Item 1. FINANCIAL STATEMENTS

Item 1. FINANCIAL STATEMENTS

84K characters. Original on sec.gov · Markdown

Payable to Shareholders

Cash to

of Record at the Close

be Paid

Date Declared

of Business on

Per Share

Date to be Paid

October 30, 2022

November 17, 2022

December 15, 2022

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (in thousands, except par values)



	September 30,		December 31,
	2022		2021
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$	201,211	$	367,278
Restricted cash		75,166		65,561
Accounts receivable, net		116,966		101,950
Costs and estimated earnings in excess of billings on uncompleted contracts		81,665		48,844
Prepaid expenses and other current assets		54,805		30,813
Total current assets		529,813		614,446
Property and equipment, net		2,658,366		2,575,487
Intangible assets, net		2,701,939		2,803,247
Operating lease right-of-use assets, net		2,325,009		2,268,470
Acquired and other right-of-use assets, net		989,685		964,405
Other assets		744,202		575,644
Total assets	$	9,949,014	$	9,801,699
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS,
AND SHAREHOLDERS' DEFICIT
Current Liabilities:
Accounts payable	$	51,314	$	34,066
Accrued expenses		96,176		68,070
Current maturities of long-term debt		663,181		24,000
Deferred revenue		216,927		184,380
Accrued interest		25,106		49,096
Current lease liabilities		255,609		238,497
Other current liabilities		30,066		18,222
Total current liabilities		1,338,379		616,331
Long-term liabilities:
Long-term debt, net		11,696,068		12,278,694
Long-term lease liabilities		2,017,760		1,981,353
Other long-term liabilities		221,022		191,475
Total long-term liabilities		13,934,850		14,451,522
Redeemable noncontrolling interests		40,615		17,250
Shareholders' deficit:
Preferred stock - par value $0.01, 30,000 shares authorized, no shares issued or outstanding		—		—
Common stock - Class A, par value $0.01, 400,000 shares authorized, 107,964 shares and
108,956 shares issued and outstanding at September 30, 2022 and December 31, 2021,
respectively		1,080		1,089
Additional paid-in capital		2,756,215		2,681,347
Accumulated deficit		(7,508,231)		(7,203,531)
Accumulated other comprehensive loss, net		(613,894)		(762,309)
Total shareholders' deficit		(5,364,830)		(5,283,404)
Total liabilities, redeemable noncontrolling interests, and shareholders' deficit	$	9,949,014	$	9,801,699

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

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

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


	For the three months				For the nine months
	ended September 30,				ended September 30,
	2022		2021		2022		2021

Revenues:
Site leasing	$	587,302	$	535,492	$	1,726,967	$	1,564,814
Site development		88,282		53,813		220,393		148,882
Total revenues		675,584		589,305		1,947,360		1,713,696
Operating expenses:
Cost of revenues (exclusive of depreciation, accretion,
and amortization shown below):
Cost of site leasing		112,013		98,666		330,682		289,510
Cost of site development		65,540		41,357		165,809		116,172
Selling, general, and administrative expenses (1)		65,843		51,000		191,241		156,546
Acquisition and new business initiatives related
adjustments and expenses		6,844		5,730		18,776		17,525
Asset impairment and decommission costs		8,532		9,860		25,565		18,560
Depreciation, accretion, and amortization		173,825		170,916		524,541		530,266
Total operating expenses		432,597		377,529		1,256,614		1,128,579
Operating income		242,987		211,776		690,746		585,117
Other income (expense):
Interest income		2,858		945		6,878		2,124
Interest expense		(86,961)		(89,199)		(253,528)		(269,839)
Non-cash interest expense		(11,528)		(11,820)		(34,582)		(35,436)
Amortization of deferred financing fees		(4,955)		(4,934)		(14,758)		(14,690)
Loss from extinguishment of debt, net		—		—		—		(13,672)
Other (expense) income, net		(39,756)		(69,804)		2,262		(49,390)
Total other expense net		(140,342)		(174,812)		(293,728)		(380,903)
Income before income taxes		102,645		36,964		397,018		204,214
(Provision) benefit for income taxes		(2,883)		10,834		(39,797)		(15,494)
Net income		99,762		47,798		357,221		188,720
Net loss attributable to noncontrolling interests		247		—		929		—
Net income attributable to SBA Communications
Corporation	$	100,009	$	47,798	$	358,150	$	188,720
Net income per common share attributable to SBA
Communications Corporation:
Basic	$	0.93	$	0.44	$	3.32	$	1.72
Diluted	$	0.91	$	0.43	$	3.27	$	1.70
Weighted average number of common shares
Basic		107,916		109,577		107,950		109,487
Diluted		109,358		111,565		109,416		111,329

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

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

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited) (in thousands)



	For the three months				For the nine months
	ended September 30,				ended September 30,

	2022		2021		2022		2021

Net income	$	99,762	$	47,798	$	357,221	$	188,720
Adjustments related to interest rate swaps		53,336		9,898		162,491		58,251
Foreign currency translation adjustments		(40,757)		(51,415)		(14,277)		(31,181)
Comprehensive income		112,341		6,281		505,435		215,790
Comprehensive loss attributable to noncontrolling interests		247		—		1,130		—
Comprehensive income attributable to SBA
Communications Corporation	$	112,588	$	6,281	$	506,565	$	215,790

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

‎

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS**’ DEFICIT**

(unaudited) (in thousands)



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

BALANCE, June 30, 2022	107,872	$	1,079	$	2,717,963	$	(7,531,180)	$	(626,473)	$	(5,438,611)
Net income attributable to SBA
Communications Corporation	—		—		—		100,009		—		100,009
Common stock issued in connection with equity
awards and stock purchase plans, offset
by the impact of net share settlements	92		1		13,221		—		—		13,222
Non-cash stock compensation	—		—		26,017		—		—		26,017
Adjustments related to interest rate swaps	—		—		—		—		53,336		53,336
Foreign currency translation adjustments
attributable to SBA Communications
Corporation	—		—		—		—		(40,757)		(40,757)
Dividends and dividend equivalents
on common stock	—		—		—		(77,060)		—		(77,060)
Adjustment to redemption amount related to
noncontrolling interests	—		—		(986)		—		—		(986)
BALANCE, September 30, 2022	107,964	$	1,080	$	2,756,215	$	(7,508,231)	$	(613,894)	$	(5,364,830)



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

BALANCE, December 31, 2021	108,956	$	1,089	$	2,681,347	$	(7,203,531)	$	(762,309)	$	(5,283,404)
Net income attributable to SBA
Communications Corporation	—		—		—		358,150		—		358,150
Common stock issued in connection with equity
awards and stock purchase plans, offset
by the impact of net share settlements	308		3		23,797		—		—		23,800
Non-cash stock compensation	—		—		75,566		—		—		75,566
Adjustments related to interest rate swaps	—		—		—		—		162,491		162,491
Repurchase and retirement of common stock	(1,300)		(12)		—		(431,654)		—		(431,666)
Foreign currency translation adjustments
attributable to SBA Communications
Corporation	—		—		—		—		(14,076)		(14,076)
Dividends and dividend equivalents
on common stock	—		—		—		(231,196)		—		(231,196)
Adjustment to redemption amount related to
noncontrolling interests	—		—		(24,495)		—		—		(24,495)
BALANCE, September 30, 2022	107,964	$	1,080	$	2,756,215	$	(7,508,231)	$	(613,894)	$	(5,364,830)

‎

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ DEFICIT

(unaudited) (in thousands)



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

BALANCE, June 30, 2021	109,534	$	1,095	$	2,657,540	$	(6,759,382)	$	(738,995)	$	(4,839,742)
Net income attributable to SBA
Communications Corporation	—		—		—		47,798		—		47,798
Common stock issued in connection with equity
awards and stock purchase plans, offset
by the impact of net share settlements	283		3		36,984		—		—		36,987
Non-cash stock compensation	—		—		17,410		—		—		17,410
Adjustments related to interest rate swaps	—		—		—		—		9,898		9,898
Repurchase and retirement of common stock	(337)		(3)		—		(115,418)		—		(115,421)
Foreign currency translation adjustments
attributable to SBA Communications
Corporation	—		—		—		—		(51,415)		(51,415)
Dividends and dividend equivalents
on common stock	—		—		—		(63,820)		—		(63,820)
BALANCE, September 30, 2021	109,480	$	1,095	$	2,711,934	$	(6,890,822)	$	(780,512)	$	(4,958,305)



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

BALANCE, December 31, 2020	109,819	$	1,098	$	2,586,130	$	(6,604,028)	$	(807,582)	$	(4,824,382)
Net income attributable to SBA
Communications Corporation	—		—		—		188,720		—		188,720
Common stock issued in connection with equity
awards and stock purchase plans, offset
by the impact of net share settlements	651		7		64,090		—		—		64,097
Non-cash stock compensation	—		—		60,197		—		—		60,197
Adjustments related to interest rate swaps	—		—		—		—		58,251		58,251
Repurchase and retirement of common stock	(990)		(10)		—		(284,333)		—		(284,343)
Foreign currency translation adjustments
attributable to SBA Communications
Corporation	—		—		—		—		(31,181)		(31,181)
Dividends on common stock	—		—		—		(191,181)		—		(191,181)
Adjustment to redemption amount related to
noncontrolling interests	—		—		1,517		—		—		1,517
BALANCE, September 30, 2021	109,480	$	1,095	$	2,711,934	$	(6,890,822)	$	(780,512)	$	(4,958,305)

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 nine months ended September 30,
	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	357,221	$	188,720
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, accretion, and amortization		524,541		530,266
(Gain) loss on remeasurement of U.S. denominated intercompany loans		(8,501)		42,582
Non-cash compensation expense		74,140		59,175
Non-cash asset impairment and decommission costs		25,202		17,935
Loss from extinguishment of debt, net		—		12,672
Deferred income tax provision (benefit)		15,532		(2,711)
Other non-cash items reflected in the Statements of Operations		55,013		58,725
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable and costs and estimated earnings in excess of
billings on uncompleted contracts, net		(33,895)		(6,371)
Prepaid expenses and other assets		(31,446)		(25,589)
Operating lease right-of-use assets, net		104,771		86,717
Accounts payable and accrued expenses		13,062		8,465
Accrued interest		(23,982)		(27,873)
Long-term lease liabilities		(96,092)		(83,885)
Other liabilities		21,500		32,502
Net cash provided by operating activities		997,066		891,330
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions		(418,721)		(1,187,754)
Capital expenditures		(148,348)		(90,407)
Purchase of investments		(506,581)		(755,530)
Proceeds from sale of investments		482,835		755,280
Other investing activities		(496)		589
Net cash used in investing activities		(591,311)		(1,277,822)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under Revolving Credit Facility		330,000		810,000
Repayments under Revolving Credit Facility		(270,000)		(1,190,000)
Proceeds from issuance of Senior Notes, net of fees		—		1,485,512
Repayment of Senior Notes		—		(757,500)
Proceeds from issuance of Tower Securities, net of fees		—		1,152,437
Repayment of Tower Securities		—		(760,000)
Repurchase and retirement of common stock		(431,666)		(284,343)
Payment of dividends on common stock		(230,102)		(190,456)
Proceeds from employee stock purchase/stock option plans		33,745		73,152
Payments related to taxes on stock options and restricted stock units		(9,905)		(9,025)
Other financing activities		11,860		(21,165)
Net cash (used in) provided by financing activities		(566,068)		308,612
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		4,561		(10,529)
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH		(155,752)		(88,409)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH:
Beginning of period		435,626		342,808
End of period	$	279,874	$	254,399

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 nine months ended September 30,
	2022		2021

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	277,219	$	298,589
Income taxes	$	18,848	$	20,153

SUPPLEMENTAL CASH FLOW INFORMATION OF NON-CASH ACTIVITIES:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	137,126	$	27,691
Operating lease modifications and reassessments	$	36,181	$	21,829
Right-of-use assets obtained in exchange for new finance lease liabilities	$	3,701	$	1,765

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 (expense) income, 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 (expense) income, net in the Consolidated Statements of Operations as settlement is anticipated or planned in the foreseeable future. The Company recorded a $25.5 million loss and a $45.0 million loss, net of taxes, on the remeasurement of intercompany loans for the three months ended September 30, 2022 and 2021, respectively, and a $4.3 million gain and a $28.4 million loss, net of taxes, on the remeasurement of intercompany loans for the nine months ended September 30, 2022 and 2021, respectively, due to changes in foreign exchange rates. During the nine months ended September 30, 2022, the Company funded $86.2 million and repaid $101.7 million of the intercompany loans. As of September 30, 2022 and December 31, 2021, the aggregate amount outstanding under the intercompany loan agreements subject to remeasurement with the Company’s foreign subsidiaries was $855.5 million and $872.9 million, respectively. Additionally, subsequent to September 30, 2022, the Company funded $680.0 million to its Brazilian subsidiary through an intercompany loan to complete its previously announced acquisition with Grupo TorreSur (GTS).

**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				For the nine months
	ended September 30,				ended September 30,
	2022		2021		2022		2021

Asset impairment (1)	$	6,952	$	8,323	$	21,626	$	13,691
Write-off of carrying value of decommissioned towers		1,275		1,130		3,599		3,718
Other (including third party decommission costs)		305		407		340		1,151
Total asset impairment and decommission costs	$	8,532	$	9,860	$	25,565	$	18,560

(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 $44.0 million and $47.9 million as of September 30, 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 September 30, 2022 and December 31, 2021, the Company had $21.1 million and $0.8 million of short-term investments, respectively. For the nine months ended September 30, 2022, the Company purchased $501.6 million and sold $481.6 million of short-term investments. For the nine months ended September 30, 2021, the Company purchased $755.4 million and sold $755.3 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
	September 30, 2022		December 31, 2021		Included on Balance Sheet

	(in thousands)
Cash and cash equivalents	$	201,211	$	367,278	Cash and cash equivalents
Securitization escrow accounts		69,478		64,764	Restricted cash - current asset
Payment, performance bonds, and other		5,688		797	Restricted cash - current asset
Surety bonds and workers compensation		3,497		2,787	Other assets - noncurrent
Total cash, cash equivalents, and restricted cash	$	279,874	$	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 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. Other restricted cash includes $5.5 million held in escrow as of September 30, 2022, related to the Company’s acquisition activities.

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 September 30, 2022 and December 31, 2021, the Company had $42.6 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 September 30, 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
	September 30, 2022		December 31, 2021

	(in thousands)
Costs incurred on uncompleted contracts	$	119,320	$	75,967
Estimated earnings		44,147		28,851
Billings to date		(98,398)		(61,628)
	$	65,069	$	43,190

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



	As of		As of
	September 30, 2022		December 31, 2021

	(in thousands)
Costs and estimated earnings in excess of billings on uncompleted contracts	$	81,665	$	48,844
Billings in excess of costs and estimated earnings on
uncompleted contracts (included in Other current liabilities)		(16,596)		(5,654)
	$	65,069	$	43,190

At September 30, 2022 and December 31, 2021, the eight largest customers comprised 99.8% 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
	September 30, 2022		December 31, 2021

		(in thousands)
Short-term investments	$	21,139	$	778
Prepaid real estate taxes		4,500		3,331
Prepaid taxes		7,070		11,096
Other current assets		22,096		15,608
Total prepaid expenses and other current assets	$	54,805	$	30,813

‎

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



	As of		As of
	September 30, 2022		December 31, 2021

		(in thousands)
Straight-line rent receivable	$	378,836	$	348,519
Interest rate swap asset (1)		189,150		60,324
Loans receivable		38,359		37,376
Deferred lease costs, net		7,512		6,345
Deferred tax asset - long term		30,705		51,918
Long-term investments		44,025		47,889
Other		55,615		23,273
Total other assets	$	744,202	$	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				For the nine months
	ended September 30,				ended September 30,
	2022		2021		2022		2021

	(in thousands)
Acquisitions of towers and related intangible assets (1)(2)	$	57,439	$	48,255	$	343,967	$	217,140
Acquisition of right-of-use assets (3)		—		694		2,220		948,392
Land buyouts and other assets (4)(5)		7,704		8,954		72,534		22,222
Total cash acquisition capital expenditures	$	65,143	$	57,903	$	418,721	$	1,187,754

(1)During the nine months ended September 30, 2022, the Company closed on 1,445 sites under the previously announced deal with Airtel Tanzania for $176.1 million. Legal title has been fully transferred for 1,234 of the towers. The remaining 211 towers are pending post-closing due diligence and continue to be 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)The nine months ended September 30, 2021 includes $77.1 million of acquisitions completed during the fourth quarter of 2020 which were not funded until the first quarter of 2021.

(3)During the nine months ended September 30, 2021, the Company acquired the exclusive right to lease and operate utility transmission structures, which included existing wireless tenant licenses from PG&E for $969.9 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 assets will be amortized over 70 years.

(4)In addition, the Company paid $4.3 million and $4.1 million for ground lease extensions and term easements on land underlying the Company’s towers during the three months ended September 30, 2022 and 2021, respectively, and paid $10.6 million and $11.3 million for ground lease extensions and term easements on land underlying the Company’s towers during the nine months ended September 30, 2022 and 2021, respectively. The Company recorded these amounts in prepaid rent on its Consolidated Balance Sheets.

(5)The nine months ended September 30, 2022 includes amounts paid related to the acquisition of a data center in Brazil during the second quarter of 2022.

During the nine months ended September 30, 2022, the Company acquired 2,148 towers and related assets and liabilities consisting of $117.9 million of property and equipment, net, $194.5 million of intangible assets, net, $119.7 million of operating lease right-of-use assets, net, $36.6 million of acquired and other right-of-use assets, net, $24.3 million of acquisition related holdbacks, $101.4 million of long-term lease liabilities, and $1.0 million of other net assets assumed. All acquisitions in the nine months ended September 30, 2022 were accounted for as asset acquisitions except for one acquisition, purchased for $49.9 million in cash which was accounted for as a business combination.

On October 11, 2022, the Company completed the previously announced acquisition of 2,632 sites from GTS in Brazil for $725.0 million in cash, net of working capital adjustments. The Company used borrowings under the Revolving Credit Facility and cash on hand to fund the acquisition.

Additionally, subsequent to September 30, 2022, the Company purchased or is under contract to purchase approximately 34 communication sites for an aggregate consideration of approximately $28.5 million in cash. The Company anticipates that these acquisitions will be consummated by the end of the first quarter of 2023.

The maximum potential obligation related to contingent consideration for acquisitions were $10.5 million and $11.6 million as of September 30, 2022 and December 31, 2021, respectively. No such amounts have been 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
	September 30, 2022		December 31, 2021

	(in thousands)
Towers and related assets (1)	$	5,544,056	$	5,323,803
Construction-in-process (2)		72,470		47,565
Furniture, equipment, and vehicles		65,196		59,939
Land, buildings, and improvements		875,996		848,051
Total property and equipment		6,557,718		6,279,358
Less: accumulated depreciation		(3,899,352)		(3,703,871)
Property and equipment, net	$	2,658,366	$	2,575,487

(1)Includes amounts related to the Company’s 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 $68.3 million and $66.2 million for the three months ended September 30, 2022 and 2021, respectively, and $205.0 million and $206.0 million for the nine months ended September 30, 2022 and 2021, respectively. At September 30, 2022 and December 31, 2021, unpaid capital expenditures that are included in accounts payable and accrued expenses were $12.7 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 September 30, 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	$	5,035,013	$	(2,974,375)	$	2,060,638	$	4,890,427	$	(2,749,594)	$	2,140,833
Network location intangibles		1,839,563		(1,198,262)		641,301		1,783,640		(1,121,226)		662,414
Intangible assets, net	$	6,874,576	$	(4,172,637)	$	2,701,939	$	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 $100.4 million and $100.3 million for the three months ended September 30, 2022 and 2021, respectively, and $303.0 million and $313.2 million for the nine months ended September 30, 2022 and 2021, respectively.

‎

**9.**ACCRUED EXPENSES

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



	As of		As of
	September 30, 2022		December 31, 2021

	(in thousands)
Salaries and benefits	$	25,161	$	24,962
Real estate and property taxes		10,118		8,336
Unpaid capital expenditures		12,666		7,295
Acquisition related holdbacks		25,408		957
Other		22,823		26,520
Total accrued expenses	$	96,176	$	68,070

**10.**DEBT

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



		As of						As of
		September 30, 2022						December 31, 2021
	Maturity Date	Principal‎Balance		Fair Value		Carrying‎Value		Principal‎Balance		Fair Value		Carrying‎Value
Revolving Credit Facility	Jul. 7, 2026	$	410,000	$	410,000	$	410,000	$	350,000	$	350,000	$	350,000
2018 Term Loan	Apr. 11, 2025		2,298,000		2,231,933		2,289,183		2,316,000		2,289,945		2,304,697
2014-2C Tower Securities (1)	Oct. 8, 2024		620,000		603,359		617,845		620,000		641,793		617,095
2018-1C Tower Securities (1)	Mar. 9, 2023		640,000		636,070		639,181		640,000		650,163		637,812
2019-1C Tower Securities (1)	Jan. 12, 2025		1,165,000		1,103,989		1,159,249		1,165,000		1,174,728		1,157,446
2020-1C Tower Securities (1)	Jan. 9, 2026		750,000		685,043		745,120		750,000		746,498		744,052
2020-2C Tower Securities (1)	Jan. 11, 2028		600,000		536,328		595,381		600,000		605,268		594,774
2021-1C Tower Securities (1)	Nov. 9, 2026		1,165,000		1,029,872		1,155,337		1,165,000		1,144,846		1,153,700
2021-2C Tower Securities (1)	Apr. 9, 2027		895,000		786,034		887,172		895,000		883,213		886,116
2021-3C Tower Securities (1)	Oct. 9, 2031		895,000		753,393		886,429		895,000		902,446		885,976
2020 Senior Notes	Feb. 15, 2027		1,500,000		1,337,610		1,486,293		1,500,000		1,550,790		1,484,178
2021 Senior Notes	Feb. 1, 2029		1,500,000		1,217,535		1,488,059		1,500,000		1,446,975		1,486,848
Total debt		$	12,438,000	$	11,331,166	$	12,359,249	$	12,396,000	$	12,386,665	$	12,302,694
Less: current maturities of long-term debt							(663,181)						(24,000)
Total long-term debt, net of current maturities						$	11,696,068					$	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 September 30,								For the nine months ended September 30,
	Rates as of	2022				2021				2022				2021
	September 30,	Cash		Non-cash		Cash		Non-cash		Cash		Non-cash		Cash		Non-cash
	2022	Interest		Interest		Interest		Interest		Interest		Interest		Interest		Interest

										(in thousands)
Revolving Credit Facility	4.540%	$	4,896	$	—	$	996	$	—	$	10,778	$	—	$	4,717	$	—
2018 Term Loan (1)	2.328%		13,038		11,440		11,156		11,441		35,565		34,318		33,220		34,314
2013-2C Tower Securities	—		—		—		5,396		—		—		—		16,188		—
2014-2C Tower Securities	3.869%		6,046		—		6,046		—		18,138		—		18,138		—
2017-1C Tower Securities	—		—		—		—		—		—		—		9,201		—
2018-1C Tower Securities	3.448%		5,570		—		5,570		—		16,711		—		16,711		—
2019-1C Tower Securities	2.836%		8,357		—		8,357		—		25,072		—		25,072		—
2020-1C Tower Securities	1.884%		3,598		—		3,598		—		10,793		—		10,793		—
2020-2C Tower Securities	2.328%		3,540		—		3,540		—		10,619		—		10,619		—
2021-1C Tower Securities	1.631%		4,870		—		4,850		—		14,567		—		7,401		—
2021-2C Tower Securities	1.840%		4,196		—		—		—		12,587		—		—		—
2021-3C Tower Securities	2.593%		5,873		—		—		—		17,619		—		—		—
2016 Senior Notes	—		—		—		13,406		293		—		—		40,219		869
2017 Senior Notes	—		—		—		—		—		—		—		2,333		—
2020 Senior Notes	3.875%		14,531		88		14,531		86		43,594		264		43,594		253
2021 Senior Notes	3.125%		11,719		—		11,719		—		35,156		—		31,510		—
Other			727		—		34		—		2,329		—		123		—
Total		$	86,961	$	11,528	$	89,199	$	11,820	$	253,528	$	34,582	$	269,839	$	35,436

(1)The 2018 Term Loan has a blended rate of 2.328%, 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 4.870% as of September 30, 2022. Refer to Note 17 for more information on the Company’s interest rate swap.

Revolving Credit Facility under the Senior Credit Agreement

The key terms of the revolving credit facility are as follows:



		Unused	Financial Covenant
	Interest Rate	Commitment	Compliance
	as of	Fee as of	Status as of
	September 30, 2022 (1)	September 30, 2022 (2)	September 30, 2022

Revolving Credit Facility	4.540%	0.190%	In Compliance

(1)The rate reflected includes a 0.050% reduction in the applicable spread as a result of meeting certain sustainability-linked targets as of December 31, 2021.

(2)The rate reflected includes a 0.010% reduction in the applicable commitment fee as a result of meeting certain sustainability-linked targets as of December 31, 2021

The table below summarizes the Company’s revolving credit facility activity during the three and nine months ended September 30, 2022 and 2021 (in thousands):



	For the three months				For the nine months
	ended September 30,				ended September 30,
	2022		2021		2022		2021

Beginning outstanding balance	$	530,000	$	85,000	$	350,000	$	380,000
Borrowings		—		—		330,000		810,000
Repayments		(120,000)		(85,000)		(270,000)		(1,190,000)
Ending outstanding balance	$	410,000	$	—	$	410,000	$	—

Subsequent to September 30, 2022, the Company borrowed $625.0 million and repaid $40.0 million under the Revolving Credit Facility, and as of the date of this filing, $995.0 million was outstanding.

Term Loan under the Senior Credit Agreement

During the three and nine months ended September 30, 2022, the Company repaid an aggregate of $6.0 million and $18.0 million, respectively, of principal on the 2018 Term Loan. As of September 30, 2022, the 2018 Term Loan had a principal balance of $2.3 billion.

Secured Tower Revenue Securities

As of September 30, 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				For the nine months
	ended September 30,				ended September 30,
	2022		2021		2022		2021

Total number of shares purchased (in millions) (1)		—		0.4		1.3		1.1
Average price paid per share (1)	$	—	$	340.70	$	332.00	$	291.48
Total price paid (in millions) (1)	$	—	$	150.0	$	431.6	$	318.9

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

Dividends

For the nine months ended September 30, 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
April 24, 2022	May 19, 2022	$0.71	$76.6 million	June 14, 2022
July 31, 2022	August 25, 2022	$0.71	$76.7 million	September 20, 2022

Dividends paid in 2022 were ordinary taxable dividends.

‎

Subsequent to September 30, 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 nine
									months ended
									September 30, 2022

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

The following table summarizes the Company’s activities with respect to its stock option plans for the nine months ended September 30, 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	(203)	$	142.94
Forfeited/canceled	(3)	$	173.16
Outstanding at September 30, 2022	1,703	$	160.49	2.7	$	211,774
Exercisable at September 30, 2022	1,436	$	155.10	2.5	$	186,080
Unvested at September 30, 2022	267	$	189.63	3.7	$	25,694

The weighted-average per share fair value of options granted during the nine months ended September 30, 2022 was $82.28. The total intrinsic value for options exercised during the nine months ended September 30, 2022 was $40.3 million.

Restricted Stock Units and Performance-Based Restricted Stock Units

The following table summarizes the Company’s RSU and PSU activity for the nine months ended September 30, 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	105	$	329.40	140	$	389.44
Vested	(116)	$	219.41	(2)	$	330.97
Forfeited/canceled	(8)	$	281.00	(6)	$	329.07
Outstanding at September 30, 2022	224	$	280.87	430	$	332.30

(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 a full valuation allowance is appropriate for the current period. 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		Development		Other		Total

For the three months ended September 30, 2022	(in thousands)
Revenues (1)	$	449,595	$	137,707	$	88,282	$	—	$	675,584
Cost of revenues (2)		66,423		45,590		65,540		—		177,553
Operating profit		383,172		92,117		22,742		—		498,031
Selling, general, and administrative expenses		26,189		14,952		5,711		18,991		65,843
Acquisition and new business initiatives
related adjustments and expenses		4,318		2,526		—		—		6,844
Asset impairment and decommission costs		7,835		697		—		—		8,532
Depreciation, amortization and accretion		122,149		49,530		624		1,522		173,825
Operating income (loss)		222,681		24,412		16,407		(20,513)		242,987
Other expense (principally interest
expense and other expense)								(140,342)		(140,342)
Income before income taxes										102,645
Cash capital expenditures (3)		48,522		73,007		1,367		933		123,829

For the three months ended September 30, 2021
Revenues (1)	$	426,758	$	108,734	$	53,813	$	—	$	589,305
Cost of revenues (2)		65,260		33,406		41,357		—		140,023
Operating profit		361,498		75,328		12,456		—		449,282
Selling, general, and administrative expenses		27,983		9,272		4,791		8,954		51,000
Acquisition and new business initiatives
related adjustments and expenses		2,911		2,819		—		—		5,730
Asset impairment and decommission costs		6,113		3,747		—		—		9,860
Depreciation, amortization and accretion		123,705		45,035		565		1,611		170,916
Operating income (loss)		200,786		14,455		7,100		(10,565)		211,776
Other expense (principally interest
expense and other expense)								(174,812)		(174,812)
Income before income taxes										36,964
Cash capital expenditures (3)		39,062		51,897		221		1,755		92,935

‎



	Domestic Site		Int'l Site		Site
	Leasing		Leasing		Development		Other		Total

For the nine months ended September 30, 2022	(in thousands)
Revenues (1)	$	1,324,666	$	402,301	$	220,393	$	—	$	1,947,360
Cost of revenues (2)		197,995		132,687		165,809		—		496,491
Operating profit		1,126,671		269,614		54,584		—		1,450,869
Selling, general, and administrative expenses		75,787		45,519		16,445		53,490		191,241
Acquisition and new business initiatives
related adjustments and expenses		10,705		8,071		—		—		18,776
Asset impairment and decommission costs		20,407		5,158		—		—		25,565
Depreciation, amortization and accretion		367,853		150,008		1,831		4,849		524,541
Operating income (loss)		651,919		60,858		36,308		(58,339)		690,746
Other expense (principally interest
expense and other expense)								(293,728)		(293,728)
Income before income taxes										397,018
Cash capital expenditures (3)		182,494		380,072		4,061		4,143		570,770

For the nine months ended September 30, 2021
Revenues (1)	$	1,249,291	$	315,523	$	148,882	$	—	$	1,713,696
Cost of revenues (2)		194,455		95,055		116,172		—		405,682
Operating profit		1,054,836		220,468		32,710		—		1,308,014
Selling, general, and administrative expenses		85,240		26,553		14,574		30,179		156,546
Acquisition and new business initiatives
related adjustments and expenses		10,839		6,686		—		—		17,525
Asset impairment and decommission costs		12,674		5,740		—		146		18,560
Depreciation, amortization and accretion		390,730		132,900		1,727		4,909		530,266
Operating income (loss)		555,353		48,589		16,409		(35,234)		585,117
Other expense (principally interest
expense and other expense)								(380,903)		(380,903)
Income before income taxes										204,214
Cash capital expenditures (3)		1,186,791		87,572		1,812		3,751		1,279,926



	Domestic Site		Int'l Site		Site
	Leasing		Leasing (1)		Development		Other (4)		Total

Assets	(in thousands)
As of September 30, 2022	$	6,400,854	$	3,055,310	$	125,512	$	367,338	$	9,949,014
As of December 31, 2021	$	6,628,156	$	2,870,503	$	87,410	$	215,630	$	9,801,699

(1)For the three months ended September 30, 2022 and 2021, site leasing revenue in Brazil was $70.7 million and $60.7 million, respectively. For the nine months ended September 30, 2022 and 2021, site leasing revenue in Brazil was $209.8 million and $174.5 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 $0.9 billion as of September 30, 2022 and December 31, 2021.

(2)Excludes depreciation, amortization, and accretion.

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

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

**15.**EARNINGS PER SHARE

Basic earnings per share was computed by dividing net income attributable to SBA Communications Corporation by the weighted-average number of shares of Class A common stock outstanding for each respective period. Diluted earnings per share was calculated by dividing net income attributable to SBA Communications Corporation by the weighted-average number of shares of Class A common stock outstanding adjusted for any dilutive Class A 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 per common share attributable to common shareholders for the three and nine months ended September 30, 2022 and 2021 (in thousands, except per share data):



	For the three months				For the nine months
	ended September 30,				ended September 30,
	2022		2021		2022		2021
Numerator:
Net income attributable to SBA
Communications Corporation	$	100,009	$	47,798	$	358,150	$	188,720
Denominator:
Basic weighted-average shares outstanding		107,916		109,577		107,950		109,487
Dilutive impact of stock options, RSUs, and PSUs		1,442		1,988		1,466		1,842
Diluted weighted-average shares outstanding		109,358		111,565		109,416		111,329
Net income per common share attributable to SBA
Communications Corporation:
Basic	$	0.93	$	0.44	$	3.32	$	1.72
Diluted	$	0.91	$	0.43	$	3.27	$	1.70

For the three and nine months ended September 30, 2022 and 2021, 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.

16. REDEEMABLE NONCONTROLLING INTERESTS

The Company allocates income and losses to its redeemable noncontrolling interest holders 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 fair value of the redeemable noncontrolling interest is estimated using Level 3 inputs.

The components of redeemable noncontrolling interests as of September 30, 2022 are as follows (in thousands):



	September 30,		December 31,
	2022		2021

Beginning balance	$	17,250	$	15,194
Net loss attributable to noncontrolling interests		(929)		—
Foreign currency translation adjustments		(201)		—
Purchase of noncontrolling interests		—		(18,000)
Contribution from joint venture partner		—		17,250
Adjustment to redemption amount		24,495		2,806
Ending balance	$	40,615	$	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 September 30, 2022, the hedge remains highly effective; therefore, changes in fair value are recorded in Accumulated other comprehensive loss, net. As of September 30, 2022 and December 31, 2021, the interest rate swap had a fair value of $189.2 million and $60.3 million, respectively, and is 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 $114.7 million gain and a $47.8 million loss as of September 30, 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 and nine months ended September 30, 2022 and 2021.



	For the three months				For the nine months
	ended September 30,				ended September 30,
	2022		2021		2022		2021

Cash Flow Hedge - Interest Rate Swap Agreement	(in thousands)
Change in fair value recorded in Accumulated other comprehensive loss, net	$	42,114	$	(1,324)	$	128,826	$	24,586

Derivatives Not Designated as Hedges - Interest Rate Swap Agreements
Amount reclassified from Accumulated other comprehensive
loss, net into Non-cash interest expense	$	11,222	$	11,222	$	33,665	$	33,665

Previous: Cover and table of contents · Next: Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS