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Second quarter over year earlier period:
"Strong operational performance, continued high levels of customer activity and material portfolio growth combined to allow SBA to post excellent financial results in the second quarter," commented
Operating Results
Total revenues in the second quarter of 2012 were
Tower
Net loss attributable to
Adjusted EBITDA in the second quarter of 2012 was
Net Cash Interest Expense was
AFFO increased 46.0% to
Investing Activities
During the second quarter of 2012, SBA purchased 2,381 tower sites and an additional 36 towers in development (including those from Mobilitie) for
Subsequent to
On
Financing Activities and Liquidity
On
On
During the second quarter, SBA increased the size of its senior secured Revolving Credit Facility by
On
SBA ended the second quarter with
On
On
During the second quarter, SBA did not repurchase any shares of its Class A common stock. The Company currently has
Outlook
The Company is providing its third quarter 2012 Outlook and updating its Full Year 2012 Outlook for anticipated results. The Outlook provided is based on a number of assumptions that the Company believes are reasonable at the time of this press release. Information regarding potential risks that could cause the actual results to differ from these forward-looking statements is set forth below and in the Company's filings with the
The Company's Full Year 2012 Outlook assumes the acquisition of only those tower assets under contract at the time of this press release, excluding any potential impact from the previously announced
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(1) The Company's Outlook for site leasing revenue reflects
(2) Net cash interest expense is defined as interest expense less interest income. Net cash interest expense does not include amortization of deferred financing fees or non-cash interest expense.
(3) Consists of tower maintenance and general corporate capital expenditures.
(4) Consists of new tower builds, tower augmentations, tower acquisitions and related earn-outs and ground lease purchases. Excludes expenditures for revenue producing assets not under contract at the date of this press release as well as the
(5) AFFO outlook for full year 2012 does not include any impact from the pending
Conference Call Information
| When: |
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| Dial-in number: | (800) 288-8960 |
| Conference call name: | SBA Second Quarter Results |
| Replay: |
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| Number: | (800) 475-6701 |
| Access Code: | 254375 |
| Internet access: | www.sbasite.com |
Information Concerning Forward-Looking Statements
This press release includes forward-looking statements, including statements regarding the Company's expectations or beliefs regarding (i) the Company's financial and operational guidance for the third quarter of 2012 and full year 2012, (ii) the sale of certain DAS assets acquired in the Mobilitie acquisition, (iii) the Company's belief that pending acquisitions will close by the end of the fourth quarter of 2012, (iv) spending additional capital in 2012 on acquiring revenue producing assets not yet identified or under contract (v) customer activity levels during the remainder of 2012 and into 2013, and (vi) the impact of the Company's recent financings and the
This press release contains non-GAAP financial measures. Reconciliation of each of these non-GAAP financial measures is presented below under "Non-GAAP Financial Measures."
This press release will be available on our website at www.sbasite.com.
About
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (in thousands, except per share amounts) | ||||
| (unaudited) | ||||
| For the three months | For the six months | |||
|
ended |
ended |
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| 2012 | 2011 | 2012 | 2011 | |
| Revenues: | ||||
| Site leasing |
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| Site development | 25,566 | 20,880 | 45,133 | 42,145 |
| Total revenues | 229,147 | 171,053 | 421,637 | 338,802 |
| Operating expenses: | ||||
| Cost of revenues (exclusive of depreciation, accretion and amortization shown below): | ||||
| Cost of site leasing | 44,759 | 32,123 | 80,166 | 64,099 |
| Cost of site development | 21,446 | 17,984 | 38,232 | 36,712 |
| Selling, general and administrative(1) | 17,744 | 15,721 | 34,959 | 31,616 |
| Asset impairment | 646 | 296 | 995 | 296 |
| Acquisition related expenses | 15,816 | 1,029 | 16,160 | 3,402 |
| Depreciation, accretion and amortization | 93,998 | 76,691 | 176,098 | 151,569 |
| Total operating expenses | 194,409 | 143,844 | 346,610 | 287,694 |
| Operating income | 34,738 | 27,209 | 75,027 | 51,108 |
| Other income (expense): | ||||
| Interest income | 37 | 29 | 84 | 59 |
| Interest expense | (43,902) | (38,528) | (86,150) | (76,309) |
| Non-cash interest expense | (17,416) | (15,613) | (34,407) | (31,006) |
| Amortization of deferred financing fees | (3,661) | (2,201) | (6,094) | (4,400) |
| Loss from extinguishment of debt, net | (27,149) | -- | (27,149) | (1,696) |
| Other income (expense) | 4,972 | (104) | 4,984 | (649) |
| Total other income (expense) | (87,119) | (56,417) | (148,732) | (114,001) |
| Loss from continuing operations before provision for income taxes | (52,381) | (29,208) | (73,705) | (62,893) |
| Provision for income taxes | (2,453) | (702) | (3,780) | (1,393) |
| Loss from continuing operations | (54,834) | (29,910) | (77,485) | (64,286) |
| Income from discontinued operations, net of income taxes | 1,380 | -- | 1,380 | -- |
| Net loss | (53,454) | (29,910) | (76,105) | (64,286) |
| Less: Net (income) loss attributable to the noncontrolling interest | (18) | 91 | 2 | 216 |
|
Net loss attributable to |
$ (53,472) | $ (29,819) | $ (76,103) | $ (64,070) |
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Net loss per common share attributable to |
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| Basic and diluted | $(0.44) | $(0.27) |
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| Basic and diluted weighted average number of common shares | 121,318 | 112,324 | 116,374 | 113,365 |
| The accompanying condensed notes are an integral part of these consolidated financial statements. | ||||
(1) Includes non-cash compensation of
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (in thousands) | ||
| (unaudited) | ||
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| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents |
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| Restricted cash | 16,910 | 22,266 |
| Short-term investments | 5,016 | 5,773 |
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Accounts receivable, net of allowance of |
26,249 | 22,100 |
| Assets held for sale | 125,000 | -- |
| Other current assets | 43,250 | 31,901 |
| Total current assets | 303,164 | 129,356 |
| Property and equipment, net | 2,066,765 | 1,583,393 |
| Intangible assets, net | 2,121,389 | 1,639,784 |
| Other long-term assets | 302,342 | 253,866 |
| Total assets |
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| LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) | ||
| Current liabilities: | ||
| Current maturities of long-term debt and short-term debt |
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| Accounts payable and accrued expenses | 48,304 | 36,501 |
| Accrued interest | 24,708 | 32,351 |
| Other current liabilities | 59,814 | 53,029 |
| Total current liabilities | 1,050,832 | 126,881 |
| Long-term liabilities: | ||
| Long-term debt, net | 3,091,382 | 3,349,485 |
| Other long-term liabilities | 159,189 | 129,282 |
| Total long-term liabilities | 3,250,571 | 3,478,767 |
| Redeemable noncontrolling interests | 12,062 | 12,064 |
| Shareholders' equity (deficit) | 480,195 | (11,313) |
| Total liabilities and shareholders' equity (deficit) |
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| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (in thousands) | ||
| (unaudited) | ||
| For the three months | ||
|
ended |
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| 2012 | 2011 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| Net loss from continuing operations | $ (54,834) | $ (29,910) |
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||
| Depreciation, accretion and amortization | 93,998 | 76,691 |
| Non-cash interest expense | 17,416 | 15,613 |
| Deferred income tax expense (benefit) | 1,375 | (226) |
| Asset impairment | 646 | 296 |
| Non-cash compensation expense | 3,850 | 3,141 |
| Provision for doubtful accounts | -- | 55 |
| Amortization of deferred financing fees | 3,661 | 2,201 |
| Loss from extinguishment of debt, net | 27,149 | -- |
| Other non-cash items reflected in the Statements of Operations | (4,614) | (15) |
| Changes in operating assets and liabilities, net of acquisitions: | ||
| Accounts receivable and costs and estimated earnings in excess of billings on | ||
| uncompleted contracts, net | (2,605) | 1,347 |
| Prepaid and other assets | (23,425) | (6,997) |
| Accounts payable and accrued expenses | 7,890 | (251) |
| Accrued interest | 38 | 7,654 |
| Other liabilities | 12,184 | 102 |
| Net cash provided by operating activities | 82,729 | 69,701 |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||
| Acquisitions and related earn-outs | (900,243) | (75,747) |
| Capital expenditures | (23,435) | (35,582) |
| Other investing activities | (1,286) | (504) |
| Net cash used in investing activities | (924,964) | (111,833) |
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||
| Proceeds from Mobilitie Bridge Loan, net of fees | 395,000 | -- |
| Net borrowings (repayments) under Revolving Credit Facility | 84,000 | (195,000) |
| Proceeds from 2012 Term Loan, net of fees | 197,310 | -- |
| Proceeds from 2011 Term Loan, net of fees | -- | 492,617 |
| Repayment of 2011 Term Loan | (1,250) | -- |
| Repurchase of 2016 and 2019 Notes | (283,828) | -- |
| Proceeds from litigation settlement on convertible hedge | 4,648 | -- |
| Proceeds from employee stock purchase/stock option plans | 7,841 | 1,427 |
| Repurchase and retirement of common stock | -- | (75,035) |
| Principal payment under capital lease obligations | (357) | -- |
| Release of restricted cash relating to CMBS Certificates | -- | 647 |
| Payment of deferred financing fees | (1,223) | 34 |
| Net cash provided by financing activities | 402,141 | 224,690 |
| Effect of exchange rate changes on cash and cash equivalents | (101) | 87 |
| Net cash provided by discontinued operations from operating activities | 1,380 | -- |
| NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (438,815) | 182,645 |
| CASH AND CASH EQUIVALENTS: | ||
| Beginning of period | 525,554 | 95,104 |
| End of period |
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| For the three | For the six | |
| months ended | months ended | |
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| (in thousands) | ||
| SELECTED CAPITAL EXPENDITURE DETAIL: | ||
| Tower new build construction |
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| Operating tower expenditures: | ||
| Tower upgrades/augmentations | 5,353 | 9,777 |
| Maintenance/improvement capital expenditures | 1,944 | 4,043 |
| 7,297 | 13,820 | |
| General corporate expenditures | 497 | 1,188 |
| Total capital expenditures |
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Non-GAAP Financial Measures
The press release contains non-GAAP financial measures, including (i) Site Leasing Segment Operating Profit, Site Development Segment Operating Profit and Segment Operating Profit Margin, (ii) Tower Cash Flow and Tower Cash Flow Margin, (iii) Adjusted EBITDA, Annualized Adjusted EBITDA and Adjusted EBITDA Margin, (iv) Net Debt, Net Secured Debt, Leverage Ratio and Secured Leverage Ratio (collectively, our "Non-GAAP Debt Measures"), and (v) Funds from Operations ("FFO"), Adjusted Funds from Operations ("AFFO") and AFFO per share.
We have included these non-GAAP financial measures because we believe that they provide investors additional tools in understanding our financial performance and condition. Specifically, we believe that:
(1) Segment Operating Profit is an indicator of the operating performance of our site leasing and site development segments;
(2) Tower Cash Flow is an indicator of the performance of our site leasing operations;
(3) Adjusted EBITDA, FFO, AFFO and AFFO per share are useful indicators of the financial performance of our core businesses; and
(4) our Non-GAAP Debt Measures provide investors a more complete understanding of our net debt and leverage position as they include the full principal amount of our debt which will be due at maturity.
In addition, Tower Cash Flow, Adjusted EBITDA and our Non-GAAP Debt Measures are components of the calculations used by our lenders to determine compliance with certain covenants under our Senior Credit Agreement, the Mobilitie Bridge Loan, 2016 Senior Notes, 2019 Senior Notes and 5.75% Notes. These non-GAAP financial measures are not intended to be an alternative to any of the financial measures provided in our results of operations or our balance sheet as determined in accordance with GAAP.
We believe that FFO, AFFO and AFFO per share, which are also being used by American Tower Corporation and Crown Castle International (our two public company peers in the tower industry), provide investors useful indicators of the financial performance of our core business and permit investors an additional tool to evaluate the performance of our business against those of our two principal competitors. FFO, AFFO and AFFO per share are not necessarily indicative of the operating results that would have been achieved had we converted to a REIT. In addition, our FFO, AFFO and AFFO per share may not be comparable to those reported in accordance with
Segment Operating Profit and Segment Operating Profit Margin
The reconciliation of Site Leasing Segment Operating Profit and Site Development Segment Operating Profit and the calculation of Segment Operating Profit Margin are as follows:
| Site Leasing Segment | Site Development Segment | |||
| For the three months | For the three months | |||
|
ended |
ended |
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| 2012 | 2011 | 2012 | 2011 | |
| (in thousands) | (in thousands) | |||
| Segment revenue |
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| Segment cost of revenues (excluding depreciation, accretion and amortization) | (44,759) | (32,123) | (21,446) | (17,984) |
| Segment operating profit |
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| Segment operating profit margin | 78.0% | 78.6% | 16.1% | 13.9% |
Tower
The tables below set forth the reconciliation of Tower Cash Flow to its most comparable GAAP measurement and the calculation of Tower Cash Flow Margin. Tower
| For the three months | ||
|
ended |
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| 2012 | 2011 | |
| (in thousands) | ||
| Site leasing revenue |
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| Site leasing cost of revenue (excluding depreciation, accretion, and amortization) | (44,759) | (32,123) |
| Site leasing segment operating profit | 158,822 | 118,050 |
| Non-cash straight-line leasing revenue | (11,508) | (2,096) |
| Non-cash straight-line ground lease expense | 5,027 | 2,689 |
|
Tower |
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| The calculation of Tower Cash Flow Margin is as follows: | ||
| For the three months | ||
|
ended |
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| 2012 | 2011 | |
| (in thousands) | ||
| Site leasing revenue |
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| Non-cash straight-line leasing revenue | (11,508) | (2,096) |
| Site leasing revenue minus non-cash straight-line leasing revenue |
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Tower |
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|
Tower |
79.3% | 80.1% |
Adjusted EBITDA, Annualized Adjusted EBITDA and Adjusted EBITDA Margin
The table below sets forth the reconciliation of Adjusted EBITDA to its most comparable GAAP measurement. Adjusted EBITDA for each of the periods set forth in the Outlook section above will be calculated in the same manner:
| For the three months | ||
|
ended |
||
| 2012 | 2011 | |
| (in thousands) | ||
| Net loss |
|
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| Interest income | (37) | (29) |
| Total interest expense (1) | 64,979 | 56,342 |
| Depreciation, accretion, and amortization | 93,998 | 76,691 |
| Asset impairment | 646 | 296 |
| Provision for taxes (2) | 2,762 | 1,251 |
| Loss from extinguishment of debt, net | 27,149 | -- |
| Non-cash compensation | 3,850 | 3,142 |
| Non-cash straight-line leasing revenue | (11,508) | (2,096) |
| Non-cash straight-line ground lease expense | 5,027 | 2,689 |
| Acquisition related expenses | 15,816 | 1,029 |
| Other (income) expense | (4,972) | 104 |
| Income from discontinued operations | (1,380) | -- |
| Adjusted EBITDA |
|
|
| Annualized Adjusted EBITDA (3) |
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|
(1) Total interest expense includes interest expense, non-cash interest expense and amortization of deferred financing fees.
(2) For the three months ended
(3) Annualized Adjusted EBITDA is calculated as Adjusted EBITDA for the most recent quarter multiplied by four.
The calculation of Adjusted EBITDA Margin is as follows:
| For the three months | ||
|
ended |
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| 2012 | 2011 | |
| (in thousands) | ||
| Total revenues |
|
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| Non-cash straight-line leasing revenue | (11,508) | (2,096) |
| Total revenues minus non-cash straight-line leasing revenue |
|
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| Adjusted EBITDA |
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| Adjusted EBITDA Margin | 65.6% | 64.8% |
Funds from Operations ("FFO") and Adjusted Funds from Operations ("AFFO")
The tables below set forth the reconciliations of FFO and AFFO to their most comparable GAAP measurement. AFFO for each of the periods set forth in the Outlook section above will be calculated in the same manner:
|
For the three months ended |
||
| 2012 | 2011 | |
| (in thousands) | ||
| Net loss | $ (53,454) | $ (29,910) |
| Less: Net income from discontinued operations | (1,380) | -- |
| Adjusted tax provision(a) | 1,460 | 103 |
| Real estate related depreciation, amortization and accretion | 93,046 | 75,979 |
| FFO |
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| Adjustments to FFO: | ||
| Non-cash straight-line leasing revenue | (11,508) | (2,096) |
| Non-cash straight-line ground lease expense | 5,027 | 2,689 |
| Non-cash compensation | 3,850 | 3,142 |
| Non-real estate related depreciation, amortization and accretion | 952 | 713 |
| Amortization of deferred financing costs and debt discounts | 21,077 | 17,814 |
| Loss from extinguishment of debt, net | 27,149 | -- |
| Other (income) expense | (4,972) | 104 |
| Acquisition related expenses | 15,816 | 1,029 |
| Asset impairment | 646 | 296 |
| Non-discretionary cash capital expenditures | (2,441) | (4,624) |
| AFFO |
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| Weighted average number of common shares(b) | 122,691 | 113,367 |
| AFFO per share |
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| (a) Adjusts the income tax provision during the period, to reflect our estimate of cash income taxes (primarily foreign taxes) that would have been payable had we been a REIT. | ||
| (b) For purposes of the AFFO per share calculation, the weighted average number of common shares has been adjusted to include the dilutive effect of stock options and restricted stock units. | ||
Net Debt, Leverage Ratio, and Secured Leverage Ratio
Net Debt is calculated using the notional principal amount of outstanding debt. Under GAAP policies, the notional principal amount of the Company's outstanding debt is not necessarily reflected on the face of the Company's financial statements.
The Debt and Leverage calculations are as follows:
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| (in thousands) | |
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2010-1 |
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2010-2 |
550,000 |
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2011 Term Loan (carrying value of |
495,000 |
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2012 Term Loan (carrying value of |
200,000 |
|
Mobilitie Bridge Loan (carry value of |
400,000 |
| Revolving Credit Facility | 284,000 |
| Total secured debt | 2,609,000 |
|
1.875% Convertible Senior Notes (carrying value of |
535,000 |
|
4.0% Convertible Senior Notes (carrying value of |
500,000 |
|
2016 Senior Notes (carrying value of |
243,750 |
|
2019 Senior Notes (carrying value of |
243,750 |
| Total unsecured debt | 1,522,500 |
| Total debt |
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| Leverage Ratio | |
| Total debt |
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| Less: Cash and cash equivalents, short-term restricted cash and short-term investments | (108,665) |
| Net debt |
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| Divided by: Annualized Adjusted EBITDA |
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| Leverage Ratio | 7.0x |
| Secured Leverage Ratio | |
| Total secured debt |
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| Less: Cash and cash equivalents, short-term restricted cash and short-term investments | (108,665) |
| Net Secured Debt |
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| Divided by: Annualized Adjusted EBITDA |
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| Secured Leverage Ratio | 4.4x |
CONTACT:Source:Mark DeRussy , CFA Capital Markets 561-226-9531Lynne Hopkins Media Relations 561-226-9431
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