
Vested	(110)	$	217.29	—	$	—
Forfeited/canceled	(2)	$	254.31	(1)	$	290.89
Outstanding at March 31, 2022	224	$	278.16	436	$	332.18

(1)PSUs represent the target number of shares granted that are issuable at the end of the three year performance period. Fair value for a portion of the PSUs was calculated using a Monte Carlo simulation model.

**13.**INCOME TAXES

The primary reasons for the difference between the Company’s effective tax rate and the U.S. statutory rate are the Company’s REIT election and the Company’s full valuation allowance on the net deferred tax assets of the U.S. taxable REIT subsidiary (“TRS”). The TRS has concluded that it is more likely than not that its deferred tax assets will not be realized and has recorded a full valuation allowance. A foreign tax provision is recognized because certain foreign subsidiaries of the Company have profitable operations or are in a net deferred tax liability position.

The Company elected to be taxed as a REIT commencing with its taxable year ended December 31, 2016. As a REIT, the Company generally will be entitled to a deduction for dividends that it pays, and therefore, not subject to U.S. federal corporate income tax on that portion of its net income that it distributes to its shareholders. As a REIT, the Company will continue to pay U.S. federal income tax on earnings, if any, from assets and operations held through its TRSs. These assets and operations currently consist primarily of the Company’s site development services and its international operations. The Company’s international operations would continue to be subject, as applicable, to foreign taxes in the jurisdictions in which those operations are located. The Company may also be subject to a variety of taxes, including payroll taxes and state, local, and foreign income, property, and other taxes on its assets and operations. The Company’s determination as to the timing and amount of future dividend distributions will be based on a number of factors, including REIT distribution requirements, its existing federal net operating losses (“NOLs”) of approximately $654.7 million as of December 31, 2021, the Company’s financial condition, earnings, debt covenants, and other possible uses of such funds. 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.

**14.**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 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. The Company has applied the aggregation criteria to operations within the international site leasing segment on a basis that is consistent with management’s review of information and performance evaluations of the individual markets in this region.

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
	Leasing		Leasing (4)		Development		Other		Total

For the three months ended March 31, 2022	(in thousands)
Revenues	$	432,986	$	126,446	$	60,338	$	—	$	619,770
Cost of revenues (1)		65,804		41,351		45,773		—		152,928
Operating profit		367,182		85,095		14,565		—		466,842
Selling, general, and administrative expenses		23,373		15,494		5,522		17,735		62,124
Acquisition and new business initiatives
related adjustments and expenses		3,599		1,505		—		—		5,104
Asset impairment and decommission costs		5,483		3,029		—		—		8,512
Depreciation, amortization and accretion		123,133		48,881		588		1,721		174,323
Operating income (loss)		211,594		16,186		8,455		(19,456)		216,779
Other expense (principally interest
expense and other expense)								12,004		12,004
Income before income taxes										228,783
Cash capital expenditures (2)		39,545		211,771		966		1,581		253,863

For the three months ended March 31, 2021
Revenues	$	403,579	$	101,524	$	43,636	$	—	$	548,739
Cost of revenues (1)		65,120		30,248		34,406		—		129,774
Operating profit		338,459		71,276		9,230		—		418,965
Selling, general, and administrative expenses		28,056		7,760		5,789		9,996		51,601
Acquisition and new business initiatives
related adjustments and expenses		3,332		1,669		—		—		5,001
Asset impairment and decommission costs		3,871		1,032		—		—		4,903
Depreciation, amortization and accretion		137,054		43,121		2,082		1,624		183,881
Operating income (loss)		166,146		17,694		1,359		(11,620)		173,579
Other expense (principally interest
expense and other expense)								(206,246)		(206,246)
Loss before income taxes										(32,667)
Cash capital expenditures (2)		1,059,678		16,947		870		750		1,078,245



	Domestic Site		Int'l Site		Site
	Leasing		Leasing (4)		Development		Other (3)		Total

Assets	(in thousands)
As of March 31, 2022	$	6,522,827	$	3,222,276	$	100,594	$	296,403	$	10,142,100
As of December 31, 2021	$	6,628,156	$	2,870,503	$	87,410	$	215,630	$	9,801,699

(1)Excludes depreciation, amortization, and accretion.

(2)Includes cash paid for capital expenditures, acquisitions, and right-of-use assets.

(3)Assets in Other consist primarily of general corporate assets and short-term investments.

(4)For the three months ended March 31, 2022 and 2021, site leasing revenue in Brazil was $65.2 million and $55.4 million, respectively. Other than Brazil, no foreign country represented a material amount of the Company’s total revenues in any of the periods presented. Total long-lived assets in Brazil were $1.0 billion and $0.9 billion as of March 31, 2022 and December 31, 2021, respectively.

**15.**EARNINGS PER SHARE

Basic earnings per share was computed by dividing net income (loss) attributable to SBA Communications Corporation 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 (loss) attributable to SBA Communications Corporation by the weighted-average number of shares of Common Stock outstanding adjusted for any dilutive Common Stock equivalents, including unvested RSUs, PSUs, and shares issuable upon exercise of stock options as determined under the “Treasury Stock” method.

‎

The following table sets forth basic and diluted net income (loss) per common share attributable to common shareholders for the three months ended March 31, 2022 and 2021 (in thousands, except per share data):



	For the three months
	ended March 31,
	2022		2021
Numerator:
Net income (loss) attributable to SBA
Communications Corporation	$	188,623	$	(11,745)
Denominator:
Basic weighted-average shares outstanding		108,086		109,469
Dilutive impact of stock options, RSUs, and PSUs		1,458		—
Diluted weighted-average shares outstanding		109,544		109,469
Net income (loss) per common share attributable to SBA
Communications Corporation:
Basic	$	1.75	$	(0.11)
Diluted	$	1.72	$	(0.11)

For the three months ended March 31, 2022, the diluted weighted-average number of common shares outstanding excluded an immaterial number of shares issuable upon exercise of the Company’s stock options because the impact would be anti-dilutive. For the three months ended March 31, 2021, all potential common stock equivalents, including 3.1 million shares underlying stock options outstanding, 0.3 million shares underlying RSUs outstanding, and 0.3 million shares underlying PSUs outstanding, were excluded as the effect would be anti-dilutive.

16. REDEEMABLE NONCONTROLLING INTERESTS

In June 2021, the Company entered into a joint venture agreement with a non-affiliated partner for the purpose of acquiring towers in Tanzania from Airtel Tanzania PLC which closed on January 4, 2022 (see Note 6). Effective June 2021, the Company consolidated the results of the joint venture into its financial statements. The agreement contains both a put option exercisable by the noncontrolling interest holder and a call option exercisable by the Company for the remaining minority interest based on a formulaic approach. As the put option is outside of the Company’s control, the estimated redemption value of the minority interest is presented as a redeemable noncontrolling interest outside of permanent equity on the Consolidated Balance Sheets. As of March 31, 2022, the redemption amount of the noncontrolling interest was $36.0 million.

The Company allocates income and losses to the noncontrolling interest holder based on the applicable membership interest percentage. At each reporting period, the redeemable noncontrolling interest is recognized at the greater of (1) the initial carrying amount of the noncontrolling interest as adjusted for accumulated income or loss attributable to the noncontrolling interest holder, or (2) the redemption value as of the balance sheet date. Adjustments to the carrying amount of redeemable noncontrolling interest are charged against retained earnings (or additional paid-in capital if there are no retained earnings).

The components of redeemable noncontrolling interests as of March 31, 2022 are as follows (in thousands):



	March 31,		December 31,
	2022		2021

Beginning balance	$	17,250	$	15,194
Net loss attributable to noncontrolling interests		(317)		—
Foreign currency translation adjustments		(117)		—
Purchase of noncontrolling interests		—		(18,000)
Contribution from joint venture partner		—		17,250
Adjustment to redemption amount		19,221		2,806
Ending balance	$	36,037	$	17,250

**17.**DERIVATIVES AND HEDGING ACTIVITIES

The Company enters into interest rate swaps to hedge the future interest expense from variable rate debt and reduce the Company’s exposure to fluctuations in interest rates. On August 4, 2020, the Company, through its wholly owned subsidiary, SBA Senior Finance II, terminated an existing $1.95 billion cash flow hedge on a portion of its 2018 Term Loan in exchange for a payment of $176.2 million. On the same date, the Company entered into an interest rate swap for $1.95 billion of notional value

accruing interest at one month LIBOR plus 175 basis points for a fixed rate of 1.874% per annum through the maturity date of the 2018 Term Loan. The Company designated this interest rate swap as a cash flow hedge as it is expected to be highly effective at offsetting changes in cash flows of the LIBOR based component interest payments of its 2018 Term Loan. As of March 31, 2022, the hedge remains highly effective; therefore, subsequent changes in the fair value are recorded in Accumulated other comprehensive loss, net. As of March 31, 2022 and December 31, 2021, the interest rate swap had a fair value of $134.4 million and $60.3 million, respectively, and was recorded in Other assets on the Consolidated Balance Sheets.

On August 4, 2020, the Company also terminated its existing interest rate swaps, which were previously de-designated as cash flow hedges. There was no cash transferred in connection with the termination of these swaps. The Company reclassifies the fair value of its interest rate swaps recorded in Accumulated other comprehensive loss, net on their de-designation date to non-cash interest expense on the Consolidated Statements of Operations over their respective remaining term end dates, which range from 2023 to 2025.

Accumulated other comprehensive loss, net includes an aggregate $37.5 million gain and a $47.8 million loss as of March 31, 2022 and December 31, 2021, respectively.

The Company is exposed to counterparty credit risk to the extent that a counterparty fails to meet the terms of a contract. The Company’s exposure is limited to the current value of the contract at the time the counterparty fails to perform.

The cash flows associated with these activities are reported in Net cash provided by operating activities on the Consolidated Statements of Cash Flows with the exception of the termination of interest rate swaps, which are recorded in Net cash used in financing activities.

The table below outlines the effects of the Company’s derivatives on the Consolidated Statements of Operations and Consolidated Statements of Shareholders’ Deficit for the three months ended March 31, 2022 and 2021.



	For the three months
	ended March 31,
	2022		2021

Cash Flow Hedge - Interest Rate Swap Agreement	(in thousands)
Change in fair value recorded in Accumulated other comprehensive loss, net	$	74,101	$	31,566

Derivatives Not Designated as Hedges - Interest Rate Swap Agreements
Amount reclassified from Accumulated other comprehensive
loss, net into Non-cash interest expense	$	11,221	$	11,221

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