Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We are a leading independent owner and operator of wireless communications infrastructure, including tower structures, rooftops, and other structures that support antennas used for wireless communications, which we collectively refer to as “towers” or “sites.” Our principal operations are in the United States and its territories. In addition, we own and operate towers in South America, Central America, Canada, South Africa, the Philippines, and Tanzania. Our primary business line is our site leasing business, which contributed 98.8% of our total segment operating profit for the three months ended March 31, 2024. In our site leasing business, we (1) lease space to wireless service providers and other customers on assets that we own or operate and (2) manage rooftop and tower sites for property owners under various contractual arrangements. As of March 31, 2024, we owned 39,638 towers, a substantial portion of which have been built by us or built by other tower owners or operators who, like us, have built such towers to lease space to multiple wireless service providers. Our other business line is our site development business, through which we assist wireless service providers in developing and maintaining their own wireless service networks.

Site Leasing

Our primary focus is the leasing of antenna space on our multi-tenant towers to a variety of wireless service providers under long-term lease contracts in the United States, South America, Central America, Canada, South Africa, the Philippines, and Tanzania. As of March 31, 2024, no U.S. state or territory accounted for more than 10% of our total tower portfolio by tower count, and no U.S. state or territory accounted for more than 10% of our total revenues for the three months ended March 31, 2024. In addition, as of

March 31, 2024, approximately 30% of our total towers are located in Brazil and no other international market (each country is considered a market) represented more than 5% of our total towers.

We derive site leasing revenues primarily from wireless service provider tenants. Wireless service providers enter into (1) individual tenant site leases with us, each of which relates to the lease or use of space at an individual site or (2) master lease agreements with us, which provide for the material terms and conditions that will apply to multiple sites; although, in most cases, each individual site under a master lease agreement is also governed by its own site leasing agreement which sets forth pricing and other site specific terms. Our tenant leases are generally for an initial term of five years to fifteen years with multiple renewal periods at the option of the tenant. Our tenant leases typically either (1) contain specific annual rent escalators, (2) escalate annually in accordance with an inflationary index, or (3) escalate using a combination of fixed and inflation adjusted escalators. In addition, our international site leases may include pass-through charges, such as rent related to ground leases and other property interests, utilities, property taxes, and fuel.

Cost of site leasing revenue primarily consists of:

Cash and non-cash rental expense on ground leases, right-of-use, and other underlying property interests;

Property taxes;

Site maintenance and monitoring costs (exclusive of employee related costs);

Utilities;

Property insurance;

Fuel (in those international markets that do not have an available electric grid at our tower sites); and

Lease initial direct cost amortization.

Ground leases and other property interests are generally for an initial term of five years or more with multiple renewal periods, which are at our option. Our ground leases either (1) contain specific annual rent escalators or (2) escalate annually in accordance with an inflationary index. As of March 31, 2024, approximately 71% of our tower structures were located on parcels of land that we own, land subject to perpetual easements, or parcels of land in which we have a leasehold interest that extends beyond 20 years. For any given tower, costs are relatively fixed over a monthly or an annual time period. As such, operating costs for owned towers do not generally increase as a result of adding additional customers to the tower. The amount of property taxes varies from site to site depending on the taxing jurisdiction and the height and age of the tower. The ongoing maintenance requirements are typically minimal and include replacing lighting systems, painting a tower, or upgrading or repairing an access road or fencing.

In Ecuador, El Salvador, Guatemala, Nicaragua, and Panama, significantly all of our revenue, expenses, and capital expenditures arising from our activities are denominated in U.S. dollars. Specifically, most of our ground leases and other property interests, tenant leases, and tower-related expenses are paid in U.S. dollars. In our Central American markets, our local currency obligations are principally limited to (1) permitting and other local fees, (2) utilities, and (3) taxes. In Brazil, Canada, Chile, South Africa, and the Philippines, significantly all of our revenue, expenses, and capital expenditures, including tenant leases, ground leases and other property interests, and other tower-related expenses are denominated in local currency. In Colombia, Costa Rica, Peru, and Tanzania, our revenue, expenses, and capital expenditures, including tenant leases, ground leases and other property interests, and other tower-related expenses are denominated in a mix of local currency and U.S. dollars.

As indicated in the table below, our site leasing business generates substantially all of our total segment operating profit. For information regarding our operating segments, see Note 14 to our Consolidated Financial Statements included in this quarterly report.

		For the three months ended
Segment operating profit as a percentage of		March 31,
total operating profit		2024			2023
Domestic site leasing			76.1%			75.3%
International site leasing			22.7%			21.9%
Total site leasing			98.8%			97.2%

We believe that the site leasing business continues to be attractive due to its long-term contracts, built-in rent escalators, high operating margins, and low customer churn (which refers to a lease that is non-renewed, cancelled, or discounted prior to the end of its term) other than in connection with customer consolidation or cessations of specific technology. We believe that over the long-term, site leasing revenues will continue to grow as wireless service providers lease additional antenna space on our towers due to increasing minutes of network use and data transfer, network expansion, and network coverage requirements.

During the remainder of 2024, we expect organic site leasing revenue in both our domestic and international segments to increase over 2023 levels due in part to wireless carriers deploying unused spectrum. We believe our site leasing business is

characterized by stable and long-term recurring revenues, predictable operating costs, and minimal non-discretionary capital expenditures. Due to the relatively young age and mix of our tower portfolio, we expect future expenditures required to maintain these towers to be minimal. Consequently, we expect to grow our cash flows by (1) adding tenants to our towers at minimal incremental costs by using existing tower capacity or requiring wireless service providers to bear all or a portion of the cost of tower modifications and (2) executing monetary amendments as wireless service providers add or upgrade their equipment. Furthermore, because our towers are strategically positioned, we have historically experienced low tenant lease terminations as a percentage of revenue other than in connection with customer consolidation or cessations of a specific technology.

Site Development

Our site development business, which is conducted in the United States only, is complementary to our site leasing business and provides us the ability to keep in close contact with the wireless service providers who generate substantially all of our site leasing revenue and to capture ancillary revenues that are generated by our site leasing activities, such as antenna and equipment installation at our tower locations. Site development revenues are earned primarily from providing a full range of end-to-end services to wireless service providers or companies providing development or project management services to wireless service providers. Our services include: (1) network pre-design; (2) site audits; (3) identification of potential locations for towers and antennas on existing infrastructure; (4) support in leasing of the location; (5) assistance in obtaining zoning approvals and permits; (6) tower and related site construction; (7) antenna installation; and (8) radio equipment installation, commissioning, and maintenance. We provide site development services at our towers and at towers owned by others on a local basis, through regional, market, and project offices. The market offices are responsible for all site development operations.

For information regarding our operating segments, see Note 14 to our Consolidated Financial Statements in this quarterly report.

Capital Allocation Strategy

Our capital allocation strategy is aimed at increasing shareholder value through investment in quality assets that meet our return criteria, stock repurchases when we believe our stock price is below its intrinsic value, and by returning cash generated by our operations in the form of cash dividends. In addition, in a high interest rate environment and when we believe interest rates may stay higher for longer, we believe that debt repayments, especially of our variable rate debt, may be an accretive use of our excess capital. While the addition of cash dividends and debt repayments have provided us with additional tools to return value to our shareholders, we continue to believe that our priority is to make investments focused on increasing Adjusted Funds From Operations per share. Key elements of our capital allocation strategy include:

Portfolio Growth. We intend to continue to grow our asset portfolio, domestically and internationally, primarily through tower acquisitions and the construction of new towers that meet our internal return on invested capital criteria.

Stock Repurchase Program. We currently utilize stock repurchases as part of our capital allocation policy when we believe our share price is below its intrinsic value. We believe that share repurchases, when purchased at the right price, will facilitate our goal of increasing our Adjusted Funds From Operations per share.

Dividend. Cash dividends are an additional component of our strategy of returning value to shareholders. We do not expect our dividend to require any changes in our leverage and believe that, due to our low dividend payout ratio, we can continue to focus on building and buying quality assets and opportunistically buying back our stock. While the timing and amount of future dividends will be subject to approval by our Board of Directors, we believe that our future cash flow generation will permit us to grow our cash dividend in the future.

Critical Accounting Policies and Estimates

We have identified the policies and significant estimation processes listed below and in our Annual Report on Form 10-K as critical to our business operations and the understanding of our results of operations. The listing is not intended to be a comprehensive list. In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States, with no need for management’s judgment in their application. In other cases, management is required to exercise judgment in the application of accounting principles with respect to particular transactions. The impact and any associated risks related to these policies on our business operations is discussed throughout “Management’s Discussion and Analysis of Financial Condition and Results of Operations” where such policies affect reported and expected financial results. For a detailed discussion on the application of these and other accounting policies, see Note 2 to our Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2023. Our preparation of our financial statements requires us to make

estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting periods. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. There can be no assurance that actual results will not differ from those estimates and such differences could be significant.

During the first quarter of 2024, we completed our assessment on the remaining estimated useful lives of our towers and intangible assets. We concluded through our assessment that we should modify our current estimates for asset lives based on our historical operating experience and the findings obtained by our independent consultant. We previously depreciated our towers on a straight-line basis over the shorter of the term of the underlying ground lease (including renewal options) taking into account residual value or the estimated useful life of the tower, which we had historically estimated to be 15 years. Based on our assessment, we revised the estimated useful lives of our towers and certain related intangible assets (which are amortized on a similar basis to our tower assets, as their useful lives correlate to the useful life of the towers) from 15 years to 30 years, effective January 1, 2024. We accounted for the change in estimated useful lives as a change in estimate under ASC 250 “Accounting Changes and Error Corrections.” The impact of the change in estimate was accounted for prospectively effective January 1, 2024, resulting in a reduction in depreciation and amortization expense of approximately $102.7 million ($93.0 million after tax, or an increase of $0.86 per diluted share) for the three months ended March 31, 2024. The change in useful lives is expected to reduce depreciation expense by approximately $411.5 million ($372.5 million after tax, or an increase of $3.43 per diluted share) for the year ended December 31, 2024.

RESULTS OF OPERATIONS

This report presents our financial results and other financial metrics on a GAAP basis and, with respect to our international and consolidated results, after eliminating the impact of changes in foreign currency exchange rates. We believe that providing these financial results and metrics on a constant currency basis, which are non-GAAP measures, gives management and investors the ability to evaluate the performance of our business without the impact of foreign currency exchange rate fluctuations. We eliminate the impact of changes in foreign currency exchange rates by dividing the current period’s financial results by the average monthly exchange rates of the prior year period, as well as by eliminating the impact of realized and unrealized gains and losses on our intercompany loans. ‎

Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023

Revenues and Segment Operating Profit:

		For the three months ended												Constant
		March 31,						Foreign			Constant			Currency
		2024			2023			Currency Impact			Currency Change			% Change
Revenues		(in thousands)
Domestic site leasing		$	461,499		$	454,833		$	—		$	6,666			1.5%
International site leasing			166,777			162,435			1,944			2,398			1.5%
Site development			29,586			58,248			—			(28,662)			(49.2%)
Total		$	657,862		$	675,516		$	1,944		$	(19,598)			(2.9%)
Cost of Revenues
Domestic site leasing		$	65,970		$	69,750		$	—		$	(3,780)			(5.4%)
International site leasing			48,843			50,369			1			(1,527)			(3.0%)
Site development			23,178			44,185			—			(21,007)			(47.5%)
Total		$	137,991		$	164,304		$	1		$	(26,314)			(16.0%)
Operating Profit
Domestic site leasing		$	395,529		$	385,083		$	—		$	10,446			2.7%
International site leasing			117,934			112,066			1,943			3,925			3.5%
Site development			6,408			14,063			—			(7,655)			(54.4%)

Revenues

Domestic site leasing revenues increased $6.7 million for the three months ended March 31, 2024, as compared to the prior year, primarily due to (1) organic site leasing growth, primarily from monetary lease amendments (due in part to our 2023 master lease agreement with AT&T) and additional equipment added to our towers as well as new leases and contractual rent escalators and (2) revenues from 81 towers acquired and 17 towers built since January 1, 2023, partially offset by lease non-renewals.

International site leasing revenues increased $4.3 million for the three months ended March 31, 2024, as compared to the prior year. On a constant currency basis, international site leasing revenues increased $2.4 million. These changes were primarily due

to (1) organic site leasing growth from new leases, amendments, and contractual escalators and (2) revenues from 21 towers acquired and 399 towers built since January 1, 2023, partially offset by lease non-renewals and a decrease in reimbursable pass-through expenses. Site leasing revenue in Brazil represented 15.5% of total site leasing revenue for the period. No other individual international market represented more than 5% of our total site leasing revenue.

Site development revenues decreased $28.7 million for the three months ended March 31, 2024, as compared to the prior year, as a result of decreased carrier activity driven primarily by T-Mobile, DISH Wireless, and Verizon Wireless.

Operating Profit

Domestic site leasing segment operating profit increased $10.4 million for the three months ended March 31, 2024, as compared to the prior year, primarily due to additional profit generated by (1) organic site leasing growth as noted above, (2) towers acquired and built since January 1, 2023, and (3) continued control of our site leasing cost of revenue.

International site leasing segment operating profit increased $5.9 million for the three months ended March 31, 2024, as compared to the prior year. On a constant currency basis, international site leasing segment operating profit increased $3.9 million. These changes were primarily due to (1) additional profit generated by towers acquired and built since January 1, 2023, (2) organic site leasing growth as noted above, and (3) continued control of our site leasing cost of revenue, partially offset by lease non-renewals.

Site development segment operating profit decreased $7.7 million for the three months ended March 31, 2024, as compared to the prior year, as a result of decreased carrier activity driven primarily by T-Mobile, DISH Wireless, and Verizon Wireless.

Selling, General, and Administrative Expenses:

		For the three months ended												Constant
		March 31,						Foreign			Constant			Currency
		2024			2023			Currency Impact			Currency Change			% Change
		(in thousands)
Domestic site leasing		$	34,348		$	31,743		$	—		$	2,605			8.2%
International site leasing			15,708			16,730			93			(1,115)			(6.7%)
Total site leasing		$	50,056		$	48,473		$	93		$	1,490			3.1%
Site development			4,426			6,077			—			(1,651)			(27.2%)
Other			14,216			17,659			—			(3,443)			(19.5%)
Total		$	68,698		$	72,209		$	93		$	(3,604)			(5.0%)

Selling, general, and administrative expenses decreased $3.5 million for the three months ended March 31, 2024, as compared to the prior year. On a constant currency basis, selling, general, and administrative expenses decreased $3.6 million. These changes were driven primarily by a decrease in non-cash compensation expense, partially offset by an increase in personnel and other support related costs.

Asset Impairment and Decommission Costs:

		For the three months ended												Constant
		March 31,						Foreign			Constant			Currency
		2024			2023			Currency Impact			Currency Change			% Change
		(in thousands)
Domestic site leasing		$	29,913		$	19,435		$	—		$	10,478			53.9%
International site leasing			13,735			4,886			(124)			8,973			183.6%
Total site leasing		$	43,648		$	24,321		$	(124)		$	19,451			80.0%
Other			—			2,069			—			(2,069)			(100.0%)
Total		$	43,648		$	26,390		$	(124)		$	17,382			65.9%

Asset impairment and decommission costs increased $17.3 million for the three months ended March 31, 2024, as compared to the prior year. On a constant currency basis, asset impairment and decommission costs increased $17.4 million. These changes were primarily as a result of an increase in impairment charges resulting from our regular analysis of whether the future cash flows from

certain towers are adequate to recover the carrying value of the investment in those towers due in part to carrier related churn and an increase in costs related to sites decommissioned in the first quarter of 2024 compared to the prior year period.

Depreciation, Accretion, and Amortization Expense:

		For the three months ended												Constant
		March 31,						Foreign			Constant			Currency
		2024			2023			Currency Impact			Currency Change			% Change
		(in thousands)
Domestic site leasing		$	40,345		$	119,487		$	—		$	(79,142)			(66.2%)
International site leasing			33,829			60,412			401			(26,984)			(44.7%)
Total site leasing		$	74,174		$	179,899		$	401		$	(106,126)			(59.0%)
Site development			834			916			—			(82)			(9.0%)
Other			1,742			1,600			—			142			8.9%
Total		$	76,750		$	182,415		$	401		$	(106,066)			(58.1%)

Depreciation, accretion, and amortization expense decreased $105.7 million for the three months ended March 31, 2024, as compared to the prior year. On a constant currency basis, depreciation, accretion, and amortization expense decreased $106.1 million. These changes were primarily due to the change in estimated useful lives of our towers and certain related intangible assets from our historical estimate of 15 years to a revised estimate of 30 years and the impact of assets that became fully depreciated since the prior year period, partially offset by an increase in the number of towers we acquired and built since January 1, 2023.

Operating Income (Expense):

		For the three months ended												Constant
		March 31,						Foreign			Constant			Currency
		2024			2023			Currency Impact			Currency Change			% Change
		(in thousands)
Domestic site leasing		$	285,625		$	211,186		$	—		$	74,439			35.2%
International site leasing			52,543			27,213			1,573			23,757			87.3%
Total site leasing		$	338,168		$	238,399		$	1,573		$	98,196			41.2%
Site development			1,148			7,070			—			(5,922)			(83.8%)
Other			(15,958)			(21,328)			—			5,370			(25.2%)
Total		$	323,358		$	224,141		$	1,573		$	97,644			43.6%

Domestic site leasing operating income increased $74.4 million for the three months ended March 31, 2024, as compared to the prior year, primarily due to a decrease in depreciation, accretion, and amortization expense and higher segment operating profit, partially offset by increases in asset impairment and decommission costs and selling, general, and administrative expenses.

International site leasing operating income increased $25.3 million for the three months ended March 31, 2024, as compared to the prior year. On a constant currency basis, international site leasing operating income increased $23.8 million. These changes were primarily due to decreases in depreciation, accretion, and amortization expense and selling, general, and administrative expenses and higher segment operating profit, partially offset by an increase in asset impairment and decommission costs.

Site development operating income decreased $5.9 million for the three months ended March 31, 2024, as compared to the prior year, primarily due to lower segment operating profit driven by less activity from T-Mobile, DISH Wireless, and Verizon Wireless.

Other operating expense decreased by $5.4 million for the three months ended March 31, 2024, as compared to the prior year, primarily due to decreases in selling, general, and administrative expenses and asset impairment and decommission costs.

‎

Other Income (Expense):

		For the three months ended												Constant
		March 31,						Foreign			Constant			Currency
		2024			2023			Currency Impact			Currency Change			% Change
		(in thousands)
Interest income		$	7,314		$	2,816		$	107		$	4,391			155.9%
Interest expense			(96,390)			(101,226)			71			4,765			(4.7%)
Non-cash interest expense			(8,443)			(14,239)			—			5,796			(40.7%)
Amortization of deferred financing fees			(5,289)			(4,988)			—			(301)			6.0%
Loss from extinguishment of debt, net			(4,428)			—			—			(4,428)			—%
Other (expense) income, net			(44,652)			37,558			(83,863)			1,653			(49.2%)
Total		$	(151,888)		$	(80,079)		$	(83,685)		$	11,876			(9.8%)

Interest income increased $4.5 million for the three months ended March 31, 2024, as compared to the prior year. On a constant currency basis, interest income increased $4.4 million. These changes were primarily due to interest received on a loan to an unconsolidated joint venture and a higher amount of interest-bearing deposits held, as well as higher effective interest rates on those deposits as compared to the prior year.

Interest expense decreased $4.8 million for the three months ended March 31, 2024, as compared to the prior year. This change was primarily due to a lower average principal amount of cash-interest bearing debt outstanding accruing interest, partially offset by a higher interest rate on said debt as compared to the prior year.

Non-cash interest expense decreased $5.8 million for the three months ended March 31, 2024, as compared to the prior year. This change was primarily due to lower amortization of accumulated losses related to our interest rate swaps de-designated as cash flow hedges which reached their term end date in 2023.

Loss from extinguishment of debt, net was $4.4 million for the three months ended March 31, 2024 due to the write-off of the original issuance discount and unamortized financing fees associated with the repayment of the 2018 Term Loan in January 2024.

Other (expense) income, net includes a $42.3 million loss on the remeasurement of U.S. dollar denominated intercompany loans with foreign subsidiaries for the three months ended March 31, 2024, while the prior year period included a $41.9 million gain.

Provision for Income Taxes:

		For the three months ended												Constant
		March 31,						Foreign			Constant			Currency
		2024			2023			Currency Impact			Currency Change			% Change
		(in thousands)
Provision for income taxes		$	(16,927)		$	(43,508)		$	28,088		$	(1,507)			5.1%

Provision for income taxes decreased $26.6 million for the three months ended March 31, 2024, as compared to the prior year primarily due to fluctuations in foreign currency exchange rates and a decrease in foreign current taxes.

Net Income:

		For the three months ended												Constant
		March 31,						Foreign			Constant			Currency
		2024			2023			Currency Impact			Currency Change			% Change
		(in thousands)
Net income		$	154,543		$	100,554		$	(54,024)		$	108,013			146.2%

Net income increased $54.0 million for the three months ended March 31, 2024, as compared to the prior year. On a constant currency basis, net income increased $108.0 million. These changes were primarily due to increases in site leasing operating income (inclusive of a $93.0 million benefit related to our revision of the estimated useful lives of our towers and certain intangible assets), interest income, and other (expense) income, net and decreases in non-cash interest expense and interest expense, partially offset by increases in loss from extinguishment of debt and provision for income taxes.

‎

NON-GAAP FINANCIAL MEASURES

This report contains information regarding Adjusted EBITDA, a non-GAAP measure. We have provided below a description of Adjusted EBITDA, a reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure and an explanation as to why management utilizes this measure. This report also presents our financial results and other financial metrics after eliminating the impact of changes in foreign currency exchange rates. We believe that providing these financial results and metrics on a constant currency basis, which are non-GAAP measures, gives management and investors the ability to evaluate the performance of our business without the impact of foreign currency exchange rate fluctuations. We eliminate the impact of changes in foreign currency exchange rates by dividing the current period’s financial results by the average monthly exchange rates of the prior year period, as well as by eliminating the impact of the remeasurement of our intercompany loans.

Adjusted EBITDA

We define Adjusted EBITDA as net income excluding the impact of non-cash straight-line leasing revenue, non-cash straight-line ground lease expense, non-cash compensation, net loss from extinguishment of debt, other income and expenses, acquisition and new business initiatives related adjustments and expenses, asset impairment and decommission costs, interest income, interest expenses, depreciation, accretion, and amortization, and income taxes.

We believe that Adjusted EBITDA is useful to investors or other interested parties in evaluating our financial performance. Adjusted EBITDA is the primary measure used by management (1) to evaluate the economic productivity of our operations and (2) for purposes of making decisions about allocating resources to, and assessing the performance of, our operations. Management believes that Adjusted EBITDA helps investors or other interested parties to meaningfully evaluate and compare the results of our operations (1) from period to period and (2) to our competitors, by excluding the impact of our capital structure (primarily interest charges from our outstanding debt) and asset base (primarily depreciation, amortization, and accretion) from our financial results. Management also believes Adjusted EBITDA is frequently used by investors or other interested parties in the evaluation of REITs. In addition, Adjusted EBITDA is similar to the measure of current financial performance generally used by our lenders to determine compliance with certain covenants under our Senior Credit Agreement and the indentures relating to the 2020 Senior Notes and 2021 Senior Notes. Adjusted EBITDA should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance.

		For the three months ended												Constant
		March 31,						Foreign			Constant			Currency
		2024			2023			Currency Impact			Currency Change			% Change
		(in thousands)
Net income		$	154,543		$	100,554		$	(54,024)		$	108,013			146.2%
Non-cash straight-line leasing revenue			(4,092)			(6,849)			90			2,667			(38.9%)
Non-cash straight-line ground lease expense			(3,383)			723			(13)			(4,093)			(566.1%)
Non-cash compensation			21,469			26,206			24			(4,761)			(18.2%)
Loss from extinguishment of debt, net			4,428			—			—			4,428			—%
Other expense (income), net			44,652			(37,558)			83,863			(1,653)			(49.2%)
Acquisition and new business initiatives
related adjustments and expenses			7,417			6,057			—			1,360			22.5%
Asset impairment and decommission costs			43,648			26,390			(124)			17,382			65.9%
Interest income			(7,314)			(2,816)			(107)			(4,391)			155.9%
Interest expense (1)			110,122			120,453			(71)			(10,260)			(8.5%)
Depreciation, accretion, and amortization			76,750			182,415			401			(106,066)			(58.1%)
Provision for income taxes (2)			17,172			43,765			(28,085)			1,492			5.1%
Adjusted EBITDA		$	465,412		$	459,340		$	1,954		$	4,118			0.9%

(1)Total interest expense includes interest expense, non-cash interest expense, and amortization of deferred financing fees.

(2)Provision for income taxes includes $0.2 million and $0.3 million of franchise taxes for the three months ended March 31, 2024 and 2023, respectively, reflected in selling, general, and administrative expenses on the Consolidated Statements of Operations.

Adjusted EBITDA increased $6.1 million for the three months ended March 31, 2024, as compared to the prior year period. On a constant currency basis, Adjusted EBITDA increased $4.1 million. These changes were primarily due to an increase in site

leasing segment operating profit, partially offset by a decrease in site development segment operating profit and an increase in cash selling, general, and administrative expenses.

LIQUIDITY AND CAPITAL RESOURCES

SBA Communications Corporation (“SBAC”) is a holding company with no business operations of its own. SBAC’s only significant asset is 100% of the outstanding capital stock of SBA Telecommunications, LLC (“Telecommunications”), which is also a holding company that owns equity interests in entities that directly or indirectly own all of our domestic and international towers and assets. We conduct all of our business operations through Telecommunications’ subsidiaries. Accordingly, our only source of cash to pay our obligations, other than financings, is distributions with respect to our ownership interest in our subsidiaries from the net earnings and cash flow generated by these subsidiaries.

A summary of our cash flows is as follows:

		For the three months ended March 31,
		2024			2023
		(in thousands)
Cash provided by operating activities		$	294,453		$	311,168
Cash used in investing activities			(85,310)			(146,761)
Cash used in financing activities			(191,412)			(160,728)
Change in cash, cash equivalents, and restricted cash			17,731			3,679
Effect of exchange rate changes on cash, cash equiv., and restricted cash			(4,345)			220
Cash, cash equivalents, and restricted cash, beginning of period			250,946			189,283
Cash, cash equivalents, and restricted cash, end of period		$	264,332		$	193,182

Operating Activities

Cash provided by operating activities was $294.5 million for the three months ended March 31, 2024 as compared to $311.2 million for the three months ended March 31, 2023. The decrease was primarily due to increases in cash outflows associated with working capital changes related to the timing of customer payments and cash asset impairment and decommission costs as well as a decrease in site development segment operating profit, partially offset by an increase in site leasing segment operating profit and interest income and a decrease in interest expense.

Investing Activities

A detail of our cash capital expenditures is as follows:

		For the three months ended March 31,
		2024			2023
		(in thousands)
Acquisitions of towers and related assets		$	(10,295)		$	(12,780)
Land buyouts and other assets (1)			(9,110)			(7,149)
Construction and related costs			(34,782)			(21,566)
Augmentation and tower upgrades			(13,064)			(15,791)
Tower maintenance			(8,858)			(10,743)
General corporate			(1,167)			(1,035)
Other investing activities (2)(3)			(8,034)			(77,697)
Net cash used in investing activities		$	(85,310)		$	(146,761)

(1)Excludes $4.6 million and $5.1 million spent to extend ground lease terms for the three months ended March 31, 2024 and 2023, respectively.

(2)Includes amounts paid for the purchase of and received from the sale of short-term investments during the three months ended March 31, 2024 and 2023.

(3)The three months ended March 31, 2024 and 2023 includes a $5.5 million and $78.0 million loan to an unconsolidated joint venture, respectively.

Additionally, subsequent to March 31, 2024, we purchased or are under contract to purchase 271 communication sites for an aggregate consideration of $84.5 million in cash. We anticipate that these acquisitions will be consummated by the end of the third quarter of 2024.

For 2024, we expect to incur non-discretionary cash capital expenditures associated with tower maintenance and general corporate expenditures of $51.0 million to $61.0 million and discretionary cash capital expenditures, based on current or potential acquisition obligations, planned new tower construction, forecasted tower augmentations, and forecasted ground lease purchases, of $335.0 million to $355.0 million. We expect to fund these cash capital expenditures from cash on hand, cash flow from operations, and borrowings under the Revolving Credit Facility or new financings. The exact amount of our future cash capital expenditures will depend on a number of factors, including amounts necessary to support our tower portfolio, our new tower build and acquisition programs, and our ground lease purchase program.

Financing Activities

A detail of our financing activities is as follows:

		For the three months ended March 31,
		2024			2023
		(in thousands)
Net borrowings (repayments) under Revolving Credit Facility (1)		$	15,000		$	(45,000)
Proceeds from issuance of Term Loans, net of fees (1)			2,274,825			—
Repayment of Term Loans (1)			(2,268,000)			(6,000)
Repurchase and retirement of common stock (2)			(106,157)			—
Payment of dividends on common stock			(108,135)			(93,933)
Proceeds from employee stock purchase/stock option plans			17,091			11,942
Payments related to taxes on stock options and restricted stock units			(17,800)			(26,658)
Other financing activities			1,764			(1,079)
Net cash used in financing activities		$	(191,412)		$	(160,728)

(1)For additional information regarding our debt instruments and financings, refer to “Debt Instruments and Debt Service Requirements” below.

(2)For additional information regarding our share repurchase activity, refer to Part II Item 2 under “Issuer Purchases of Equity Securities” below.

Dividends

For the three months ended March 31, 2024, we 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 26, 2024		March 14, 2024		$0.98		$108.1 million		March 28, 2024

Dividends paid in 2024 were ordinary taxable dividends.

Subsequent to March 31, 2024, we declared the following cash dividends:

		Payable to Shareholders		Cash to
		of Record at the Close		be Paid
Date Declared		of Business on		Per Share		Date to be Paid
April 29, 2024		May 23, 2024		$0.98		June 19, 2024

The amount of future distributions will be determined, from time to time, by our Board of Directors to balance our goal of increasing long-term shareholder value and retaining sufficient cash to implement our current capital allocation policy, which prioritizes investment in quality assets that meet our return criteria, and then stock repurchases when we believe our stock price is below its intrinsic value. The actual amount, timing, and frequency of future dividends will be at the sole discretion of our Board of Directors and will be declared based upon various factors, many of which are beyond our control.

Registration Statements

We have on file with the Securities and Exchange Commission (the “Commission”) a shelf registration statement on Form S-4 registering shares of Class A common stock that we may issue in connection with the acquisition of wireless communication towers or antenna sites and related assets or companies who own wireless communication towers, antenna sites, or related assets. During the three months ended March 31, 2024, we did not issue any shares of Class A common stock under this registration statement. As of March 31, 2024, we had approximately 1.2 million shares of Class A common stock remaining under this registration statement.

On February 29, 2024, we filed with the Securities and Exchange Commission an automatic shelf registration statement for well-known seasoned issuers on Form S-3ASR, which enables us to issue shares of its Class A common stock, preferred stock, debt securities, warrants, or depositary shares as well as units that include any of these securities. We will file a prospectus supplement containing the amount and type of securities each time we issue securities under our automatic shelf registration statement on Form S-3ASR. During the three months ended March 31, 2024, we did not issue any securities under this automatic shelf registration statement.

Debt Instruments and Debt Service Requirements

Terms of the Senior Credit Agreement

On January 25, 2024, we, through our wholly owned subsidiary SBA Senior Finance II LLC (“SBA Senior Finance II”), amended and restated our Senior Credit Agreement to (1) issue a new $2.3 billion Term Loan and retire the 2018 Term Loan, (2) increase the total commitments under the Revolving Credit Facility from $1.5 billion to $1.75 billion, (3) extend the maturity date of the Revolving Credit Facility to January 25, 2029, and (4) amend certain other terms and conditions under the Senior Credit Agreement. The proceeds from the 2024 Term Loan were used to retire our 2018 Term Loan and to pay related fees and expenses.

On February 23, 2024, we, through our wholly owned subsidiary, SBA Senior Finance II, further increased the total commitments under the Revolving Credit Facility from $1.75 billion to $2.0 billion.

As of March 31, 2024, SBA Senior Finance II was in compliance with the financial covenants contained in the Senior Credit Agreement.

Revolving Credit Facility under the Senior Credit Agreement

The Revolving Credit Facility consists of a revolving loan under which up to $2.0 billion aggregate principal amount may be borrowed, repaid and redrawn, based upon specific financial ratios and subject to the satisfaction of other customary conditions to borrowing through the maturity date of January 25, 2029. Amounts borrowed under the Revolving Credit Facility accrue interest, at SBA Senior Finance II’s election, at either (1) the Eurodollar Rate or Term SOFR Rate plus a margin that ranges from 112.5 basis points to 150.0 basis points or (2) the Base Rate plus a margin that ranges from 12.5 basis points to 50.0 basis points, in each case based on the ratio of Consolidated Net Debt to Annualized Borrower EBITDA, calculated in accordance with the Senior Credit Agreement. In addition, SBA Senior Finance II, is required to pay a commitment fee of between 0.15% and 0.25% per annum on the amount of unused commitment. Furthermore, the Revolving Credit Facility incorporates sustainability-linked targets which will adjust the Revolving Credit Facility’s applicable interest and commitment fee rates upward or downward based on how we perform against those targets. Borrowings under the Revolving Credit Facility may be used for general corporate purposes. SBA Senior Finance II may, from time to time, borrow from and repay the Revolving Credit Facility. Consequently, the amount outstanding under the Revolving Credit Facility at the end of the period may not be reflective of the total amounts outstanding during such period.

The key terms of the Revolving Credit Facility are as follows:

				Unused
		Interest Rate		Commitment
		as of		Fee as of
		March 31, 2024 (1)		March 31, 2024 (2)
Revolving Credit Facility		6.395%		0.140%

(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, 2023.

(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, 2023.

The table below summarizes our Revolving Credit Facility activity during the three months ended March 31, 2024 and 2023 (in thousands):

		For the three months
		ended March 31,
		2024			2023
Beginning outstanding balance		$	180,000		$	720,000
Borrowings			125,000			140,000
Repayments			(110,000)			(185,000)
Ending outstanding balance		$	195,000		$	675,000

Subsequent to March 31, 2024, we repaid $50.0 million and borrowed $50.0 million under the Revolving Credit Facility, and as of the date of this filing, $195.0 million was outstanding.

Term Loan under the Senior Credit Agreement

2024 Term Loan

On January 25, 2024, we, through our wholly owned subsidiary, SBA Senior Finance II, issued a term loan (the “2024 Term Loan”) under the amended and restated Senior Credit Agreement. The 2024 Term Loan consists of a senior secured term loan with an initial aggregate principal amount of $2.3 billion that matures on January 25, 2031. The 2024 Term Loan accrues interest, at SBA Senior Finance II's election, at either the Base Rate plus 100 basis points (with a zero Base Rate floor) or at Term SOFR plus 200 basis points (with a floor of 0%). The 2024 Term Loan was issued at 99.75% of par value. The proceeds from the 2024 Term Loan were used to retire the 2018 Term Loan and to pay related fees and expenses. In connection with the repayment, we expensed $3.3 million of net deferred financing fees and $1.2 million of discount related to the debt. As of March 31, 2024, the 2024 Term Loan was accruing interest at 7.340% per annum.

Principal payments on the 2024 Term Loan will be made in quarterly installments on the last day of each March, June, September, and December in an amount equal to $5.75 million beginning on June 30, 2024. We incurred financing fees of approximately $19.4 million in relation to this transaction, which are being amortized through the maturity date.

Secured Tower Revenue Securities

Tower Revenue Securities Terms

As of March 31, 2024, we, through a New York common law trust (the “Trust”), had issued and outstanding an aggregate of $6.9 billion of Secured Tower Revenue Securities (“Tower Securities”). The sole asset of the Trust consists of a non-recourse mortgage loan made in favor of certain of our subsidiaries that are borrowers on the mortgage loan (the “Borrowers”) under which there is a loan tranche for each Tower Security outstanding with the same interest rate and maturity date as the corresponding Tower Security. The mortgage loan will be paid from the operating cash flows from the aggregate 9,889 tower sites owned by the Borrowers as of March 31, 2024. The mortgage loan is secured by (1) mortgages, deeds of trust, and deeds to secure debt on a substantial portion of the tower sites, (2) a security interest in the tower sites and substantially all of the Borrowers’ personal property and fixtures, (3) the Borrowers’ rights under certain tenant leases, and (4) all of the proceeds of the foregoing. For each calendar month, SBA Network Management, Inc., an indirect subsidiary (“Network Management”), is entitled to receive a management fee equal to 4.5% of the Borrowers’ operating revenues for the immediately preceding calendar month.

‎

The table below sets forth the material terms of our outstanding Tower Securities as of March 31, 2024:

Security		Issue Date			Amount Outstanding‎(in millions)			Interest****‎ Rate (1)			Anticipated Repayment Date			Final Maturity Date
2014-2C Tower Securities		Oct. 15, 2014			$620.0			3.869%			Oct. 8, 2024			Oct. 8, 2049
2019-1C Tower Securities		Sep. 13, 2019			$1,165.0			2.836%			Jan. 12, 2025			Jan. 12, 2050
2020-1C Tower Securities		Jul. 14, 2020			$750.0			1.884%			Jan. 9, 2026			Jul. 11, 2050
2020-2C Tower Securities		Jul. 14, 2020			$600.0			2.328%			Jan. 11, 2028			Jul. 9, 2052
2021-1C Tower Securities		May 14, 2021			$1,165.0			1.631%			Nov. 9, 2026			May 9, 2051
2021-2C Tower Securities		Oct. 27, 2021			$895.0			1.840%			Apr. 9, 2027			Oct. 10, 2051
2021-3C Tower Securities		Oct. 27, 2021			$895.0			2.593%			Oct. 9, 2031			Oct. 10, 2056
2022-1C Tower Securities		Nov. 23, 2022			$850.0			6.599%			Jan. 11, 2028			Nov. 9, 2052

(1)Interest paid monthly.

Risk Retention Tower Securities

The table below sets forth the material terms of our outstanding Risk Retention Tower Securities as of March 31, 2024:

Security		Issue Date			Amount Outstanding‎(in millions)			Interest****‎ Rate (1)			Anticipated Repayment Date			Final Maturity Date
2019-1R Tower Securities		Sep. 13, 2019			$61.4			4.213%			Jan. 12, 2025			Jan. 12, 2050
2020-2R Tower Securities		Jul. 14, 2020			$71.1			4.336%			Jan. 11, 2028			Jul. 9, 2052
2021-1R Tower Securities		May 14, 2021			$61.4			3.598%			Nov. 9, 2026			May 9, 2051
2021-3R Tower Securities		Oct. 27, 2021			$94.3			4.090%			Oct. 9, 2031			Oct. 10, 2056
2022-1R Tower Securities		Nov. 23, 2022			$44.8			7.870%			Jan. 11, 2028			Nov. 9, 2052

(1)Interest paid monthly.

To satisfy certain risk retention requirements of Regulation RR promulgated under the Exchange Act, SBA Guarantor, LLC, a wholly owned subsidiary, purchased the Risk Retention Tower Securities. Principal and interest payments made on the 2019-1R Tower Securities, 2020-2R Tower Securities, 2021-1R Tower Securities, 2021-3R Tower Securities, and 2022-1R Tower Securities eliminate in consolidation.

Debt Covenants

As of March 31, 2024, 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.

Senior Notes

The table below sets forth the material terms of our outstanding senior notes as of March 31, 2024:

Senior Notes		Issue Date		Amount Outstanding‎(in millions)		Interest Rate Coupon		Maturity Date		Interest Due Dates		Optional Redemption Date
2020 Senior Notes		Feb. 4, 2020		$1,500.0		3.875%		Feb. 15, 2027		Feb. 15 & Aug. 15		Feb. 15, 2024
2021 Senior Notes		Jan. 29, 2021		$1,500.0		3.125%		Feb. 1, 2029		Feb. 1 & Aug. 1		Feb. 1, 2024

Each of our senior notes is subject to redemption, at our option, in whole or in part on or after the date set forth above. We may redeem each of the senior notes during the time periods and at the redemption prices set forth in the indentures.

Debt Service

As of March 31, 2024, we believe that our cash on hand, capacity available under our Revolving Credit Facility, and cash flows from operations for the next twelve months will be sufficient to service our outstanding debt during the next twelve months.

The following table illustrates our estimate of our debt service requirement over the next twelve months ended March 31, 2025 based on the amounts outstanding as of March 31, 2024 and the interest rates accruing on those amounts on such date (in thousands):

Revolving Credit Facility (1)		$	14,998
2024 Term Loan (2)			88,665
2014-2C Tower Securities			633,031
2019-1C Tower Securities			1,198,409
2020-1C Tower Securities			14,368
2020-2C Tower Securities			14,159
2021-1C Tower Securities			19,371
2021-2C Tower Securities			16,752
2021-3C Tower Securities			23,491
2022-1C Tower Securities			56,362
2020 Senior Notes			58,125
2021 Senior Notes			46,875
Total debt service for the next 12 months		$	2,184,606

(1)As of March 31, 2024, $195.0 million was outstanding under the Revolving Credit Facility. Subsequent to March 31, 2024, we repaid $50.0 million and borrowed $50.0 million under the Revolving Credit Facility, and as of the date of this filing, $195.0 million was outstanding.

(2)Total debt service on the 2024 Term Loan includes the impact of the interest rate swap which swaps $1.95 billion of notional value accruing interest at Term SOFR plus 200 basis points for an all-in fixed rate of 2.050% per annum through March 31, 2025.

Inflation

The impact of inflation on our operations has not been material to date. However, the impact of rising interest rates, due to actions by the Federal Reserve to combat inflation, has impacted, and is expected to continue to impact, our growth rate and future operating results. Increasing interest rates has impacted, and is expected to continue to impact, the ability and willingness of wireless service providers to incur capital expenditures at prior levels to expand their networks, which could adversely affect our future revenue growth rates. In addition, increased interest rates may adversely affect our costs to refinance our indebtedness at maturity. In addition, persistent high rates of inflation could adversely affect our future operating results particularly in light of the fact that our site leasing revenues are governed by long-term contracts with pre-determined pricing that we will not be able to increase in response to increases in inflation other than our contracts in South America, South Africa, the Philippines, and Tanzania which have inflationary index based rent escalators.