SBA COMMUNICATIONS CORPORATION

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SBA COMMUNICATIONS CORP MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

04/29/2022 | 03:24pm EDT
We are a leading independent owner and operator of wireless communications
infrastructure, including tower structures, rooftops, and other structures that
support antennas used for wireless communications, which we collectively refer
to as "towers" or "sites." Our principal operations are in the United States and
its territories. In addition, we own and operate towers in South America,
Central America, Canada, South Africa, the Philippines, and Tanzania. Our
primary business line is our site leasing business, which contributed 96.9% of
our total segment operating profit for the three months ended March 31, 2022. In
our site leasing business, we (1) lease space to wireless service providers and
other customers on assets that we own or operate and (2) manage rooftop and
tower sites for property owners under various contractual arrangements. As of
March 31, 2022, we owned 36,017 towers, a substantial portion of which have been
built by us or built by other tower owners or operators who, like us, have built
such towers to lease space to multiple wireless service providers. Our other
business line is our site development business, through which we assist wireless
service providers in developing and maintaining their own wireless service
networks.

Site Leasing


Our primary focus is the leasing of antenna space on our multi-tenant towers to
a variety of wireless service providers under long-term lease contracts in the
United States, South America, Central America, Canada, South Africa, the
Philippines, and Tanzania. As of March 31, 2022, no U.S. state or territory
accounted for more than 10% of our total tower portfolio by tower count, and no
U.S. state or territory accounted for more than 10% of our total revenues for
the three months ended March 31, 2022. In addition, as of March 31, 2022,
approximately 30% of our total towers are located in Brazil and no other
international markets (each country is considered a market) represented more
than 4% of our total towers. We derive site leasing revenues primarily from
wireless service

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provider tenants, including T-Mobile, AT&T, Verizon Wireless, Oi S.A., Telefonica, Claro, DISH Wireless, Tigo, 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 our international markets, our tenant leases are
generally for an initial term of five years to 15 years with multiple renewal
periods at the option of the tenant. In the United States, Canada, and in our
Central American markets, tenant leases typically contain specific rent
escalators, which average 3-4% per year, including the renewal option periods.
In our South American markets, South Africa, and the Philippines, tenant leases
typically escalate annually in accordance with an inflationary index. In
Tanzania, tenant leases typically escalate using a combination of fixed and
inflation adjusted escalators. Site leases in our South American markets
typically provide for a fixed rental amount and a pass-through charge for the
underlying rent related to ground leases and other property interests. In South
Africa, our site leases contain pass through charges related to utilities and,
in Tanzania, our site leases include components related to utilities and fuel.
The utility and fuel portion of our Tanzanian site leases adjust periodically in
accordance with changes in fuel and electricity prices. In certain markets such
as Brazil, tenant leases are typically governed by master lease agreements,
which provide for the material terms and conditions that will govern the terms
of the use of the site.

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;
?Fuel (in those international markets that do not have an available electric
grid at our tower sites); and
?Lease initial direct cost amortization.

In the United States and our international markets, ground leases and other
property interests are generally for an initial term of five years or more with
multiple renewal periods, which are at our option. In the United States, Canada,
our Central American markets, and the Philippines, ground leases and other
property interests provide for fixed rent escalators which typically average
2-3% annually, and in our South American markets and South Africa, ground leases
adjust in accordance with an inflationary index. As of March 31, 2022,
approximately 71% of our tower structures were located on parcels of land that
we own, land subject to perpetual easements, or parcels of land in which we have
a leasehold interest that extends beyond 20 years. For any given tower, costs
are relatively fixed over a monthly or an annual time period. As such, operating
costs for owned towers do not generally increase as a result of adding
additional customers to the tower. The amount of property taxes varies from site
to site depending on the taxing jurisdiction and the height and age of the
tower. The ongoing maintenance requirements are typically minimal and include
replacing lighting systems, painting a tower, or upgrading or repairing an
access road or fencing.

In 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, South Africa, and the Philippines,
significantly all of our revenue, expenses, and capital expenditures, including
tenant leases, ground leases and other property interests, and other
tower-related expenses are denominated in local currency. In Colombia,
Argentina, Peru, and Tanzania, our revenue, expenses, and capital expenditures,
including tenant leases, ground leases and other property interests, and other
tower-related expenses are denominated in a mix of local currency and U.S.
dollars.

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

                                               For the three months ended
Segment operating profit as a percentage of            March 31,

total operating profit                                2022            2021

Domestic site leasing                                         78.7%   80.8%
International site leasing                                    18.2%   17.0%
Total site leasing                                            96.9%   97.8%


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

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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 2022, we expect organic site leasing revenue in both our
domestic and international segments to increase over 2021 levels due in part to
wireless carriers deploying unused spectrum. We believe our site leasing
business is characterized by stable and long-term recurring revenues,
predictable operating costs and minimal non-discretionary capital expenditures.
Due to the relatively young age and mix of our tower portfolio, we expect future
expenditures required to maintain these towers to be minimal. Consequently, we
expect to grow our cash flows by (1) adding tenants to our towers at minimal
incremental costs by using existing tower capacity or requiring wireless service
providers to bear all or a portion of the cost of tower modifications and
(2) executing monetary amendments as wireless service providers add or upgrade
their equipment. Furthermore, because our towers are strategically positioned,
we have historically experienced low tenant lease terminations as a percentage
of revenue other than in connection with customer consolidation or cessations of
a specific technology.

Site Development

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

For information regarding our operating segments, see Note 14 of our condensed notes to consolidated financial statements in this quarterly report.

Capital Allocation Strategy


Our capital allocation strategy is aimed at increasing shareholder value through
investment in quality assets that meet our return criteria, stock repurchases
when we believe our stock price is below its intrinsic value, and by returning
cash generated by our operations in the form of cash dividends. While the
addition of a cash dividend to our capital allocation strategy in 2019 has
provided us with a new tool to return value to our shareholders, we continue to
believe that our priority is to make investments focused on increasing Adjusted
Funds From Operations per share. Key elements of our capital allocation strategy
include:

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

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

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

Critical Accounting Policies and Estimates


We have identified the policies and significant estimation processes listed
below and in our Annual Report on Form 10-K as critical to our business
operations and the understanding of our results of operations. The listing is
not intended to be a comprehensive list. In many cases, the accounting treatment
of a particular transaction is specifically dictated by accounting principles
generally accepted in the United States, with no need for management's judgment
in their application. In other cases, management is required to exercise
judgment in the application of accounting principles with respect to particular
transactions. The impact and any associated risks related to these policies on
our business operations is discussed throughout "Management's Discussion and
Analysis of Financial

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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, 2021. 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.

RESULTS OF OPERATIONS


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

Three Months Ended March 31, 2022 Compared to Three Months Ended March 31, 2021 Revenues and Segment Operating Profit:

                               For the three months ended                                             Constant
                                        March 31,                 Foreign            Constant         Currency
                                    2022           2021       Currency Impact     Currency Change     % Change

Revenues                                                 (in thousands)
Domestic site leasing          $       432,986   $ 403,579   $               -   $          29,407          7.3%
International site leasing             126,446     101,524               2,268              22,654         22.3%
Site development                        60,338      43,636                   -              16,702         38.3%
Total                          $       619,770   $ 548,739   $           2,268   $          68,763         12.5%
Cost of Revenues
Domestic site leasing          $        65,804   $  65,120   $               -   $             684          1.1%
International site leasing              41,351      30,248                 785              10,318         34.1%
Site development                        45,773      34,406                   -              11,367         33.0%
Total                          $       152,928   $ 129,774   $             785   $          22,369         17.2%
Operating Profit
Domestic site leasing          $       367,182   $ 338,459   $               -   $          28,723          8.5%
International site leasing              85,095      71,276               1,483              12,336         17.3%
Site development                        14,565       9,230                   -               5,335         57.8%


Revenues

Domestic site leasing revenues increased $29.4 million for the three months
ended March 31, 2022, as compared to the prior year, primarily due to (1)
revenues from 824 towers acquired (including wireless tenant licenses on 713
utility transmission structures from the PG&E transaction) and towers built
since January 1, 2021 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.

International site leasing revenues increased $24.9 million for the three months
ended March 31, 2022, as compared to the prior year. On a constant currency
basis, international site leasing revenues increased $22.7 million. These
changes were primarily due to (1) revenues from 1,974 towers acquired (including
1,445 towers under the deal with Airtel Tanzania) and 412 towers built since
January 1, 2021 and (2) organic site leasing growth from new leases, amendments,
and contractual escalators, partially offset by lease non-renewals. Site leasing
revenue in Brazil represented 11.7% of total site leasing revenue for the
period. No other individual international market represented more than 4% of our
total site leasing revenue.

Site development revenues increased $16.7 million for the three months ended March 31, 2022, as compared to prior year, as a result of increased carrier activity driven primarily by T-Mobile and DISH Wireless.

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Operating Profit


Domestic site leasing segment operating profit increased $28.7 million for the
three months ended March 31, 2022, as compared to the prior year, primarily due
to additional profit generated by (1) towers acquired and built since January 1,
2021 and organic 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 $13.8 million for
the three months ended March 31, 2022, as compared to the prior year. On a
constant currency basis, international site leasing segment operating profit
increased $12.3 million. These changes were primarily due to additional profit
generated by (1) towers acquired and built since January 1, 2021 and organic
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.

Site development segment operating profit increased $5.3 million for the three months ended March 31, 2022, as compared to the prior year, as a result of increased carrier activity driven primarily by T-Mobile and DISH Wireless.

Selling, General, and Administrative Expenses:

                               For the three months ended                                      Constant
                                        March 31,                 Foreign         Constant     Currency
                                                                                  Currency
                                    2022           2021       Currency Impact      Change      % Change

                                                      (in thousands)
Domestic site leasing          $        23,373   $  28,056   $               -   $   (4,683)     (16.7%)
International site leasing              15,494       7,760               (144)         7,878      101.5%
Total site leasing             $        38,867   $  35,816   $           (144)   $     3,195        8.9%
Site development                         5,522       5,789                   -         (267)      (4.6%)
Other                                   17,735       9,996                   -         7,739       77.4%
Total                          $        62,124   $  51,601   $           (144)   $    10,667       20.7%


Selling, general, and administrative expenses increased $10.5 million for the
three months ended March 31, 2022, as compared to the prior year. On a constant
currency basis, selling, general, and administrative expenses increased $10.7
million. These changes were primarily as a result of an increase in non-cash
compensation, personnel, and other support related costs due in part to our
entry into new markets.

The decrease in Domestic site leasing and corresponding increases in International site leasing and Other selling, general, and administrative expenses are primarily due to changes in our internal cost allocations.

Asset Impairment and Decommission Costs:


                               For the three months ended                                             Constant
                                        March 31,                 Foreign            Constant         Currency
                                    2022           2021       Currency Impact     Currency Change     % Change

                                                         (in thousands)
Domestic site leasing          $         5,483   $   3,871   $               -   $           1,612        41.6%
International site leasing               3,029       1,032                  80               1,917       185.8%
Total                          $         8,512   $   4,903   $              80   $           3,529        72.0%


Asset impairment and decommission costs increased $3.6 million for the three
months ended March 31, 2022, as compared to the prior year. On a constant
currency basis, asset impairment and decommission costs increased $3.5 million.
These changes were primarily as a result of an increase in impairment charges
resulting from our regular analysis of whether the anticipated future discounted
cash flows from certain towers are sufficient to recover the carrying value of
the investment in those towers, partially offset by a decrease in costs related
to sites decommissioned in the first quarter of 2022 compared to the prior year
period.


?

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Depreciation, Accretion, and Amortization Expense:

                               For the three months ended                                      Constant
                                        March 31,                 Foreign         Constant     Currency
                                                                                  Currency
                                    2022           2021       Currency Impact      Change      % Change

                                                      (in thousands)
Domestic site leasing          $       123,133   $ 137,054   $               -   $  (13,921)     (10.2%)
International site leasing              48,881      43,121                 839         4,921       11.4%
Total site leasing             $       172,014   $ 180,175   $             839   $   (9,000)      (5.0%)
Site development                           588       2,082                   -       (1,494)     (71.8%)
Other                                    1,721       1,624                   -            97        6.0%
Total                          $       174,323   $ 183,881   $             839   $  (10,397)      (5.7%)


Depreciation, accretion, and amortization expense decreased $9.6 million for the
three months ended March 31, 2022, as compared to the prior year. On a constant
currency basis, depreciation, accretion, and amortization expense decreased
$10.4 million. These changes were primarily due to the impact of assets that
became fully depreciated since the prior year period, partially offset by an
increase in the number of towers we acquired and built since January 1, 2021.

Operating Income (Expense):
                                For the three months ended                                      Constant
                                        March 31,                  Foreign         Constant     Currency
                                                                                   Currency
                                    2022            2021       Currency Impact      Change      % Change

                                                       (in thousands)
Domestic site leasing          $       211,594   $  166,146   $               -   $    45,448       27.4%
International site leasing              16,186       17,694                 696       (2,204)     (12.5%)
Total site leasing             $       227,780   $  183,840   $             696   $    43,244       23.5%
Site development                         8,455        1,359                   -         7,096      522.1%
Other                                 (19,456)     (11,620)                   -       (7,836)       67.4%
Total                          $       216,779   $  173,579   $             696   $    42,504       24.5%


Domestic site leasing operating income increased $45.4 million for the three
months ended March 31, 2022, as compared to the prior year, primarily due to
higher segment operating profit, decreases in depreciation, accretion, and
amortization expense and selling, general, and administrative expenses,
partially offset by an increase in asset impairment and decommission costs.

International site leasing operating income decreased $1.5 million for the three
months ended March 31, 2022, as compared to the prior year. On a constant
currency basis, international site leasing operating income decreased $2.2
million. These changes were primarily due to increases in selling, general, and
administrative expenses, depreciation, accretion, and amortization expense, and
asset impairment and decommission costs, partially offset by higher segment
operating profit.

Site development operating income increased $7.1 million for the three months
ended March 31, 2022, as compared to the prior year, primarily due to higher
segment operating profit driven by more activity from T-Mobile and DISH
Wireless.

Other Income (Expense):

                                For the three months ended                                       Constant
                                        March 31,               Foreign         Constant         Currency
                                                               Currency
                                    2022           2021         Impact       Currency Change     % Change

                                                       (in thousands)
Interest income                $        2,502   $       632   $        75   $           1,795       284.0%
Interest expense                     (82,252)      (90,095)             -               7,843       (8.7%)
Non-cash interest expense            (11,526)      (11,804)             -                 278       (2.4%)
Amortization of deferred
financing fees                        (4,881)       (4,891)             -                  10       (0.2%)
Loss from extinguishment of
debt, net                                   -      (11,652)             -              11,652     (100.0%)
Other income (expense), net           108,161      (88,436)       196,397                 200      (10.8%)
Total                          $       12,004   $ (206,246)   $   196,472   $          21,778      (18.2%)


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Interest income increased $1.9 million for the three months ended March 31,
2022, as compared to the prior year. This change was primarily due to a higher
amount of interest-bearing deposits held in Brazil and higher effective interest
rates on those deposits as compared to the prior year.

Interest expense decreased $7.8 million for the three months ended March 31,
2022, as compared to the prior year. This change was primarily due to a lower
weighted average interest rate, partially offset by a higher average principal
amount of cash-interest bearing debt outstanding.

Loss from extinguishment of debt was $11.7 million for the three months ended
March 31, 2021 representing the payment of a $7.5 million call premium and the
write-off of $4.2 million of unamortized financing fees related to the repayment
of the 2017 Senior Notes in February 2021.

Other expense, net includes a $109.6 million gain on the remeasurement of U.S.
dollar denominated intercompany loans with foreign subsidiaries for the three
months ended March 31, 2022, while the prior year period included a $86.3
million loss.

(Provision) Benefit for Income Taxes:

                                For the three months ended                                      Constant
                                        March 31,               Foreign         Constant        Currency
                                                               Currency
                                     2022           2021        Impact       Currency Change    % Change

                                                       (in thousands)
(Provision) benefit for
income taxes                   $       (40,477)   $  20,922   $  (69,026)   $           7,627     (90.5%)


Provision for income taxes increased $61.4 million for the three months ended
March 31, 2022, as compared to the prior year primarily due to fluctuations in
foreign currency exchange rates, partially offset by a decrease in deferred
foreign taxes.

Net Income (Loss):
                               For the three months ended                                       Constant
                                        March 31,              Foreign         Constant         Currency
                                                              Currency
                                    2022           2021        Impact       Currency Change     % Change

                                                      (in thousands)
Net income (loss)              $      188,306   $ (11,745)   $   128,142   $          71,909       158.0%

Net income increased $200.1 million for the three months ended March 31, 2022, as compared to the prior year. On a constant currency basis, net income increased $71.9 million. These changes were primarily due to an increase in operating income and decreases in loss from extinguishment of debt and cash interest expense, partially offset by an increase in provision for income taxes.

NON-GAAP FINANCIAL MEASURES


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

Adjusted EBITDA


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

We believe that Adjusted EBITDA is useful to investors or other interested
parties in evaluating our financial performance. Adjusted EBITDA is the primary
measure used by management (1) to evaluate the economic productivity of our
operations and (2) for purposes of making decisions about allocating resources
to, and assessing the performance of, our operations. Management believes
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that Adjusted EBITDA helps investors or other interested parties to meaningfully
evaluate and compare the results of our operations (1) from period to period and
(2) to our competitors, by excluding the impact of our capital structure
(primarily interest charges from our outstanding debt) and asset base (primarily
depreciation, amortization and accretion) from our financial results. Management
also believes Adjusted EBITDA is frequently used by investors or other
interested parties in the evaluation of REITs. In addition, Adjusted EBITDA is
similar to the measure of current financial performance generally used by our
lenders to determine compliance with certain covenants under our Senior Credit
Agreement and the indentures relating to the 2020 Senior Notes and 2021 Senior
Notes. Adjusted EBITDA should be considered only as a supplement to net income
computed in accordance with GAAP as a measure of our performance.
                                For the three months ended                                        Constant
                                         March 31,                  Foreign         Constant      Currency
                                                                                    Currency
                                     2022            2021       Currency Impact      Change       % Change

                                                       (in thousands)
Net income (loss)              $        188,306   $ (11,745)   $         128,142   $    71,909       158.0%
Non-cash straight-line
leasing revenue                         (8,001)        (576)                  50       (7,475)     1,297.7%
Non-cash straight-line
ground lease expense                      1,053        2,641                 (5)       (1,583)      (59.9%)
Non-cash compensation                    24,747       20,422                  54         4,271        20.9%
Loss from extinguishment of
debt, net                                     -       11,652                   -      (11,652)     (100.0%)
Other (income) expense, net           (108,161)       88,436           (196,397)         (200)      (10.8%)
Acquisition and new business
initiatives
related adjustments and
expenses                                  5,104        5,001                  12            91         1.8%
Asset impairment and
decommission costs                        8,512        4,903                  80         3,529        72.0%
Interest income                         (2,502)        (632)                (75)       (1,795)       284.0%
Interest expense (1)                     98,659      106,790                   -       (8,131)       (7.6%)
Depreciation, accretion, and
amortization                            174,323      183,881                 839      (10,397)       (5.7%)
Provision (benefit) for
income taxes (2)                         41,711     (20,702)              69,026       (6,613)      (76.5%)
Adjusted EBITDA                $        423,751   $  390,071   $           1,726   $    31,954         8.2%


(1)Total interest expense includes interest expense, non-cash interest expense,
and amortization of deferred financing fees.
(2)Provision (benefit) for taxes includes $1,234 and $220 of franchise taxes for
the three months ended March 31, 2022 and 2021, respectively, reflected in
selling, general, and administrative expenses on the Consolidated Statements of
Operations.

Adjusted EBITDA increased $33.7 million for the three months ended March 31,
2022, as compared to the prior year period. On a constant currency basis,
Adjusted EBITDA increased $32.0 million. These changes were primarily due to an
increase in segment operating profit, partially offset by an increase in cash
selling, general, and administrative expenses.

LIQUIDITY AND CAPITAL RESOURCES


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


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A summary of our cash flows is as follows:

                                                           For the three months ended March
                                                                         31,
                                                                 2022              2021

                                                                    (in thousands)
Cash provided by operating activities                     $          292,482   $     285,498
Cash used in investing activities                                  (255,881)     (1,076,584)
Cash (used in) provided by financing activities                    (151,750)         701,343
Change in cash, cash equivalents, and restricted cash              

(115,149) (89,743) Effect of exchange rate changes on cash, cash equiv., and restricted cash

15,961 (10,880) Cash, cash equivalents, and restricted cash, beginning of period

                                                            435,626         342,808
Cash, cash equivalents, and restricted cash, end of
period                                                    $          336,438   $     242,185


Operating Activities

Cash provided by operating activities was $292.5 million for the three months
ended March 31, 2022 as compared to $285.5 million for the three months ended
March 31, 2021. The increase was primarily due to an increase in operating
profit, partially offset by an increase in cash outflows associated with working
capital changes.

Investing Activities

A detail of our cash capital expenditures is as follows:

                                                            For the three months ended March
                                                                          31,
                                                                  2022              2021

                                                                     (in thousands)

Acquisitions of towers and related intangible assets (1) $ (207,863) $ (101,630) Acquisition of right-of-use assets (2)

                                      -       (945,915)
Land buyouts and other assets (3)                                     (7,318)         (5,131)
Construction and related costs                                       (16,477)         (8,823)
Augmentation and tower upgrades                                       (9,274)         (7,560)
Tower maintenance                                                     (9,327)         (7,313)
General corporate                                                     (2,930)           (840)
Other investing activities                                            (2,692)             628
Net cash used in investing activities                      $        

(255,881) $ (1,076,584)



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

(2)During the three months ended March 31, 2021, we acquired the exclusive right
to lease and operate 697 utility transmission structures, which included
existing wireless tenant licenses from PG&E for $954.0 million. The difference
between the purchase price and the cash acquisition amount is due to working
capital adjustments.
(3)Excludes $3.8 million and $2.8 million spent to extend ground lease terms for
the three months ended March 31, 2022 and 2021, respectively.

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

For 2022, we expect to incur non-discretionary cash capital expenditures
associated with tower maintenance and general corporate expenditures of $47.0
million to $57.0 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 $615.0
million to $635.0 million. We expect to fund these cash capital expenditures
from, among other sources, cash on hand, cash flow from operations, and
borrowings under the Revolving Credit Facility or new financings. The exact
amount of our future cash

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capital expenditures will depend on a number of factors, including amounts necessary to support our tower portfolio, our new tower build and acquisition programs, and our ground lease purchase program.

Financing Activities

A detail of our financing activities is as follows:

                                                           For the three months ended
                                                                   March 31,
                                                              2022            2021

                                                                 (in thousands)

Net borrowings under Revolving Credit Facility (1) $ 330,000 $

210,000

Proceeds from issuance of Senior Notes, net of fees (1)               -     

1,485,670

Repayment of Senior Notes (1)                                         -     

(757,500)

Repurchase and retirement of common stock (2)                 (431,667)     

(168,923)

Payment of dividends on common stock                           (76,873)     

(63,412)

Proceeds from employee stock purchase/stock option plans, net of taxes

                                               1,608     

2,015

Other financing activities                                       25,182     

(6,507)

Net cash (used in) provided by financing activities $ (151,750) $

701,343

(1)For additional information regarding our debt instruments and financings, refer to "Debt Instruments and Debt Service Requirements" below. (2)For additional information, refer to Item 2. Issuer Purchases of Equity Securities.

Dividends


For the three months ended March 31, 2022, 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 27, 2022      March 10, 2022         $0.71     $76.9 million    March 25, 2022


Dividends paid in 2022 were ordinary taxable dividends. Subsequent to March 31, 2022, we declared the following cash dividends:

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

April 24, 2022       May 19, 2022          $0.71     June 14, 2022


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

Registration Statements


We have on file with the Securities and Exchange Commission (the "Commission") a
shelf registration statement on Form S-4 registering shares of Class A common
stock that we may issue in connection with the acquisition of wireless
communication towers or antenna sites and related assets or companies who own
wireless communication towers, antenna sites, or related assets. During the
three months ended March 31, 2022, we did not issue any shares of Class A common
stock under this registration statement. As of March 31, 2022, we had
approximately 1.2 million shares of Class A common stock remaining under this
registration statement.

We have on file with the Commission an automatic shelf registration statement
for well-known seasoned issuers on Form S-3ASR, which enables us to issue shares
of our Class A common stock, preferred stock, debt securities, warrants, or
depositary shares

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as well as units that include any of these securities. We will file a prospectus
supplement containing the amount and type of securities each time we issue
securities under our automatic shelf registration statement on Form S-3ASR. No
securities were issued under this registration statement through the date of
this filing.

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
$1.5 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 150.0 basis
points or (2) the Base Rate plus a margin that ranges from 12.5 basis points to
50.0 basis points, in each case based on the ratio of Consolidated Net Debt to
Annualized Borrower EBITDA, calculated in accordance with the Senior Credit
Agreement. In addition, SBA Senior Finance II LLC, our wholly owned subsidiary
("SBA Senior Finance II") is required to pay a commitment fee of between 0.15%
and 0.25% per annum on the amount of unused commitment. 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, July 7, 2026. Furthermore, the Revolving Credit Facility provides
mechanics relating to a transition away from LIBOR as a benchmark interest rate
and the replacement of LIBOR by an alternative benchmark rate and incorporates
sustainability-linked targets which will adjust the Facility's applicable
interest and commitment fee rates upward or downward based on how the Company
performs against those targets. Borrowings under the Revolving Credit Facility
may be used for general corporate purposes. SBA Senior Finance II may, from time
to time, borrow from and repay the Revolving Credit Facility. Consequently, the
amount outstanding under the Revolving Credit Facility at the end of the period
may not be reflective of the total amounts outstanding during such period.
Subsequent to March 31, 2022, the Company received a 0.05% reduction in the
applicable spread and a 0.01% reduction in the commitment fee as a result of
meeting certain sustainability-linked targets as of December 31, 2021.

During the three months ended March 31, 2022, we borrowed $330.0 million of the
outstanding balance under the Revolving Credit Facility. As of March 31, 2022,
there was $680.0 million outstanding under the Revolving Credit Facility
accruing interest at 1.619%. In addition, SBA Senior Finance II was required to
pay a commitment fee of 0.15% per annum on the amount of the unused commitment.
As of March 31, 2022, SBA Senior Finance II was in compliance with the financial
covenants contained in the Senior Credit Agreement.

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

Term Loan under the Senior Credit Agreement

2018 Term Loan


On April 11, 2018, we, through our wholly owned subsidiary, SBA Senior Finance
II, obtained a 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 75 basis points (with a zero Base Rate
floor) or the Eurodollar Rate plus 175 basis points (with a zero Eurodollar Rate
floor). The 2018 Term Loan was issued at 99.75% of par value. As of March 31,
2022, the 2018 Term Loan was accruing interest at 2.210% per annum.

On August 4, 2020, we, through our wholly owned subsidiary, SBA Senior Finance
II, 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.

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

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Secured Tower Revenue Securities

Tower Revenue Securities Terms


As of March 31, 2022, we, through the Trust, had issued and outstanding an
aggregate of $6.7 billion of Secured Tower Revenue Securities ("Tower
Securities"). The sole asset of the Trust consists of a non-recourse mortgage
loan made in favor of certain of our subsidiaries that are borrowers on the
mortgage loan (the "Borrowers") under which there is a loan tranche for each
Tower Security outstanding with the same interest rate and maturity date as the
corresponding Tower Security. The mortgage loan will be paid from the operating
cash flows from the aggregate 9,903 tower sites owned by the Borrowers as of
March 31, 2022. The mortgage loan is secured by (1) mortgages, deeds of trust,
and deeds to secure debt on a substantial portion of the tower sites, (2) a
security interest in the tower sites and substantially all of the Borrowers'
personal property and fixtures, (3) the Borrowers' rights under certain tenant
leases, and (4) all of the proceeds of the foregoing. For each calendar month,
SBA Network Management, Inc., an indirect subsidiary ("Network Management"), is
entitled to receive a management fee equal to 4.5% of the Borrowers' operating
revenues for the immediately preceding calendar month.

The table below sets forth the material terms of our outstanding Tower Securities as of the date of this filing:

                                                                               Anticipated      Final
                                               Amount                           Repayment      Maturity
        Security            Issue Date       Outstanding     Interest Rate        Date           Date
2014-2C Tower Securities   Oct. 15, 2014          $620.0            3.869%  

Oct. 8, Oct. 8,

                                                 million                          2024           2049
2018-1C Tower Securities   Mar. 9, 2018           $640.0            3.448%  

Mar. 9, Mar. 9,

                                                 million                          2023           2048
2019-1C Tower Securities   Sep. 13, 2019          $1.165            2.836%  

Jan. 12, Jan. 12,

                                                 billion                          2025           2050
2020-1C Tower Securities   Jul. 14, 2020          $750.0            1.884%  

Jan. 9, Jul. 11,

                                                 million                          2026           2050
2020-2C Tower Securities   Jul. 14, 2020          $600.0            2.328%  

Jan. 11, Jul. 9,

                                                 million                          2028           2052
2021-1C Tower Securities   May 14, 2021           $1.165            1.631%  

Nov. 9, May 9,

                                                 billion                          2026           2051
2021-2C Tower Securities   Oct. 27, 2021          $895.0            1.840%  

Apr. 9, Oct. 10,

                                                 million                          2027           2051
2021-3C Tower Securities   Oct. 27, 2021          $895.0            2.593%       Oct. 9,       Oct. 10,
                                                 million                          2031           2056

Risk Retention 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 (1) $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, (2) $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, (3) $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, (4) $61.4 million of Secured Tower Revenue
Securities Series 2021-1R (the "2021-1R Tower Securities") issued by the Trust
with a fixed interest rate of 3.625% per annum, payable monthly, and with the
same anticipated repayment date and final maturity date as the 2021-1C Tower
Securities, and (5) $94.3 million of Secured Tower Revenue Securities Series
2021-3R (the "2021-3R Tower Securities") issued by the Trust with a fixed
interest rate of 4.090% per annum, payable monthly, and with the same
anticipated repayment date and final maturity date as the 2021-3C Tower
Securities. Principal and interest payments made on the 2018-1R Tower
Securities, 2019-1R Tower Securities, 2020-2R Tower Securities, 2021-1R Tower
Securities, and 2021-3R Tower Securities eliminate in consolidation.

As of March 31, 2022, the Borrowers met the debt service coverage ratio required
by the mortgage loan agreement and were in compliance with all other covenants
as set forth in the agreement.

Senior Notes


The table below sets forth the material terms of our outstanding senior notes as
of March 31, 2022:
                                                  Interest                                   Optional
                                      Amount        Rate                     Interest Due   Redemption
  Senior Notes       Issue Date     Outstanding    Coupon    Maturity Date      Dates          Date
2020 Senior Notes   Feb. 4, 2020           $1.5     3.875%   Feb. 15, 2027  

Feb. 15 & Feb. 15,

                                        billion                                Aug. 15         2023
2021 Senior Notes   Jan. 29, 2021          $1.5     3.125%   Feb. 1, 2029      Feb. 1 &      Feb. 1,
                                        billion                                 Aug. 1         2024


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

Debt Service


As of March 31, 2022, we believe that our cash on hand, capacity available under
our Revolving Credit Facility, and cash flows from operations for the next
twelve months will be sufficient to service our outstanding debt during the next
twelve months.

The following table illustrates our estimate of our debt service requirement
over the next twelve months based on the amounts outstanding as of March 31,
2022 and the interest rates accruing on those amounts on such date (in
thousands):
Revolving Credit Facility (1)              $  12,237
2018 Term Loan (2)                            68,497
2014-2C Tower Securities                      24,185
2018-1C Tower Securities                     662,270
2019-1C Tower Securities                      33,409
2020-1C Tower Securities                      14,368
2020-2C Tower Securities                      14,159
2021-1C Tower Securities                      19,371
2021-2C Tower Securities                      16,752
2021-3C Tower Securities                      23,491
2020 Senior Notes                             58,125
2021 Senior Notes                             46,875

Total debt service for the next 12 months $ 993,739

(1)As of March 31, 2022, $680.0 million was outstanding under the Revolving
Credit Facility. Subsequent to March 31, 2022, we repaid an additional $110.0
million under the Revolving Credit Facility, and as of the date of this filing,
$570.0 million was outstanding.
(2)Total debt service on the 2018 Term Loan 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.

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