UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, ~~2019~~2020

¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number: 001-16853

SBA COMMUNICATIONS CORPORATION

(Exact name of Registrant as specified in its charter)


Florida	65-0716501
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)


8051 Congress Avenue
Boca Raton, Florida	33487
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (561) 995-7670

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading ~~Symbol(s)~~Symbol	Name of Each Exchange on Which Registered
Class A Common Stock, $0.01 par value per share	SBAC	The NASDAQ Stock Market LLC
		(NASDAQ Global Select Market)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the ~~registrant~~Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the ~~registrant~~Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	x	Accelerated ~~filer~~Filer	¨

Non-Accelerated filer	¨	Smaller ~~reporting company~~Reporting Company	¨

		Emerging ~~growth company~~Growth Company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ¨ No x

Indicate the number of shares outstanding of each issuer’s classes of common stock, as of the latest practicable date: ~~112,601,008~~111,114,641 shares of Class A common stock as of October 31, ~~2019.~~2020.

Table of Contents



		Page
PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements
	Consolidated Balance Sheets as of September 30, ~~2019~~2020 (unaudited) and December 31, ~~2018~~2019	1
	Consolidated Statements of Operations (unaudited) for the three and nine months ended September 30, ~~2019~~2020 and ~~2018~~2019	2
	Consolidated Statements of Comprehensive ~~Loss~~Income (Loss) (unaudited) for the three and nine months ended September 30, ~~2019~~2020 and ~~2018~~2019	3
	Consolidated Statement of Shareholders’ Deficit (unaudited) for the three and nine months ended September 30, ~~2019~~2020 and ~~2018~~2019	4
	Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, ~~2019~~2020 and ~~2018~~2019	6
	Condensed Notes to Consolidated Financial Statements (unaudited)	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2925
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4844
Item 4.	Controls and Procedures	5147

PART II – OTHER INFORMATION

Item 1A.	Risk Factors	47

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5248

Item 5.	Other Information	48

Item 6.	Exhibits	5249


SIGNATURES		5350

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (in thousands, except par values)



	September 30,		December 31,		September 30,		December 31,
	2019		2018		2020		2019
ASSETS	(unaudited)				(unaudited)
Current assets:
Cash and cash equivalents	$	128,778	$	143,444	$	271,874	$	108,309
Restricted cash		27,502		32,464		61,572		30,243
Accounts receivable, net		122,725		111,035		68,042		132,125
Costs and estimated earnings in excess of billings on uncompleted contracts		28,303		23,785		27,109		26,313
Prepaid expenses and other current assets ⁽¹⁾		21,946		63,126		29,994		37,281
Total current assets		329,254		373,854		458,591		334,271
Property and equipment, net ⁽¹⁾		2,763,055		2,786,355		2,668,004		2,794,602
Intangible assets, net		3,261,885		3,331,465		3,063,498		3,626,773
Right-of-use assets, net ⁽¹⁾		2,449,933		—		2,340,035		2,572,217
Other assets ⁽¹⁾		397,011		722,033		504,554		432,078
Total assets	$	9,201,138	$	7,213,707	$	9,034,682	$	9,759,941
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST,
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS,
AND SHAREHOLDERS' DEFICIT
Current Liabilities:
Accounts payable	$	35,130	$	34,308	$	29,230	$	31,846
Accrued expenses		63,151		63,665		62,523		67,618
Current maturities of long-term debt		24,000		941,728		24,000		522,090
Deferred revenue		112,382		108,054		155,799		113,507
Accrued interest		34,493		48,722		33,885		49,269
Current lease liabilities ⁽¹⁾		230,197		—		229,177		247,015
Other current liabilities⁽¹⁾		10,799		9,802		16,634		16,948
Total current liabilities		510,152		1,206,279		551,248		1,048,293
Long-term liabilities:
Long-term debt, net		9,821,502		8,996,825		10,692,710		9,812,335
Long-term lease liabilities⁽¹⁾		2,174,512		—		2,080,916		2,279,400
Other long-term liabilities⁽¹⁾		241,269		387,426		181,012		270,868
Total long-term liabilities		12,237,283		9,384,251		12,954,638		12,362,603
Redeemable noncontrolling interest		14,077		—
Redeemable noncontrolling interests						15,194		16,052
Shareholders' deficit:
Preferred stock - par value $0.01, 30,000 shares authorized, 0 shares issued or outstanding		—		—		—		—
Common stock - Class A, par value $0.01, 400,000 shares authorized, 112,604 shares and 112,433
shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively		1,126		1,124
Common stock - Class A, par value $0.01, 400,000 shares authorized, 111,443 shares and
111,775 shares issued and outstanding at September 30, 2020 and December 31, 2019,
respectively						1,114		1,118
Additional paid-in capital		2,446,369		2,270,326		2,563,979		2,461,335
Accumulated deficit		(5,387,091)		(5,136,368)		(6,177,879)		(5,560,695)
Accumulated other comprehensive loss, net		(620,778)		(511,905)		(873,612)		(568,765)
Total shareholders' deficit		(3,560,374)		(3,376,823)		(4,486,398)		(3,667,007)
Total liabilities, redeemable noncontrolling interests, and shareholders' deficit	$	9,201,138	$	7,213,707	$	9,034,682	$	9,759,941

~~(1)~~On January 1, 2019, the Company adopted ASU 2016-02 which requires lessees to recognize a right-of-use asset and a lease liability. Upon adoption, certain assets and liabilities were reclassified to Right-of-use assets, net and lease liabilities in accordance with provisions of ASU 2016-02. See Note 1 for further discussion.

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

Table of Contents

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

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


	For the three months				For the nine months				For the three months				For the nine months
	ended September 30,				ended September 30,				ended September 30,				ended September 30,
	2019		2018		2019		2018		2020		2019		2020		2019
Revenues:
Site leasing	$	468,572	$	435,260	$	1,379,758	$	1,295,686	$	486,765	$	468,572	$	1,461,523	$	1,379,758
Site development		38,975		31,961		121,229		86,160		36,175		38,975		85,708		121,229
Total revenues		507,547		467,221		1,500,987		1,381,846		522,940		507,547		1,547,231		1,500,987
Operating expenses:
Cost of revenues (exclusive of depreciation, accretion,
and amortization shown below):
Cost of site leasing		92,993		92,294		279,167		278,800		92,722		92,993		280,120		279,167
Cost of site development		30,516		24,447		92,606		67,693		28,797		30,516		68,417		92,606
Selling, general, and administrative ⁽¹⁾		42,272		34,908		148,755		106,901
Selling, general, and administrative expenses ⁽¹⁾										48,152		42,272		146,856		148,755
Acquisition and new business initiatives related
adjustments and expenses		4,692		2,995		9,669		9,171		4,124		4,692		12,557		9,669
Asset impairment and decommission costs		8,240		6,868		23,631		22,778		8,506		8,240		29,103		23,631
Depreciation, accretion, and amortization		174,987		167,703		517,590		502,659		180,302		174,987		541,587		517,590
Total operating expenses		353,700		329,215		1,071,418		988,002		362,603		353,700		1,078,640		1,071,418
Operating income		153,847		138,006		429,569		393,844		160,337		153,847		468,591		429,569
Other income (expense):
Interest income		1,311		2,006		4,692		4,972		756		1,311		2,340		4,692
Interest expense		(96,567)		(95,717)		(292,681)		(278,278)		(89,791)		(96,567)		(281,329)		(292,681)
Non-cash interest expense		(662)		(632)		(1,954)		(2,002)		(8,323)		(662)		(13,066)		(1,954)
Amortization of deferred financing fees		(5,157)		(4,980)		(15,333)		(15,265)		(4,883)		(5,157)		(15,211)		(15,333)
Loss from extinguishment of debt, net		(457)		—		(457)		(14,443)		(2,599)		(457)		(19,463)		(457)
Other income (expense), net		(33,551)		(24,518)		(21,296)		(110,175)
Total other income (expense), net		(135,083)		(123,841)		(327,029)		(415,191)
Other expense, net										(42,262)		(33,551)		(300,144)		(21,296)
Total other expense, net										(147,102)		(135,083)		(626,873)		(327,029)
Income (loss) before income taxes		18,764		14,165		102,540		(21,347)		13,235		18,764		(158,282)		102,540
(Provision) benefit for income taxes		3,002		1,979		(22,813)		11,645
Benefit (provision) for income taxes										9,441		3,002		76,143		(22,813)
Net income (loss)		21,766		16,144		79,727		(9,702)		22,676		21,766		(82,139)		79,727
Net (income) attributable to the noncontrolling interest		(87)		—		(87)		—
Net (income) loss attributable to noncontrolling interests										(108)		(87)		461		(87)
Net income (loss) attributable to SBA Communications
Corporation	$	21,679	$	16,144	$	79,640	$	(9,702)	$	22,568	$	21,679	$	(81,678)	$	79,640
Net income (loss) per common share attributable to SBA
Communications Corporation:
Basic	$	0.19	$	0.14	$	0.70	$	(0.08)	$	0.20	$	0.19	$	(0.73)	$	0.70
Diluted	$	0.19	$	0.14	$	0.69	$	(0.08)	$	0.20	$	0.19	$	(0.73)	$	0.69
Weighted average number of common shares
Basic		113,037		114,597		112,985		115,378		111,783		113,037		111,809		112,985
Diluted		115,184		116,114		114,824		115,378		113,703		115,184		111,809		114,824

(1)Includes non-cash compensation of ~~$12,281~~$16,606 and ~~$10,261~~$12,281 for the three months ended September 30, ~~2019~~2020 and ~~2018,~~2019, respectively, and ~~$59,017~~$50,291 and ~~$31,188~~$59,017 for the nine months ended September 30, ~~2019~~2020 and ~~2018,~~2019, respectively.

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

Table of Contents

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~LOSS~~INCOME (LOSS)

(unaudited) (in thousands)

For the three months
For the nine months
ended September 30,
ended September 30,
2019
2018
2019
2018
Net income (loss)
$
21,766
$
16,144
$
79,727
$
(9,702)
Change in fair value of cash flow hedge
(10,811)
—
(62,404)
—
Foreign currency translation adjustments
(55,047)
(27,598)
(46,469)
(149,057)
Comprehensive loss
(44,092)
(11,454)
(29,146)
(158,759)
Comprehensive income attributable to noncontrolling interest
(87)
—
(87)
—
Comprehensive loss attributable to SBA Communications
Corporation
$
(44,179)
$
(11,454)
$
(29,233)
$
(158,759)



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

	2020		2019		2020		2019

Net income (loss)	$	22,676	$	21,766	$	(82,139)	$	79,727
Adjustments related to interest rate swaps		1,557		(10,811)		(114,366)		(62,404)
Foreign currency translation adjustments		(7,196)		(55,047)		(191,389)		(46,469)
Comprehensive income (loss)		17,037		(44,092)		(387,894)		(29,146)
Comprehensive (income) loss attributable to noncontrolling interests		(204)		(87)		1,369		(87)
Comprehensive income (loss) attributable to SBA
Communications Corporation	$	16,833	$	(44,179)	$	(386,525)	$	(29,233)

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

‎

Table of Contents

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, December 31, 2018
112,433
$
1,124
$
2,270,326
$
(5,136,368)
$
(511,905)
$
(3,376,823)
Net income attributable to SBA
Communications Corporation
—
—
—
25,989
—
25,989
Common stock issued in connection with
stock purchase/option plans
762
8
63,467
—
—
63,475
Non-cash stock compensation
—
—
23,722
—
—
23,722
Common stock issued in connection with
acquisitions
10
—
1,680
—
—
1,680
Change in fair value of cash flow hedge
—
—
—
—
(15,312)
(15,312)
Foreign currency translation adjustments
—
—
—
—
(4,544)
(4,544)
Impact of adoption of ASU 2016-02
related to leases
—
—
—
(20,968)
—
(20,968)
BALANCE, March 31, 2019
113,205
$
1,132
$
2,359,195
$
(5,131,347)
$
(531,761)
$
(3,302,781)
Net income attributable to SBA
Communications Corporation
—
—
—
31,973
—
31,973
Common stock issued in connection with
stock purchase/option plans
348
3
24,443
—
—
24,446
Non-cash stock compensation
—
—
24,747
—
—
24,747
Change in fair value of cash flow hedge
—
—
—
—
(36,281)
(36,281)
Repurchase and retirement of common stock
(463)
(4)
—
(94,568)
—
(94,572)
Foreign currency translation adjustments
—
—
—
—
13,122
13,122
BALANCE, June 30, 2019
113,090
$
1,131
$
2,408,385
$
(5,193,942)
$
(554,920)
$
(3,339,346)
Net income attributable to SBA
Communications Corporation
—
—
—
21,679
—
21,679
Common stock issued in connection with
stock purchase/option plans
208
2
24,986
—
—
24,988
Non-cash stock compensation
—
—
12,998
—
—
12,998
Change in fair value of cash flow hedge
—
—
—
—
(10,811)
(10,811)
Repurchase and retirement of common stock
(694)
(7)
—
(172,955)
—
(172,962)
Foreign currency translation adjustments
—
—
—
—
(55,047)
(55,047)
Payment of dividends on common stock
—
—
—
(41,873)
—
(41,873)
BALANCE, September 30, 2019
112,604
$
1,126
$
2,446,369
$
(5,387,091)
$
(620,778)
$
(3,560,374)



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

BALANCE, June 30, 2020	111,918	$	1,119	$	2,534,423	$	(5,972,657)	$	(867,877)	$	(4,304,992)
Net income attributable to SBA
Communications Corporation	—		—		—		22,568		—		22,568
Common stock issued in connection with equity
awards and stock purchase plans, offset
by the impact of net share settlements	105		1		12,810		—		—		12,811
Non-cash stock compensation	—		—		17,387		—		—		17,387
Adjustments related to interest rate swaps	—		—		—		—		1,557		1,557
Repurchase and retirement of common stock	(580)		(6)		—		(175,652)		—		(175,658)
Foreign currency translation adjustments
attributable to SBA Communications
Corporation	—		—		—		—		(7,292)		(7,292)
Dividends on common stock	—		—		—		(52,138)		—		(52,138)
Adjustment to fair value related to
noncontrolling interests	—		—		(641)		—		—		(641)
BALANCE, September 30, 2020	111,443	$	1,114	$	2,563,979	$	(6,177,879)	$	(873,612)	$	(4,486,398)



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

BALANCE, June 30, 2019	113,090	$	1,131	$	2,408,385	$	(5,193,942)	$	(554,920)	$	(3,339,346)
Net income attributable to SBA
Communications Corporation	—		—		—		21,679		—		21,679
Common stock issued in connection with equity
awards and stock purchase plans, offset
by the impact of net share settlements	208		2		24,986		—		—		24,988
Non-cash stock compensation	—		—		12,998		—		—		12,998
Adjustments related to interest rate swaps	—		—		—		—		(10,811)		(10,811)
Repurchase and retirement of common stock	(694)		(7)		—		(172,955)		—		(172,962)
Foreign currency translation adjustments
attributable to SBA Communications
Corporation	—		—		—		—		(55,047)		(55,047)
Dividends on common stock	—		—		—		(41,873)		—		(41,873)
BALANCE, September 30, 2019	112,604	$	1,126	$	2,446,369	$	(5,387,091)	$	(620,778)	$	(3,560,374)

‎

Table of Contents

SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ DEFICIT

(unaudited) (in thousands)



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

BALANCE, December 31, 2017	116,446	$	1,164	$	2,167,470	$	(4,388,288)	$	(379,460)	$	(2,599,114)
Net income attributable to SBA
BALANCE, December 31, 2019												111,775		1,118		2,461,335		(5,560,695)		(568,765)		(3,667,007)
Net loss attributable to SBA
Communications Corporation	—		—		—		31,545		—		31,545	—		—		—		(81,678)		—		(81,678)
Common stock issued in connection with
stock purchase/option plans	264		3		6,883		—		—		6,886
Common stock issued in connection with equity
awards and stock purchase plans, offset
by the impact of net share settlements												1,086		10		50,117		—		—		50,127
Non-cash stock compensation	—		—		10,636		—		—		10,636	—		—		53,038		—		—		53,038
Adjustments related to interest rate swaps												—		—		—		—		(114,366)		(114,366)
Repurchase and retirement of common stock	(238)		(2)		—		(38,543)		—		(38,545)	(1,418)		(14)		—		(378,974)		—		(378,988)
Foreign currency translation adjustments	—		—		—		—		351		351
BALANCE, March 31, 2018	116,472	$	1,165	$	2,184,989	$	(4,395,286)	$	(379,109)	$	(2,588,241)
Net loss attributable to SBA
Communications Corporation	—		—		—		(57,391)		—		(57,391)
Common stock issued in connection with
stock purchase/option plans	238		2		20,791		—		—		20,793
Non-cash stock compensation	—		—		11,493		—		—		11,493
Repurchase and retirement of common stock	(1,878)		(19)		—		(306,960)		—		(306,979)
Foreign currency translation adjustments	—		—		—		—		(121,810)		(121,810)
BALANCE, June 30 2018	114,832	$	1,148	$	2,217,273	$	(4,759,637)	$	(500,919)	$	(3,042,135)
Net income attributable to SBA
Communications Corporation	—		—		—		16,144		—		16,144
Common stock issued in connection with
stock purchase/option plans	109		1		5,849		—		—		5,850
Non-cash stock compensation	—		—		10,671		—		—		10,671
Repurchase and retirement of common stock	(697)		(7)		—		(108,008)		—		(108,015)
Foreign currency translation adjustments	—		—		—		—		(27,598)		(27,598)
BALANCE, September 30, 2018	114,244	$	1,142	$	2,233,793	$	(4,851,501)	$	(528,517)	$	(3,145,083)
attributable to SBA Communications
Corporation												—		—		—		—		(190,481)		(190,481)
Dividends on common stock												—		—		—		(156,532)		—		(156,532)
Adjustment to fair value related to
noncontrolling interests												—		—		(511)		—		—		(511)
BALANCE, September 30, 2020												111,443	$	1,114	$	2,563,979	$	(6,177,879)	$	(873,612)	$	(4,486,398)



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

BALANCE, December 31, 2018	112,433	$	1,124	$	2,270,326	$	(5,136,368)	$	(511,905)	$	(3,376,823)
Net income attributable to SBA
Communications Corporation	—		—		—		79,641		—		79,641
Common stock issued in connection with equity
awards and stock purchase plans, offset
by the impact of net share settlements	1,318		13		112,896		—		—		112,909
Non-cash stock compensation	—		—		61,467		—		—		61,467
Common stock issued in connection with
acquisitions	10		—		1,680		—		—		1,680
Adjustments related to interest rate swaps	—		—		—		—		(62,404)		(62,404)
Repurchase and retirement of common stock	(1,157)		(11)		—		(267,523)		—		(267,534)
Foreign currency translation adjustments
attributable to SBA Communications
Corporation	—		—		—		—		(46,469)		(46,469)
Impact of adoption of ASU 2016-02
related to leases	—		—		—		(20,968)		—		(20,968)
Dividends on common stock	—		—		—		(41,873)		—		(41,873)
BALANCE, September 30, 2019	112,604	$	1,126	$	2,446,369	$	(5,387,091)	$	(620,778)	$	(3,560,374)

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

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SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited) (in thousands)



	For the nine months ended September 30,				For the nine months ended September 30,
	2019		2018		2020		2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	79,727	$	(9,702)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net (loss) income					$	(82,139)	$	79,727
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation, accretion, and amortization		517,590		502,659		541,587		517,590
Loss on remeasurement of U.S. dollar denominated intercompany loans						299,913		25,880
Non-cash compensation expense						51,915		60,633
Non-cash asset impairment and decommission costs		22,816		22,146		28,675		22,816
Non-cash compensation expense		60,633		32,140
Deferred income tax expense (benefit)		5,988		(27,925)
Loss on remeasurement of U.S. dollar denominated intercompany loans		25,880		113,138
Loss from extinguishment of debt						19,463		235
Deferred income tax (benefit) expense						(93,104)		5,988
Other non-cash items reflected in the Statements of Operations		14,839		31,374		28,700		14,604
Changes in operating assets and liabilities, net of acquisitions:
AR and costs and est. earnings in excess of billings on uncompleted contracts, net		(13,909)		(4,655)
Accounts receivable and costs and estimated earnings in excess of
billings on uncompleted contracts, net						48,272		(13,909)
Prepaid expenses and other assets		669		(28,061)		(2,571)		669
Operating lease right-of-use assets, net		68,518		—		88,470		68,518
Accounts payable and accrued expenses		(2,521)		(2,496)		5,672		(2,521)
Accrued interest		(14,228)		(14,813)		(17,010)		(14,228)
Long-term lease liabilities		(64,057)		—		(75,199)		(64,057)
Other liabilities		3,039		10,338		40,264		3,039
Net cash provided by operating activities		704,984		624,143		882,908		704,984
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions		(283,701)		(403,835)		(199,899)		(283,701)
Capital expenditures		(111,381)		(104,966)		(95,371)		(111,381)
Purchase of investments		(528,915)		(99,823)		(1,288,267)		(528,915)
Proceeds from sale of investments		515,557		95,890		1,235,000		515,557
Other investing activities		(6,626)		(7,583)		(4,841)		(6,626)
Net cash used in investing activities		(415,066)		(520,317)		(353,378)		(415,066)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under Revolving Credit Facility		265,000		805,000		515,000		265,000
Repayments under Revolving Credit Facility		(590,000)		(725,000)		(1,005,000)		(590,000)
Proceeds from issuance of Senior Notes, net of fees						1,479,522		—
Repayment of Senior Notes						(759,143)		—
Proceeds from issuance of Tower Securities, net of fees						1,336,003		1,153,036
Repayment of Tower Securities		(920,000)		(755,000)		(1,200,000)		(920,000)
Proceeds from issuance of Tower Securities, net of fees		1,153,036		631,479
Termination of interest rate swap						(176,200)		—
Proceeds from employee stock purchase/stock option plans, net of taxes						50,283		112,909
Repurchase and retirement of common stock		(267,534)		(453,539)		(378,988)		(267,534)
Proceeds from employee stock purchase/stock option plans		112,909		33,678
Repayment of Term Loans		(18,000)		(1,941,000)
Proceeds from Term Loans, net of fees		—		2,377,264
Payment of dividends on common stock		(41,873)		—		(156,199)		(41,873)
Other financing activities		(1,119)		(4,071)		(19,528)		(19,119)
Net cash used in financing activities		(307,581)		(31,189)		(314,250)		(307,581)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		(1,957)		(13,608)		(20,427)		(1,957)
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH		(19,620)		59,029		194,853		(19,620)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH:
Beginning of period		178,300		104,295		141,120		178,300
End of period	$	158,680	$	163,324	$	335,973	$	158,680

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

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SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



	For the nine months ended September 30,				For the nine months ended September 30,
	2019		2018		2020		2019

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	306,810	$	293,372	$	298,140	$	306,810
Income taxes	$	14,860	$	16,525	$	14,061	$	14,860

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:
SUPPLEMENTAL CASH FLOW INFORMATION OF NON-CASH ACTIVITIES:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	37,913	$	—	$	21,785	$	37,913
Operating lease modifications and reassessments	$	67,794	$	—	$	23,811	$	(67,794)
Right-of-use assets obtained in exchange for new finance lease liabilities	$	1,706	$	1,142	$	893	$	1,706
Common stock issued in connection with acquisitions	$	1,680	$	—	$	—	$	1,680
Consolidation of an equity method investment	$	71,990	$	—	$	—	$	71,990

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

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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, ~~2018~~2019 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 remeasurement gains and losses are reported as foreign currency translation adjustments through Accumulated ~~Other Comprehensive Loss~~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. Unrealized translation gains and losses are reported as other income (expense), net in the Consolidated Statements of Operations.

Intercompany Loans Subject to Remeasurement

In accordance with Accounting Standards Codification (ASC) 830, the Company remeasures foreign denominated intercompany loans with the corresponding change in the balance being recorded in Other income (expense), net in the Consolidated ~~Statement~~Statements of Operations as settlement is anticipated or planned in the foreseeable future. The Company recorded a ~~$21.0~~$25.4 million loss and a ~~$17.1~~$21.0 million loss, net of taxes, on the remeasurement of intercompany loans for the three months ended September 30, ~~2019~~2020 and ~~2018,~~2019, respectively, and a ~~$16.3~~$198.6 million loss and a ~~$74.7~~$16.3 million loss, net of taxes, on the remeasurement of intercompany loans for the nine months ended September 30, ~~2019~~2020 and ~~2018,~~2019, respectively, due to changes in foreign exchange rates. As of September 30, ~~2019~~2020 and December 31, ~~2018,~~2019, the aggregate amount outstanding under the intercompany loan agreements subject to remeasurement with the Company’s ~~Brazilian subsidiary~~foreign subsidiaries was ~~$434.8~~$935.3 million and ~~$536.9~~$899.7 million, respectively. ~~As of September 30, 2019, the aggregate amount outstanding under the intercompany loan agreement with the Company’s South African subsidiary was $58.9 million.~~

~~Leases~~Credit Losses

~~The~~Effective January 1, 2020, the Company adopted ASU ~~No. 2016-02, Leases~~2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“~~Topic 842”~~ASU 2016-13”) ~~using~~prospectively. ASU 2016-13 replaces the ~~modified retrospective adoption method~~incurred loss impairment model with an ~~effective date~~expected credit loss impairment model for financial instruments, including trade receivables. The amendment requires entities to consider forward-looking information to estimate expected credit losses over the lifetime of ~~January 1, 2019.~~the asset, resulting in earlier recognition of losses for receivables that are current or not yet due, which were not considered under the previous accounting guidance. The ~~consolidated financial statements~~impact of the adoption of ASU 2016-13 was not material individually or in the aggregate to the Company.

ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses (“ASU 2018-19”) clarified that operating lease receivables are not within the scope of ASC 326-20 and should instead be accounted for ~~2019 are presented~~ under the new leasing standard, ~~while~~ASC 842. The Company is exposed to credit losses which are subject to this standard primarily through the ~~comparative periods presented are not adjusted~~site development business segment which provides consulting and ~~continue to be reported in accordance with the Company's~~construction related services. The Company’s expected credit loss allowance methodology for accounts receivable is developed using historical ~~accounting policy. This standard requires all lessees to recognize a right-of-use asset~~collection experience, current and future economic and market conditions, and a ~~lease liability, initially measured at the present value~~review of the ~~lease payments. The Company has elected not~~current status of customers’ trade accounts receivables. Due to ~~separate nonlease components from~~ the ~~associated lease component for all underlying classes~~short-term nature of ~~assets.~~

~~The adoption~~such receivables, the estimate of the ~~new lease standard had a significant impact on~~amount of accounts receivable that may not be collected considers aging of the Company’s Consolidated Balance Sheets resulting in the recognition of $2.6 billion of right-of-use assets, net, $226.0 million of current lease liabilities, and $2.3 billion of long-term lease liabilities. The right-of-use assets included $266.3 million of rent prepayments and financing lease right-of-use assets, net which were previously reported in Prepaid expenses and other current assets, Other assets, and Property, Plant and Equipment, net on the Consolidated Balance Sheets. In addition, the Company recognized a $21.0 million cumulative effect adjustment, net of tax, toaccounts receivable

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~~Accumulated deficit on~~balances and the ~~Consolidated Balance Sheet related~~financial condition of customers. Additionally, specific allowance amounts are established to record the ~~unamortized deferred lease costs incurred in prior periods which do not meet the definition~~appropriate provision for customers that have a higher probability of ~~initial direct costs under Topic 842.~~default. The Company’s monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of customers’ financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible.

The adoption of Topic 842 did not have a significant impact on the Company’s lease classification or a material impact on its Consolidated Statements of Operations and liquidity. Additionally, the adoption of Topic 842 did not have a material impact on the Company’s debt covenant compliance under its current agreements.

~~The components of the right-of-use assets and lease liabilities as of September 30, 2019 are as follows (in thousands):~~Reference Rate Reform



~~Operating lease right-of-use assets, net~~	$	~~2,446,640~~
~~Financing lease right-of-use assets, net~~		~~3,293~~
~~Right-of-use assets, net~~	$	~~2,449,933~~

~~Current operating lease liabilities~~	$	~~229,210~~
~~Current financing lease liabilities~~		~~987~~
~~Current lease liabilities~~	$	~~230,197~~

~~Long-term operating lease liabilities~~	$	~~2,173,039~~
~~Long-term financing lease liabilities~~		~~1,473~~
~~Long-term lease liabilities~~	$	~~2,174,512~~

~~Operating Leases~~

~~Ground leases.~~ASU 2020-04, Reference Rate Reform, provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The ~~Company enters into long-term lease~~amendments apply only to contracts, ~~for land~~hedging relationships, and other transactions that underlies its tower structures. Ground lease agreements generally include renewal options which can be exercised exclusively at the Company’s election. In making the determination of the period for which the Company is reasonably certain to remain on the site, the Company will assume optional renewals are reasonably certain of being exercised for the greater of: (1) a period sufficient to cover all tenants under their current committed term where the Company has provided rights to the tower not to exceed the contractual ground lease terms including renewals, and (2) a period sufficient to recover the investment of significant leasehold improvements located on the site.

~~Substantially all leases provide for rent~~reference LIBOR or another reference rate escalations. The most common provisions provide for fixed rent escalators which typically average 2-3% annually. The Company also has ground leases that include consumer price index escalators, particularly in its South American operations. Increases or decreases in lease payments that result from subsequent changes in the index or rate are accounted for as variable lease payments.

~~Office leases.~~ The Company’s office leases consist of long-term leases for international, regional, and certain site development office locations. Office leases include a single lease component, lease of the office space and sometimes nonlease components such as common area maintenance expenses. The lease term for office leases are generally consideredexpected to be discontinued because of reference rate reform. The expedients and exceptions provided by the ~~contractually committed term.~~

~~Finance Leases~~

~~Vehicle leases.~~ ~~The Company leases vehicles that are used in its site development business. These leases are accounted for as financing leases and have lease terms that are contractually committed and~~amendments do not ~~include optional renewal terms.~~

~~Discount Rate~~

~~When available, the Company uses the rate implicit in the lease~~apply to discount lease payments to present value. However, the Company’s ground leases generally do not provide a readily determinable implicit rate. Therefore, the Company estimates the incremental borrowing rate to discount lease payments based on information available at lease commencementcontract modifications made and hedging relationships entered into or ~~upon a modification. The Company uses publicly available data~~evaluated after December 31, 2022, except for ~~instruments with similar characteristics when calculating its incremental borrowing rates.~~

~~Table of Contents~~

~~Lease Cost~~

Variable lease payments include escalations based on standard cost of living indexes and are initially recognized using the prevailing index at the date of initial measurement or upon reassessment of the lease term. Subsequent changes in standard cost of living increases are recognizedhedging relationships existing as ~~variable lease costs. Variable lease payments also include contingent rent provisions.~~

~~The components of lease cost, lease term, and discount rate as of September 30, 2019 are as follows:~~

For the three months
For the nine months
ended September 30, 2019
ended September 30, 2019
(in thousands)
Amortization of right-of-use assets
$
296
$
917
Interest on finance lease liabilities
28
82
Total finance lease cost
324
999
Operating lease cost ⁽¹⁾
66,059
200,881
Variable lease cost⁽¹⁾
10,190
27,356
Total lease cost
$
76,573
$
229,236
Weighted Average Remaining Lease Term as of September 30, 2019
Operating leases
17 years
Finance leases
3 years
Weighted Average Discount Rate as of September 30, 2019
Operating leases
6.1%
Finance leases
3.9%
For the nine months
Other information:
ended September 30, 2019
Cash paid for amounts included in measurement of lease liabilities:
Cash flows from operating leases
$
177,960
Cash flows from finance leases
$
917

~~(1)~~For the three and nine months ended September 30, 2018, operating lease costs were $67.7 million and $205.3 million, respectively. For the three and nine months ended September 30, 2018, variable lease costs were $6.8 million and $20.3 million, respectively.

~~Tenant (Operating) Leases~~

The Company enters into long-term lease contracts with wireless service providers to lease antenna space on towers that it owns or operates. Each tenant lease relates to the lease or use of space at an individual site. Tenant leases are generally for an initial term of 5 to ten years with multiple 5 year renewal periods at the option of the tenant. Tenant leases typically contain specific rent escalators, which can be fixed or escalate in accordance with a standard cost of living index, including the renewal option periods.

Tenant lease agreements generally include renewal options which can be exercised exclusively at the tenant’s election. The only common exception is if the Company no longer has a right to the ground underlying the site, the lease agreements permit the Company to terminate the lease. Despite high frequency of renewal of options to extend the lease by its tenants, the Company has concluded that the exercise of a renewal option by a tenant is not reasonably certain of occurrence; therefore, only the current committed term is included in the determination of the lease term.

~~Table of Contents~~

Certain tenant leases provide for a reimbursement of costs incurred by the Company. The Company pays these costs directly and is not relieved of the primary obligation for the expenses. These reimbursements are recorded as revenue on the Statements of Operations.

~~Deferred Lease Costs~~

Prior to the adoption of ASU 2016-02, the Company deferred certain initial direct costs associated with the origination of tenant leases and lease amendments and amortized these costs over the remaining lease term. These costs included an allocation of a portion of the employees’ total compensation and payroll related benefits related to time spent performing those activities. Such deferred costs were approximately $2.8 million and $8.8 million for the three and nine months ended September 30, 2018. Amortization expense related to these deferred costs was $3.2 million and $9.3 million for the three and nine months ended September 30, 2018 and is included in cost of site leasing on the Consolidated Statements of Operations. As of December 31, ~~2018, unamortized deferred lease costs were $27.0 million.~~

~~ASU 2016-02, defines initial direct costs~~2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The amendments are effective for all entities as ~~incremental costs that would not have been incurred if the lease had not been obtained. These costs, including commissions paid related to the origination~~ of specific tenant leases, will continue to be deferred and amortized over the remaining lease term. Upon adoption, the Company recognized a $21.0 million cumulative effect adjustment, net of tax, to Accumulated deficit on the Consolidated Balance Sheets. This adjustment reflects the recognition of unamortized deferred lease costs incurred in prior periods which do not meet the definition of initial direct costs under Topic 842.

Initial direct costs were approximately $0.4 million and $1.6 million for the three and nine months ended September 30, 2019. Amortization expense related to deferred initial direct costs was $0.4 million and $1.1 million for the three and nine months ended September 30, 2019.March 12, 2020 through December 31, 2022. As of September 30, ~~2019, unamortized deferred initial direct costs were $4.3 million~~2020, the Company has not modified any contracts as a result of reference rate reform and ~~were included in other assets~~is evaluating the impact this standard may have on ~~the Consolidated Balance Sheets.~~

its consolidated financial statements.

2.FAIR VALUE MEASUREMENTS

Items Measured at Fair Value on a Recurring Basis— The Company’s earnout liabilities related to business combinations are measured at fair value on a recurring basis using Level 3 inputs and are recorded in Accrued expenses in the Consolidated Balance Sheets. Changes in estimates are recorded in Acquisition and new business initiatives related adjustments and expenses in the Consolidated Statements of Operations. The Company determines the fair value of earnouts (contingent consideration) and any subsequent changes in fair value using a discounted probability-weighted approach using Level 3 inputs. Level 3 valuations rely on unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. The fair value of the earnouts is reviewed quarterly and is based on the payments the Company expects to make based on historical internal observations related to the anticipated performance of the underlying assets. The maximum potential obligation related to the performance targets for acquisitions, which have not been recorded on the Company’s Consolidated Balance Sheet, were $28.9 million and $14.0 million as of September 30, 2019 and December 31, 2018, respectively.

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.

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~~Table of Contents~~

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				For the three months				For the nine months
	ended September 30,				ended September 30,				ended September 30,				ended September 30,
	2019		2018		2019		2018		2020		2019		2020		2019

Asset impairment ⁽¹⁾	$	5,742	$	2,909	$	13,326	$	13,291	$	7,132	$	5,742	$	23,565	$	13,326
Write-off of carrying value of decommissioned towers		2,241		3,561		9,405		7,932		1,187		2,241		4,626		9,405
Other (including third party decommission costs)		257		398		900		1,555		187		257		912		900
Total asset impairment and decommission costs	$	8,240	$	6,868	$	23,631	$	22,778	$	8,506	$	8,240	$	29,103	$	23,631

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

The Company’s long term investments were $60.0 million and $13.3 million as of September 30, 2020 and December 31, 2019, respectively, which are classified within other assets on the Consolidated Balance Sheets. These investments are accounted for under the cost and equity method. The Company periodically reviews these investments for 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. The estimation of the fair value of the investment involves the use of Level 3 inputs.

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. ~~Short-term investments consisted of $0.2 million in Treasury securities as of September 30, 2019 and December 31, 2018.~~ The Company’s estimate of ~~the fair value of~~ its ~~held-to-maturity~~short term investments ~~in treasury and corporate bonds, including current portion,~~ are based primarily upon Level 1 reported market values. As of

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September 30, ~~2019~~2020 and December 31, ~~2018,~~2019, the ~~carrying value~~Company had $4.9 million and ~~fair value~~$0.5 million of ~~the held-to-maturity~~short-term investments, ~~including current portion, were $0.2 million. The current portion is recorded in Prepaid~~which are classified within prepaid expenses and other current assets in the Consolidated Balance Sheets, while held-to-maturity investments are recorded in Other assets. As of September 30, 2019, in addition to the Treasury securities, the Company had $0.5 million of short-term investments. For the three months ended September 30, 2019, the Company purchased $235.0 million and sold $260.0 million of short-term investments. For the nine months ended September 30, 2019, the Company purchased and sold $515.0 million of short-term investments.

On February 1, 2019, the Company, through its wholly owned subsidiary, SBA Senior Finance II, LLC, entered into a four year interest rate swap on a portion of its 2018 Term Loan in order to reduce the Company’s exposure to fluctuations in interest rates. The interest rate swap has a $1.2 billion notional value receiving interest at one month LIBOR plus 200 basis points and paying a fixed rate of 4.495% per annum settled monthly. The Company designated this swap as a cash flow hedge.

On May 23, 2019, the Company, through its wholly owned subsidiary, SBA Senior Finance II, LLC, entered into a four year interest rate swap on a portion of its 2018 Term Loan. The interest rate swap has a $750.0 million notional value receiving interest at one month LIBOR plus 200 basis points and paying a fixed rate of 4.08% per annum settled monthly. The Company designated this swap as a cash flow hedge.

On a quarterly basis, the Company evaluates whether the swaps remain highly effective in offsetting changes in cash flows. As of September 30, 2019, the Company believes that the hedges remain highly effective and changes in the fair value were recorded in Accumulated other comprehensive loss, net on the Consolidated Balance Sheet. As of September 30, 2019, the fair value of the swaps using Level 2 inputs resulted in a liability of $62.4 million and was included within Other long-term liabilities on the Consolidated Balance Sheet. 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.Sheets.

The Company determines fair value of its debt instruments utilizing various Level 2 sources including quoted prices and indicative quotes (non-binding quotes) from brokers that require judgment to interpret market information including implied credit spreads for similar borrowings on recent trades or bid/ask prices. The fair value of the Revolving Credit Facility is considered to approximate the carrying value because the interest payments are based on Eurodollar rates that reset monthly or more frequently. 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 175.0 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.

~~Table of Contents~~

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			As of		As of
	September 30, 2019		December 31, 2018		Included on Balance Sheet	September 30, 2020		December 31, 2019		Included on Balance Sheet

		(in thousands)				(in thousands)
Cash and cash equivalents	$	128,778	$	143,444		$	271,874	$	108,309
Securitization escrow accounts(1)		27,309		32,260	Restricted cash - current asset		61,417		30,046	Restricted cash - current asset
Payment and performance bonds		193		204	Restricted cash - current asset		155		197	Restricted cash - current asset
Surety bonds and workers compensation		2,400		2,392	Other assets - noncurrent		2,527		2,568	Other assets - noncurrent
Total cash, cash equivalents, and restricted cash	$	158,680	$	178,300		$	335,973	$	141,120

(1)Increase is due to the timing of customer payments.

Pursuant to the terms of the Tower Securities (see Note 10), the Company is required to establish a securitization escrow account, held by the indenture trustee, into which all rents and other sums due on the towers that secure the Tower Securities are directly deposited by the lessees. These restricted cash amounts are used to fund reserve accounts for the payment of (1) debt service costs, (2) ground rents, real estate and personal property taxes and insurance premiums related to towers, (3) trustee and servicing expenses, and (4) management fees. The restricted cash in the securitization escrow account in excess of required reserve balances is subsequently released to the Borrowers (as defined in Note 10) monthly, provided that the Borrowers are in compliance with their debt service coverage ratio and that no event of default has occurred. All monies held by the indenture trustee are classified as restricted cash on the Company’s Consolidated Balance Sheets.

Payment and performance bonds relate primarily to collateral requirements for tower construction currently in process by the Company. Cash is pledged as collateral related to surety bonds issued for the benefit of the Company or its affiliates in the ordinary course of business and primarily related to the Company’s tower removal obligations. As of September 30, ~~2019~~2020 and December 31, ~~2018,~~2019, the Company had ~~$41.4~~$41.6 million and ~~$40.5~~$41.7 million in surety, payment and performance bonds, respectively, for which 0 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, ~~2019~~2020 and December 31, ~~2018,~~2019, the Company had also pledged $2.3 million ~~and $2.2 million, respectively,~~ as collateral related to its ~~workers~~workers’ compensation policy.

‎

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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		As of		As of
	September 30, 2019		December 31, 2018		September 30, 2020		December 31, 2019

	(in thousands)				(in thousands)
Costs incurred on uncompleted contracts	$	51,291	$	38,464	$	51,419	$	52,339
Estimated earnings		19,191		16,655		20,134		19,954
Billings to date		(43,403)		(31,952)		(45,484)		(47,401)
	$	27,079	$	23,167	$	26,069	$	24,892

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



	As of		As of		As of		As of
	September 30, 2019		December 31, 2018		September 30, 2020		December 31, 2019

	(in thousands)				(in thousands)
Costs and estimated earnings in excess of billings on uncompleted contracts	$	28,303	$	23,785	$	27,109	$	26,313
Billings in excess of costs and estimated earnings on
uncompleted contracts (included in Other current liabilities)		(1,224)		(618)		(1,040)		(1,421)
	$	27,079	$	23,167	$	26,069	$	24,892

At September 30, 2020 and December 31, 2019, 8 customers comprised 98.4% and 94.4% of the costs and estimated earnings in excess of billings on uncompleted contracts, net of billings in excess of costs and estimated earnings, respectively.

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, 2020		December 31, 2019

		(in thousands)
Prepaid ground rent	$	2,508	$	1,632
Prepaid real estate taxes		4,349		3,003
Prepaid taxes		5,087		4,924
Other		18,050		27,722
Total prepaid expenses and other current assets	$	29,994	$	37,281

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~~At September 30, 2019 and December 31, 2018, 8 customers~~The Company’s other assets are comprised ~~96.5% and 96.3%~~ of the ~~contract assets, net of contract liabilities.~~following:



	As of		As of
	September 30, 2020		December 31, 2019

		(in thousands)
Straight-line rent receivable	$	317,694	$	330,660
Interest rate swap asset ⁽¹⁾		7,750		47,583
Loan receivables		13,858		8,295
Deferred lease costs, net		4,591		4,865
Deferred tax asset - long term		77,431		4,342
Long-term investments		60,012		13,255
Other		23,218		23,078
Total other assets	$	504,554	$	432,078

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

5.6.ACQUISITIONS

The following table summarizes the Company’s acquisition activity:



	For the three months				For the nine months				For the three months				For the nine months
	ended September 30,				ended September 30,				ended September 30,				ended September 30,
	2019		2018		2019		2018		2020		2019		2020		2019

	(in thousands)								(in thousands)
Acquisitions of towers and related intangible assets ^{(1) (2)}	$	99,173	$	110,464	$	224,585	$	372,054
Acquisitions of towers and related intangible assets ⁽¹⁾									$	21,895	$	99,173	$	121,319	$	224,585
Land buyouts and other assets ⁽³⁾⁽²⁾		33,346		8,008		59,116		31,781		58,969		33,346		78,580		59,116
Total cash acquisition capital expenditures	$	132,519	$	118,472	$	283,701	$	403,835	$	80,864	$	132,519	$	199,899	$	283,701

(1)The nine months ended September 30, 2019 excludes $1.7 million of acquisition costs funded through the issuance of 10,000 shares of Class A common stock.

(2)On August 30, 2019, the Company acquired an additional interest of a previously unconsolidated joint venture in South Africa which resulted in the consolidation of the entity. The cash consideration is included herein. Furthermore, the three and nine months ended September 30, 2019 excludes $72.0 million associated with the consolidation of this entity.

~~(3)~~In addition, the Company paid ~~$7.0~~$2.3 million and ~~$6.7~~$7.0 million for ground lease extensions and term easements on land underlying the Company’s towers during the three months ended September 30, ~~2019~~2020 and ~~2018,~~2019, respectively, and paid ~~$13.1~~$5.9 million and ~~$16.4~~$13.1 million for ground lease extensions and term easements on land underlying the Company’s towers during the nine months ended September 30, ~~2019~~2020 and ~~2018,~~2019, respectively. The Company recorded these amounts in prepaid rent on its Consolidated Balance Sheets. Includes amounts paid related to the acquisition of data centers for the nine months ended September 30, 2020 and 2019.

During the nine months ended September 30, ~~2019,~~2020, the Company allocated the purchase price of ~~1,103 completed~~129 acquired towers and related assets and liabilities consisting of ~~$51.3~~$16.7 million of property and equipment, ~~$286.7~~$100.3 million of intangible assets, and ~~$41.4~~$4.4 million of other net assets and liabilities assumed. All acquisitions in the three and nine months ended September 30, ~~2019~~2020 were accounted for as asset acquisitions. All but 1 acquisition in the nine months ended September 30, 2019 were accounted for as asset acquisitions. During the three months ended March 31, 2019, the Company consummated an acquisition for $3.0 million in cash and $1.7 million in the Company’s Class A common stock, which was accounted for as a business combination.

Subsequent to September 30, ~~2019,~~2020, the Company acquired 654 towers and related assets for ~~$6.7~~$14.6 million in cash.

6.~~PREPAID EXPENSES AND OTHER CURRENT ASSETS AND OTHER ASSETS~~

The maximum potential obligation related to the performance targets for acquisitions, which have not been recorded on the Company’s ~~prepaid expenses~~Consolidated Balance Sheet, were $24.9 million and ~~other current assets are comprised~~$29.7 million as of ~~the following:~~September 30, 2020 and December 31, 2019, respectively.

As of
As of
September 30, 2019
December 31, 2018
(in thousands)
Prepaid ground rent⁽¹⁾
$
1,497
$
34,276
Loan receivables
—
11,178
Marketable Securities
656
239
Prepaid real estate taxes
4,193
2,998
Other
15,600
14,435
Total prepaid expenses and other current assets
$
21,946
$
63,126

~~(1)~~Prepaid ground rent related to non-contingent rent provisions was reclassified to Right-of-use assets, net on the Consolidated Balance Sheets in the first quarter of 2019 due to the adoption of ASU 2016-02.

‎

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

As of
As of
September 30, 2019
December 31, 2018
(in thousands)
Prepaid ground rent⁽¹⁾
$
—
$
263,694
Straight-line rent receivable
326,220
322,073
Loan receivables
8,767
49,255
Deferred lease costs, net⁽¹⁾
4,342
27,020
Deferred tax asset - long term
16,981
18,330
Other
40,701
41,661
Total other assets
$
397,011
$
722,033

~~(1)~~Prepaid ground rent was reclassified from Other assets to Right-of-use assets, net on the Consolidated Balance Sheets in the first quarter of 2019 and deferred lease costs of $23.3 million were written off to Accumulated deficit on the Consolidated Balance Sheets in the first quarter of 2019 due to the adoption of ASU 2016-02.

7.PROPERTY AND EQUIPMENT, NET

Property and equipment, net consists of the following:



	As of		As of		As of		As of
	September 30, 2019		December 31, 2018		September 30, 2020		December 31, 2019

	(in thousands)				(in thousands)
Towers and related components	$	5,069,473	$	4,951,321	$	5,142,440	$	5,164,104
Construction-in-process ⁽¹⁾		36,814		35,756		36,642		33,644
Furniture, equipment, and vehicles ⁽²⁾		49,677		54,814		51,545		51,654
Land, buildings, and improvements		724,361		668,459		803,963		736,378
Total property and equipment		5,880,325		5,710,350		6,034,590		5,985,780
Less: accumulated depreciation ⁽²⁾		(3,117,270)		(2,923,995)		(3,366,586)		(3,191,178)
Property and equipment, net	$	2,763,055	$	2,786,355	$	2,668,004	$	2,794,602

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

~~(2)Financing lease right-of-use assets are included in the prior period but are included in Right-of-use assets, net on the Consolidated Balance Sheets for the current period.~~

Depreciation expense was ~~$71.4~~$71.8 million and ~~$67.5~~$71.4 million for the three months ended September 30, ~~2019~~2020 and ~~2018,~~2019, respectively, and ~~$210.1~~$215.0 million and ~~$200.6~~$210.1 million for the nine months ended September 30, ~~2019~~2020 and ~~2018,~~2019, respectively. At September 30, ~~2019~~2020 and December 31, ~~2018,~~2019, unpaid capital expenditures that are included in accounts payable and accrued expenses were ~~$11.8~~$7.0 million and ~~$12.4~~$14.7 million, respectively.

‎

~~Table of Contents~~

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, 2019						As of December 31, 2018						As of September 30, 2020						As of December 31, 2019
	Gross carrying		Accumulated		Net book		Gross carrying		Accumulated		Net book		Gross carrying		Accumulated		Net book		Gross carrying		Accumulated		Net book
	amount		amortization		value		amount		amortization		value		amount		amortization		value		amount		amortization		value

	(in thousands)												(in thousands)
Current contract intangibles	$	4,564,516	$	(2,130,479)	$	2,434,037	$	4,394,416	$	(1,928,030)	$	2,466,386	$	4,688,240	$	(2,367,997)	$	2,320,243	$	4,996,591	$	(2,218,404)	$	2,778,187
Network location intangibles		1,713,590		(885,742)		827,848		1,669,859		(804,780)		865,079		1,730,030		(986,775)		743,255		1,764,484		(915,898)		848,586
Intangible assets, net	$	6,278,106	$	(3,016,221)	$	3,261,885	$	6,064,275	$	(2,732,810)	$	3,331,465	$	6,418,270	$	(3,354,772)	$	3,063,498	$	6,761,075	$	(3,134,302)	$	3,626,773

All intangible assets noted above are included in the Company’s site leasing segment. Amortization expense relating to the intangible assets above was ~~$103.5~~$108.2 million and ~~$100.1~~$103.5 million for the three months ended September 30, ~~2019~~2020 and ~~2018,~~2019, respectively, and ~~$307.3~~$326.2 million and ~~$301.7~~$307.3 million for the nine months ended September 30, ~~2019~~2020 and ~~2018,~~2019, respectively.

‎

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9.ACCRUED EXPENSES

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



	As of		As of		As of		As of
	September 30, 2019		December 31, 2018		September 30, 2020		December 31, 2019

	(in thousands)				(in thousands)
Salaries and benefits	$	14,864	$	16,015	$	18,759	$	19,838
Real estate and property taxes		10,474		7,928		11,841		9,598
Unpaid capital expenditures		11,781		12,387		7,026		14,669
Other		26,032		27,335		24,897		23,513
Total accrued expenses	$	63,151	$	63,665	$	62,523	$	67,618

~~Table of Contents~~

10.DEBT

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



			As of						As of								As of						As of
			September 30, 2019						December 31, 2018								September 30, 2020						December 31, 2019
		Maturity Date	Principal ‎Balance		Fair Value		Carrying ‎Value		Principal ‎Balance		Fair Value		Carrying ‎Value			Maturity Date	Principal ‎Balance		Fair Value		Carrying ‎Value		Principal ‎Balance		Fair Value		Carrying ‎Value
Revolving Credit Facility																Apr. 11, 2023	$	—	$	—	$	—	$	490,000	$	490,000	$	490,000
2018 Term Loan																Apr. 11, 2025		2,346,000		2,281,485		2,330,568		2,364,000		2,369,910		2,346,183
2013-2C Tower Securities ⁽¹⁾																Apr. 11, 2023		575,000		603,802		571,760		575,000		585,954		570,866
2014-2C Tower Securities ⁽¹⁾																Oct. 8, 2024		620,000		675,726		615,896		620,000		644,912		615,205
2015-1C Tower Securities ⁽¹⁾																Oct. 8, 2020		—		—		—		500,000		502,095		498,090
2016-1C Tower Securities ⁽¹⁾																Jul. 9, 2021		—		—		—		700,000		704,095		696,936
2017-1C Tower Securities ⁽¹⁾																Apr. 11, 2022		760,000		778,445		756,632		760,000		763,405		755,061
2018-1C Tower Securities ⁽¹⁾																Mar. 9, 2023		640,000		676,198		635,614		640,000		658,266		634,344
2019-1C Tower Securities ⁽¹⁾																Jan. 12, 2025		1,165,000		1,226,570		1,154,532		1,165,000		1,158,057		1,153,086
2020-1C Tower Securities ⁽¹⁾																Jan. 9, 2026		750,000		756,563		742,505		—		—		—
2020-2C Tower Securities ⁽¹⁾																Jan. 11, 2028		600,000		605,214		593,938		—		—		—
2014 Senior Notes		Jul. 15, 2022	$	750,000	$	757,500	$	742,993	$	750,000	$	735,000	$	741,273		Jul. 15, 2022		—		—		—		750,000		760,313		743,580
2016 Senior Notes		Sep. 1, 2024		1,100,000		1,141,250		1,085,591		1,100,000		1,034,000		1,083,689		Sep. 1, 2024		1,100,000		1,124,750		1,088,241		1,100,000		1,142,625		1,086,241
2017 Senior Notes		Oct. 1, 2022		750,000		763,125		744,392		750,000		712,500		743,099		Oct. 1, 2022		750,000		755,625		746,182		750,000		764,063		744,833
2013-2C Tower Securities		Apr. 11, 2023		575,000		589,410		570,574		575,000		569,164		569,715
2014-1C Tower Securities		Oct. 8, 2019		—		—		—		920,000		914,241		917,728
2014-2C Tower Securities		Oct. 8, 2024		620,000		650,175		614,979		620,000		609,665		614,315
2015-1C Tower Securities		Oct. 8, 2020		500,000		502,500		497,493		500,000		496,640		495,737
2016-1C Tower Securities		Jul. 9, 2021		700,000		705,236		696,445		700,000		691,432		694,994
2017-1C Tower Securities		Apr. 11, 2022		760,000		766,300		754,546		760,000		744,496		753,028
2018-1C Tower Securities		Mar. 9, 2023		640,000		662,586		633,928		640,000		641,478		632,725
2019-1C Tower Securities		Jan. 12, 2025		1,165,000		1,165,501		1,153,140		—		—		—
Revolving Credit Facility		Apr. 11, 2023		—		—		—		325,000		325,000		325,000
2018 Term Loan		Apr. 11, 2025		2,370,000		2,372,963		2,351,421		2,388,000		2,262,630		2,367,250
2020 Senior Notes																Feb. 15, 2027		1,500,000		1,515,000		1,480,842		—		—		—
Total debt			$	9,930,000	$	10,076,546	$	9,845,502	$	10,028,000	$	9,736,246	$	9,938,553			$	10,806,000	$	10,999,378	$	10,716,710	$	10,414,000	$	10,543,695	$	10,334,425
Less: current maturities of long-term debt	Less: current maturities of long-term debt							(24,000)						(941,728)	Less: current maturities of long-term debt							(24,000)						(522,090)
Total long-term debt, net of current maturities	Total long-term debt, net of current maturities						$	9,821,502					$	8,996,825	Total long-term debt, net of current maturities						$	10,692,710					$	9,812,335

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

‎

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



	For the three months ended September 30,								For the nine months ended September 30,								Interest	For the three months ended September 30,								For the nine months ended September 30,
	2019				2018				2019				2018				Rates as of	2020				2019				2020				2019
	Cash		Non-cash		Cash		Non-cash		Cash		Non-cash		Cash		Non-cash		September 30,	Cash		Non-cash		Cash		Non-cash		Cash		Non-cash		Cash		Non-cash
	Interest		Interest		Interest		Interest		Interest		Interest		Interest		Interest		2020	Interest		Interest		Interest		Interest		Interest		Interest		Interest		Interest

	(in thousands)																	(in thousands)
2014 Senior Notes	$	9,141	$	201	$	9,141	$	191	$	27,422	$	596	$	27,422	$	567
2016 Senior Notes		13,406		265		13,406		252		40,219		786		40,219		748
2017 Senior Notes		7,500		—		7,500		—		22,500		—		22,500		—
2013 Tower Securities		5,396		—		5,396		—		16,188		—		20,267		—
2014 Tower Securities		11,439		—		12,785		—		37,009		—		38,354		—
Revolving Credit Facility																	1.347%	$	711	$	—	$	1,009	$	—	$	5,086	$	—	$	5,409	$	—
2018 Term Loan ⁽¹⁾																	1.878%		14,536		7,962		26,243		196		57,688		12,014		79,959		572
2013-2C Tower Securities																	3.722%		5,396		—		5,396		—		16,188		—		16,188		—
2014 Tower Securities ⁽²⁾																	3.869%		6,046		—		11,439		—		18,138		—		37,009		—
2015-1C Tower Securities		3,985		—		3,985		—		11,954		—		11,954		—	3.156%		620		—		3,985		—		8,589		—		11,954		—
2016-1C Tower Securities		5,090		—		5,090		—		15,271		—		15,271		—	2.877%		792		—		5,090		—		10,972		—		15,271		—
2017-1C Tower Securities		6,096		—		6,096		—		18,269		—		18,268		—	3.168%		6,096		—		6,096		—		18,269		—		18,269		—
2018-1C Tower Securities		5,570		—		5,570		—		16,711		—		12,502		—	3.448%		5,570		—		5,570		—		16,711		—		16,711		—
2019-1C Tower Securities		1,671		—		—		—		1,671		—		—		—	2.836%		8,357		—		1,671		—		25,072		—		1,671		—
Revolving Credit Facility		1,009		—		1,721		—		5,409		—		4,911		—
2014 Term Loan		—		—		—		—		—		—		15,550		146
2015 Term Loan		—		—		—		—		—		—		5,237		187
2018 Term Loan		26,243		196		25,096		189		79,959		572		46,303		354
2020-1C Tower Securities																	1.884%		3,077		—		—		—		3,077		—		—		—
2020-2C Tower Securities																	2.328%		3,028		—		—		—		3,028		—		—		—
2014 Senior Notes																	4.875%		—		—		9,141		201		3,352		112		27,422		596
2016 Senior Notes																	4.875%		13,406		279		13,406		265		40,219		826		40,219		786
2017 Senior Notes																	4.000%		7,500		—		7,500		—		22,500		—		22,500		—
2020 Senior Notes																	3.875%		14,531		82		—		—		32,238		114		—		—
Other		21		—		(69)		—		99		—		(480)		—			125		—		21		—		202		—		99		—
Total	$	96,567	$	662	$	95,717	$	632	$	292,681	$	1,954	$	278,278	$	2,002		$	89,791	$	8,323	$	96,567	$	662	$	281,329	$	13,066	$	292,681	$	1,954

~~Table of Contents~~

~~Senior Credit Agreement~~(1) The 2018 Term Loan has a blended rate of 1.878% 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 1.900% as of September 30, 2020. Refer to Note 17 for more information on the Company’s interest rate swap.

(2) The 2014-1C Tower Securities, which was repaid September 13, 2019, accrued interest at 2.898%. The 2014-2C Tower Securities accrue interest at 3.869%.

Revolving Credit Facility under the Senior Credit Agreement

The Revolving Credit Facility consists of a revolving loan under which up to $1.25 billion aggregate principal amount may be borrowed, repaid and redrawn, based upon specific financial ratios and subject to the satisfaction of other customary conditions to borrowing. Amounts borrowed under the Revolving Credit Facility accrue interest, at SBA Senior Finance II’s election, at either (1) the Eurodollar Rate plus a margin that ranges from 112.5 basis points to 175.0 basis points or (2) the Base Rate plus a margin that ranges from 12.5 basis points to 75.0 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 0.20% and 0.25% per annum on the amount of unused commitment. If not earlier terminated by SBA Senior Finance II, the Revolving Credit Facility will terminate on, and SBA Senior Finance II will repay all amounts outstanding on or before, April 11, 2023. The proceeds available under the Revolving Credit Facility may be used for general corporate purposes. SBA Senior Finance II may, from time to time, borrow from and repay the Revolving Credit Facility. Consequently, the amount outstanding under the Revolving Credit Facility at the end of the period may not be reflective of the total amounts outstanding during such period.

During the three months ended September 30, ~~2019, the Company~~2020, no amounts were borrowed ~~$175.0 million and~~or repaid ~~$255.0 million of the outstanding balance~~ under the Revolving Credit Facility. During the nine months ended September 30, ~~2019,~~2020, the Company borrowed ~~$265.0~~$515.0 million and repaid ~~$590.0 million~~$1.0 billion of the outstanding balance under the Revolving Credit Facility. As of September 30, ~~2019, there was~~2020, the Company had no ~~balance~~amount outstanding under the $1.25 billion Revolving Credit Facility. In addition, SBA Senior Finance II LLC, the Company’s wholly owned subsidiary (“SBA Senior Finance II”) was required to pay a commitment fee of 0.20% per annum on the amount of the unused commitment. As of September 30, ~~2019,~~2020, SBA Senior Finance II was in compliance with the financial covenants contained in the Senior Credit Agreement.

As of the date of this filing, the Company had no amount outstanding under the Revolving Credit Facility.

Term ~~Loans~~Loan under the Senior Credit Agreement

~~2014 Term Loan~~

The 2014 Term Loan consisted of a senior secured term loan with an initial aggregate principal amount of $1.5 billion that was scheduled to mature on March 24, 2021. The 2014 Term Loan accrued interest, at SBA Senior Finance II’s election, at either the Base Rate plus 125 basis points (with a 0 Base Rate floor) or the Eurodollar Rate plus 225 basis points (with a 0 Eurodollar Rate floor). The 2014 Term Loan was originally issued at 99.75% of par value. Principal payments on the 2014 Term Loan commenced on September 30, 2014 and were being made in quarterly installments on the last day of each March, June, September, and December in an amount equal to $3.8 million. The Company incurred deferred financing fees of approximately $14.1 million in relation to this transaction, which were being amortized through the maturity date.

During the three months ended March 31, 2018, the Company repaid $3.8 million of principal on the 2014 Term Loan. On April 11, 2018, the Company repaid the remaining $1,443.8 million outstanding principal balance of the 2014 Term Loan with proceeds from the 2018 Term Loan. In connection with the repayment, the Company expensed $5.8 million of net deferred financing fees and $1.7 million of discount related to the debt.

~~2015 Term Loan~~

The 2015 Term Loan consisted of a senior secured term loan with an initial aggregate principal amount of $500.0 million that was scheduled to mature on June 10, 2022. The 2015 Term Loan accrued interest, at SBA Senior Finance II’s election at either the Base Rate plus 125 basis points (with a 0 Base Rate floor) or the Eurodollar Rate plus 225 basis points (with a 0 Eurodollar Rate floor). The 2015 Term Loan was originally issued at 99.0% of par value. Principal payments on the 2015 Term Loan commenced on September 30, 2015 and were being made in quarterly installments on the last day of each March, June, September, and December in an amount equal to $1.3 million. The Company incurred deferred financing fees of approximately $5.5 million in relation to this transaction, which were being amortized through the maturity date.

During the three months ended March 31, 2018, the Company repaid $1.3 million of principal on the 2015 Term Loan. On April 11, 2018, the Company repaid the remaining $486.3 million outstanding principal balance of the 2015 Term Loan with proceeds from the 2018 Term Loan. In connection with the repayment, the Company expensed $3.2 million of net deferred financing fees and $3.1 million of discount related to the debt.

~~Table of Contents~~

~~2018 Term Loan~~

On April 11, 2018, the Company, through its wholly owned subsidiary, SBA Senior Finance II LLC, obtained a new term loan (the “2018 Term Loan”) under the amended and restated Senior Credit Agreement. The 2018 Term Loan consists of a senior secured term loan with an initial aggregate principal amount of $2.4 billion that matures on April 11, 2025. The 2018 Term Loan accrues interest, at SBA Senior Finance II’s election at either the Base Rate plus 100 basis points (with a 0 Base Rate floor) or the Eurodollar Rate plus 200 basis points (with a 0 Eurodollar Rate floor). The 2018 Term Loan was issued at 99.75% of par value. As of September 30, 2019, the 2018 Term Loan was accruing interest at 4.05% per annum. Principal payments on the 2018 Term Loan commenced on September 30, 2018 and are being made in quarterly installments on the last day of each March, June, September, and December in an amount equal to $6.0 million. The Company incurred deferred financing fees of approximately $16.8 million in relation to this transaction, which are being amortized through the maturity date. The proceeds from the 2018 Term Loan were used (1) to retire the outstanding $1.93 billion in aggregate principal amount of the 2014 Term Loan and 2015 Term Loan, (2) to pay down the existing outstanding balance under the Revolving Credit Facility, and (3) for general corporate purposes.

During the three and nine months ended September 30, ~~2019,~~2020, 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, ~~2019,~~2020, the 2018 Term Loan had a principal balance of ~~$2.4~~$2.3 billion.

On May 23, 2019, the Company, through its wholly owned subsidiary, SBA Senior Finance II, LLC, entered into a four year interest rate swap on a portion of its 2018 Term Loan in order to reduce the Company’s exposure to fluctuations in interest rates. The interest rate swap has a $750.0 million notional value receiving interest at one month LIBOR plus 200 basis points and paying a fixed rate of 4.08% per annum settled monthly.

~~Secured Tower Revenue Securities~~

~~2013 Tower Securities~~

On April 18, 2013, the Company, through a New York common law trust (the “Trust”), issued $425.0 million of 2.240% Secured Tower Revenue Securities Series 2013-1C, which had an anticipated repayment date of April 10, 2018 and a final maturity date of April 9, 2043 (the “2013-1C Tower Securities”), $575.0 million of 3.722% Secured Tower Revenue Securities Series 2013-2C, which have an anticipated repayment date of April 11, 2023 and a final maturity date of April 9, 2048 (the “2013-2C Tower Securities”), and $330.0 million of 3.598% Secured Tower Revenue Securities Series 2013-1D, which had an anticipated repayment date of April 10, 2018 and a final maturity date of April 9, 2043 (the “2013-1D Tower Securities”) (collectively the “2013 Tower Securities”). The aggregate $1.33 billion of 2013 Tower Securities had a blended interest rate of 3.218% per annum, payable monthly. The Company incurred financing fees of $11.0 million in relation to this transaction, which were being amortized through the anticipated repayment date of each of the 2013 Tower Securities.

On March 9, 2018, the Company repaid the entire aggregate principal amount of the 2013-1C Tower Securities and 2013-1D Tower Securities in connection with the issuance of the 2018-1C Tower Securities (as defined below).

~~2014 Tower Securities~~

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

~~On September 13, 2019, the Company repaid the entire aggregate principal amount of the 2014-1C Tower Securities in connection with the issuance of the 2019-1C Tower Securities (as defined below).~~

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Table of Contents

~~2015-1C Tower Securities~~

On ~~October 14, 2015,~~August 4, 2020, the Company, through its wholly owned subsidiary, SBA Senior Finance II, terminated its 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 ~~Trust, issued $500.0 million~~same date, the Company entered into an interest rate swap for $1.95 billion of ~~Secured Tower Revenue Securities Series 2015-1C, which have an anticipated repayment date~~notional value accruing interest at one month LIBOR plus 175 basis points for a fixed rate of ~~October 8, 2020 and a final~~1.874% per annum through the maturity date of ~~October 10, 2045 (the “2015-1C Tower Securities”). The fixed~~the 2018 Term Loan. Refer to Note 17 for more information on the Company’s interest rate of the 2015-1C Tower Securities is 3.156% per annum, payable monthly. The Company incurred financing fees of $11.2 million in relation to this transaction, which are being amortized through the anticipated repayment date of the 2015-1C Tower Securities.swaps.

~~2016-1C Tower Securities~~

~~On July 7, 2016, the Company, through the Trust, issued $700.0 million of~~ Secured Tower Revenue Securities Series 2016-1C, which have an anticipated repayment date of July 9, 2021 and a final maturity date of July 10, 2046 (the “2016-1C Tower Securities”). The fixed interest rate of the 2016-1C Tower Securities is 2.877% per annum, payable monthly. The Company incurred financing fees of $9.5 million in relation to this transaction, which are being amortized through the anticipated repayment date of the 2016-1C Tower Securities.

~~2017-1C Tower Securities~~

On April 17, 2017, the Company, through the Trust, issued $760.0 million of Secured Tower Revenue Securities Series 2017-1C, which have an anticipated repayment date of April 11, 2022 and a final maturity date of April 9, 2047 (the “2017-1C Tower Securities”). The fixed interest rate on the 2017-1C Tower Securities is 3.168% per annum, payable monthly. The Company incurred financing fees of $10.2 million in relation to this transaction, which are being amortized through the anticipated repayment date of the 2017-1C Tower Securities.

~~2018-1C Tower Securities~~

On March 9, 2018, the Company, through the Trust, issued $640.0 million of Secured Tower Revenue Securities Series 2018-1C, which have an anticipated repayment date of March 9, 2023 and a final maturity date of March 9, 2048 (the “2018-1C Tower Securities”). The fixed interest rate on the 2018-1C Tower Securities is 3.448% per annum, payable monthly. The Company incurred financing fees of $8.6 million in relation to this transaction, which are being amortized through the anticipated repayment date of the 2018-1C Tower Securities.

In addition, to satisfy certain risk retention requirements of Regulation RR promulgated under the Exchange Act, SBA Guarantor, LLC, a wholly owned subsidiary, purchased $33.7 million of Secured Tower Revenue Securities Series 2018-1R issued by the Trust. These securities have an anticipated repayment date of March 9, 2023 and a final maturity date of March 9, 2048 (the “2018-1R Tower Securities”). The fixed interest rate on the 2018-1R Tower Securities is 4.949% per annum, payable monthly. Principal and interest payments made on the 2018-1R Tower Securities eliminate in consolidation.

~~2019-1C Tower Securities~~

On September 13, 2019, the Company, through the Trust, issued $1.165 billion of Secured Tower Revenue Securities Series 2019-1C, which have an anticipated repayment date of January 12, 2025 and a final maturity date of January 12, 2050 (the “2019-1C Tower Securities”). The fixed interest rate on the 2019-1C Tower Securities is 2.836% per annum, payable monthly. Net proceeds from this offering were used to repay the entire aggregate principal amount of the 2014-1C Tower Securities ($920.0 million), as well as accrued and unpaid interest, amounts outstanding on the Revolving Credit Facility, and any remaining amount was used for general corporate purposes. The Company has incurred deferred financing fees of $12.0 million to date in relation to this transaction, which are being amortized through the anticipated repayment date of the 2019-1C Tower Securities.

~~Table of Contents~~

“2019-1R Tower Securities”). The fixed interest rate on the 2019-1R Tower Securities is 4.213% per annum, payable monthly. Principal and interest payments made on the 2019-1R Tower Securities eliminate in consolidation.

In connection with the issuance of the 2019-1C Tower Securities, the non-recourse mortgage loan was increased by $1.2 billion (but increased by a net of $306.4 million after giving effect to prepayment of the loan components relating to the 2014-1C Tower Securities). The new loan, after eliminating the risk retention securities, accrues interest at the same rate as the 2019-1C Tower Securities and is subject to all other material terms of the existing mortgage loan, including collateral and interest rate after the anticipated repayment date.

~~Debt Covenants and Terms of the~~ Tower Revenue Securities

As of September 30, ~~2019,~~2020, 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 (defined below) consists of a non-recourse mortgage loan made in favor of the Borrowers.

~~Senior Notes~~

~~2014 Senior Notes~~2020 Tower Securities

On July ~~1, 2014,~~14, 2020, the Company, through a New York common law trust (the “Trust”), issued $750.0 million of ~~unsecured senior notes due~~1.884% Secured Tower Revenue Securities Series 2020-1C which have an anticipated repayment date of January 9, 2026 and a final maturity date of July ~~15, 2022~~11, 2050 (the ~~“2014 Senior Notes”~~“2020-1C Tower Securities”) and $600.0 million of 2.328% Secured Tower Revenue Securities Series 2020-2C which have an anticipated repayment date of January 11, 2028 and a final maturity date of July 9, 2052 (the “2020-2C Tower Securities”) (collectively the “2020 Tower Securities”). The ~~2014 Senior Notes accrue~~aggregate $1.35 billion of 2020 Tower Securities have a blended interest ~~at a~~ rate of ~~4.875% per annum~~2.081% and a weighted average life through the anticipated repayment date of 6.4 years. Net proceeds from this offering were ~~issued at 99.178%~~used to repay the entire aggregate principal amount of ~~par value. Interest on~~ the ~~2014 Senior Notes is due semi-annually on January 15~~2015-1C Tower Securities ($500.0 million) and ~~July 15 of each year.~~the 2016-1C Tower Securities ($700.0 million). The remaining net proceeds were used for general corporate purposes. The Company has incurred deferred financing fees of ~~$11.6~~$14.0 million in relation to this transaction which are being amortized through the ~~maturity date.~~anticipated repayment date of the 2020 Tower Securities.

In addition, to satisfy certain risk retention requirements of Regulation RR promulgated under the Exchange Act, SBA Guarantor, LLC, a wholly owned subsidiary, purchased $71.1 million of Secured Tower Revenue Securities Series 2020-2R issued by the Trust. These securities have an anticipated repayment date of January 11, 2028 and a final maturity date of July 9, 2052 (the “2020-2R Tower Securities”). The 2014 Senior Notes are subject to redemption in whole or in part at the redemption prices set forth in the indenture agreement plus accrued and unpaid interest. The Company may redeem the 2014 Senior Notes during the twelve-month period beginningfixed interest rate on the ~~following dates at the following redemption prices: July 15, 2019 at 101.219% or July 15, 2020 until maturity at 100.000% of the principal amount of the 2014 Senior Notes to be redeemed~~2020-2R Tower Securities is 4.336% per annum, payable monthly. Principal and interest payments made on the ~~redemption date plus accrued and unpaid interest.~~2020-2R Tower Securities eliminate in consolidation.

~~2016~~Senior Notes

2020 Senior Notes

On ~~August 15, 2016,~~February 4, 2020, the Company issued ~~$1.1~~$1.0 billion of unsecured senior notes ~~due September 1, 2024~~at par value (the ~~“2016~~“2020-1 Senior Notes”). ~~The 2016~~On May 26, 2020, the Company issued $500.0 million of additional unsecured senior notes under the same indenture at 99.500% of par value (the “2020-2 Senior Notes”). These notes, collectively the “2020 Senior Notes,” accrue interest at a rate of ~~4.875%~~3.875% per annum and ~~were issued at 99.178% of par value.~~are due February 15, 2027. Interest on the ~~2016~~2020 Senior Notes is due semi-annually on ~~March 1~~February 15 and ~~September 1~~August 15 of each year, beginning on ~~March 1, 2017.~~August 15, 2020. The Company incurred financing fees of ~~$12.8~~$18.0 million in relation to ~~this transaction,~~these transactions, which are being amortized through the maturity date. Net proceeds from these offerings were used to redeem all of the outstanding principal amount of the 2014 Senior Notes, repay amounts outstanding under the Revolving Credit Facility, and for general corporate purposes. In addition, the Company paid a $9.1 million call premium and expensed $7.7 million for the write-off of the original issue discount and financing fees related to the redemption of the 2014 Senior Notes which are reflected in loss from extinguishment of debt on the Consolidated Statements of Operations.

The ~~2016~~2020 Senior Notes are subject to redemption in whole or in part on or after September 1, 2019 at the redemption prices set forth in the indenture agreement plus accrued and unpaid interest. The Company may redeem the 2016 Senior Notes during the twelve-month period beginning on the following dates at the following redemption prices: September 1, 2019 at 103.656%, September 1, 2020 at 102.438%, September 1, 2021 at 101.219%, or September 1, 2022 until maturity at 100.000%, of the principal amount of the 2016 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest.

~~2017 Senior Notes~~

On October 13, 2017, the Company issued $750.0 million of unsecured senior notes due October 1, 2022 (the “2017 Senior Notes”). The 2017 Senior Notes accrue interest at a rate of 4.0% per annum. Interest on the 2017 Senior Notes is due semi-annually on April 1 and October 1 of each year, beginning on April 1, 2018. The Company incurred financing fees of $8.9 million in relation to this transaction, which are being amortized through the maturity date.

~~The 2017 Senior Notes are subject to redemption in whole or in part on or after October 1, 2019~~February 15, 2023 at the redemption prices set forth in the indenture agreement plus accrued and unpaid interest. Prior to ~~October 1, 2020,~~February 15, 2023, the Company may, at its option, redeem up to 35% of the aggregate principal amount of the ~~2017~~2020 Senior Notes originally issued at a redemption price of ~~104.000%~~103.875% of the principal amount of the ~~2017~~2020 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest with the net proceeds of certain equity offerings. The Company may redeem the ~~2017~~2020 Senior Notes during the twelve-month period beginning on the following dates at the following redemption prices: ~~October 1, 2019~~February 15, 2023 at ~~102.000%~~101.938%, ~~October 1, 2020~~February 15, 2024 at ~~101.000%~~100.969%, or ~~October 1, 2021~~February 15, 2025 until maturity at 100.000%, of the principal amount of the ~~2017~~2020 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest.

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11.SHAREHOLDERS’ EQUITY

Common Stock Equivalents

The Company has outstanding stock options, ~~and~~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).

Registration of Additional Shares

On August 6, 2020, the Company filed a registration statement on Form S-8 with the Securities and Exchange Commission registering 3.4 million shares of the Company’s Class A common stock, consisting of 3.0 million shares of Common Stock issuable under the 2020 Performance and Equity Incentive Plan (the “2020 Plan”) and 400,000 shares of Common Stock subject to awards granted under the 2010 Performance and Equity Incentive Plan (the “2010 Plan”) that may become available for issuance or reissuance, as applicable, under the 2020 Plan if such awards are forfeited or are settled in cash or otherwise expire or terminate without the delivery of the shares.

Stock Repurchases

~~On July 29, 2019, the~~The Company’s Board of Directors ~~authorized a new $1.0 billion stock repurchase plan, replacing the prior plan authorized on February 16, 2018 which had a remaining authorization of $110.0 million. This new plan~~ authorizes the Company to purchase, from time to time, ~~up to $1.0 billion of the Company’s~~ outstanding Class A common stock through open market repurchases in compliance with Rule 10b-18 under the Exchange Act and/or in privately negotiated transactions at management’s discretion based on market and business conditions, applicable legal requirements and other factors. ~~Shares repurchased will be retired. The new~~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.

~~During~~ Shares repurchased are retired. On November 2, 2020, the ~~three months ended September 30, 2019, the Company repurchased 0.7 million shares~~Company’s Board of ~~its Class A common stock under its existing~~Directors authorized a new $1.0 billion stock repurchase plan, ~~for $175.7 million, at an average price per share~~replacing the prior plan authorized on July 29, 2019 which had a remaining authorization of $249.04. During the nine months ended September 30, 2019, the Company repurchased 1.2 million shares of its Class A common stock for $270.3 million, at an average price per share of $231.20. Shares repurchased were retired.$124.3 million. As of the date of this filing, the Company had ~~$824.3 million~~the full $1.0 billion of authorization remaining under the ~~current stock~~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,
	2020		2019		2020		2019

Total number of shares purchased (in millions) ⁽¹⁾		0.6		0.7		1.4		1.2
Average price paid per share ⁽¹⁾	$	302.63	$	249.04	$	267.57	$	231.20
Total price paid (in millions) ⁽¹⁾	$	175.6	$	175.7	$	375.6	$	270.3

(1)Amounts are calculated based on the trade date. For the nine months ended September 30, 2020, this differs from the Consolidated Statements of Cash Flows which calculate share repurchases based on the settlement date and includes an additional $3.3 million spent to repurchase ~~plan.~~13,870 shares which settled on January 2, 2020.

Subsequent to September 30, 2020, the Company made the following share repurchases:



Total number of shares purchased (in millions) ⁽¹⁾		0.4
Average price paid per share ⁽¹⁾	$	299.54
Total price paid (in millions) ⁽¹⁾	$	124.4

(1)Amounts are calculated based on the trade date.

Table of Contents

Dividends

As of September 30, 2020, 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 20, 2020	March 10, 2020	$0.465	$52.2 million	March 26, 2020
May 5, 2020	May 28, 2020	$0.465	$52.0 million	June 18, 2020
August 3, 2020	August 25, 2020	$0.465	$52.0 million	September 21, 2020

Subsequent to September 30, 2020, the Company 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

November 2, 2020	November 19, 2020	$0.465	December 17, 2020

12.STOCK-BASED COMPENSATION

Commencing with the 2020 equity award, the Company modified the type of equity granted to certain employees to align long-term compensation with Company performance. Under the new structure, the Company continued to issue RSUs; however, RSUs will now vest ratably over three years rather than four years. The Company further replaced stock options with PSUs which will cliff vest at the end of three years. PSUs have performance metrics for which threshold, target, and maximum parameters are established at the time of the grant. The performance metrics are used to calculate the number of shares that will be issuable when the awards vest, which may range from 0 to 200% of the target amounts. At the end of each three year performance period, the number of shares that vest will depend on the results achieved against the pre-established performance metrics. The Company recognizes compensation expense for RSUs and PSUs on a straight-line basis over the vesting period; however, compensation expense related to certain PSUs are subject to adjustment on performance relative to the established targets. Furthermore, effective with the 2020 grant, RSUs and PSUs will accrue dividend equivalents prior to vesting, which will be paid out only in respect to shares that actually vest.

On ~~September~~February 25, ~~2019, the Company paid a cash dividend of $0.37 per share, or an aggregate amount of $41.9 million, to shareholders of record at the close of business on August 28, 2019. On October 25, 2019,~~2020, the Company’s ~~Board~~2010 Plan expired by its terms. On May 14, 2020, the Company’s shareholders approved the 2020 Plan which provides for the issuance of ~~Directors declared another quarterly cash dividend of $0.37 per share on~~up to 3.0 million shares of the Company’s Class A common ~~stock. The~~stock (of which approximately 3.0 million shares remain available for future issuance as of September 30, 2020), plus additional shares of Class A common stock (a) subject to awards granted under the 2010 Plan that may become available for issuance or reissuance, as applicable, under the 2020 Plan if such awards are forfeited or are settled in cash or otherwise expire or terminate without the delivery of the shares or (b) which become issuable under the 2020 Plan by reason of any stock dividend, ~~will be payable on December 19, 2019 to shareholders~~stock split, recapitalization or other similar transaction effected without the receipt of ~~record at~~consideration which results in an increase in the ~~close~~number of ~~business on November 21, 2019.~~

~~12.STOCK-BASED COMPENSATION~~outstanding shares of Class A common stock.

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,
2019
2018
Risk free interest rate
1.37% - 2.47%
2.57% - 2.87%
Dividend yield
1.3%
0.7%
Expected volatility
20%
22%
Expected lives
4.6 years
4.6 years

‎

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	For the nine months ended
	September 30,
	2020	2019

Risk free interest rate	1.66%	1.37% - 2.47%
Dividend yield	1.3%	1.3%
Expected volatility	20%	20%
Expected lives	4.6 years	4.6 years

The following table summarizes the Company’s activities with respect to its stock option plans for the nine months ended September 30, ~~2019~~2020 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, 2018
4,816
$
114.48
Granted
1,068
$
183.41
Exercised
(1,290)
$
103.43
Forfeited/canceled
(56)
$
139.03
Outstanding at September 30, 2019
4,538
$
133.55
4.4
$
488,143
Exercisable at September 30, 2019
1,939
$
109.35
3.0
$
255,552
Unvested at September 30, 2019
2,599
$
151.62
5.4
$
232,591



		Weighted-		Weighted-Average
		Average		Remaining
	Number	Exercise Price		Contractual	Aggregate
	of Shares	Per Share		Life (in years)	Intrinsic Value
Outstanding at December 31, 2019	4,507	$	133.68
Granted	10	$	240.99
Exercised	(1,266)	$	110.44
Forfeited/canceled	(28)	$	168.11
Outstanding at September 30, 2020	3,223	$	142.84	4.0	$	566,269
Exercisable at September 30, 2020	1,722	$	124.84	3.3	$	333,471
Unvested at September 30, 2020	1,501	$	163.47	4.8	$	232,798

The weighted-average per share fair value of options granted during the nine months ended September 30, ~~2019~~2020 was ~~$33.99.~~$41.09. The total intrinsic value for options exercised during the nine months ended September 30, ~~2019~~2020 was ~~$129.6~~$231.1 million.

Restricted Stock Units and Performance-Based Restricted Stock Units

The following table summarizes the Company’s ~~restricted stock unit~~RSU and PSU activity for the nine months ended September 30, ~~2019:~~2020:

Weighted-Average
Number of
Grant Date Fair
Shares
Value per Share
(in thousands)
Outstanding at December 31, 2018
324
$
128.69
Granted
134
$
185.31
Vested
(130)
$
125.71
Forfeited/canceled
(11)
$
150.07
Outstanding at September 30, 2019
317
$
153.20



	RSUs			PSUs
		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, 2019	313	$	152.98	—	$	—
Granted ⁽¹⁾	99	$	290.77	149	$	376.48
Vested	(129)	$	142.06	—	$	—
Forfeited/canceled	(8)	$	200.03	(1)	$	376.50
Outstanding at September 30, 2020	275	$	206.51	148	$	376.48

~~During 2018,~~

(1)PSUs represent the ~~Board~~target number of Directors adopted a retirement policy applicable to all employees receiving equity as part of their compensation plan. This policy was effective January 1, 2019. Historically, all unvested outstanding equity awards were forfeited upon termination of employment and any optionsshares granted that ~~were vested but unexercised would be forfeited 90 days after~~are issuable at the termination of employment. The new retirement policy allows employees that meet certain conditions to vest or continue vesting in outstanding equity awards following retirement and extends the time the employee has to exercise vested and outstanding awards. As a result of this policy, stock compensation expense related to the adoptionend of the ~~policy resulted in an acceleration~~three year performance period. Fair value for a portion of ~~unrecognized stock compensation expense of approximately $11.2 million and $7.3 million in~~ the ~~first and second quarter of 2019, respectively.~~

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 ~~Company~~TRS has concluded that it is not more likely than not that its deferred tax assets will be realized and has

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recorded a full valuation allowance. A foreign tax provision is recognized because certain foreign subsidiaries of the Company have profitable operations or are in a net deferred tax liability position.

The Company elected to be taxed as a REIT commencing with its taxable year ended December 31, 2016. As a REIT, the Company generally will be entitled to a deduction for dividends that it pays, and therefore, not subject to U.S. federal corporate income tax on that portion of its net income that it distributes to its shareholders. As a REIT, the Company will continue to pay U.S.

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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 ~~$755.4~~$652.9 million as of December 31, ~~2018,~~2019, 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 2 business segments: site leasing and site development. The Company’s site leasing business includes ~~two~~2 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.

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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.

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

For the three months ended September 30, 2019	(in thousands)
For the three months ended September 30, 2020											(in thousands)
Revenues	$	374,705	$	93,867	$	38,975	$	—	$	507,547	$	390,961	$	95,804	$	36,175	$	—	$	522,940
Cost of revenues ⁽²⁾		63,836		29,157		30,516		—		123,509
Cost of revenues ⁽¹⁾												64,228		28,494		28,797		—		121,519
Operating profit		310,869		64,710		8,459		—		384,038		326,733		67,310		7,378		—		401,421
Selling, general, and administrative		21,840		8,626		4,183		7,623		42,272
Acquisition and new business initiatives related
adjustments and expenses		2,717		1,975		—		—		4,692
Selling, general, and administrative expenses												25,466		8,747		4,518		9,421		48,152
Acquisition and new business initiatives
related adjustments and expenses												2,458		1,666		—		—		4,124
Asset impairment and decommission costs		6,027		2,213		—		—		8,240		6,129		2,377		—		—		8,506
Depreciation, amortization and accretion		132,650		40,208		660		1,469		174,987		135,350		42,851		578		1,523		180,302
Operating income (loss)		147,635		11,688		3,616		(9,092)		153,847		157,330		11,669		2,282		(10,944)		160,337
Other expense (principally interest expense
and other income (expense))								(135,083)		(135,083)								(147,102)		(147,102)
Income before income taxes										18,764										13,235
Cash capital expenditures ⁽³⁾		67,951		101,776		357		1,060		171,144
Cash capital expenditures ⁽²⁾												89,982		17,971		127		1,176		109,256

For the three months ended September 30, 2018
For the three months ended September 30, 2019
Revenues	$	353,502	$	81,758	$	31,961	$	—	$	467,221	$	374,705	$	93,867	$	38,975	$	—	$	507,547
Cost of revenues ⁽²⁾		66,862		25,432		24,447		—		116,741
Cost of revenues ⁽¹⁾												63,836		29,157		30,516		—		123,509
Operating profit		286,640		56,326		7,514		—		350,480		310,869		64,710		8,459		—		384,038
Selling, general, and administrative		17,763		6,734		3,934		6,477		34,908
Acquisition and new business initiatives related
adjustments and expenses		1,887		1,108		—		—		2,995
Selling, general, and administrative expenses												21,840		8,626		4,183		7,623		42,272
Acquisition and new business initiatives
related adjustments and expenses												2,717		1,975		—		—		4,692
Asset impairment and decommission costs		2,801		4,067		—		—		6,868		6,027		2,213		—		—		8,240
Depreciation, amortization and accretion		129,246		36,310		646		1,501		167,703		132,650		40,208		660		1,469		174,987
Operating income (loss)		134,943		8,107		2,934		(7,978)		138,006		147,635		11,688		3,616		(9,092)		153,847
Other expense (principally interest expense
and other income (expense))								(123,841)		(123,841)								(135,083)		(135,083)
Income before income taxes										14,165										18,764
Cash capital expenditures ⁽³⁾		33,794		120,176		425		666		155,061
Cash capital expenditures ⁽²⁾												67,951		101,776		357		1,060		171,144

‎

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

For the nine months ended September 30, 2020											(in thousands)
Revenues											$	1,165,322	$	296,201	$	85,708	$	—	$	1,547,231
Cost of revenues ⁽¹⁾												192,226		87,894		68,417		—		348,537
Operating profit												973,096		208,307		17,291		—		1,198,694
Selling, general, and administrative expenses												78,021		25,713		13,468		29,654		146,856
Acquisition and new business initiatives
related adjustments and expenses												8,059		4,498		—		—		12,557
Asset impairment and decommission costs												22,297		6,806		—		—		29,103
Depreciation, amortization and accretion												403,725		131,474		1,791		4,597		541,587
Operating income (loss)												460,994		39,816		2,032		(34,251)		468,591
Other expense (principally interest expense
and other income (expense))																		(626,873)		(626,873)
Loss before income taxes																				(158,282)
Cash capital expenditures ⁽²⁾												229,795		61,605		1,191		3,572		296,163

For the nine months ended September 30, 2019	(in thousands)
Revenues	$	1,106,722	$	273,036	$	121,229	$	—	$	1,500,987	$	1,106,722	$	273,036	$	121,229	$	—	$	1,500,987
Cost of revenues ⁽²⁾		194,525		84,642		92,606		—		371,773
Cost of revenues ⁽¹⁾												194,525		84,642		92,606		—		371,773
Operating profit		912,197		188,394		28,623		—		1,129,214		912,197		188,394		28,623		—		1,129,214
Selling, general, and administrative		77,926		22,624		16,774		31,431		148,755
Acquisition and new business initiatives related
adjustments and expenses		4,698		4,971		—		—		9,669
Selling, general, and administrative expenses												77,926		22,624		16,774		31,431		148,755
Acquisition and new business initiatives
related adjustments and expenses												4,698		4,971		—		—		9,669
Asset impairment and decommission costs		18,476		5,155		—		—		23,631		18,476		5,155		—		—		23,631
Depreciation, amortization and accretion		394,308		117,197		1,900		4,185		517,590		394,308		117,197		1,900		4,185		517,590
Operating income (loss)		416,789		38,447		9,949		(35,616)		429,569		416,789		38,447		9,949		(35,616)		429,569
Other expense (principally interest expense
and other income (expense))								(327,029)		(327,029)								(327,029)		(327,029)
Income before income taxes										102,540										102,540
Cash capital expenditures ⁽³⁾		242,660		149,704		2,165		2,259		396,788

For the nine months ended September 30, 2018
Revenues	$	1,041,892	$	253,794	$	86,160	$	—	$	1,381,846
Cost of revenues ⁽²⁾		199,633		79,167		67,693		—		346,493
Operating profit		842,259		174,627		18,467		—		1,035,353
Selling, general, and administrative		55,047		20,242		11,943		19,669		106,901
Acquisition and new business initiatives related
adjustments and expenses		5,242		3,929		—		—		9,171
Asset impairment and decommission costs		15,971		6,475		332		—		22,778
Depreciation, amortization and accretion		382,490		113,550		1,936		4,683		502,659
Operating income (loss)		383,509		30,431		4,256		(24,352)		393,844
Other expense (principally interest expense
and other income (expense))								(415,191)		(415,191)
Loss before income taxes										(21,347)
Cash capital expenditures ⁽³⁾		287,711		218,739		1,345		2,148		509,943
Cash capital expenditures ⁽²⁾												242,660		149,704		2,165		2,259		396,788

Domestic Site
Int'l Site
Site
Leasing
Leasing
Development
Other ⁽¹⁾
Total
Assets
(in thousands)
As of September 30, 2019
$
6,261,128
$
2,766,050
$
79,773
$
94,187
$
9,201,138
As of December 31, 2018
$
5,035,826
$
2,042,800
$
60,775
$
74,306
$
7,213,707



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

Assets	(in thousands)
As of September 30, 2020	$	5,939,062	$	2,827,255	$	60,182	$	208,183	$	9,034,682
As of December 31, 2019	$	6,157,511	$	3,381,448	$	81,772	$	139,210	$	9,759,941

(1)~~Assets in Other consist primarily of general corporate assets.~~

~~(2)~~Excludes depreciation, amortization, and accretion.

~~(3)~~(2)Includes cash paid for capital expenditures and acquisitions and financing leases.

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

Other than Brazil, no foreign country represented a material amount of the Company’s total revenues in any of the periods presented. Site leasing revenue in Brazil was ~~$168.6~~$167.8 million and ~~$167.1~~$168.6 million for the nine months ended September 30, 2020 and 2019, respectively. Total long-lived assets in Brazil were $0.9 billion and $1.4 billion as of September 30, 2020 and December 31, 2019, respectively.

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~~2018, respectively. Total long-lived assets in Brazil were $915.5 million and $1,031.6 million as of September 30, 2019 and December 31, 2018, respectively.~~

15.EARNINGS PER SHARE

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

The following table sets forth basic and diluted net income (loss) per common share attributable to common shareholders for the three and nine months ended September 30, ~~2019~~2020 and ~~2018~~2019 (in thousands, except per share data):



	For the three months				For the nine months				For the three months				For the nine months
	ended September 30,				ended September 30,				ended September 30,				ended September 30,
	2019		2018		2019		2018		2020		2019		2020		2019
Numerator:
Net income (loss) attributable to SBA
Communications Corporation	$	21,679	$	16,144	$	79,640	$	(9,702)	$	22,568	$	21,679	$	(81,678)	$	79,640
Denominator:
Basic weighted-average shares outstanding		113,037		114,597		112,985		115,378		111,783		113,037		111,809		112,985
Dilutive impact of stock options and restricted shares		2,147		1,517		1,839		—
Dilutive impact of stock options, RSUs, and PSUs										1,920		2,147		—		1,839
Diluted weighted-average shares outstanding		115,184		116,114		114,824		115,378		113,703		115,184		111,809		114,824
Net income (loss) per common share attributable to SBA
Communications Corporation:
Basic	$	0.19	$	0.14	$	0.70	$	(0.08)	$	0.20	$	0.19	$	(0.73)	$	0.70
Diluted	$	0.19	$	0.14	$	0.69	$	(0.08)	$	0.20	$	0.19	$	(0.73)	$	0.69

For the three months ended September 30, 2020, the diluted weighted average number of common shares outstanding excluded an additional 1,520 shares issuable upon the vesting of the Company’s RSUs and PSUs because the impact would be anti-dilutive.

For the nine months ended September 30, 2020, all potential common stock equivalents, including 3.2 million shares of stock options, 0.3 million shares of RSUs, and 0.1 million shares of PSUs, each issuable upon exercise or vesting, were excluded as the effect would be anti-dilutive.

For the three and nine months ended September 30, 2019, the diluted weighted average number of common shares outstanding excluded an additional 8,091 and 18,277 shares, respectively, issuable upon exercise of the Company’s stock options because the impact would be anti-dilutive.

For the three months ended September 30, 2018, the diluted weighted average number of common shares outstanding excluded an additional 0.9 million shares issuable upon exercise of the Company’s stock options because the impact would be anti-dilutive.16. REDEEMABLE NONCONTROLLING INTERESTS

~~For~~During the ~~nine months ended September 30, 2018, all potential common stock equivalents, including 5.2 million shares~~third quarter of ~~stock options outstanding and 0.3 million shares of restricted stock units outstanding, were excluded as the effect would be anti-dilutive.~~

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~~16.~~ ~~COMMITMENTS AND CONTINGENCIES~~

~~The Company is obligated under various non-cancelable operating leases for land, office space, equipment and site leases. In addition,~~2020, the Company ~~is obligated under various non-cancelable financing leases for vehicles. The annual minimum lease payments, including fixed rate escalations, as of September 30, 2019 are as follows (in thousands):~~

Finance Leases
Operating Leases
The remainder of 2019
$
348
$
59,102
2020
924
237,623
2021
745
239,390
2022
529
240,539
2023
59
240,594
Thereafter
—
3,086,003
Total minimum lease payments
2,605
4,103,251
Less: amount representing interest
(145)
(1,701,002)
Present value of future payments
2,460
2,402,249
Less: current obligations
(987)
(229,210)
Long-term obligations
$
1,473
$
2,173,039

~~Tenant (Operating) Leases~~

~~The annual minimum tower lease income~~noticed its intent to ~~be received for tower space rental under non-cancelable operating leases, including fixed rate escalations, as of September 30, 2019 is as follows:~~

(in thousands)
The remainder of 2019
$
426,237
2020
1,561,995
2021
1,320,941
2022
1,070,375
2023
865,317
Thereafter
2,259,217
Total
$
7,504,082

~~17.~~ ~~REDEEMABLE NONCONTROLLING INTEREST~~

~~In August 2019,~~exercise its call option to acquire the ~~Company acquired an additional~~remaining 6% interest ofin a ~~previously unconsolidated~~ joint venture in South Africa, ~~which~~ operated under the name Atlas Tower South Africa, ~~(“Atlas SA”). As a result of the transaction,~~which the Company ~~has consolidated~~expects to close in the ~~results~~fourth quarter of the entity into its financial statements. The incremental investment is reflected within Acquisitions on the Consolidated Statement of Cash Flows. As of the acquisition date, the fair market value of the 6% noncontrolling interest was $14.0 million. The fair value assigned to the redeemable noncontrolling interest is estimated using Level 3 inputs based on unobservable inputs.

In connection with the acquisition of the additional interest in Atlas SA, the parties agreed to both a put option exercisable by the noncontrolling interest holder and a call option exercisable by the Company. The put option allows the noncontrolling interest holder to sell its 6% noncontrolling interest to the Company for an amount to be determined using ~~a formulaic approach. The call option allows the Company to purchase the remaining 6% minority interest using the same formulaic approach. Both the put and call options can be exercised on or after August 30,~~ 2020. As the put option is outside of the Company’s control, the estimated redemption value of the minority interest is presented as a redeemable noncontrolling interest outside of permanent equity on the Consolidated Balance Sheets.

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The Company allocates income and losses to the noncontrolling interest holder based on the applicable membership interest percentage. At each reporting period, the redeemable noncontrolling interest iswas recognized at the higher 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 contractually-defined redemption value as of the balance sheet date. Adjustments to the carrying amount of redeemable noncontrolling interest ~~are~~were charged against retained earnings (or additional paid-in capital if there ~~are~~were no retained earnings).

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The components of the redeemable noncontrolling interest ~~as of September 30, 2019~~ are as follows (in thousands):



~~BALANCE, December 31, 2018~~	$	—
~~Purchase of noncontrolling interest~~		~~13,990~~
~~Net income attributable to the noncontrolling interest~~		87
~~BALANCE, September 30, 2019~~	$	~~14,077~~



	For the three months ended		For the nine months ended
	September 30, 2020		September 30, 2020

Beginning balance	$	14,349	$	16,052
Foreign currency translation adjustments		96		(908)
Adjustment to fair value		641		511
Net income (loss) attributable to noncontrolling interests		108		(461)
Ending balance	$	15,194	$	15,194

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 its 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, 2020, the hedge remains highly effective; therefore, subsequent changes in the fair value are recorded in Accumulated other comprehensive loss, net. As of September 30, 2020, the interest rate swap has a fair value of $7.7 million.

On August 4, 2020, the Company also terminated its existing interest rate swaps, which were previously de-designated as cash flow hedges. There was 0 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 terms which range from 2023 to 2025.

Accumulated other comprehensive loss, net includes an aggregate of $156.5 million and $42.1 million of accumulated derivative net losses as of September 30, 2020 and December 31, 2019, respectively.

Additionally, 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 disclosures below provide additional information about the effects of these interest rate swaps on the Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Comprehensive Income (Loss), and Consolidated Statements of Shareholders’ Deficit. 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.

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The table below outlines the effects of the Company’s interest rate swaps on the Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019.



		Fair Value as of
	Balance Sheet	September 30,		December 31,
	Location	2020		2019

Derivatives Designated as Hedging Instruments		(in thousands)
Interest rate swap agreements in a fair value asset position	Other assets	$	7,750	$	—
Interest rate swap agreement in a fair value liability position	Other long-term liabilities	$	—	$	42,698
Derivatives Not Designated as Hedging Instruments
Interest rate swap agreements in a fair value asset position	Other assets	$	—	$	47,583
Interest rate swap agreements in a fair value liability position	Other long-term liabilities	$	—	$	47,583

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 month periods ended September 30, 2020 and 2019.



	For the three months				For the nine months
	ended September 30,				ended September 30,
	2020		2019		2020		2019

Cash Flow Hedge - Interest Rate Swap Agreement	(in thousands)
Change in fair value recorded in Accumulated other comprehensive loss, net	$	(7,252)	$	—	$	(132,460)	$	—
Amount recognized in Non-cash interest expense	$	(1,062)	$	—	$	(6,707)	$	—

Derivatives Not Designated as Hedges - Interest Rate Swap Agreements
Amount reclassified from Accumulated other comprehensive
loss, net into Non-cash interest expense	$	8,809	$	—	$	18,094	$	—
Change in fair value recorded in Other income (expense), net	$	(3,192)	$	—	$	—	$	—

18. CONCENTRATION OF CREDIT RISK

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

On April 1, 2020, T-Mobile finalized a merger with Sprint and now operates as T-Mobile. For the three months ended September 30, 2020, T-Mobile represented 40.2% of the Company’s total domestic site leasing revenue and 67.6% of the Company’s site development revenue. For the nine months ended September 30, 2020, T-Mobile represented 40.6% of the Company’s total domestic site leasing revenue and 59.7% of the Company’s site development revenue.

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, and South Africa. Our primary business line is our site leasing business, which contributed ~~97.5%~~98.6% of our total segment operating profit for the nine months ended September 30, ~~2019.~~2020. In our site leasing business, we (1) lease antenna space to wireless service providers on towers that we own or operate and (2) manage rooftop and tower sites for property owners under various contractual arrangements. As of September 30, ~~2019,~~2020, we owned ~~30,904~~32,724 towers, a substantial portion of which have been built

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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, ~~Canada,~~South America, Central America, ~~South America,~~Canada, and South Africa. As of September 30, ~~2019,~~2020, (1) no U.S. state or territory accounted for more than 10% of our total tower portfolio by tower count, and (2) no U.S. state or territory accounted for more than 10% of our total revenues for the nine months ended September 30, ~~2019.~~2020. In addition, as of September 30, ~~2019,~~2020, approximately ~~27.7%~~30% of our total towers are located in Brazil and less than 3%4% of our total towers are located in any of our other international markets (each country is considered a market). We derive site leasing revenues primarily from wireless service provider tenants, including T-Mobile, AT&T, ~~T-Mobile, Sprint,~~ Verizon Wireless, Oi S.A., Telefonica, Claro, and TIM. Wireless service providers enter into tenant leases with us, each of which relates to the lease or use of space at an individual site. In the United States and Canada, our tenant leases are generally for an initial term of 5five years to ~~ten~~10 years with multiple 5five year renewal periods at the option of the tenant. These tenant leases typically contain specific rent escalators, which average 3-4% per year, including the renewal option periods. Tenant leases in South Africa and our Central and South American markets typically have an initial term of ~~ten~~10 years with multiple 5five year renewal periods. In Central America, we have similar rent escalators to that of leases in the United States and Canada while our leases in South America and South Africa escalate in accordance with a standard cost of living index. Site leases in South America typically provide for a fixed rental amount and a pass through charge for the underlying rent related to ground ~~lease rent.~~leases and other property interests.

Cost of site leasing revenue primarily consists of:

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

Property taxes;

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

Utilities;

Property insurance; and

Lease initial direct cost amortization.

In the United States ~~Canada, Central America,~~ and ~~South America,~~our international markets, ground leases and other property interests are generally for an initial term of 5five years ~~or more~~to 10 years with multiple ~~5 year~~ renewal periods, at our ~~option. In South Africa, ground leases are generally for an initial term of ten years with three 10 year renewal periods at our option. Ground leases~~option, and provide for rent escalators which typically average 2-3% annually, or in our South American markets and South Africa, adjust in accordance with a standard cost of living index. As of September 30, ~~2019,~~2020, approximately ~~72%~~71% of our tower structures were located on parcels of land that we own, land subject to perpetual easements, or

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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 our Central American markets and Ecuador, significantly all of our revenue, expenses, and capital expenditures arising from our new build 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, and South Africa 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, Argentina, and Peru, 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.

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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 of our ~~Condensed Notes~~condensed notes to consolidated financial statements included in this quarterly report.



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

Segment operating profit as a percentage of total	2019		2018		2019		2018		2020		2019		2020		2019

Domestic site leasing		80.9%		81.8%		80.8%		81.3%		81.4%		80.9%		81.2%		80.8%
International site leasing		16.9%		16.1%		16.7%		16.9%		16.8%		16.9%		17.4%		16.7%
Total site leasing		97.8%		97.9%		97.5%		98.2%		98.2%		97.8%		98.6%		97.5%

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 when a customer does not renew its lease or cancels its lease prior to the end of its term) other than in connection with customer consolidation or cessation of a particular 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 ~~2019,~~2020, we expect organic site leasing revenue in both our domestic and international segments to increase over ~~2018~~2019 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 (e.g. MetroPCS, Leap, Clearwire, and iDEN).~~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 of our condensed notes to consolidated financial statements in this quarterly report.

Customers

We lease tower space to and perform site development services for all of the large U.S. wireless service providers. In both our site leasing and site development businesses, we work with large national providers and smaller regional, local, or private operators. Internationally, we lease tower space to all major service providers in South America, Central America, Canada, and South Africa.

On April 1, 2020, T-Mobile finalized a merger with Sprint and now operates as T-Mobile. For the three months ended September 30, 2020, T-Mobile represented 40.2% of our total domestic site leasing revenue and 67.6% of our site development revenue. For the nine months ended September 30, 2020, T-Mobile represented 40.6% of our total domestic site leasing revenue and 59.7% of our site development revenue.

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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 a cash ~~dividend distribution.~~dividends. While the addition of a cash dividend to our capital allocation strategy has provided us with a new tool to return value to our shareholders, we will also continue to make investments focused on increasing ~~our~~ Adjusted Funds From Operations per share. To achieve this, we expect to continue to deploy capital to portfolio growth and stock repurchases, subject to compliance with REIT distribution requirements, available funds and market conditions, while maintaining our target leverage levels. Key elements of our capital allocation strategy include:

Portfolio Growth. We intend to continue to grow our ~~tower~~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. ~~Commencing in the third quarter of~~In 2019, we added dividends as 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, we believe, it will allow us to 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.

COVID-19 Update

During the nine months ended September 30, 2020, we experienced minimal impact to our business or results of operations from the coronavirus (COVID-19) pandemic. The extent to which COVID-19 could adversely affect our future business operations will depend on future developments such as the duration of the outbreak, new information on the severity of COVID-19, and methods taken to contain or treat the outbreak of COVID-19. While the full impact of COVID-19 is not yet known, we will continue to monitor this recent outbreak and the potential effects on our business. For more information regarding COVID-19, refer to Item 1A. Risk Factors.

Critical Accounting Policies and Estimates

We have identified the policies and significant estimation processes listed in the 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 of our consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019. 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.

~~Lease Accounting~~

We adopted ASU No. 2016-02, Leases (“Topic 842”) using the modified retrospective adoption method with an effective date of January 1, 2019. This standard requires all lessees to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments. The adoption of the new lease standard had a significant impact on our Consolidated Balance Sheets but did not have a significant impact on our lease classification or a material impact on our Consolidated Statements of Operations and liquidity. Additionally, the adoption of Topic 842 did not have a material impact on our debt covenant compliance under our current agreements. We have elected to not separate nonlease components from the associated lease component for all underlying classes of assets.

In order to calculate our lease liability, we make certain assumptions related to lease term and discount rate. For lease terms, we evaluate renewal options. For the discount rate, we use the rate implicit in the lease when available to discount lease payments to present value. However, our ground leases generally do not provide a readily determinable implicit rate. Therefore, we estimate the incremental borrowing rate to discount lease payments based on the lease term and lease currency. We use publicly available data for instruments with similar characteristics when calculating our incremental borrowing rates. For a further discussion on lease accounting, refer to Note 1 of our Condensed Notes to consolidated financial statements included in this quarterly report.

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RESULTS OF OPERATIONS

This report 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.

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Three Months Ended September 30, ~~2019~~2020 Compared to Three Months Ended September 30, ~~2018~~2019

Revenues and Segment Operating Profit:



	For the three months ended								Constant		For the three months ended								Constant
	September 30,				Foreign		Constant		Currency		September 30,				Foreign		Constant		Currency
	2019		2018		Currency Impact		Currency Change		% Change		2020		2019		Currency Impact		Currency Change		% Change

Revenues	(in thousands)										(in thousands)
Domestic site leasing	$	374,705	$	353,502	$	—	$	21,203		6.0%	$	390,961	$	374,705	$	—	$	16,256		4.3%
International site leasing		93,867		81,758		(649)		12,758		15.6%		95,804		93,867		(20,147)		22,084		23.5%
Site development		38,975		31,961		—		7,014		21.9%		36,175		38,975		—		(2,800)		(7.2%)
Total	$	507,547	$	467,221	$	(649)	$	40,975		8.8%	$	522,940	$	507,547	$	(20,147)	$	35,540		7.0%
Cost of Revenues
Domestic site leasing	$	63,836	$	66,862	$	—	$	(3,026)		(4.5%)	$	64,228	$	63,836	$	—	$	392		0.6%
International site leasing		29,157		25,432		(223)		3,948		15.5%		28,494		29,157		(6,659)		5,996		20.6%
Site development		30,516		24,447		—		6,069		24.8%		28,797		30,516		—		(1,719)		(5.6%)
Total	$	123,509	$	116,741	$	(223)	$	6,991		6.0%	$	121,519	$	123,509	$	(6,659)	$	4,669		3.8%
Operating Profit
Domestic site leasing	$	310,869	$	286,640	$	—	$	24,229		8.5%	$	326,733	$	310,869	$	—	$	15,864		5.1%
International site leasing		64,710		56,326		(426)		8,810		15.6%		67,310		64,710		(13,488)		16,088		24.9%
Site development		8,459		7,514		—		945		12.6%		7,378		8,459		—		(1,081)		(12.8%)

Revenues

Domestic site leasing revenues increased ~~$21.2~~$16.3 million for the three months ended September 30, ~~2019,~~2020, as compared to the prior year, primarily due to (1) revenues from ~~161~~120 towers acquired and 2821 towers built since July 1, ~~2018~~2019 and (2) organic site leasing growth, primarily from monetary lease amendments for additional equipment added to our towers as well as new leases and contractual rent escalators, partially offset by lease ~~non-renewals primarily by MetroPCS, Leap, Clearwire, and Sprint iDEN.~~non-renewals.

International site leasing revenues increased ~~$12.1~~$1.9 million for the three months ended September 30, ~~2019,~~2020, as compared to the prior year. On a constant currency basis, international site leasing revenues increased ~~$12.8~~$22.1 million. These changes were primarily due to (1) revenues from ~~1,700~~2,316 towers acquired (including 1,313 and ~~488~~911 towers acquired in Brazil and South Africa, respectively) and 446 towers built since July 1, ~~2018~~2019 and (2) organic site leasing growth from new leases, amendments, and contractual escalators. Site leasing revenue in Brazil represented ~~12.1%~~10.8% of total site leasing revenue for the period. No other individual international market represented more than 3%4% of our total site leasing revenue.

Site development revenues ~~increased $7.0~~decreased $2.8 million for the three months ended September 30, ~~2019,~~2020, as compared to prior year, as a result of ~~increased~~decreased carrier activity driven primarily ~~driven~~ by ~~network related projects by Sprint~~T-Mobile and ~~T-Mobile.~~Sprint.

Operating Profit

Domestic site leasing segment operating profit increased ~~$24.2~~$15.9 million for the three months ended September 30, ~~2019,~~2020, as compared to the prior year, primarily due to additional profit generated by (1) towers acquired and built since July 1, ~~2018~~2019 and organic

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site leasing growth as noted above, (2) continued control of our site leasing cost of revenue, and (3) the positive impact of our ground lease purchase program.

International site leasing segment operating profit increased ~~$8.4~~$2.6 million for the three months ended September 30, ~~2019,~~2020, as compared to the prior year. On a constant currency basis, international site leasing segment operating profit increased ~~$8.8~~$16.1 million. These changes were primarily due to additional profit generated by (1) towers acquired and built since July 1, ~~2018~~2019 and organic site

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leasing growth as noted above, (2) continued control of our site leasing cost of revenue, and ~~(2)~~(3) the positive impact of our ground lease purchase program.

Site development segment operating profit ~~increased $0.9~~decreased $1.1 million for the three months ended September 30, ~~2019,~~2020, as compared to the prior year, ~~primarily due to an increase in revenue from increased~~as a result of decreased carrier activity driven primarily ~~driven~~ by ~~network related projects by Sprint~~T-Mobile and ~~T-Mobile partially offset by a change in the mix of work performed.~~Sprint.

Selling, General, and Administrative Expenses:



	For the three months ended								Constant		For the three months ended								Constant
	September 30,				Foreign		Constant		Currency		September 30,				Foreign		Constant		Currency
	2019		2018		Currency Impact		Currency Change		% Change		2020		2019		Currency Impact		Currency Change		% Change

	(in thousands)										(in thousands)
Domestic site leasing	$	21,840	$	17,763	$	—	$	4,077		23.0%	$	25,466	$	21,840	$	—	$	3,626		16.6%
International site leasing		8,626		6,734		(110)		2,002		29.7%		8,747		8,626		(1,174)		1,295		15.0%
Total site leasing	$	30,466	$	24,497	$	(110)	$	6,079		24.8%	$	34,213	$	30,466	$	(1,174)	$	4,921		16.2%
Site development		4,183		3,934		—		249		6.3%		4,518		4,183		—		335		8.0%
Other		7,623		6,477		—		1,146		17.7%		9,421		7,623		—		1,798		23.6%
Total	$	42,272	$	34,908	$	(110)	$	7,474		21.4%	$	48,152	$	42,272	$	(1,174)	$	7,054		16.7%

Selling, general, and administrative expenses increased ~~$7.4~~$5.9 million for the three months ended September 30, ~~2019,~~2020, as compared to the prior year. On a constant currency basis, selling, general, and administrative expenses ~~increase $7.5~~increased $7.1 million. These changes were primarily as a result of increases in ~~personnel costs,~~ noncash compensation, ~~benefits,~~personnel and other ~~support-related costs.~~support related costs due in part to our continued international expansion and charitable contributions related to COVID-19 relief, and back-office operating expenses, partially offset by a decrease in travel related expenses.

Acquisition and New Business Initiatives Related Adjustments and Expenses:



	For the three months ended								Constant		For the three months ended								Constant
	September 30,				Foreign		Constant		Currency		September 30,				Foreign		Constant		Currency
	2019		2018		Currency Impact		Currency Change		% Change		2020		2019		Currency Impact		Currency Change		% Change

	(in thousands)										(in thousands)
Domestic site leasing	$	2,717	$	1,887	$	—	$	830		44.0%	$	2,458	$	2,717	$	—	$	(259)		(9.5%)
International site leasing		1,975		1,108		(31)		898		81.0%		1,666		1,975		(322)		13		0.7%
Total	$	4,692	$	2,995	$	(31)	$	1,728		57.7%	$	4,124	$	4,692	$	(322)	$	(246)		(5.2%)

Acquisition and new business initiatives related adjustments and expenses increased $1.7 million, on an actual and constant currency basis, for the three months ended September 30, 2019, as compared to the prior year. These changes were primarily as a result of incremental costs incurred in support of new business initiatives.

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Asset Impairment and Decommission Costs:



	For the three months ended								Constant		For the three months ended								Constant
	September 30,				Foreign		Constant		Currency		September 30,				Foreign		Constant		Currency
	2019		2018		Currency Impact		Currency Change		% Change		2020		2019		Currency Impact		Currency Change		% Change

	(in thousands)										(in thousands)
Domestic site leasing	$	6,027	$	2,801	$	—	$	3,226		115.2%	$	6,129	$	6,027	$	—	$	102		1.7%
International site leasing		2,213		4,067		(12)		(1,842)		(45.3%)		2,377		2,213		(522)		686		31.0%
Total	$	8,240	$	6,868	$	(12)	$	1,384		20.2%	$	8,506	$	8,240	$	(522)	$	788		9.6%

Asset impairment and decommission costs increased ~~$1.4~~$0.3 million for the three months ended September 30, ~~2019,~~2020, as compared to the prior year. ~~This change was~~On a constant currency basis, asset impairment and decommission costs increased $0.8 million. These changes were primarily as a result of a ~~$2.8~~$1.4 million 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, partially offset by a ~~$1.4~~$1.1 million decrease in the impairment charge ~~recorded due~~related to ~~less~~ sites decommissioned in the third quarter of ~~2019~~2020 compared to the prior year period.

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Depreciation, Accretion, and Amortization Expense:



	For the three months ended								Constant		For the three months ended								Constant
	September 30,				Foreign		Constant		Currency		September 30,				Foreign		Constant		Currency
	2019		2018		Currency Impact		Currency Change		% Change		2020		2019		Currency Impact		Currency Change		% Change

	(in thousands)										(in thousands)
Domestic site leasing	$	132,650	$	129,246	$	—	$	3,404		2.6%	$	135,350	$	132,650	$	—	$	2,700		2.0%
International site leasing		40,208		36,310		(313)		4,211		11.6%		42,851		40,208		(8,891)		11,534		28.7%
Total site leasing	$	172,858	$	165,556	$	(313)	$	7,615		4.6%	$	178,201	$	172,858	$	(8,891)	$	14,234		8.2%
Site development		660		646		—		14		2.2%		578		660		—		(82)		(12.4%)
Other		1,469		1,501		—		(32)		(2.1%)		1,523		1,469		—		54		3.7%
Total	$	174,987	$	167,703	$	(313)	$	7,597		4.5%	$	180,302	$	174,987	$	(8,891)	$	14,206		8.1%

Depreciation, accretion, and amortization expense increased ~~$7.3~~$5.3 million for the three months ended September 30, ~~2019,~~2020, as compared to the prior year. On a constant currency basis, depreciation, accretion, and amortization expense increased ~~$7.6~~$14.2 million. These changes were primarily due to an increase in the number of towers we acquired and built since July 1, ~~2018,~~2019, partially offset by the impact of assets that became fully depreciated since the prior year period.

Operating Income (Expense):



	For the three months ended								Constant		For the three months ended								Constant
	September 30,				Foreign		Constant		Currency		September 30,				Foreign		Constant		Currency
	2019		2018		Currency Impact		Currency Change		% Change		2020		2019		Currency Impact		Currency Change		% Change

	(in thousands)										(in thousands)
Domestic site leasing	$	147,635	$	134,943	$	—	$	12,692		9.4%	$	157,330	$	147,635	$	—	$	9,695		6.6%
International site leasing		11,688		8,107		40		3,541		43.7%		11,669		11,688		(2,579)		2,560		21.9%
Total site leasing	$	159,323	$	143,050	$	40	$	16,233		11.3%	$	168,999	$	159,323	$	(2,579)	$	12,255		7.7%
Site development		3,616		2,934		—		682		23.2%		2,282		3,616		—		(1,334)		(36.9%)
Other		(9,092)		(7,978)		—		(1,114)		14.0%		(10,944)		(9,092)		—		(1,852)		20.4%
Total	$	153,847	$	138,006	$	40	$	15,801		11.4%	$	160,337	$	153,847	$	(2,579)	$	9,069		5.9%

~~Table of Contents~~

Domestic site leasing operating income increased ~~$12.7~~$9.7 million for the three months ended September 30, ~~2019,~~2020, as compared to the prior year, primarily due to higher segment operating profit, partially offset by increases in selling, general, and administrative expenses and depreciation, accretion, and amortization ~~expense, and asset impairment and decommission costs.~~expense.

International site leasing operating income ~~increased $3.6 million~~did not change significantly on an actual basis for the three months ended September 30, ~~2019,~~2020, as compared to the prior year. On a constant currency basis, international site leasing operating income increased ~~$3.5~~$2.6 million. These changes were primarily due to higher segment operating profit and a decrease in asset impairment and decommission costs, partially offset by increases in depreciation, accretion, and amortization expenses and selling, general, and administrative expenses.

~~Site development operating income increased $0.7 million for the three months ended September 30, 2019, as compared to the prior year,~~ primarily due to higher segment operating profit, partially offset by increases in depreciation, accretion, and amortization expense, selling, general, and administrative expenses, and asset impairment and decommission costs.

Site development operating income decreased $1.3 million for the three months ended September 30, 2020, as compared to the prior year, primarily due to lower segment operating profit driven by less activity from T-Mobile and Sprint and an increase in selling, general, and administrative expenses.

‎

Table of Contents

Other Income (Expense):



	For the three months ended								Constant		For the three months ended								Constant
	September 30,				Foreign		Constant		Currency		September 30,				Foreign		Constant		Currency
	2019		2018		Currency Impact		Currency Change		% Change		2020		2019		Currency Impact		Currency Change		% Change

	(in thousands)										(in thousands)
Interest income	$	1,311	$	2,006	$	(4)	$	(691)		(34.4%)	$	756	$	1,311	$	(154)	$	(401)		(30.6%)
Interest expense		(96,567)		(95,717)		—		(850)		0.9%		(89,791)		(96,567)		1		6,775		(7.0%)
Non-cash interest expense		(662)		(632)		—		(30)		4.7%		(8,323)		(662)		—		(7,661)		1,157.3%
Amortization of deferred financing fees		(5,157)		(4,980)		—		(177)		3.6%		(4,883)		(5,157)		—		274		(5.3%)
Loss from extinguishment of debt, net		(457)		—		—		(457)		—%		(2,599)		(457)		—		(2,142)		468.7%
Other (expense) income, net		(33,551)		(24,518)		(5,994)		(3,039)		NM
Other expense, net												(42,262)		(33,551)		(7,005)		(1,706)		113.4%
Total	$	(135,083)	$	(123,841)	$	(5,998)	$	(5,244)		5.4%	$	(147,102)	$	(135,083)	$	(7,158)	$	(4,861)		4.7%

Interest expense ~~increased $0.9~~decreased $6.8 million for the three months ended September 30, ~~2019,~~2020, as compared to the prior ~~year. These changes were~~year primarily due to a lower weighted average interest rate due in part to the new interest rate swap entered into during the third quarter of 2020, partially offset by a higher average principal amount of cash-interest bearing debt ~~outstanding~~outstanding.

Non-cash interest expense increased $7.7 million for the three months ended September 30, 2020, as compared to the prior year ~~partially offset by a lower weighted average~~primarily related to amortization of accumulated losses related to our interest rate swaps de-designated as ~~compared~~cash flow hedges.

Loss from extinguishment of debt was $2.6 million for the three months ended September 30, 2020 representing the write-off of unamortized financing fees related to the ~~prior year.~~repayment of the 2015-1C and 2016-1C Tower Securities.

Other ~~(expense) income,~~expense, net includes a ~~$31.9~~$38.6 million loss on the remeasurement of U.S. dollar denominated intercompany loans with foreign subsidiaries for the three months ended September 30, ~~2019,~~2020, while the prior year period included a ~~$25.9~~$31.9 million loss.

Benefit (Provision) ~~Benefit~~ for Income Taxes:

For the three months ended
Constant
September 30,
Foreign
Constant
Currency
2019
2018
Currency Impact
Currency Change
% Change
(in thousands)
(Provision) benefit for income taxes
$
3,002
$
1,979
$
2,417
$
(1,394)
20.5%



	For the three months ended								Constant
	September 30,				Foreign		Constant		Currency
	2020		2019		Currency Impact		Currency Change		% Change

	(in thousands)
Benefit (provision) for income taxes	$	9,441	$	3,002	$	2,751	$	3,688		(46.4%)

Benefit for income taxes increased ~~$1.0~~$6.4 million for the three months ended September 30, ~~2019,~~2020, as compared to the prior year. On a constant currency basis, ~~provision~~benefit for income taxes increased ~~$1.4~~$3.7 million primarily due to a decrease in domestic and foreign withholding taxes, partially offset by an increase in foreign income taxes.

Net Income:



	For the three months ended								Constant
	September 30,				Foreign		Constant		Currency
	2020		2019		Currency Impact		Currency Change		% Change

	(in thousands)
Net income	$	22,676	$	21,766	$	(6,986)	$	7,896		18.0%

Net income increased $0.9 million for the three months ended September 30, 2020, as compared to the prior year. On a constant currency basis, net income increased $7.9 million. This change was primarily due ~~an increase~~to increases in ~~foreign~~operating income and ~~withholding~~benefit for income taxes and a decrease in cash interest expense related to the interest rate swaps, partially offset by ~~a decrease~~increases in ~~state taxes.~~non-cash interest expense related to the interest rate swap and loss from extinguishment of debt.

‎

3532

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~~Net Income:~~

For the three months ended
Constant
September 30,
Foreign
Constant
Currency
2019
2018
Currency Impact
Currency Change
% Change
(in thousands)
Net income
$
21,766
$
16,144
$
(3,541)
$
9,163
27.5%

Net income increased $5.6 million for the three months ended September 30, 2019, as compared to the prior year. This change was primarily due to increases in operating income and a benefit for income taxes, partially offset by fluctuations in foreign currency exchange rates including changes recorded on the remeasurement of the U.S. dollar denominated intercompany loans with foreign subsidiaries (net of the tax impact).

Nine Months Ended September 30, ~~2019~~2020 Compared to Nine Months Ended September 30, ~~2018~~

2019

Revenues and Segment Operating Profit:



	For the nine months ended								Constant		For the nine months ended								Constant
	September 30,				Foreign		Constant		Currency		September 30,				Foreign		Constant		Currency
	2019		2018		Currency Impact		Currency Change		% Change		2020		2019		Currency Impact		Currency Change		% Change

Revenues	(in thousands)										(in thousands)
Domestic site leasing	$	1,106,722	$	1,041,892	$	—	$	64,830		6.2%	$	1,165,322	$	1,106,722	$	—	$	58,600		5.3%
International site leasing		273,036		253,794		(15,589)		34,831		13.7%		296,201		273,036		(53,616)		76,781		28.1%
Site development		121,229		86,160		—		35,069		40.7%		85,708		121,229		—		(35,521)		(29.3%)
Total	$	1,500,987	$	1,381,846	$	(15,589)	$	134,730		9.8%	$	1,547,231	$	1,500,987	$	(53,616)	$	99,860		6.7%
Cost of Revenues
Domestic site leasing	$	194,525	$	199,633	$	—	$	(5,108)		(2.6%)	$	192,226	$	194,525	$	—	$	(2,299)		(1.2%)
International site leasing		84,642		79,167		(5,276)		10,751		13.6%		87,894		84,642		(17,461)		20,713		24.5%
Site development		92,606		67,693		—		24,913		36.8%		68,417		92,606		—		(24,189)		(26.1%)
Total	$	371,773	$	346,493	$	(5,276)	$	30,556		8.8%	$	348,537	$	371,773	$	(17,461)	$	(5,775)		(1.6%)
Operating Profit
Domestic site leasing	$	912,197	$	842,259	$	—	$	69,938		8.3%	$	973,096	$	912,197	$	—	$	60,899		6.7%
International site leasing		188,394		174,627		(10,313)		24,080		13.8%		208,307		188,394		(36,155)		56,068		29.8%
Site development		28,623		18,467		—		10,156		55.0%		17,291		28,623		—		(11,332)		(39.6%)

Revenues

Domestic site leasing revenues increased ~~$64.8~~$58.6 million for the nine months ended September 30, ~~2019,~~2020, as compared to the prior year, primarily due to ~~(i)~~(1) revenues from ~~415~~230 towers acquired and 4835 towers built since January 1, ~~2018~~2019 and ~~(ii)~~(2) organic site leasing growth, primarily from monetary lease amendments for additional equipment added to our towers as well as new leases and contractual rent escalators, partially offset by lease ~~non-renewals primarily by MetroPCS, Leap, Clearwire, and Sprint iDEN.~~non-renewals.

International site leasing revenues increased ~~$19.2~~$23.2 million for the nine months ended September 30, ~~2019,~~2020, as compared to the prior year. On a constant currency basis, international site leasing revenues increased ~~$34.8~~$76.8 million. These changes were primarily due to ~~(i)~~(1) revenues from ~~2,004~~2,342 towers acquired and ~~622~~591 towers built since January 1, ~~2018~~2019 and ~~(ii)~~(2) organic site leasing growth from new leases, amendments, and contractual escalators. Site leasing revenue in Brazil represented ~~12.2%~~11.5% of total site leasing revenue for the period. No other individual international market represented more than 3%4% of our total site leasing revenue.

Site development revenues ~~increased $35.1~~decreased $35.5 million for the nine months ended September 30, ~~2019,~~2020, as compared to ~~the~~ prior year, as a result of ~~increased~~decreased carrier activity driven primarily ~~driven~~ by ~~network related projects by Sprint~~T-Mobile and ~~T-Mobile.~~

~~Table of Contents~~

Sprint.

Operating Profit

Domestic site leasing segment operating profit increased ~~$69.9~~$60.9 million for the nine months ended September 30, ~~2019,~~2020, as compared to the prior year, primarily due to additional profit generated by ~~(i)~~(1) towers acquired and built since January 1, ~~2018~~2019 and organic site leasing growth as noted above, ~~(ii)~~(2) continued control of our site leasing cost of revenue, and ~~(iii)~~(3) the positive impact of our ground lease purchase program.

International site leasing segment operating profit increased ~~$13.8~~$19.9 million for the nine months ended September 30, ~~2019,~~2020, as compared to the prior year. On a constant currency basis, international site leasing segment operating profit increased ~~$24.1~~$56.1 million. These changes were primarily due to additional profit generated by ~~(i)~~(1) towers acquired and built since January 1, ~~2018~~2019 and organic site leasing growth as noted above, ~~(ii)~~(2) continued control of our site leasing cost of revenue, and ~~(iii)~~(3) the positive impact of our ground lease purchase program.

Table of Contents

Site development segment operating profit ~~increased $10.2~~decreased $11.3 million for the nine months ended September 30, ~~2019,~~2020, as compared to the prior year, ~~primarily due to an increase in revenue from increased~~as a result of decreased carrier activity driven primarily ~~driven~~ by ~~network related projects by Sprint~~T-Mobile and ~~T-Mobile partially offset by a change in the mix of work performed.~~Sprint.

Selling, General, and Administrative Expenses:



	For the nine months ended								Constant		For the nine months ended								Constant
	September 30,				Foreign		Constant		Currency		September 30,				Foreign		Constant		Currency
	2019		2018		Currency Impact		Currency Change		% Change		2020		2019		Currency Impact		Currency Change		% Change

	(in thousands)										(in thousands)
Domestic site leasing	$	77,926	$	55,047	$	—	$	22,879		41.6%	$	78,021	$	77,926	$	—	$	95		0.1%
International site leasing		22,624		20,242		(786)		3,168		15.7%		25,713		22,624		(3,064)		6,153		27.2%
Total site leasing	$	100,550	$	75,289	$	(786)	$	26,047		34.6%	$	103,734	$	100,550	$	(3,064)	$	6,248		6.2%
Site development		16,774		11,943		—		4,831		40.5%		13,468		16,774		—		(3,306)		(19.7%)
Other		31,431		19,669		—		11,762		59.8%		29,654		31,431		—		(1,777)		(5.7%)
Total	$	148,755	$	106,901	$	(786)	$	42,640		39.9%	$	146,856	$	148,755	$	(3,064)	$	1,165		0.8%

Selling, general, and administrative expenses ~~increased $41.9~~decreased $1.9 million for the nine months ended September 30, ~~2019,~~2020, as compared to the prior year. On a constant currency basis, selling, general, and administrative expenses increased ~~$42.6~~$1.2 million. These changes were primarily as a result of ~~a $27.8 million increase~~increases in personnel and other support related costs due in part to our continued international expansion and charitable contributions related to COVID-19 relief, partially offset by decreases in noncash compensation ~~as well as increases~~due to the acceleration of unrecognized stock compensation expense in ~~personnel, compensation, benefits, and other support-related costs, partially offset by a $2.3 million partial recovery~~the prior year related to the adoption of the ~~Oi reserve in the first quarter of 2019.~~retirement plan, travel related expenses, and back-office operating expenses.

Acquisition and New Business Initiatives Related Adjustments and Expenses:



	For the nine months ended								Constant		For the nine months ended								Constant
	September 30,				Foreign		Constant		Currency		September 30,				Foreign		Constant		Currency
	2019		2018		Currency Impact		Currency Change		% Change		2020		2019		Currency Impact		Currency Change		% Change

	(in thousands)										(in thousands)
Domestic site leasing	$	4,698	$	5,242	$	—	$	(544)		(10.4%)	$	8,059	$	4,698	$	—	$	3,361		71.5%
International site leasing		4,971		3,929		(250)		1,292		32.9%		4,498		4,971		(695)		222		4.5%
Total	$	9,669	$	9,171	$	(250)	$	748		8.2%	$	12,557	$	9,669	$	(695)	$	3,583		37.1%

‎Acquisition and new business initiatives related adjustments and expenses increased $2.9 million for the nine months ended September 30, 2020, as compared to the prior year. On a constant currency basis, acquisition and new business initiatives related adjustments and expenses increased $3.6 million. These changes were primarily as a result of incremental costs incurred in support of new business initiatives.

Asset Impairment and Decommission Costs:



	For the nine months ended								Constant
	September 30,				Foreign		Constant		Currency
	2020		2019		Currency Impact		Currency Change		% Change

	(in thousands)
Domestic site leasing	$	22,297	$	18,476	$	—	$	3,821		20.7%
International site leasing		6,806		5,155		(901)		2,552		49.5%
Total	$	29,103	$	23,631	$	(901)	$	6,373		27.0%

Asset impairment and decommission costs increased $5.5 million for the nine months ended September 30, 2020, as compared to the prior year. On a constant currency basis, asset impairment and decommission costs increased $6.4 million. These changes were primarily as a result of a $10.2 million increase in impairment charges resulting from our regular analysis of whether the

3734

Table of Contents

~~Asset Impairment and Decommission Costs:~~

For the nine months ended
Constant
September 30,
Foreign
Constant
Currency
2019
2018
Currency Impact
Currency Change
% Change
(in thousands)
Domestic site leasing
$
18,476
$
15,971
$
—
$
2,505
15.7%
International site leasing
5,155
6,475
(169)
(1,151)
(17.8%)
Total site leasing
$
23,631
$
22,446
$
(169)
$
1,354
6.0%
Site development
—
332
—
(332)
(100.0%)
Total
$
23,631
$
22,778
$
(169)
$
1,022
4.5%

future cash flows from certain towers are adequate to recover the carrying value of the investment in those towers, partially offset by a $4.8 million decrease in the impairment charge related to sites decommissioned in the nine months ended September 30, 2020 compared to the prior year period.

Depreciation, Accretion, and Amortization Expenses:



	For the nine months ended								Constant		For the nine months ended								Constant
	September 30,				Foreign		Constant		Currency		September 30,				Foreign		Constant		Currency
	2019		2018		Currency Impact		Currency Change		% Change		2020		2019		Currency Impact		Currency Change		% Change

	(in thousands)										(in thousands)
Domestic site leasing	$	394,308	$	382,490	$	—	$	11,818		3.1%	$	403,725	$	394,308	$	—	$	9,417		2.4%
International site leasing		117,197		113,550		(6,750)		10,397		9.2%		131,474		117,197		(23,803)		38,080		32.5%
Total site leasing	$	511,505	$	496,040	$	(6,750)	$	22,215		4.5%	$	535,199	$	511,505	$	(23,803)	$	47,497		9.3%
Site development		1,900		1,936		—		(36)		(1.9%)		1,791		1,900		—		(109)		(5.7%)
Other		4,185		4,683		—		(498)		(10.6%)		4,597		4,185		—		412		9.8%
Total	$	517,590	$	502,659	$	(6,750)	$	21,681		4.3%	$	541,587	$	517,590	$	(23,803)	$	47,800		9.2%

Depreciation, accretion, and amortization expense increased ~~$14.9~~$24.0 million for the nine months ended September 30, ~~2019,~~2020, as compared to the prior year. On a constant currency basis, depreciation, accretion, and amortization expense increased ~~$21.7~~$47.8 million. These changes were primarily due to an increase in the number of towers we acquired and built since January 1, ~~2018,~~2019, partially offset by the impact of assets that became fully depreciated since the prior year period.

Operating Income (Expense):



	For the nine months ended								Constant		For the nine months ended								Constant
	September 30,				Foreign		Constant		Currency		September 30,				Foreign		Constant		Currency
	2019		2018		Currency Impact		Currency Change		% Change		2020		2019		Currency Impact		Currency Change		% Change

	(in thousands)										(in thousands)
Domestic site leasing	$	416,789	$	383,509	$	—	$	33,280		8.7%	$	460,994	$	416,789	$	—	$	44,205		10.6%
International site leasing		38,447		30,431		(2,358)		10,374		34.1%		39,816		38,447		(7,692)		9,061		23.6%
Total site leasing	$	455,236	$	413,940	$	(2,358)	$	43,654		10.5%	$	500,810	$	455,236	$	(7,692)	$	53,266		11.7%
Site development		9,949		4,256		—		5,693		133.8%		2,032		9,949		—		(7,917)		(79.6%)
Other		(35,616)		(24,352)		—		(11,264)		46.3%		(34,251)		(35,616)		—		1,365		(3.8%)
Total	$	429,569	$	393,844	$	(2,358)	$	38,083		9.7%	$	468,591	$	429,569	$	(7,692)	$	46,714		10.9%

Domestic site leasing operating income increased ~~$33.3~~$44.2 million for the nine months ended September 30, ~~2019,~~2020, as compared to the prior year, primarily due to higher segment operating profit, partially offset by increases in ~~selling, general, and administrative expenses,~~ depreciation, accretion, and amortization expense, ~~and~~ asset impairment and decommission ~~costs.~~

~~Table of Contents~~

costs, acquisition and new business initiatives related adjustments and expenses, and selling, general, and administrative expenses.

International site leasing operating income increased ~~$8.0~~$1.4 million for the nine months ended September 30, ~~2019,~~2020, as compared to the prior year. On a constant currency basis, international site leasing operating income increased ~~$10.4~~$9.1 million. These changes were primarily due to higher segment operating profit and a decrease in asset impairment and decommission costs, partially offset by increases in depreciation, accretion, and amortization expenses, selling, general, and administrative expenses, and acquisition and new business initiatives related adjustments and expenses.

~~Site development operating income increased $5.7 million for the nine months ended September 30, 2019, as compared to the prior year,~~ primarily due to higher segment operating profit, partially offset by increases in depreciation, accretion, and amortization expense, selling, general, and administrative expenses, and asset impairment and decommission costs.

Site development operating income decreased $7.9 million for the nine months ended September 30, 2020, as compared to the prior year, primarily due to lower segment operating profit driven by less activity from T-Mobile and Sprint, partially offset by a decrease in selling, general, and administrative expenses.

‎

Table of Contents

Other Income (Expense):



	For the nine months ended								Constant		For the nine months ended								Constant
	September 30,				Foreign		Constant		Currency		September 30,				Foreign		Constant		Currency
	2019		2018		Currency Impact		Currency Change		% Change		2020		2019		Currency Impact		Currency Change		% Change

	(in thousands)										(in thousands)
Interest income	$	4,692	$	4,972	$	(151)	$	(129)		(2.6%)	$	2,340	$	4,692	$	(374)	$	(1,978)		(42.2%)
Interest expense		(292,681)		(278,278)		(8)		(14,395)		5.2%		(281,329)		(292,681)		(13)		11,365		(3.9%)
Non-cash interest expense		(1,954)		(2,002)		—		48		(2.4%)		(13,066)		(1,954)		—		(11,112)		568.7%
Amortization of deferred financing fees		(15,333)		(15,265)		—		(68)		0.4%		(15,211)		(15,333)		—		122		(0.8%)
Loss from extinguishment of debt, net		(457)		(14,443)		—		13,986		(96.8%)		(19,463)		(457)		—		(19,006)		4,158.9%
Other (expense) income, net		(21,296)		(110,175)		88,143		736		24.8%
Other expense, net												(300,144)		(21,296)		(276,008)		(2,840)		(78.9%)
Total	$	(327,029)	$	(415,191)	$	87,984	$	178		(0.1%)	$	(626,873)	$	(327,029)	$	(276,395)	$	(23,449)		7.8%

Interest ~~expense increased $14.4~~income decreased $2.4 million for the nine months ended September 30, ~~2019,~~2020, as compared to the prior year. On a constant currency basis, interest income decreased $2.0 million. These changes were primarily due to a lower rate of interest earned on both domestic and international investments.

Interest expense decreased $11.4 million for the nine months ended September 30, 2020, as compared to the prior year. These changes were primarily due to a lower weighted average interest rate due in part to the new interest rate swap entered into during third quarter of 2020, partially offset by a higher average principal amount of cash-interest bearing debt ~~outstanding~~outstanding.

Non-cash interest expense increased $11.1 million for the nine months ended September 30, 2020, as compared to the prior year ~~partially offset by a lower weighted average~~primarily related to amortization of accumulated losses related to our interest rate swaps de-designated as ~~compared to the prior year.~~cash flow hedges.

Loss from extinguishment of debt was ~~$14.4~~$19.5 million for the nine months ended September 30, ~~2018~~2020 due to the payment of a $9.1 million call premium and the write-off of $7.7 million of the original issuance discount and financing fees related to the redemption of the 2014 Senior Notes in February 2020, as well as the write-off of $2.6 million of unamortized financing fees ~~associated with~~related to the repayment of the ~~2013-1C Tower Securities~~2015-1C and ~~2013-1D~~2016-1C Tower Securities in ~~March 2018, as well as the 2014 Term Loan and 2015 Term Loan in April 2018.~~July 2020.

Other ~~(expense) income,~~expense, net includes a ~~$24.8~~$299.9 million loss on the remeasurement of U.S. dollar denominated intercompany loans with foreign subsidiaries for the nine months ended September 30, ~~2019,~~2020, while the prior year period included ~~an $113.1~~a $24.8 million loss.

Benefit (Provision) ~~Benefit~~ for Income Taxes:

For the nine months ended
Constant
September 30,
Foreign
Constant
Currency
2019
2018
Currency Impact
Currency Change
% Change
(in thousands)
(Provision) benefit for income taxes
$
(22,813)
$
11,645
$
(28,512)
$
(5,946)
22.2%



	For the nine months ended								Constant
	September 30,				Foreign		Constant		Currency
	2020		2019		Currency Impact		Currency Change		% Change

	(in thousands)
Benefit (provision) for income taxes	$	76,143	$	(22,813)	$	92,853	$	6,103		(19.5%)

~~Provision~~Benefit for income taxes increased ~~$34.5~~$99.0 million for the nine months ended September 30, ~~2019,~~2020, as compared to the prior year. On a constant currency basis, ~~provision~~benefit for income taxes increased ~~$5.9~~$6.1 million. ~~This change was~~These changes were primarily due to a decrease in domestic income taxes and foreign withholding taxes, partially offset by an increase in foreign income ~~and withholding~~ taxes.

‎Net (Loss) Income:



	For the nine months ended								Constant
	September 30,				Foreign		Constant		Currency
	2020		2019		Currency Impact		Currency Change		% Change

	(in thousands)
Net (loss) income	$	(82,139)	$	79,727	$	(191,234)	$	29,368		30.0%

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Net ~~Income (Loss):~~

For the nine months ended
Constant
September 30,
Foreign
Constant
Currency
2019
2018
Currency Impact
Currency Change
% Change
(in thousands)
Net income (loss)
$
79,727
$
(9,702)
$
57,114
$
32,315
(5.0%)

~~Net income increased $89.4~~loss was $82.1 million for the nine months ended September 30, ~~2019,~~2020, as compared to net income of $79.7 million in the prior ~~year.~~year period. This change was primarily due to ~~increases in operating income,~~ fluctuations in foreign currency exchange rates including changes recorded on the remeasurement of the U.S. dollar denominated intercompany loans with foreign subsidiaries, ~~(net of the tax impact), and~~ a ~~decrease in~~ loss from extinguishment of debt in the current year period, and an increase in non-cash interest expense, partially offset by increases in ~~the provision~~operating income, interest expense, and benefit for income ~~taxes and interest expense.~~

taxes.

NON-GAAP FINANCIAL MEASURES

This report contains information regarding Adjusted EBITDA, a non-GAAP ~~measure, Adjusted EBITDA.~~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 provision for or benefit from 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 ~~2014 Senior Notes,~~ 2016 Senior Notes, 2017 Senior Notes, and ~~2017~~2020 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
	September 30,				Foreign		Constant		Currency
	2020		2019		Currency Impact		Currency Change		% Change

	(in thousands)
Net income	$	22,676	$	21,766	$	(6,986)	$	7,896		18.0%
Non-cash straight-line leasing revenue		(635)		(3,807)		(57)		3,229		(84.8%)
Non-cash straight-line ground lease expense		3,375		4,522		(22)		(1,125)		(24.9%)
Non-cash compensation		17,057		12,732		(279)		4,604		36.2%
Loss from extinguishment of debt, net		2,599		457		—		2,142		468.7%
Other expense, net		42,262		33,551		7,005		1,706		113.4%
Acquisition and new business initiatives
related adjustments and expenses		4,124		4,692		(322)		(246)		(5.2%)
Asset impairment and decommission costs		8,506		8,240		(522)		788		9.6%
Interest income		(756)		(1,311)		154		401		(30.6%)
Total interest expense ⁽¹⁾		102,997		102,386		(1)		612		0.6%
Depreciation, accretion, and amortization		180,302		174,987		(8,891)		14,206		8.1%
Benefit for income taxes ⁽²⁾		(9,206)		(2,788)		(2,752)		(3,666)		(44.9%)
Adjusted EBITDA	$	373,301	$	355,427	$	(12,673)	$	30,547		8.6%

‎

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For the three months ended
Constant
September 30,
Foreign
Constant
Currency
2019
2018
Currency Impact
Currency Change
% Change
(in thousands)
Net income
$
21,766
$
16,144
$
(3,541)
$
9,163
27.5%
Non-cash straight-line leasing revenue
(3,807)
(5,064)
6
1,251
(24.7%)
Non-cash straight-line ground lease expense
4,522
6,961
(1)
(2,438)
(35.0%)
Non-cash compensation
12,732
10,433
(24)
2,323
22.3%
Loss from extinguishment of debt, net
457
—
—
457
—%
Other (income) expense, net
33,551
24,518
5,994
3,039
NM
Acquisition and new business initiatives
related adjustments and expenses
4,692
2,995
(31)
1,728
57.7%
Asset impairment and decommission costs
8,240
6,868
(12)
1,384
20.2%
Interest income
(1,311)
(2,006)
4
691
(34.4%)
Total interest expense ⁽¹⁾
102,386
101,329
—
1,057
1.0%
Depreciation, accretion, and amortization
174,987
167,703
(313)
7,597
4.5%
Provision (benefit) for income taxes ⁽²⁾
(2,788)
(1,786)
(2,417)
1,415
20.2%
Adjusted EBITDA
$
355,427
$
328,095
$
(335)
$
27,667
8.4%



	For the nine months ended								Constant		For the nine months ended								Constant
	September 30,				Foreign		Constant		Currency		September 30,				Foreign		Constant		Currency
	2019		2018		Currency Impact		Currency Change		% Change		2020		2019		Currency Impact		Currency Change		% Change

	(in thousands)										(in thousands)
Net income (loss)	$	79,727	$	(9,702)	$	57,114	$	32,315		(5.0%)
Net (loss) income											$	(82,139)	$	79,727	$	(191,234)	$	29,368		30.0%
Non-cash straight-line leasing revenue		(9,344)		(15,691)		213		6,134		(39.1%)		(3,323)		(9,344)		(81)		6,102		(65.3%)
Non-cash straight-line ground lease expense		15,880		20,328		(5)		(4,443)		(21.9%)		10,902		15,880		(44)		(4,934)		(31.1%)
Non-cash compensation		60,633		32,140		(228)		28,721		89.4%		51,915		60,633		(939)		(7,779)		(12.8%)
Loss from extinguishment of debt, net		457		14,443		—		(13,986)		(96.8%)		19,463		457		—		19,006		4,158.9%
Other (income) expense, net		21,296		110,175		(88,143)		(736)		(24.8%)
Other expense, net												300,144		21,296		276,008		2,840		78.9%
Acquisition and new business initiatives
related adjustments and expenses		9,669		9,171		(250)		748		8.2%		12,557		9,669		(695)		3,583		37.1%
Asset impairment and decommission costs		23,631		22,778		(169)		1,022		4.5%		29,103		23,631		(901)		6,373		27.0%
Interest income		(4,692)		(4,972)		151		129		(2.6%)		(2,340)		(4,692)		374		1,978		(42.2%)
Total interest expense ⁽¹⁾		309,968		295,545		8		14,415		4.9%		309,606		309,968		13		(375)		(0.1%)
Depreciation, accretion, and amortization		517,590		502,659		(6,750)		21,681		4.3%		541,587		517,590		(23,803)		47,800		9.2%
Provision (benefit) for income taxes ⁽²⁾		23,423		(11,069)		28,510		5,983		21.8%
(Benefit) provision for income taxes ⁽²⁾												(75,461)		23,423		(92,855)		(6,029)		(18.9%)
Adjusted EBITDA	$	1,048,238	$	965,805	$	(9,549)	$	91,983		9.5%	$	1,112,014	$	1,048,238	$	(34,157)	$	97,933		9.3%

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

(2)~~Provision~~(Benefit) provision for taxes includes ~~$214~~$235 and ~~$193~~$214 of franchise taxes for the three months ended September 30, ~~2019~~2020 and ~~2018,~~2019, respectively, and ~~$610~~$682 and ~~$576~~$610 of franchise taxes for the nine months ended September 30, ~~2019~~2020 and ~~2018,~~2019, respectively, reflected in selling, general, and administrative expenses on the Consolidated Statements of Operations.

~~Table of Contents~~

Adjusted EBITDA increased ~~$27.3~~$17.9 million for the three months ended September 30, ~~2019,~~2020, as compared to the prior year period. On a constant currency basis, Adjusted EBITDA increased ~~$27.7~~$30.5 million. These changes were primarily due to ~~higher~~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.

Adjusted EBITDA increased ~~$82.4~~$63.8 million for the nine months ended September 30, ~~2019,~~2020, as compared to the prior year period. On a constant currency basis, Adjusted EBITDA increased ~~$92.0~~$97.9 million. These changes were primarily due to ~~higher~~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

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.

‎

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A summary of our cash flows is as follows:



	For the nine months ended				For the nine months ended
	September 30, 2019		September 30, 2018		September 30, 2020		September 30, 2019

	(in thousands)				(in thousands)
Cash provided by operating activities	$	704,984	$	624,143	$	882,908	$	704,984
Cash used in investing activities		(415,066)		(520,317)		(353,378)		(415,066)
Cash used in financing activities		(307,581)		(31,189)		(314,250)		(307,581)
Change in cash, cash equivalents, and restricted cash		(17,663)		72,637		215,280		(17,663)
Effect of exchange rate changes on cash, cash equiv., and restricted cash		(1,957)		(13,608)		(20,427)		(1,957)
Cash, cash equivalents, and restricted cash, beginning of period		178,300		104,295		141,120		178,300
Cash, cash equivalents, and restricted cash, end of period	$	158,680	$	163,324	$	335,973	$	158,680

Operating Activities

Cash provided by operating activities was $882.9 million for the nine months ended September 30, 2020 as compared to $705.0 million for the nine months ended September 30, ~~2019 as compared to $624.1 million for the nine months ended September 30, 2018.~~2019. The increase was primarily due to ~~an increase~~increases in site leasing segment operating profit and ~~a decrease in~~ cash ~~outflows~~inflows associated with working capital changes primarily from timing of customer payments, partially offset by ~~increases~~a decrease in site development segment operating profit and an increase in cash selling, general, and administrative ~~expenses and cash interest payments.~~

‎

~~Table of Contents~~

expenses.

Investing Activities

A detail of our investing activities is as follows:



	For the nine months ended September 30,				For the nine months ended September 30,
	2019		2018		2020		2019

	(in thousands)				(in thousands)
Acquisitions of towers and related intangible assets	$	(224,585)	$	(372,054)	$	(121,319)	$	(224,585)
Land buyouts and other assets ⁽¹⁾		(59,116)		(31,781)		(78,580)		(59,116)
Construction and related costs on new builds		(40,191)		(45,029)		(40,126)		(40,191)
Augmentation and tower upgrades		(46,571)		(34,978)		(29,712)		(46,571)
Tower maintenance		(21,480)		(21,616)		(22,162)		(21,480)
General corporate		(3,139)		(3,343)		(3,371)		(3,139)
Purchase of investments		(528,915)		(99,823)
Proceeds from sale of investments		515,557		95,890
Net purchases of investments						(53,267)		(13,358)
Other investing activities		(6,626)		(7,583)		(4,841)		(6,626)
Net cash used in investing activities	$	(415,066)	$	(520,317)	$	(353,378)	$	(415,066)

(1)Excludes ~~$13.1~~$5.9 million and ~~$16.4~~$13.1 million spent to extend ground lease terms for the nine months ended September 30, 2020 and 2019, respectively. Includes amounts paid related to the acquisition of data centers for the nine months ended September 30, 2020 and ~~2018, respectively.~~2019.

Subsequent to September 30, ~~2019,~~2020, we acquired 654 towers and related assets for ~~$6.7~~$14.6 million in cash. In addition, we ~~have~~ agreed to purchase ~~and anticipate to close on 107~~132 additional ~~communication~~ sites for ~~an aggregate of $32.7~~$85.0 million.

For ~~2019, including capital expenditures made during the nine months ended September 30, 2019,~~2020, we expect to incur non-discretionary cash capital expenditures associated with tower maintenance and general corporate expenditures of ~~$31.0~~$32.0 million to ~~$37.0~~$38.0 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 ~~$468.0~~$356.0 million to ~~$478.0~~$366.0 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.

Table of Contents

Financing Activities

A detail of our financing activities is as follows:



	For the nine months ended				For the nine months ended
	September 30, 2019		September 30, 2018		September 30, 2020		September 30, 2019

	(in thousands)				(in thousands)
Net (repayments) borrowings under Revolving Credit Facility⁽¹⁾	$	(325,000)	$	80,000
Net borrowings (repayments) under Revolving Credit Facility⁽¹⁾					$	(490,000)	$	(325,000)
Proceeds from issuance of Senior Notes, net of fees⁽¹⁾						1,479,522		—
Repayment of Senior Notes ⁽¹⁾						(759,143)		—
Proceeds from issuance of Tower Securities, net of fees ⁽¹⁾						1,336,003		1,153,036
Repayment of Tower Securities⁽¹⁾		(920,000)		(755,000)		(1,200,000)		(920,000)
Proceeds from issuance of Tower Securities, net of fees⁽¹⁾		1,153,036		631,479
Termination of interest rate swap						(176,200)		—
Proceeds from employee stock purchase/stock option plans, net of taxes						50,283		112,909
Repurchase and retirement of common stock⁽²⁾		(267,534)		(453,539)		(378,988)		(267,534)
Proceeds from employee stock purchase/stock option plans		112,909		33,678
Repayment of Term Loans⁽¹⁾		(18,000)		(1,941,000)
Proceeds from Term Loans, net of fees⁽¹⁾		—		2,377,264
Payment of dividends on common stock		(41,873)		—		(156,199)		(41,873)
Other financing activities		(1,119)		(4,071)		(19,528)		(19,119)
Net cash used in financing activities	$	(307,581)	$	(31,189)	$	(314,250)	$	(307,581)

~~Table of Contents~~

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

(2)During the nine months ended September 30, 2020, we repurchased 1.4 million shares of our Class A common stock for $375.6 million, at an average price per share of $267.57. Subsequent to September 30, 2020, we repurchased 0.4 million shares of our Class A common stock for $124.4 million at a weighted average price per share of $299.54. Shares repurchased were retired. On ~~July 29, 2019,~~November 2, 2020, our Board of Directors authorized a new $1.0 billion stock repurchase plan, replacing the prior plan authorized on ~~February 16, 2018~~July 29, 2019 which had a remaining authorization of ~~$110.0~~$124.3 million. This new plan authorizes ~~us to~~the purchase, from time to time, of up to $1.0 billion of our 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. Shares repurchased will be retired. The new plan has no time deadline and will continue until otherwise modified or terminated by our Board of Directors at any time in its sole discretion. During the nine months ended September 30, 2019, we repurchased 1.2 million shares of our Class A common stock for $270.3 million, at an average price per share of $231.20. Shares repurchased were retired. As of the date of this filing, we had the ~~Company had $824.3 million~~full $1.0 billion of authorization remaining under the ~~current stock repurchase~~new plan.

Dividend

For the nine months ended September 30, 2020, 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 20, 2020	March 10, 2020	$0.465	$52.2 million	March 26, 2020
May 5, 2020	May 28, 2020	$0.465	$52.0 million	June 18, 2020
August 3, 2020	August 25, 2020	$0.465	$52.0 million	September 21, 2020

Subsequent to September ~~25, 2019,~~30, 2020, we ~~paid a~~declared the following cash ~~dividend~~dividends:



	Payable to Shareholders	Cash to
	of Record At the Close	be Paid
Date Declared	of Business on	Per Share	Date to be Paid

November 2, 2020	November 19, 2020	$0.465	December 17, 2020

Table of ~~$0.37 per share, or an aggregate~~Contents

The amount of ~~$41.9 million,~~future distributions will be determined, from time to ~~shareholders of record at the close of business on August 28, 2019. On October 25, 2019,~~time, by our Board of Directors ~~declared a quarterly~~to balance our goal of increasing long-term shareholder value and retaining sufficient cash ~~dividend~~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 ~~$0.37 per share on shares of our Class A common stock. The dividend~~future dividends, will be ~~payable on December 19, 2019 to shareholders of record~~ at the ~~close of business on November 21, 2019. Future dividends are subject to the approval~~sole discretion of our Board of ~~Directors. We expect to continue to invest~~Directors and will be declared based upon various factors, many of which are beyond our ~~cash flow after dividends, if declared, consistent with our past practice of investing in acquisitions, the construction of new sites, land purchases and the repurchase of our own shares.~~control.

Registration Statements

We have on file with 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 nine months ended September 30, ~~2019,~~2020, we ~~issued 10,000~~did not issue any shares of Class A common stock under this registration statement. As of September 30, ~~2019,~~2020, we had approximately 1.2 million shares of Class A common stock remaining under this ~~shelf~~ registration statement.

On March 5, 2018, we filed with the Commission an automatic shelf registration statement for well-known seasoned issuers on Form S-3ASR. This registration statement enables us to issue shares of our Class A common stock, preferred stock or debt securities either separately or represented by warrants, or depositary shares as well as units that include any of these securities. Under the rules governing automatic shelf registration statements, we will file a prospectus supplement and advise the Commission of the amount and type of securities each time we issue securities under this registration statement. No securities were issued under this registration statement through the date of this filing.

On August 6, 2020, we filed a registration statement on Form S-8 with the Securities and Exchange Commission registering 3.4 million shares of our Class A common stock, consisting of 3.0 million shares of Common Stock issuable under the 2020 Performance and Equity Incentive Plan (the “2020 Plan”) and 400,000 shares of Common Stock subject to awards granted under the 2010 Plan that may become available for issuance or reissuance, as applicable, under the 2020 Plan if such awards are forfeited or are settled in cash or otherwise expire or terminate without the delivery of the shares.

Debt Instruments and Debt Service Requirements

Revolving Credit Facility under the Senior Credit Agreement

The Revolving Credit Facility consists of a revolving loan under which up to $1.25 billion aggregate principal amount may be borrowed, repaid and redrawn, based upon specific financial ratios and subject to the satisfaction of other customary conditions to borrowing. Amounts borrowed under the Revolving Credit Facility accrue interest, at SBA Senior Finance II’s election, at either (1) the Eurodollar Rate plus a margin that ranges from 112.5 basis points to 175.0 basis points or (2) the Base Rate plus a margin that ranges from 12.5 basis points to 75.0 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 0.20% and 0.25% per annum on the amount of unused commitment. If not earlier terminated by SBA Senior Finance II the Revolving Credit Facility will terminate on, and SBA Senior Finance II will repay all amounts outstanding on or before, April 11, 2023. The proceeds available under the Revolving Credit Facility may be used for general corporate purposes. SBA Senior Finance II may, from time to time, borrow from and repay the Revolving Credit Facility. Consequently, the amount outstanding under the Revolving Credit Facility at the end of the period may not be reflective of the total amounts outstanding during such period.

During the three months ended September 30, ~~2019, we~~2020, no amounts were borrowed ~~$175.0 million and~~or repaid ~~$255.0 million of the outstanding balance~~ under the Revolving Credit Facility. During the nine months ended September 30, ~~2019,~~2020, we borrowed ~~$265.0~~$515.0 million and repaid ~~$590.0 million~~$1.0 billion of the outstanding balance under the Revolving Credit Facility. As of September 30, ~~2019, there was~~2020, we had no ~~balance~~amount outstanding under the $1.25 billion Revolving Credit Facility. In addition, SBA Senior Finance II was required to pay a commitment fee of 0.20% per annum on the amount of the unused commitment. As of September 30, ~~2019,~~2020, SBA Senior Finance II was in compliance with the financial covenants contained in the Senior Credit Agreement.

As of the date of this filing, we had no amount outstanding under the Revolving Credit Facility.

4441

Table of Contents

Term ~~Loans~~Loan under the Senior Credit Agreement

2018 Term Loan

On April 11, 2018, we, through our wholly owned subsidiary, SBA Senior Finance II, ~~LLC,~~ obtained a new term loan (the “2018 Term Loan”) under the amended and restated Senior Credit Agreement. The 2018 Term Loan consists of a senior secured term loan with an initial aggregate principal amount of $2.4 billion that matures on April 11, 2025. The 2018 Term Loan accrues interest, at SBA Senior Finance II’s election at either the Base Rate plus ~~100~~75 basis points (with a zero Base Rate floor) or the Eurodollar Rate plus ~~200~~175 basis points (with a zero Eurodollar Rate floor). ~~The 2018 Term Loan was issued at 99.75% of par value.~~ As of September 30, ~~2019,~~2020, the 2018 Term Loan was accruing interest at ~~4.05%~~1.900% per annum. Principal payments on the 2018 Term Loan ~~commenced on September 30, 2018 and~~ are being made in quarterly installments on the last day of each March, June, September, and December in an amount equal to $6.0 million. We incurred deferred financing fees of approximately $16.8 million in relation to this transaction, which are being amortized through the maturity date. The proceeds from the 2018 Term Loan were used (1) to retire the outstanding $1.93 billion in aggregate principal amount of the 2014 Term Loan and 2015 Term Loan, (2) to pay down the existing outstanding balance under the Revolving Credit Facility, and (3) for general corporate purposes.

During the three and nine months ended September 30, ~~2019,~~2020, we repaid an aggregate of $6.0 million and $18.0 million ~~respectively,~~ of principal on the 2018 Term ~~Loan.~~Loan, respectively. As of September 30, ~~2019,~~2020, the 2018 Term Loan had a principal balance of ~~$2.4~~$2.3 billion.

On ~~February 1, 2019,~~August 4, 2020, we, through our wholly owned subsidiary, SBA Senior Finance II, ~~LLC, entered into a four year interest rate swap~~terminated our existing $1.95 billion cash flow hedge on a portion of our 2018 Term Loan in ~~order to reduce our exposure to fluctuations in interest rates. The~~exchange for a payment of $176.2 million. On the same date, we entered into an interest rate swap ~~has a $1.2~~for $1.95 billion of notional value ~~receiving~~accruing interest at one month LIBOR plus ~~200~~175 basis points ~~and paying~~for a fixed rate of ~~4.495%~~1.874% per annum ~~settled monthly.~~

~~On May 23, 2019, we,~~ through ~~our wholly owned subsidiary, SBA Senior Finance II, LLC, entered into a four year interest rate swap on a portion~~the maturity date of ~~our~~the 2018 Term Loan in order to reduce our exposure to fluctuations in interest rates. The interest rate swap has a $750.0 million notional value receiving interest at one month LIBOR plus 200 basis points and paying a fixed rate of 4.08% per annum settled monthly.Loan.

Secured Tower Revenue Securities

~~2013-2C Tower Securities~~

~~On April 18, 2013,~~As of September 30, 2020, we, through a New York common law trust (the “Trust”), had issued ~~$575.0~~and outstanding an aggregate of $5.1 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 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:

Security

Issue Date

Amount Outstanding

Interest Rate

Anticipated Repayment Date

Final Maturity Date

2013-2C Tower Securities

Apr. 18, 2013

$575.0 million

3.722%

Apr. 11, 2023

Apr. 9, 2048

2014-2C Tower Securities

Oct. 15, 2014

$620.0 million

3.869%

Oct. 8, 2024

Oct. 8, 2049

2017-1C Tower Securities

Apr. 17, 2017

$760.0 million

3.168%

Apr. 11, 2022

Apr. 9, 2047

2018-1C Tower Securities

Mar. 9, 2018

$640.0 million

3.448%

Mar. 9, 2023

Mar. 9, 2048

2019-1C Tower Securities

Sep. 13, 2019

$1.165 billion

2.836%

Jan. 12, 2025

Jan. 12, 2050

2020-1C Tower Securities

Jul. 14, 2020

$750.0 million

1.884%

Jan. 9, 2026

Jul. 11, 2050

2020-2C Tower Securities

Jul. 14, 2020

$600.0 million

2.328%

Jan. 11, 2028

Jul. 9, 2052

As of September 30, 2020, 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.

On July 14, 2020, we, through the Trust, issued $750.0 million of ~~3.722%~~1.884% Secured Tower Revenue Securities Series ~~2013-2C,~~2020-1C which have an anticipated repayment date of ~~April 11, 2023~~January 9, 2026 and a final maturity date of ~~April 9, 2048~~July 11, 2050 (the ~~“2013-2C~~“2020-1C Tower Securities”)~~. We incurred financing fees of $11.0 million in relation to this transaction, which were being amortized through the anticipated repayment date of each of the 2013 Tower Securities.~~

~~2014 Tower Securities~~

~~On October 15, 2014, we, through the Trust, issued $920.0~~ and $600.0 million of ~~2.898%~~2.328% Secured Tower Revenue Securities Series 2014-1C, which had an anticipated repayment date of October 8, 2019 and a final maturity date of October 11, 2044 (the “2014-1C Tower Securities”) and $620.0 million of 3.869% Secured Tower Revenue Securities Series 2014-2C,2020-2C which have an anticipated repayment date of ~~October 8, 2024~~January 11, 2028 and a final maturity date of ~~October 8, 2049~~July 9, 2052 (the ~~“2014-2C~~“2020-2C Tower Securities”) (collectively the ~~“2014~~“2020 Tower Securities”). The aggregate ~~$1.54~~$1.35 billion of ~~2014~~2020 Tower Securities have a blended interest rate of ~~3.289% per annum, payable monthly. We incurred financing fees of $22.5 million in relation to this transaction, which were being amortized~~2.081% and a weighted average life through the anticipated repayment date of ~~each of the 2014 Tower Securities.~~

~~On September 13, 2019, we repaid~~6.4 years. Net proceeds from this offering were used to repay the entire aggregate principal amount of the ~~2014-1C Tower Securities in connection with the issuance of the 2019-1C Tower Securities (as defined below).~~

~~2015-1C Tower Securities~~

On October 14, 2015, we, through the Trust, issued $500.0 million of Secured Tower Revenue Securities Series 2015-1C, which have an anticipated repayment date of October 8, 2020 and a final maturity date of October 10, 2045 (the “2015-1C Tower Securities”). The fixed interest rate of the 2015-1C Tower Securities ~~is 3.156% per annum, payable monthly.~~($500.0 million) and the 2016-1C Tower Securities ($700.0 million). The remaining net proceeds of the 2020 Tower Securities were used for general corporate purposes. We have incurred deferred financing

~~Table of Contents~~

fees of ~~$11.2~~$14.0 million in relation to this transaction which are being amortized through the anticipated repayment date of the ~~2015-1C~~2020 Tower Securities.

~~2016-1C~~42

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Risk Retention Tower Securities

On July 7, 2016, we, through the Trust, issued $700.0 million of Secured Tower Revenue Securities Series 2016-1C, which have an anticipated repayment date of July 9, 2021 and a final maturity date of July 10, 2046 (the “2016-1C Tower Securities”). The fixed interest rate of the 2016-1C Tower Securities is 2.877% per annum, payable monthly. We incurred financing fees of $9.5 million in relation to this transaction, which are being amortized through the anticipated repayment date of the 2016-1C Tower Securities.

~~2017-1C Tower Securities~~

On April 17, 2017, we, through the Trust, issued $760.0 million of Secured Tower Revenue Securities Series 2017-1C, which have an anticipated repayment date of April 11, 2022 and a final maturity date of April 9, 2047 (the “2017-1C Tower Securities”). The fixed interest rate on the 2017-1C Tower Securities is 3.168% per annum, payable monthly. We incurred financing fees of $10.2 million in relation to this transaction, which are being amortized through the anticipated repayment date of the 2017-1C Tower Securities.

In addition, to satisfy certain risk retention requirements of Regulation RR promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), SBA Guarantor, LLC, a wholly owned subsidiary, purchased (1) $40.0 million of Secured Tower Revenue Securities Series 2017-1R (the “2017-1R Tower Securities”) issued by the Trust ~~which have an anticipated repayment date of April 11, 2022 and~~with a ~~final maturity date of April 9, 2047 (the “2017-1R Tower Securities”). The~~ fixed interest rate ~~on the 2017-1R Tower Securities is~~of 4.459% per annum, payable ~~monthly.~~monthly, and with the same anticipated repayment date and final maturity date as the 2017-1C Tower Securities, (2) $33.7 million of Secured Tower Revenue Securities Series 2018-1R (the “2018-1R Tower Securities”) issued by the Trust with a fixed interest rate of 4.949% per annum, payable monthly, and with the same anticipated repayment date and final maturity date as the 2018-1C Tower Securities, (3) $61.4 million of Secured Tower Revenue Securities Series 2019-1R (the “2019-1R Tower Securities”) issued by the Trust with a fixed interest rate of 4.213% per annum, payable monthly, and with the same anticipated repayment date and final maturity date as the 2019-1C Tower Securities, and (4) $71.1 million of Secured Tower Revenue Securities Series 2020-2R (the “2020-2R Tower Securities”) issued by the Trust with a fixed interest rate of 4.336% per annum, payable monthly, and with the same anticipated repayment date and final maturity date as the 2020-2C Tower Securities. Principal and interest payments made on the 2017-1R Tower Securities, ~~eliminate in consolidation.~~

~~2018-1C Tower Securities~~

On March 9, 2018, we, through the Trust, issued $640.0 million of Secured Tower Revenue Securities Series 2018-1C, which have an anticipated repayment date of March 9, 2023 and a final maturity date of March 9, 2048 (the “2018-1C Tower Securities”). The fixed interest rate on the 2018-1C Tower Securities is 3.448% per annum, payable monthly. We incurred financing fees of $8.6 million in relation to this transaction, which are being amortized through the anticipated repayment date of the 2018-1C Tower Securities.

In addition, to satisfy certain risk retention requirements of Regulation RR promulgated under the Exchange Act, SBA Guarantor, LLC, a wholly owned subsidiary, purchased $33.7 million of Secured Tower Revenue Securities Series 2018-1R issued by the Trust. These securities have an anticipated repayment date of March 9, 2023 and a final maturity date of March 9, 2048 (the “2018-1R Tower Securities”). The fixed interest rate on the 2018-1R Tower Securities, ~~is 4.949% per annum, payable monthly. Principal~~2019-1R Tower Securities, and ~~interest payments made on the 2018-1R~~2020-2R Tower Securities eliminate in consolidation.

~~2019-1C Tower Securities~~Senior Notes

The table below sets forth the material terms of our outstanding senior notes:

Senior Notes

Issue Date

Amount Outstanding

Interest Rate

Maturity Date

Interest Due Dates

% of Par Value

2016 Senior Notes

Aug. 15, 2016

$1.1 billion

4.875%

Sep. 1, 2024

Mar. 1 & Sep. 1

99.178%

2017 Senior Notes

Oct. 13, 2017

$750.0 million

4.000%

Oct. 1, 2022

Apr. 1 & Oct. 1

100.000%

2020-1 Senior Notes ⁽¹⁾

Feb. 4, 2020

$1.0 billion

3.875%

Feb. 15, 2027

Feb. 15 & Aug. 15

100.000%

2020-2 Senior Notes ⁽¹⁾

May 26, 2020

$500.0 million

3.875%

Feb. 15, 2027

Feb. 15 & Aug. 15

99.500%

(1)On ~~September 13, 2019,~~February 4, 2020, we ~~through the Trust,~~ issued ~~$1.165~~$1.0 billion of ~~Secured Tower Revenue Securities Series 2019-1C, which have an anticipated repayment date~~unsecured senior notes at par value (the “2020-1 Senior Notes”), and on May 26, 2020, we issued $500.0 million of ~~January 12, 2025 and a final maturity date~~additional unsecured senior notes under the same indenture at 99.500% of ~~January 12, 2050~~par value (the ~~“2019-1C Tower Securities”~~“2020-2 Senior Notes”) (collectively, the “2020 Senior Notes”). ~~The fixed interest rate on the 2019-1C Tower Securities is 2.836% per annum, payable monthly.~~ Net proceeds from ~~this offering~~these offerings were used to ~~repay~~redeem the entire ~~aggregate~~$750.0 million outstanding principal amount of the ~~2014-1C Tower Securities ($920.0 million), as well as accrued and unpaid interest,~~2014 Senior Notes, repay amounts outstanding onunder the Revolving Credit Facility, and ~~any remaining amount was used~~ for general corporate purposes. ~~We have incurred deferred~~In addition, we paid a $9.1 million call premium and expensed $7.7 million for the write-off of the original issue discount and financing fees ~~of $12.0 million to date in relation to this transaction, which are being amortized through the anticipated repayment date of the 2019-1C Tower Securities.~~

In addition, to satisfy certain risk retention requirements of Regulation RR promulgated under the Exchange Act, SBA Guarantor, LLC, a wholly owned subsidiary, purchased $61.4 million of Secured Tower Revenue Securities Series 2019-1R issued by the Trust. These securities have an anticipated repayment date of January 12, 2025 and a final maturity date of January 12, 2050 (the “2019-1R Tower Securities”). The fixed interest rate on the 2019-1R Tower Securities is 4.213% per annum, payable monthly. Principal and interest payments made on the 2019-1R Tower Securities eliminate in consolidation.

In connection with the issuance of the 2019-1C Tower Securities, the non-recourse mortgage loan was increased by $1.2 billion (but increased by a net of $306.4 million after giving effect to prepayment of the loan components relatingrelated to the ~~2014-1C Tower Securities). The new loan, after eliminating the risk retention securities, accrues interest at the same rate as the 2019-1C Tower~~

~~Table~~redemption of ~~Contents~~

~~Securities and is subject to all other material terms of the existing mortgage loan, including collateral and interest rate after the anticipated repayment date.~~

~~Debt Covenants and Terms of the Tower Revenue Securities~~

As of September 30, 2019, 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.~~

~~Senior Notes~~

~~2014 Senior Notes~~

On July 1, 2014, we issued $750.0 million of unsecured senior notes due July 15, 2022 (the “2014 Senior Notes”). The 2014 Senior Notes accrue interest at a rate of 4.875% per annum and were issued at 99.178% of par value. Interest on the 2014 Senior Notes ~~is due semi-annually~~which are reflected in loss from extinguishment of debt on ~~January~~the Consolidated Statements of Operations. Interest on the 2020 Senior Notes began August 15, ~~and July 15 of each year.~~2020. We incurred financing fees of ~~$11.6~~$18.0 million in relation to this transaction, which are being amortized through the maturity date.

The ~~2014~~2020 Senior Notes are subject to redemption in whole or in part on or after February 15, 2023 at the redemption prices set forth in the indenture agreement plus accrued and unpaid interest. Prior to February 15, 2023, we may, at our option, redeem up to 35% of the aggregate principal amount of the 2020 Senior Notes originally issued at a redemption price of 103.875% of the principal amount of the 2020 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest with the net proceeds of certain equity offerings. We may redeem the 2020 Senior Notes during the twelve-month period beginning on the following dates at the following redemption prices: February 15, 2023 at 101.938%, February 15, 2024 at 100.969%, or February 15, 2025 until maturity at 100.000%, of the principal amount of the 2020 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest.

The unsecured senior notes are subject to redemption in whole or in part at the redemption prices set forth in the indenture agreement plus accrued and unpaid interest. We may redeem each of the ~~2014 Senior Notes~~senior notes during the twelve-month period beginning on the following dates at the following redemption prices: July 15, 2019 at 101.219% or July 15, 2020 until maturity at 100.000% of the principal amount of the 2014 Senior Notes to be redeemed on the redemption date plus accruedtime periods and ~~unpaid interest.~~

~~2016 Senior Notes~~

On August 15, 2016, we issued $1.1 billion of unsecured senior notes due September 1, 2024 (the “2016 Senior Notes”). The 2016 Senior Notes accrue interest at a rate of 4.875% per annum and were issued at 99.178% of par value. Interest on the 2016 Senior Notes is due semi-annually on March 1 and September 1 of each year, beginning on March 1, 2017. We incurred financing fees of $12.8 million in relation to this transaction, which are being amortized through the maturity date. The 2016 Senior Notes are subject to redemption in whole or in part on or after September 1, 2019 at the redemption prices set forth in the indenture agreement plus accrued and unpaid interest. We may redeem the 2016 Senior Notes during the twelve-month period beginning on the following dates at the following redemption prices: September 1, 2019 at 103.656%, September 1, 2020 at 102.438%, September 1, 2021 at 101.219%, or September 1, 2022 until maturity at 100.000%, of the principal amount of the 2016 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest.

~~2017 Senior Notes~~

On October 13, 2017, we issued $750.0 million of unsecured senior notes due October 1, 2022 (the “2017 Senior Notes”). The 2017 Senior Notes accrue interest at a rate of 4.0% per annum. Interest on the 2017 Senior Notes is due semi-annually on April 1 and October 1 of each year, beginning on April 1, 2018. We incurred financing fees of $8.9 million in relation to this transaction, which are being amortized through the maturity date.

The 2017 Senior Notes are subject to redemption in whole or in part on or after October 1, 2019 at the redemption prices set forth in the indenture agreement plus accrued and unpaid interest. Prior to October 1, 2020, we may, at our option, redeem up to 35% of the aggregate principal amount of the 2017 Senior Notes originally issued at a redemption price of 104.000% of the principal amount of the 2017 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest with the net proceeds of certain equity offerings. We may redeem the 2017 Senior Notes during the twelve-month period beginning on the following dates at the following redemption prices: October 1, 2019 at 102.000%, October 1, 2020 at 101.000%, or October 1, 2021 until maturity at 100.000%, of the principal amount of the 2017 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest.indentures.

Debt Service

As of September 30, ~~2019,~~2020, 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.

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The following table illustrates our estimate of our debt service requirement over the next twelve months ~~ended September 30, 2020~~ based on the amounts outstanding as of September 30, ~~2019~~2020 and the interest rates accruing on those amounts on such date (in thousands):



2014 Senior Notes	$	36,563
2016 Senior Notes		53,625
2017 Senior Notes		30,000
Revolving Credit Facility			$	2,500
2018 Term Loan ⁽¹⁾				68,065
2013-2C Tower Securities		21,585		21,585
2014-2C Tower Securities		24,185		24,185
2015-1C Tower Securities		15,939
2016-1C Tower Securities		20,361
2017-1C Tower Securities		24,318		24,318
2018-1C Tower Securities		22,270		22,270
2019-1C Tower Securities		33,409		33,409
Revolving Credit Facility ⁽¹⁾		2,500
2018 Term Loan		125,550
2020-1C Tower Securities				14,368
2020-2C Tower Securities				14,159
2016 Senior Notes				53,625
2017 Senior Notes				30,000
2020 Senior Notes				58,125
Total debt service for the next 12 months	$	410,305	$	366,609

(1)~~Amount represents~~Total debt service on the ~~unused commitment fee. No amounts were outstanding under~~2018 Term Loan includes the ~~Revolving Credit Facility as~~impact of ~~September 30, 2019.~~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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to certain market risks that are inherent in our financial instruments. These instruments arise from transactions entered into in the normal course of business.

The following table presents the future principal payment obligations and fair values associated with our long-term debt instruments assuming our actual level of long-term indebtedness as of September 30, ~~2019:~~2020:



	2019		2020		2021		2022		2023		Thereafter		Total		Fair Value		2020		2021		2022		2023		2024		Thereafter		Total		Fair Value

	(in thousands)																(in thousands)
2014 Senior Notes	$	—	$	—	$	—	$	750,000	$	—	$	—	$	750,000	$	757,500
2016 Senior Notes		—		—		—		—		—		1,100,000		1,100,000		1,141,250
2017 Senior Notes		—		—		—		750,000		—		—		750,000		763,125
2018 Term Loan																	$	6,000	$	24,000	$	24,000	$	24,000	$	24,000	$	2,244,000	$	2,346,000	$	2,281,485
2013-2C Tower Securities ⁽¹⁾		—		—		—		—		575,000		—		575,000		589,410		—		—		—		575,000		—		—		575,000		603,802
2014-2C Tower Securities ⁽¹⁾		—		—		—		—		—		620,000		620,000		650,175		—		—		—		—		620,000		—		620,000		675,726
2015-1C Tower Securities ⁽¹⁾		—		500,000		—		—		—		—		500,000		502,500
2016-1C Tower Securities ⁽¹⁾		—		—		700,000		—		—		—		700,000		705,236
2017-1C Tower Securities ⁽¹⁾		—		—		—		760,000		—		—		760,000		766,300		—		—		760,000		—		—		—		760,000		778,445
2018-1C Tower Securities ⁽¹⁾		—		—		—		—		640,000		—		640,000		662,586		—		—		—		640,000		—		—		640,000		676,198
2019-1C Tower Securities ⁽¹⁾		—		—		—		—		—		1,165,000		1,165,000		1,165,501		—		—		—		—		—		1,165,000		1,165,000		1,226,570
2018 Term Loan		6,000		24,000		24,000		24,000		24,000		2,268,000		2,370,000		2,372,963
2020-1C Tower Securities ⁽¹⁾																		—		—		—		—		—		750,000		750,000		756,563
2020-2C Tower Securities ⁽¹⁾																		—		—		—		—		—		600,000		600,000		605,214
2016 Senior Notes																		—		—		—		—		1,100,000		—		1,100,000		1,124,750
2017 Senior Notes																		—		—		750,000		—		—		—		750,000		755,625
2020 Senior Notes																		—		—		—		—		—		1,500,000		1,500,000		1,515,000
Total debt obligation	$	6,000	$	524,000	$	724,000	$	2,284,000	$	1,239,000	$	5,153,000	$	9,930,000	$	10,076,546	$	6,000	$	24,000	$	1,534,000	$	1,239,000	$	1,744,000	$	6,259,000	$	10,806,000	$	10,999,378

(1)~~The~~For information on the anticipated repayment date and ~~the~~ final maturity date for ~~the 2013-2C Tower Securities is April 11, 2023~~each tower security, refer to Debt Instruments and ~~April 9, 2048, respectively.~~Debt Service Requirements above.

~~The anticipated repayment date and the final maturity date for the 2014-2C Tower Securities is October 8, 2024 and October 8, 2049, respectively.~~

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~~The anticipated repayment date and the final maturity date for the 2015-1C Tower Securities is October 8, 2020 and October 10, 2045, respectively.~~

~~The anticipated repayment date and the final maturity date for the 2016-1C Tower Securities is July 9, 2021 and July 10, 2046, respectively.~~

~~The anticipated repayment date and the final maturity date for the 2017-1C Tower Securities is April 11, 2022 and April 9, 2047, respectively.~~

~~The anticipated repayment date and the final maturity date for the 2018-1C Tower Securities is March 9, 2023 and March 9, 2048, respectively.~~

~~The anticipated repayment date and the final maturity date for the 2019-1C Tower Securities is January 12, 2025 and January 12, 2050, respectively.~~

Our current primary market risk exposure is (1) interest rate risk relating to our ability to refinance our debt at commercially reasonable rates, if at all, and (2) interest rate risk relating to the impact of interest rate movements on the variable portion of our 2018 Term Loan and any borrowings that we may incur under our Revolving Credit Facility, which are at floating rates. We manage the interest rate risk on our outstanding debt through our large percentage of fixed rate debt, including ~~two four year~~ interest rate ~~swaps on a majority~~swaps. On August 4,

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2020, we, through our ~~2018 Term Loan~~wholly owned subsidiary, SBA Senior Finance II, entered into ~~on February 1, 2019 and May 23, 2019. The first~~an interest rate swap ~~has a $1.2~~for $1.95 billion of notional value ~~receiving~~accruing interest at one month LIBOR plus ~~200~~175 basis points ~~and paying~~for a fixed rate of ~~4.495%~~1.874% per annum ~~settled monthly. The second interest rate swap has a $750.0 million notional value receiving interest at one month LIBOR plus 200 basis points and paying a fixed rate~~through the maturity date of ~~4.08% per annum settled monthly.~~the 2018 Term Loan. While we cannot predict our ability to refinance existing debt or the impact interest rate movements will have on our existing debt, we continue to evaluate our financial position on an ongoing basis. In addition, there is currently uncertainty about whether LIBOR will continue to exist after 2021. The discontinuation of LIBOR after 2021 and the replacement with an alternative reference rate may adversely impact interest rates and our interest expense could increase.

We are exposed to market risk from changes in foreign currency exchange rates in connection with our operations in Brazil, Canada, Chile, Peru, Argentina, Colombia, South Africa, and to a lesser extent, our markets in Central America. In each of these countries, we pay most of our selling, general, and administrative expenses and a portion of our operating expenses, such as taxes and utilities incurred in the country in local currency. In addition, in Brazil, Canada, Chile, and South Africa, we receive significantly all of our revenue and pay significantly all of our operating expenses in local currency. In Colombia, Argentina, and Peru, we receive our revenue and pay our operating expenses in a mix of local currency and U.S. dollars. All transactions denominated in currencies other than the U.S. Dollar are reported in U.S. Dollars at the applicable exchange rate. All assets and liabilities are translated into U.S. Dollars at exchange rates in effect at the end of the applicable fiscal reporting period, and all revenues and expenses are translated at average rates for the period. The cumulative translation effect is included in equity as a component of Accumulated other comprehensive ~~income (loss).~~loss, net. For the nine months ended September 30, ~~2019,~~2020, approximately ~~13.0%~~13.8% of our revenues and approximately ~~15.8%~~17.5% of our total operating expenses were denominated in foreign currencies.

We have performed a sensitivity analysis assuming a hypothetical 10% adverse movement in the Brazilian Real from the quoted foreign currency exchange rates at September 30, ~~2019.~~2020. As of September 30, ~~2019,~~2020, the analysis indicated that such an adverse movement would have caused our revenues and operating income to decline by approximately 1.0% and ~~0.6%~~0.5%, respectively, for the nine months ended September 30, ~~2019.~~2020.

As of September 30, ~~2019,~~2020, we had intercompany debt, which is denominated in a currency other than the functional currency of the subsidiary in which it is recorded. As settlement of this debt is anticipated or planned in the foreseeable future, any changes in the foreign currency exchange rates will result in unrealized gains or losses, which will be included in our determination of net income. A change of 10% in the underlying exchange rates of our unsettled intercompany debt at September 30, ~~2019~~2020 would have resulted in approximately ~~$37.8~~$82.1 million of unrealized gains or losses that would have been included in Other income (expense), net in our Consolidated Statements of Operations for the nine months ended September 30, ~~2019.~~2020.

Special Note Regarding Forward-Looking Statements

This quarterly report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements concern expectations, beliefs, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Specifically, this quarterly report contains forward-looking statements regarding:

our expectations on the future growth and financial health of the wireless industry and the industry participants, the drivers of such growth, the demand for our towers, the future capital investments of our customers, future spectrum auctions, the trends developing in our industry, and competitive factors;

our ability to capture and capitalize on industry growth and the impact of such growth on our financial and operational results;

our intent to grow our tower portfolio domestically and internationally and expand through acquisitions, new builds, and organic lease up on existing towers;

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our belief that over the long-term, site leasing revenues will continue to grow as wireless service providers increase their use of our towers due to increasing minutes of network use and data transfer, network expansion and network coverage requirements;

our expectation regarding site leasing revenue growth, on an organic basis, in our domestic and international segments, and the drivers of such growth;

our focus on our site leasing business and belief that our site leasing business is characterized by stable and long-term recurring revenues, reduced exposure to changes in customer spending, predictable operating costs, and minimal non-discretionary capital expenditures;

our expectation that, due to the relatively young age and mix of our tower portfolio, future expenditures required to maintain these towers will be minimal;

our expectation that we will grow our cash flows by adding tenants to our towers at minimal incremental costs and executing monetary amendments;

our expectations regarding churn rates;

our election to be subject to tax as a REIT and our intent to continue to operate as a REIT;

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our belief that our business is currently operated in a manner that complies with the REIT rules and our intent to continue to do so;

our plans regarding our distribution policy, and the amount and timing of, and source of funds for, any such distributions;

our expectations regarding the use of NOLs to reduce REIT taxable income;

our expectations regarding our capital allocation strategy, including future allocation decisions among portfolio growth, stock repurchases and dividends, the impact of our election to be taxed as a REIT on that strategy, and our goal of increasing our Adjusted Funds From Operations per share;

our expectations regarding dividends and our ability to grow our dividend in the future and the drivers of such growth;

our expectations regarding our future cash capital expenditures, both discretionary and non-discretionary, including expenditures required for new builds and to maintain, improve, and modify our towers, ground lease purchases, and general corporate expenditures, and the source of funds for these expenditures;

our expectations regarding our business strategies, including our strategy for securing rights to the land underlying our towers, and the impact of such strategies on our financial and operational results;

our intended use of our liquidity;

our intent to maintain our target leverage levels, including in light of our dividend;

our expectations regarding our debt service in ~~2019~~2020 and our belief that our cash on hand, capacity under our Revolving Credit Facility, and our cash flows from operations for the next twelve months will be sufficient to service our outstanding debt during the next twelve months; and

our expectations and estimates regarding certain tax and accounting matters, including the impact on our financial statements.

These forward-looking statements reflect our current views about future events and are subject to risks, uncertainties and assumptions. We wish to caution readers that certain important factors may have affected and could in the future affect our actual results and could cause actual results to differ significantly from those expressed in any forward-looking statement. The most important factors that could prevent us from achieving our goals, and cause the assumptions underlying forward-looking statements and the actual results to differ materially from those expressed in or implied by those forward-looking statements include, but are not limited to, the following:

the impact of consolidation among wireless service providers, including the ~~potential~~ impact of T-Mobile and Sprint;

the ~~proposed merger between Sprint~~ability of Dish Network to become and ~~T-Mobile if consummated, on our leasing revenue;~~compete as a nationwide carrier;

our ability to continue to comply with covenants and the terms of our credit instruments and our ability to obtain additional financing to fund our capital expenditures;

our ability to successfully manage the risks associated with international operations, including risks relating to political or economic conditions, inflation, tax laws, currency restrictions and exchange rate fluctuations, legal or judicial systems, and land ownership;

our ability to successfully manage the risks associated with our acquisition initiatives, including our ability to satisfactorily complete due diligence on acquired towers, the amount and quality of due diligence that we are able to complete prior to closing of any acquisition, our ability to accurately anticipate the future performance of the acquired towers, our ability to receive required regulatory approval, the ability and willingness of each party to fulfill their respective closing conditions and their contractual obligations, and, once acquired, our ability to effectively integrate acquired towers into our business and to achieve the financial results projected in our valuation models for the acquired towers;

the health of the South Africa economy and wireless communications market, and the willingness of carriers to invest in their networks in that market;

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developments in the wireless communications industry in general, and for wireless communications infrastructure providers in particular, that may slow growth or affect the willingness or ability of the wireless service providers to expend capital to fund network expansion or enhancements;

our ability to secure as many site leasing tenants as anticipated, recognize our expected economies of scale with respect to new tenants on our towers, and retain current leases on towers;

our ability to secure and deliver anticipated services business at contemplated margins;

our ability to build new towers, including our ability to identify and acquire land that would be attractive for our customers and to successfully and timely address zoning, permitting, weather, availability of labor and supplies and other issues that arise in connection with the building of new towers;

competition for the acquisition of towers and other factors that may adversely affect our ability to purchase towers that meet our investment criteria and are available at prices which we believe will be accretive to our shareholders and allow us to maintain our long-term target leverage ratios while achieving our expected portfolio growth levels;

our capital allocation decisions and the impact on our ability to achieve our expected tower portfolio growth levels;

our ability to protect our rights to the land under our towers, and our ability to acquire land underneath our towers on terms that are accretive;

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our ability to sufficiently increase our revenues and maintain expenses and cash capital expenditures at appropriate levels to permit us to meet our anticipated uses of liquidity for operations, debt service and estimated portfolio growth;

the impact of rising interest rates on our results of operations and our ability to refinance our existing indebtedness at commercially reasonable rates or at all;

the extent and duration of the impact of the COVID-19 crisis on the global economy, on our business and results of operations, and on foreign currency exchange rates;

our ability to successfully estimate the impact of regulatory and litigation matters;

natural disasters and other unforeseen damage for which our insurance may not provide adequate coverage;

a decrease in demand for our towers;

the introduction of new technologies or changes in a tenant’s business model that may make our tower leasing business less desirable to existing or potential tenants;

our ability to qualify for treatment as a REIT for U.S. federal income tax purposes and to comply with and conduct our business in accordance with such rules;

our ability to utilize available NOLs to reduce REIT taxable income; and

our ability to successfully estimate the impact of certain accounting and tax matters, including the effect on our company of adopting certain accounting pronouncements and the availability of sufficient NOLs to offset future REIT taxable income.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

In order to ensure that the information we must disclose in our filings with the Commission is recorded, processed, summarized and reported on a timely basis, we have formalized our disclosure controls and procedures. Our principal executive officer and principal financial officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, as defined in Securities and Exchange Act Rule 13a-15(e) as of September 30, ~~2019.~~2020. Based on such evaluation, such officers have concluded that, as of September 30, ~~2019,~~2020, our disclosure controls and procedures were effective.

‎PART II – OTHER INFORMATION

ITEM 1A. RISK FACTORS

“Item 1A. Risk Factors” of our Form 10-K for the year ended December 31, 2019 includes a discussion of our risk factors. The information presented below updates, and should be read in conjunction with, the risk factors and information disclosed in our Form 10-K. Many of the following risks and uncertainties, as well as the risk factors contained in our Form 10-K are, and will be, exacerbated by the COVID-19 pandemic and any worsening of the global business and economic environment as a result.

The recent COVID-19 pandemic has significantly impacted worldwide economic conditions and could have a material adverse effect on our business operations, results of operations, cash flows and financial condition.

In December 2019, a novel strain of coronavirus, COVID-19, was identified in China. This virus continues to spread globally and in March 2020, the World Health Organization declared COVID-19 a pandemic. Public and private sector responsive measures, such as the imposition of travel restrictions, quarantines, adoption of remote working, and suspension of non-essential business and government services, could impact our operations. In addition, COVID-19 continues to significantly impact worldwide economic conditions, including negatively impacting economic growth and creating disruption and volatility in the global financial and capital markets. Among other things, COVID-19 and the responsive measures that have been adopted may adversely affect:

the ability of our suppliers and vendors to provide products and services to us;

demand for our wireless infrastructure;

our ability to build new towers or the ability of our customers to install new antennae on an existing tower, including as a result of delays or suspensions in the issuance of permits or other authorizations needed to increase the number of our tenants or amend our tenant leases;

interest rates and the overall availability and cost of capital, which could affect our ability to continue to grow our asset portfolio or pursue new business initiatives;

the financial condition of wireless service providers;

the ability and willingness of wireless service providers to maintain or increase capital expenditures;

the ability of our tenants to make lease payments on a timely basis; and

the willingness of our tenants to renew their existing leases for additional terms.

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~~PART II –~~ ~~OTHER INFORMATION~~In addition, our results of operations may be negatively affected by foreign currency adjustments resulting from the COVID-19 pandemic, including the recent strengthening of the U.S. Dollar against the currencies in certain international markets in which we operate. The extent of the impact of COVID-19 on our business operations, results of operations, cash flows, and financial condition, will depend on future developments, including the duration and spread of the pandemic and related government restrictions, all of which are uncertain and cannot be predicted. Additionally, if the COVID-19 pandemic results in a global recession, the negative impacts of the pandemic on our operating results may worsen or be prolonged.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following table presents information related to our repurchases of Class A common stock during the third quarter of ~~2019:~~

2020:

Total
Total Number of Shares
Approximate Dollar Value
Number
Average
Purchased as Part of
of Shares that May Yet Be
of Shares
Price Paid
Publicly Announced
Purchased Under the
Period
Purchased
Per Share
Plans or Programs ⁽¹⁾
Plans or Programs
7/1/2019 - 7/31/2019
—
$
—
—
$
1,000,000,000
8/1/2019 - 8/31/2019
112,482
$
262.38
112,482
$
970,486,675
9/1/2019 - 9/30/2019
593,012
$
246.50
593,012
$
824,306,904
Total
705,494
$
249.04
705,494
$
824,306,904



	Total			Total Number of Shares	Approximate Dollar Value
	Number	Average		Purchased as Part of	of Shares that May Yet Be
	of Shares	Price Paid		Publicly Announced	Purchased Under the
Period	Purchased	Per Share		Plans or Programs ⁽¹⁾	Plans or Programs

7/1/2020 - 7/31/2020	—	$	—	—	$	424,306,994
8/1/2020 - 8/31/2020	328,495	$	302.20	328,495	$	325,036,390
9/1/2020 - 9/30/2020	251,895	$	303.20	251,895	$	248,661,081
Total	580,390	$	302.63	580,390	$	248,661,081

1)(1)On ~~July 29, 2019,~~November 2, 2020, our Board of Directors authorized a new $1.0 billion stock repurchase plan, replacing the prior plan authorized on ~~February 16, 2018~~July 29, 2019 which had a remaining authorization of ~~$110.0~~$124.3 million. As of the date of this filing, we had the full $1.0 billion of authorization remaining under the new plan. This new plan authorizes us to purchase, from time to time, ~~up to $1.0 billion of our~~ 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. ~~Shares repurchased will be retired. The new~~Once authorized, the repurchase plan has no time deadline and will continue until otherwise modified or terminated by our Board of Directors at any time in its sole discretion. Shares repurchased are retired.

ITEM 5. OTHER INFORMATION

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(e)

On August 3, 2020, we entered into an employment agreement with Jeffrey A. Stoops, our President and Chief Executive Officer. The agreement replaces his existing employment agreement entered into with him on August 15, 2017 which would have expired on December 31, 2020. The new employment agreement provides for Mr. Stoops to serve in his present position and expires on December 31, 2023.

Pursuant to the employment agreement, Mr. Stoops will receive an annual base salary of $1,000,000, which may be increased by the Board of Directors. In addition, Mr. Stoops will receive an annual bonus based on achievement of performance criteria established by the Compensation Committee of the Board of Directors. Mr. Stoops is eligible to receive a target bonus of 150% of base salary for 2020, and in subsequent years, the Compensation Committee will set Mr. Stoops’ target bonus, which may be greater or less than 150% of Mr. Stoops’ base salary for that year.

The employment agreement provides that upon termination of Mr. Stoops’ employment without cause, or Mr. Stoops’ resignation for good reason, Mr. Stoops is entitled to receive (i) an amount equal to the Applicable Multiple (as defined below) times the sum of his: (a) base salary for the year in which the termination or resignation occurs, (b) Reference Bonus (as defined below) and (c) Reference Benefits Value (as defined below), and (ii) a pro rata portion of the bonus for the year in which the termination or resignation occurs. The severance payments will be paid in a lump sum on the first business day of the third calendar month following the calendar month in which the termination or resignation is effective.

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The Applicable Multiple means two, in the event the termination occurs prior to a change in control, and three, in the event the termination occurs on or after a change in control. Reference Benefits Value means the greater of (1) $33,560 and (2) the value of all medical, dental, health, life, and other fringe benefit plans and arrangements for the year in which the termination or resignation occurs. Reference Bonus means the greater of (i) 75% of Mr. Stoops’ target bonus for the year in which the termination or resignation occurs and (ii) 100% of the bonus for the year immediately preceding the year in which the termination or resignation occurred.

Upon a change in control, the agreement is automatically extended for three years. The employment agreement provides for noncompetition, noninterference, non-disparagement and nondisclosure covenants. Mr. Stoops’ severance payment is subject to his execution of a full release and waiver of claims against us.

ITEM 6. EXHIBITS



Exhibit No.	Description of Exhibits
10.35I*	Employment Agreement, dated August 3, 2020, between SBA Communications Corporation and Jeffrey A. Stoops.
31.1	Certification by Jeffrey A. Stoops, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by Brendan T. Cavanagh, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification by Jeffrey A. Stoops, Chief Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification by Brendan T. Cavanagh, Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive File (formatted in Inline XBRL and contained in Exhibit 101).

*Management contract or compensatory plan or arrangement.
‎

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	SBA COMMUNICATIONS CORPORATION

November ~~7, 2019~~5, 2020	/s/ Jeffrey A. Stoops
	Jeffrey A. Stoops
	Chief Executive Officer
	(Duly Authorized Officer)

November ~~7, 2019~~5, 2020	/s/ Brendan T. Cavanagh
	Brendan T. Cavanagh
	Chief Financial Officer
	(Principal Financial Officer)

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	For the three months		For the nine months
	ended September 30, 2019		ended September 30, 2019
	(in thousands)
Amortization of right-of-use assets	$	296	$	917
Interest on finance lease liabilities		28		82
Total finance lease cost		324		999
Operating lease cost ⁽¹⁾		66,059		200,881
Variable lease cost⁽¹⁾		10,190		27,356
Total lease cost	$	76,573	$	229,236

Weighted Average Remaining Lease Term as of September 30, 2019
Operating leases				17 years
Finance leases				3 years

Weighted Average Discount Rate as of September 30, 2019
Operating leases				6.1%
Finance leases				3.9%

			For the nine months
Other information:			ended September 30, 2019
Cash paid for amounts included in measurement of lease liabilities:
Cash flows from operating leases			$	177,960
Cash flows from finance leases			$	917



	Finance Leases		Operating Leases
The remainder of 2019	$	348	$	59,102
2020		924		237,623
2021		745		239,390
2022		529		240,539
2023		59		240,594
Thereafter		—		3,086,003
Total minimum lease payments		2,605		4,103,251
Less: amount representing interest		(145)		(1,701,002)
Present value of future payments		2,460		2,402,249
Less: current obligations		(987)		(229,210)
Long-term obligations	$	1,473	$	2,173,039



	(in thousands)
The remainder of 2019	$	426,237
2020		1,561,995
2021		1,320,941
2022		1,070,375
2023		865,317
Thereafter		2,259,217
Total	$	7,504,082