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MarketScreener Homepage  >  Equities  >  Nasdaq  >  SBA Communications Corporation    SBAC

SBA COMMUNICATIONS CORPORATION

(SBAC)
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SBA Communications REIT : CORP MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

08/06/2020 | 12:56pm EST
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 98.8% of our total segment operating profit
for the six months ended June 30, 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 June 30, 2020, we owned 32,610 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, and South Africa. As of
June 30, 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 six months ended June
30, 2020. In addition, as of June 30, 2020, approximately 30.4% of our total
towers are located in Brazil and less than 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, 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 five years to
10 years with multiple five 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 10 years with multiple five 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 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 and our international markets, ground leases and other
property interests are generally for an initial term of five years to 10 years
with multiple renewal periods, at our 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
June 30, 2020, 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.

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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.

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             For the six months ended
                                          June 30,                    June 30,

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

Domestic site leasing                   81.9%        80.8%          81.1%          80.7%
International site leasing              16.9%        16.5%          17.7%          16.6%
Total site leasing                      98.8%        97.3%          98.8%          97.3%


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 2020, we expect organic site leasing
revenue in both our domestic and international segments to increase over 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.

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.

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On April 1, 2020, T-Mobile finalized a merger with Sprint and now operates as
T-Mobile. For the three months ended June 30, 2020, T-Mobile represented 40.4%
of our total domestic site leasing revenue and 53.0% of our site development
revenue. For the six months ended June 30, 2020, T-Mobile represented 40.8% of
our total domestic site leasing revenue and 53.8% of our site development
revenue.

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 has provided us
with a new tool to return value to our shareholders, we will also continue to
make investments focused on increasing 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 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. 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 six months ended June 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.

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, 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.

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

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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.

Three Months Ended June 30, 2020 Compared to Three Months Ended June 30, 2019

Revenues and Segment Operating Profit:

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

Revenues                                           (in thousands)
Domestic site leasing          $       388,018$ 369,180   $         -   $    18,838        5.1%
International site leasing              94,385      89,823      (21,411)        25,973       28.9%
Site development                        24,823      41,144             -      (16,321)     (39.7%)
Total                          $       507,226$ 500,147$  (21,411)$    28,490        5.7%
Cost of Revenues
Domestic site leasing          $        64,093$  65,576   $         -   $   (1,483)      (2.3%)
International site leasing              27,505      27,884       (6,880)         6,501       23.3%
Site development                        19,904      30,988             -      (11,084)     (35.8%)
Total                          $       111,502$ 124,448$   (6,880)$   (6,066)      (4.9%)
Operating Profit
Domestic site leasing          $       323,925$ 303,604   $         -   $    20,321        6.7%
International site leasing              66,880      61,939      (14,531)        19,472       31.4%
Site development                         4,919      10,156             -       (5,237)     (51.6%)


Revenues

Domestic site leasing revenues increased $18.8 million for the three months
ended June 30, 2020, as compared to the prior year, primarily due to (1)
revenues from 180 towers acquired and 28 towers built since April 1, 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.

International site leasing revenues increased $4.6 million for the three months
ended June 30, 2020, as compared to the prior year. On a constant currency
basis, international site leasing revenues increased $26.0 million. These
changes were primarily due to (1) revenues from 2,294 towers acquired and 451
towers built since April 1, 2019 and (2) organic site leasing growth from new
leases, amendments, and contractual escalators. Site leasing revenue in Brazil
represented 10.8% 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 decreased $16.3 million for the three months ended June 30, 2020, as compared to prior year, as a result of decreased carrier activity driven primarily by T-Mobile and Sprint.

Operating Profit


Domestic site leasing segment operating profit increased $20.3 million for the
three months ended June 30, 2020, as compared to the prior year, primarily due
to additional profit generated by (1) towers acquired and built since April 1,
2019 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 $4.9 million for
the three months ended June 30, 2020, as compared to the prior year. On a
constant currency basis, international site leasing segment operating profit
increased $19.5 million. These changes were primarily due to additional profit
generated by (1) towers acquired and built since April 1, 2019 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 decreased $5.2 million for the three months ended June 30, 2020, as compared to the prior year, as a result of decreased carrier activity driven primarily by T-Mobile and Sprint.


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Selling, General, and Administrative Expenses:

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

                                                   (in thousands)
Domestic site leasing          $        25,233$  27,193   $         -   $   (1,960)      (7.2%)
International site leasing               9,035       8,310       (1,451)         2,176       26.2%
Total site leasing             $        34,268$  35,503$   (1,451)$       216        0.6%
Site development                         4,494       6,885             -       (2,391)     (34.7%)
Other                                   10,326      13,136             -       (2,810)     (21.4%)
Total                          $        49,088$  55,524$   (1,451)$   (4,985)      (9.0%)


Selling, general, and administrative expenses decreased $6.4 million for the
three months ended June 30, 2020, as compared to the prior year. On a constant
currency basis, selling, general, and administrative expenses decreased $5.0
million. These changes were primarily as a result of decreases in noncash
compensation due to the acceleration of unrecognized stock compensation expense
in the prior year related to the adoption of the retirement plan, back-office
operating expenses, and travel related expenses. These decreases were partially
offset by increases in personnel and other support related costs due in part to
our continued international expansion and charitable contributions related to
COVID-19 relief.

Acquisition and New Business Initiatives Related Adjustments and Expenses:


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

                                                         (in thousands)
Domestic site leasing          $         3,004   $   1,272   $               -   $           1,732       136.2%
International site leasing               1,630       1,267               (249)                 612        48.3%
Total                          $         4,634   $   2,539   $           (249)   $           2,344        92.3%


Acquisition and new business initiatives related adjustments and expenses
increased $2.1 million for the three months ended June 30, 2020, as compared to
the prior year. On a constant currency basis, acquisition and new business
initiatives related adjustments and expenses increased $2.3 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 three months ended                                      Constant
                                        June 30,                  Foreign         Constant     Currency
                                                                                  Currency
                                    2020           2019       Currency Impact      Change      % Change

                                                      (in thousands)
Domestic site leasing          $         5,342   $   8,815   $               -   $   (3,473)     (39.4%)
International site leasing                 900         805               (282)           377       46.8%
Total                          $         6,242   $   9,620   $           (282)   $   (3,096)     (32.2%)


Asset impairment and decommission costs decreased $3.4 million for the three
months ended June 30, 2020, as compared to the prior year. On a constant
currency basis, asset impairment and decommission costs decreased $3.1 million.
These changes were primarily as a result of a $4.5 million decrease in the
impairment charge recorded due to sites decommissioned in the second quarter of
2020 compared to the prior year period, partially offset by a $1.1 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.


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Depreciation, Accretion, and Amortization Expense:

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

                                                      (in thousands)
Domestic site leasing          $       134,569$ 131,413   $         -   $           3,156        2.4%
International site leasing              42,011      38,194       (9,548)              13,365       35.0%
Total site leasing             $       176,580$ 169,607$   (9,548)   $          16,521        9.7%
Site development                           597         678             -                (81)     (11.9%)
Other                                    1,529       1,279             -                 250       19.5%
Total                          $       178,706$ 171,564$   (9,548)   $          16,690        9.7%


Depreciation, accretion, and amortization expense increased $7.1 million for the
three months ended June 30, 2020, as compared to the prior year. On a constant
currency basis, depreciation, accretion, and amortization expense increased
$16.7 million. These changes were primarily due to an increase in the number of
towers we acquired and built since April 1, 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
                                         June 30,               Foreign      Constant      Currency
                                                               Currency      Currency
                                    2020            2019        Impact        Change       % Change

                                                    (in thousands)
Domestic site leasing          $       155,777$  134,911   $         -   $    20,866        15.5%
International site leasing              13,304       13,363       (3,001)         2,942        22.0%
Total site leasing             $       169,081$  148,274$   (3,001)$    23,808        16.1%
Site development                         (172)        2,593             -       (2,765)     (106.6%)
Other                                 (11,855)     (14,415)             -         2,560      (17.8%)
Total                          $       157,054$  136,452$   (3,001)$    23,603        17.3%


Domestic site leasing operating income increased $20.9 million for the three
months ended June 30, 2020, as compared to the prior year, primarily due to
higher segment operating profit and decreases in asset impairment and
decommission costs and selling, general, and administrative expenses, partially
offset by increases in depreciation, accretion, and amortization expense and
acquisition and new business initiatives related adjustments and expenses.

International site leasing operating income decreased $0.1 million for the three
months ended June 30, 2020, as compared to the prior year. On a constant
currency basis, international site leasing operating income increased $2.9
million. These changes were primarily due to higher segment operating profit,
partially offset by increases in depreciation, accretion, and amortization
expense, selling, general, and administrative expenses, acquisition and new
business initiatives related adjustments and expenses, and asset impairment and
decommission costs.

Site development operating income decreased $2.8 million for the three months
ended June 30, 2020, as compared to the prior year, primarily due to lower
segment operating profit driven by less activity from Sprint and T-Mobile,
partially offset by a decrease in selling, general, and administrative expenses.

Other Income (Expense):

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

                                                    (in thousands)
Interest income                $            699   $    1,581$     (155)$     (727)      (46.0%)
Interest expense                       (95,687)     (97,447)          (13)         1,773       (1.8%)
Non-cash interest expense               (2,337)        (651)             -       (1,686)       259.0%
Amortization of deferred
financing fees                          (5,188)      (5,116)             -          (72)         1.4%
Other (expense) income, net            (31,588)       12,762      (40,376)       (3,974)     (107.6%)
Total                          $      (134,101)$ (88,871)$  (40,544)$   (4,686)         4.8%


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Interest expense decreased $1.8 million for the three months ended June 30,
2020, as compared to the prior year primarily due to a lower weighted average
interest rate as compared to the prior year, partially offset by a higher
average principal amount of cash-interest bearing debt outstanding as compared
to the prior year.

Non-cash interest expense increased $1.7 million for the three months ended June
30, 2020, as compared to the prior year primarily related to amortization on our
interest rate swaps de-designated as cash flow hedges.

Other (expense) income, net includes a $31.2 million loss on the remeasurement
of U.S. dollar denominated intercompany loans with foreign subsidiaries for the
three months ended June 30, 2020. For the three months ended June 30, 2019,
other (expense) income, net included a $9.1 million gain on the remeasurement of
U.S. dollar denominated intercompany loans with foreign subsidiaries.

Benefit (Provision) for Income Taxes:

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

                                                       (in thousands)
Benefit (provision) for
income taxes                   $      165$ (15,608)   $          15,113   $             660       (5.3%)


Benefit for income taxes increased $15.8 million for the three months ended June
30, 2020, as compared to the prior year. On a constant currency basis, provision
for income taxes decreased $0.7 million primarily due to a decrease in domestic
and foreign income taxes partially offset by an increase in foreign withholding
taxes.

Net Income:

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

                                                      (in thousands)
Net income                     $        23,118$  31,973$  (28,432)   $          19,577         74.7%


Net income decreased $8.9 million for the three months ended June 30, 2020, as
compared to the prior year. This change was primarily due to fluctuations in
foreign currency exchange rates including changes recorded on the remeasurement
of the U.S. dollar denominated intercompany loans with foreign subsidiaries,
partially offset by increases in operating income and benefit for income taxes.

Six Months Ended June 30, 2020 Compared to Six Months Ended June 30, 2019

Revenues and Segment Operating Profit:

                                   For the six months ended                                   Constant
                                           June 30,                 Foreign      Constant     Currency
                                                                   Currency      Currency
                                    2020                2019        Impact        Change      % Change

Revenues                                              (in thousands)

Domestic site leasing $ 774,361$ 732,017 $ - $ 42,344 5.8% International site leasing

             200,397          179,169      (33,469)        54,697       30.5%
Site development                        49,534           82,254             -      (32,720)     (39.8%)
Total                          $     1,024,292$ 993,440$  (33,469)$    64,321        6.5%
Cost of Revenues
Domestic site leasing          $       127,997$ 130,690   $         -   $   (2,693)      (2.1%)
International site leasing              59,400           55,485      (10,802)        14,717       26.5%
Site development                        39,620           62,089             -      (22,469)     (36.2%)
Total                          $       227,017$ 248,264$  (10,802)$  (10,445)      (4.2%)
Operating Profit
Domestic site leasing          $       646,364$ 601,327   $         -   $    45,037        7.5%
International site leasing             140,997          123,684      (22,667)        39,980       32.3%
Site development                         9,914           20,165             -      (10,251)     (50.8%)


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Revenues


Domestic site leasing revenues increased $42.3 million for the six months ended
June 30, 2020, as compared to the prior year, primarily due to (1) revenues from
208 towers acquired and 35 towers built since January 1, 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.

International site leasing revenues increased $21.2 million for the six months
ended June 30, 2020, as compared to the prior year. On a constant currency
basis, international site leasing revenues increased $54.7 million. These
changes were primarily due to (1) revenues from 2,320 towers acquired and 516
towers built since January 1, 2019 and (2) organic site leasing growth from new
leases, amendments, and contractual escalators. Site leasing revenue in Brazil
represented 11.8% 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 decreased $32.7 million for the six months ended June
30, 2020, as compared to prior year, as a result of decreased carrier activity
driven primarily by T-Mobile and Sprint.

Operating Profit


Domestic site leasing segment operating profit increased $45.0 million for the
six months ended June 30, 2020, as compared to the prior year, primarily due to
additional profit generated by (1) towers acquired and built since January 1,
2019 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 $17.3 million for
the six months ended June 30, 2020, as compared to the prior year. On a constant
currency basis, international site leasing segment operating profit increased
$40.0 million. These changes were primarily due to additional profit generated
by (1) towers acquired and built since January 1, 2019 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 decreased $10.3 million for the six months ended June 30, 2020, as compared to the prior year, as a result of decreased carrier activity driven primarily by T-Mobile and Sprint.

Selling, General, and Administrative Expenses:

                               For the six months ended                                Constant
                                       June 30,              Foreign      Constant     Currency
                                                            Currency      Currency
                                   2020          2019        Impact        Change      % Change

                                                  (in thousands)
Domestic site leasing          $      52,555$  56,086   $         -   $   (3,531)      (6.3%)
International site leasing            16,966      13,998       (1,890)         4,858       34.7%
Total site leasing             $      69,521$  70,084$   (1,890)$     1,327        1.9%
Site development                       8,950      12,591             -       (3,641)     (28.9%)
Other                                 20,233      23,808             -       (3,575)     (15.0%)
Total                          $      98,704$ 106,483$   (1,890)$   (5,889)      (5.5%)


Selling, general, and administrative expenses decreased $7.8 million for the six
months ended June 30, 2020, as compared to the prior year. On a constant
currency basis, selling, general, and administrative expenses decreased $5.9
million. These changes were primarily as a result of decreases in noncash
compensation due to the acceleration of unrecognized stock compensation expense
in the prior year related to the adoption of the retirement plan, back-office
operating expenses, and travel related expenses. These decreases were partially
offset by increases in personnel and other support related costs due in part to
our continued international expansion and charitable contributions related to
COVID-19 relief.


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Acquisition and New Business Initiatives Related Adjustments and Expenses:

                               For the six months ended                                             Constant
                                       June 30,                 Foreign            Constant         Currency
                                   2020          2019       Currency Impact     Currency Change     % Change

                                                        (in thousands)
Domestic site leasing          $       5,601$   1,980   $               -   $           3,621       182.9%
International site leasing             2,832       2,996               (373)                 209         7.0%
Total                          $       8,433$   4,976   $           (373)   $           3,830        77.0%


Acquisition and new business initiatives related adjustments and expenses
increased $3.5 million for the six months ended June 30, 2020, as compared to
the prior year. On a constant currency basis, acquisition and new business
initiatives related adjustments and expenses increased $3.8 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 six months ended                                             Constant
                                        June 30,                 Foreign            Constant         Currency
                                    2020          2019       Currency Impact     Currency Change     % Change

                                                         (in thousands)
Domestic site leasing          $       16,168$  12,449   $               -   $           3,719         29.9%
International site leasing              4,429       2,942               (379)               1,866         63.4%
Total                          $       20,597$  15,391   $           (379)   $           5,585         36.3%


Asset impairment and decommission costs increased $5.2 million for the six
months ended June 30, 2020, as compared to the prior year. On a constant
currency basis, asset impairment and decommission costs increased $5.6 million.
These changes were primarily as a result of a $8.8 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 $3.6 million decrease in the
impairment charge recorded due to sites decommissioned in the six months ended
June 30, 2020 compared to the prior year period.

Depreciation, Accretion, and Amortization Expenses:

                                For the six months ended                                       Constant
                                        June 30,              Foreign         Constant         Currency
                                                             Currency
                                    2020          2019        Impact       Currency Change     % Change

                                                      (in thousands)
Domestic site leasing          $      268,375$ 261,657   $         -   $           6,718         2.6%
International site leasing             88,623      76,989      (14,912)              26,546        34.5%
Total site leasing             $      356,998$ 338,646$  (14,912)   $          33,264         9.8%
Site development                        1,213       1,240             -                (27)       (2.2%)
Other                                   3,074       2,716             -                 358        13.2%
Total                          $      361,285$ 342,602$  (14,912)   $          33,595         9.8%


Depreciation, accretion, and amortization expense increased $18.7 million for
the six months ended June 30, 2020, as compared to the prior year. On a constant
currency basis, depreciation, accretion, and amortization expense increased
$33.6 million. These changes were primarily due to an increase in the number of
towers we acquired and built since January 1, 2019, partially offset by the
impact of assets that became fully depreciated since the prior year period.


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Operating Income (Expense):

                                   For the six months ended                                    Constant
                                           June 30,                 Foreign      Constant      Currency
                                                                   Currency      Currency
                                    2020                2019        Impact        Change       % Change

                                                      (in thousands)
Domestic site leasing          $      303,665$  269,155   $         -   $    34,510        12.8%
International site leasing             28,147            26,759       (5,113)         6,501        24.3%
Total site leasing             $      331,812$  295,914$   (5,113)$    41,011        13.9%
Site development                        (249)             6,334             -       (6,583)     (103.9%)
Other                                (23,307)          (26,524)             -         3,217      (12.1%)
Total                          $      308,256$  275,724   $  

(5,113) $ 37,645 13.7%

Domestic site leasing operating income increased $34.5 million for the six months ended June 30, 2020, as compared to the prior year, primarily due to higher segment operating profit and a decrease in selling, general, and administrative expenses, partially offset by increases in depreciation, accretion, and amortization expense, asset impairment and decommission costs, and acquisition and new business initiatives related adjustments and expenses.


International site leasing operating income increased $1.4 million for the six
months ended June 30, 2020, as compared to the prior year. On a constant
currency basis, international site leasing operating income increased $6.5
million. These changes were primarily due to higher segment operating profit,
partially offset by increases in depreciation, accretion, and amortization
expense, selling, general, and administrative expenses, asset impairment and
decommission costs, and acquisition and new business initiatives related
adjustments and expenses.

Site development operating income decreased $6.6 million for the six months ended June 30, 2020, as compared to the prior year, primarily due to lower segment operating profit driven by less activity from Sprint and T-Mobile, partially offset by a decrease in selling, general, and administrative expenses.


Other Income (Expense):

                                  For the six months ended                                         Constant
                                          June 30,                    Foreign         Constant     Currency
                                                                                      Currency
                                    2020              2019        Currency Impact      Change      % Change

                                                        (in thousands)
Interest income                $        1,584$     3,381   $           (220)   $   (1,577)     (46.6%)
Interest expense                    (191,538)        (196,114)                (13)         4,589      (2.3%)
Non-cash interest expense             (4,743)          (1,292)                   -       (3,451)      267.1%
Amortization of deferred
financing fees                       (10,328)         (10,176)                   -         (152)        1.5%
Loss from extinguishment of
debt, net                            (16,864)                -                   -      (16,864)          -%
Other (expense) income, net         (257,885)           12,254           (268,906)       (1,233)     (24.2%)
Total                          $    (479,774)$ (191,947)$       (269,139)$  (18,688)        9.4%


Interest income decreased $1.8 million for the six months ended June 30, 2020,
as compared to the prior year. On a constant currency basis, interest income
decreased $1.6 million. These changes were primarily due to a lower amount of
interest bearing domestic investments.

Interest expense decreased $4.6 million for the six months ended June 30, 2020,
as compared to the prior year. These changes were primarily due to a lower
weighted average interest rate as compared to the prior year, partially offset
by a higher average principal amount of cash-interest bearing debt outstanding
as compared to the prior year.

Non-cash interest expense increased $3.5 million for the six months ended June
30, 2020, as compared to the prior year primarily related to amortization on our
interest rate swaps de-designated as cash flow hedges.

Loss from extinguishment of debt was $16.9 million for the six months ended June
30, 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.

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Other (expense) income, net includes a $261.3 million loss on the remeasurement
of U.S. dollar denominated intercompany loans with foreign subsidiaries as well
as a $3.2 million net gain on the change in fair value related to interest rate
swaps not designated as hedges for the six months ended June 30, 2020. Other
(expense) income, net includes a $7.0 million gain on the remeasurement of U.S.
dollar denominated intercompany loans with foreign subsidiaries for the six
months ended June 30, 2019.

Benefit (Provision) for Income Taxes:

                               For the six months ended                                            Constant
                                       June 30,                 Foreign            Constant        Currency
                                   2020          2019       Currency Impact     Currency Change    % Change

                                                        (in thousands)
Benefit (provision) for
income taxes                   $     66,702$ (25,815)   $          90,101   $           2,416     (10.3%)


Benefit for income taxes increased $92.5 million for the six months ended June
30, 2020, as compared to the prior year. On a constant currency basis, provision
for income taxes decreased $2.4 million primarily due to a decrease in domestic
and foreign income taxes partially offset by an increase in foreign withholding
taxes.

Net (Loss) Income:

                                 For the six months ended                                              Constant
                                         June 30,                  Foreign            Constant         Currency
                                     2020           2019       Currency Impact     Currency Change     % Change

                                                          (in thousands)
Net (loss) income              $      (104,816)$  57,962$       (184,151)   $          21,373         39.5%


Net loss was $104.8 million for the six months ended June 30, 2020, as compared
to net income of $58.0 million in the prior year period. This change was
primarily due to fluctuations in foreign currency exchange rates including
changes recorded on the remeasurement of the U.S. dollar denominated
intercompany loans with foreign subsidiaries and a loss from extinguishment of
debt in the current year period, partially offset by increases in operating
income and benefit for income taxes.



NON-GAAP FINANCIAL MEASURES


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

Adjusted EBITDA


We define Adjusted EBITDA as net income excluding the impact of non-cash
straight-line leasing revenue, non-cash straight-line ground lease expense,
non-cash compensation, net loss from extinguishment of debt, other income and
expenses, acquisition and new business initiatives related adjustments and
expenses, asset impairment and decommission costs, interest income, interest
expenses, depreciation, accretion, and amortization, and 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 2016 Senior Notes, 2017 Senior
Notes, and 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.

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

                                                   (in thousands)
Net income                     $       23,118$   31,973$  (28,432)$    19,577        74.7%
Non-cash straight-line
leasing revenue                         (346)      (2,892)          (55)         2,601      (89.9%)
Non-cash straight-line
ground lease expense                    3,678        5,268          (16)       (1,574)      (29.9%)
Non-cash compensation                  18,579       24,487         (325)       (5,583)      (22.8%)
Other expense (income), net            31,588     (12,762)        40,376         3,974     (107.6%)
Acquisition and new business
initiatives
related adjustments and
expenses                                4,634        2,539         (249)         2,344        92.3%
Asset impairment and
decommission costs                      6,242        9,620         (282)       (3,096)      (32.2%)
Interest income                         (699)      (1,581)           155           727      (46.0%)
Total interest expense (1)            103,212      103,214            13          (15)       (0.0%)
Depreciation, accretion, and
amortization                          178,706      171,564       (9,548)        16,690         9.7%
(Benefit) provision for
income taxes (2)                           55       15,808      (15,113)         (640)       (5.0%)
Adjusted EBITDA                $      368,767$  347,238$  (13,476)$    35,005        10.1%


                                   For the six months ended                                         Constant
                                           June 30,                    Foreign         Constant     Currency
                                                                                       Currency
                                    2020                2019       Currency Impact      Change      % Change

                                                         (in thousands)
Net (loss) income              $     (104,816)$   57,962$       (184,151)$    21,373       39.5%
Non-cash straight-line
leasing revenue                        (2,687)          (5,537)                (24)         2,874     (51.9%)
Non-cash straight-line
ground lease expense                     7,527           11,357                (22)       (3,808)     (33.5%)
Non-cash compensation                   34,857           47,901               (660)      (12,384)     (25.9%)
Loss from extinguishment of
debt, net                               16,864                -                   -        16,864          -%
Other expense (income), net            257,885         (12,254)             268,906         1,233       24.2%
Acquisition and new business
initiatives
related adjustments and
expenses                                 8,433            4,976               (373)         3,830       77.0%
Asset impairment and
decommission costs                      20,597           15,391               (379)         5,585       36.3%
Interest income                        (1,584)          (3,381)                 220         1,577     (46.6%)
Total interest expense (1)             206,609          207,582                  13         (986)      (0.5%)
Depreciation, accretion, and
amortization                           361,285          342,602            (14,912)        33,595        9.8%
(Benefit) provision for
income taxes (2)                      (66,255)           26,211            (90,102)       (2,364)      (9.9%)
Adjusted EBITDA                $       738,715$  692,810$        (21,484)$    67,389        9.7%

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


(2)(Benefit) provision for taxes includes $220 and $200 of franchise taxes for
the three months ended June 30, 2020 and 2019, respectively, and $447 and $396
of franchise taxes for the six months ended June 30, 2020 and 2019,
respectively, reflected in selling, general, and administrative expenses on the
Consolidated Statements of Operations.

Adjusted EBITDA increased $21.5 million for the three months ended June 30, 2020, as compared to the prior year period. On a constant currency basis, Adjusted EBITDA increased $35.0 million. These changes were primarily due to an increase in site leasing segment operating profit, partially offset by a decrease in site development segment operating profit.


Adjusted EBITDA increased $45.9 million for the six months ended June 30, 2020,
as compared to the prior year period. On a constant currency basis, Adjusted
EBITDA increased $67.4 million. These changes were primarily due to an increase
in site leasing segment operating profit, partially offset by a decrease in site
development segment operating profit and an increase in cash selling, general,
and administrative expenses.

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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.

A summary of our cash flows is as follows:

                                                        For the six months ended
                                                   June 30, 2020        June 30, 2019

                                                             (in thousands)
Cash provided by operating activities             $       592,418      $    

466,106

Cash used in investing activities                       (413,970)           

(255,475)

Cash used in financing activities                        (52,121)           

(264,463)

Change in cash, cash equivalents, and
restricted cash                                           126,327           

(53,832)

Effect of exchange rate changes on cash, cash
equiv., and restricted cash                              (15,809)           

2,344

Cash, cash equivalents, and restricted cash,
beginning of period                                       141,120           

178,300

Cash, cash equivalents, and restricted cash,
end of period                                     $       251,638$       126,812


Operating Activities

Cash provided by operating activities was $592.4 million for the six months
ended June 30, 2020 as compared to $466.1 million for the six months ended June
30, 2019. The increase was primarily due to increases in site leasing segment
operating profit and cash inflows associated with working capital changes
primarily from timing of customer payments, partially offset by a decrease in
site development segment operating profit and an increase in cash selling,
general, and administrative expenses.

Investing Activities

A detail of our investing activities is as follows:

                                                       For the six months ended June 30,
                                                              2020              2019

                                                                 (in thousands)

Acquisitions of towers and related intangible assets $ (99,424) $ (125,412) Land buyouts and other assets (1)

                                (19,611)   

(25,770)

Construction and related costs on new builds                     (28,012)   

(28,150)

Augmentation and tower upgrades                                  (21,423)        (28,825)
Tower maintenance                                                (15,180)        (14,029)
General corporate                                                 (2,364)         (1,781)
Net purchases of investments                                    (225,026)        (30,042)
Other investing activities                                        (2,930)         (1,466)
Net cash used in investing activities                  $        (413,970)

$ (255,475)

(1)Excludes $3.6 million and $6.7 million spent to extend ground lease terms for the six months ended June 30, 2020 and 2019, respectively.


Subsequent to June 30, 2020, we acquired 25 towers and related assets and one
data center for $61.6 million in cash. In addition, we agreed to purchase 100
additional sites for $42.0 million.

For 2020, we expect to incur non-discretionary cash capital expenditures
associated with tower maintenance and general corporate expenditures of $31.0
million to $41.0 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 $325.0
million to $345.0 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

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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 six months ended
                                                   June 30, 2020        June 30, 2019

                                                             (in thousands)
Net borrowings (repayments) under Revolving
Credit Facility (1)                               $     (490,000)      $    

(245,000)

Proceeds from Senior Notes, net of fees and
original issue discount (1)                             1,480,206           

-

Repayment of Senior Notes (1)                           (759,143)           

-

Proceeds from employee stock purchase/stock
option plans, net of taxes                                 37,316           

87,921

Repurchase and retirement of common stock (2)           (203,330)           

(94,572)

Payment of dividends on common stock                    (104,171)           

-

Other financing activities                               (12,999)           

(12,812)

Net cash used in financing activities             $      (52,121)      $    

(264,463)

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


(2)During the six months ended June 30, 2020, we repurchased 0.8 million shares
of our Class A common stock for $200.0 million, at an average price per share of
$242.86. Shares repurchased were retired. As of the date of this filing, we had
$424.3 million of authorization remaining under the current stock repurchase
plan.

Dividend

For the six months ended June 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

Subsequent to June 30, 2020, 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

August 3, 2020      August 25, 2020       $0.465    September 22, 2020


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 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 six months ended June 30, 2020, we did not issue any
shares of Class A common stock under this registration statement. As of June 30,
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

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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.

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 June 30, 2020, we borrowed $15.0 million and
repaid $500.0 million of the outstanding balance under the Revolving Credit
Facility. During the six months ended June 30, 2020, we borrowed $515.0 million
and repaid $1.0 billion of the outstanding balance under the Revolving Credit
Facility. As of June 30, 2020, we had no amount outstanding under the $1.25
billion Revolving Credit Facility. In addition, SBA Senior Finance II was
required to pay a commitment fee of 0.25% per annum on the amount of the unused
commitment. As of June 30, 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.

Term 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 75 basis points (with
a zero Base Rate floor) or the Eurodollar Rate plus 175 basis points (with a
zero Eurodollar Rate floor). As of June 30, 2020, the 2018 Term Loan was
accruing interest at 1.93% per annum. Principal payments on the 2018 Term Loan
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.

During the three and six months ended June 30, 2020, we repaid an aggregate of
$6.0 million and $12.0 million of principal on the 2018 Term Loan, respectively.
As of June 30, 2020, the 2018 Term Loan had a principal balance of $2.4 billion.

On December 3, 2019, we, through our wholly owned subsidiary, SBA Senior Finance
II LLC, entered into a series of interest rate swaps on a portion of our 2018
Term Loan. As a result, we swapped $1.95 billion of notional value receiving
interest at one month LIBOR plus 175 basis points for a fixed rate of 3.78% per
annum settled monthly through the maturity date of the 2018 Term Loan. On August
6, 2020, we, through our wholly owned subsidiary, SBA Senior Finance II LLC,
terminated interest rate swaps entered into in 2019 in exchange for a payment of
$176.2 million. On the same date, we entered into an interest rate swap with
$1.95 billion of notional value receiving interest at one month LIBOR for a
fixed rate of 0.1239% per annum settled monthly through the maturity date of the
2018 Term Loan.

Secured Tower Revenue Securities


As of June 30, 2020, we, through a New York common law trust (the "Trust"), had
issued and outstanding an aggregate of $5.0 billion of Secured Tower Revenue
Securities ("Tower Securities"). The sole asset of the Trust consists of a
non-recourse

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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:

                                                                           Anticipated       Final
                                           Amount                           Repayment      Maturity

Security Issue Date Outstanding Interest Rate

   Date           Date
2013-2C Tower          Apr. 18, 2013          $575.0            3.722%      Apr. 11,        Apr. 9,
Securities                                   million                          2023           2048
2014-2C Tower          Oct. 15, 2014          $620.0            3.869%       Oct. 8,        Oct. 8,
Securities                                   million                          2024           2049
2015-1C Tower          Oct. 14, 2015          $500.0            3.156%       Oct. 8,       Oct. 10,
Securities (1)                               million                          2020           2045
2016-1C Tower          Jul. 7, 2016           $700.0            2.877%       Jul. 9,       Jul. 10,
Securities (1)                               million                          2021           2046
2017-1C Tower          Apr. 17, 2017          $760.0            3.168%      Apr. 11,        Apr. 9,
Securities                                   million                          2022           2047
2018-1C Tower          Mar. 9, 2018           $640.0            3.448%       Mar. 9,        Mar. 9,
Securities                                   million                          2023           2048
2019-1C Tower          Sep. 13, 2019          $1.165            2.836%      Jan. 12,       Jan. 12,
Securities                                   billion                          2025           2050


(1)On July 14, 2020, we repaid the entire aggregate principal amounts of the
2015-1C Tower Securities and the 2016-1C Tower Securities in connection with the
issuance of the 2020 Tower Securities (as defined below).

As of June 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 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 11, 2050 (the "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 aggregate $1.35 billion of 2020
Tower Securities have a blended interest rate of 2.081% and a weighted average
life through the anticipated repayment date of 6.4 years. Net proceeds from this
offering were used to repay the entire aggregate principal amount of the 2015-1C
Tower Securities ($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 fees of $13.6
million to date in relation to this transaction which are being amortized
through the anticipated repayment date of the 2020 Tower Securities.

Risk Retention 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 with a fixed interest rate of 4.459% per annum,
payable 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, 2018-1R Tower Securities, 2019-1R Tower
Securities, and 2020-2R Tower Securities eliminate in consolidation.


?

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Senior Notes

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


                                     Amount                                 

Interest % of Par

  Senior Notes      Issue Date     Outstanding   Interest Rate   Maturity Date    Due Dates     Value
2016 Senior        Aug. 15, 2016          $1.1          4.875%   Sep. 1, 2024     Mar. 1 &      99.178%
Notes                                  billion                                     Sep. 1
2017 Senior        Oct. 13, 2017        $750.0          4.000%   Oct. 1, 2022     Apr. 1 &     100.000%
Notes                                  million                                     Oct. 1
2020-1 Senior      Feb. 4, 2020           $1.0          3.875%   Feb. 15, 2027    Feb. 15 &    100.000%
Notes (1)                              billion                                     Aug. 15
2020-2 Senior      May 26, 2020         $500.0          3.875%   Feb. 15, 2027    Feb. 15 &     99.500%
Notes (1)                              million                                     Aug. 15


(1)On February 4, 2020, we issued $1.0 billion of unsecured senior notes at par
value (the "2020-1 Senior Notes"), and on May 26, 2020, we issued $500.0 million
of additional unsecured senior notes under the same indenture at 99.500% of par
value (the "2020-2 Senior Notes") (collectively, the "2020 Senior Notes"). Net
proceeds from these offerings were used to redeem the entire $750.0 million
outstanding principal amount of the 2014 Senior Notes, repay amounts outstanding
under the Revolving Credit Facility, and for general corporate purposes. 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 related to the
redemption of the 2014 Senior Notes which are reflected in loss from
extinguishment of debt on the Consolidated Statement of Operations. Interest on
the 2020 Senior Notes begins August 15, 2020. We incurred financing fees of
$17.3 million to date in relation to this transaction, which are being amortized
through the maturity date.

The 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 senior notes during the time periods and at
the redemption prices set forth in the indentures.

Debt Service


As of June 30, 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.

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

Revolving Credit Facility                         $   3,125
2018 Term Loan (1)                                  105,469
2013-2C Tower Securities                             21,585
2014-2C Tower Securities                             24,185
2015-1C Tower Securities (2)(3)                     504,559
2016-1C Tower Securities (3)                         20,361
2017-1C Tower Securities                             24,318
2018-1C Tower Securities                             22,270
2019-1C Tower Securities                             33,409
2016 Senior Notes                                    53,625
2017 Senior Notes                                    30,000
2020 Senior Notes                                    58,125

Total debt service for the next 12 months (3) $ 901,031



(1)Total debt service on the 2018 Term Loan includes the impact of interest rate
swaps entered into in 2019 which swapped $1.95 billion of notional value
accruing interest at one month LIBOR plus 175 basis points for a fixed rate of
3.78% per

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annum through the maturity date of the 2018 Term Loan. Total debt service on the
2018 Term Loan excludes the impact of the interest rate swap entered into on
August 6, 2020.

(2)The anticipated repayment date and the final maturity date for the 2015-1C
Tower Securities is October 8, 2020 and October 10, 2045, respectively. Interest
expense included above is through the anticipated repayment date.

(3)Total debt service excludes interest payments on the $1.35 billion 2020 Tower Securities issued July 14, 2020, proceeds from which were used to repay the entire aggregate principal amount of the 2015-1C Tower Securities ($500.0 million) and the 2016-1C Tower Securities ($700.0 million).

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