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First quarter over year earlier period:
Operating Results
Total revenues in the first quarter of 2012 were
Tower
Net loss attributable to
Adjusted EBITDA in the first quarter of 2012 was
Net Cash Interest Expense was
Equity Free Cash Flow for the first quarter of 2012 was
SBA is introducing the following financial metrics, which are metrics typically utilized by Real Estate Investment Trusts ("REITs"): Funds from Operations ("FFO"), Adjusted Funds from Operations ("AFFO") and AFFO per share.
SBA defines FFO as net income plus adjusted tax provision (as defined below) plus real estate depreciation, amortization and accretion. FFO increased 49.0% to
SBA defines AFFO as FFO adjusted to remove the impact of straight-line revenue, straight-line expense, stock-based compensation expense, non-real estate related depreciation, amortization and accretion, amortization of deferred financing costs and debt discounts, gain (loss) on retirement of long-term obligations, other (income) and expense, acquisition and integration costs, and asset impairment charges and less non-discretionary cash capital expenditures.
AFFO increased 19.6% to
The only differences between SBA's Equity Free Cash Flow Per Share and AFFO Per Share calculations relate to (i) cash taxes (AFFO Per Share includes only SBA's estimate of income taxes (primarily foreign taxes) payable during the period had SBA been a REIT) and (ii) the weighted average number of common shares (for purposes of the AFFO per share calculation, the weighted average number of common shares has been adjusted to include the dilutive impact of unexercised stock options and restricted stock units). See "Non-GAAP Financial Measures" below. Given the similar nature of the two metrics, SBA will replace its historical Equity Free Cash Flow metric with AFFO beginning with its second quarter 2012 earnings release.
SBA has provided a supplemental file containing additional historical information related to the introduction of these metrics on its website at www.sbasite.com.
"We got off to a solid start to 2012 in the first quarter," commented
Investing Activities
As of
On
In addition to the Mobilitie acquisition, subsequent to
Financing Activities and Liquidity
On March 7, 2012, SBA sold 6,005,000 shares of the Company's Class A common stock at
During the three months ended
During the first quarter, SBA did not repurchase any shares of its Class A common stock. The Company currently has
Simultaneous with the closing of the Mobilitie acquisition, SBA entered into a credit agreement ("the Bridge Loan Credit Agreement") for a
In addition, simultaneous with the closing of the Mobilitie Acquisition, SBA increased the aggregate principal amount of its revolving credit facility (the "Revolving Credit Facility") under the Amended and Restated Credit Agreement ("the Senior Credit Agreement"), dated as of June 30, 2011, from
Outlook
The Company is providing its second 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, and includes the impact from the previously announced Mobilitie acquisition. However, the Company has assumed that the DAS assets acquired in the Mobilitie acquisition will be sold by the end of the second quarter. As a result, the Company has not included any results from the operations of the DAS assets in its second quarter and full year 2012 Outlook. The Company intends to spend additional capital in 2012 on acquiring revenue producing assets not yet identified or under contract, the impact of which is not reflected in the 2012 guidance.
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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.
Conference Call Information
| When: |
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| Dial-in number: | (800) 288-8968 |
| Conference call name: | SBA First Quarter Results |
| Replay: |
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| Number: | (800) 475-6701 |
| Access Code: | 244630 |
| 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 second quarter of 2012 and full year 2012, (ii) the Company's belief that pending acquisitions will close by the end of the third quarter of 2012, (iii) spending additional capital in 2012 on acquiring revenue producing assets not yet identified or under contract, (iv) material growth in site leasing revenue, adjusted EBITDA, AFFO and AFFO per share and (v) continued strong customer activity. These forward-looking statements may be affected by the risks and uncertainties in the Company's business. This information is qualified in its entirety by cautionary statements and risk factor disclosures contained in the Company's
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 | ||
|
ended |
||
| 2012 | 2011 | |
| Revenues: | ||
| Site leasing | $ 172,923 | $ 146,484 |
| Site development | 19,567 | 21,265 |
| Total revenues | 192,490 | 167,749 |
| Operating expenses: | ||
| Cost of revenues (exclusive of depreciation, | ||
| accretion and amortization shown below): | ||
| Cost of site leasing | 35,407 | 31,976 |
| Cost of site development | 16,786 | 18,728 |
| Selling, general and administrative(1) | 17,215 | 15,895 |
| Acquisition related expenses | 344 | 2,373 |
| Depreciation, accretion, amortization, and asset impairment | 82,449 | 74,878 |
| Total operating expenses | 152,201 | 143,850 |
| Operating income | 40,289 | 23,899 |
| Other income (expense): | ||
| Interest income | 47 | 30 |
| Interest expense | (42,248) | (37,781) |
| Non-cash interest expense | (16,991) | (15,393) |
| Amortization of deferred financing fees | (2,433) | (2,199) |
| Loss from extinguishment of debt, net | -- | (1,696) |
| Other income (expense) | 12 | (545) |
| Total other expense | (61,613) | (57,584) |
| Loss from operations before provision for income taxes | (21,324) | (33,685) |
| Provision for income taxes | (1,327) | (691) |
| Net loss | (22,651) | (34,376) |
| Net loss attributable to noncontrolling interest | 20 | 125 |
|
Net loss attributable to |
$ (22,631) | $ (34,251) |
| Net loss per common share attributable to | ||
|
|
||
|
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$ (0.20) | $ (0.30) |
| Weighted average number of common shares | 111,431 | 114,416 |
|
(1) Includes non-cash compensation of |
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| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (in thousands) | ||
| (unaudited) | ||
| . |
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| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 525,554 | $ 47,316 |
| Restricted cash | 17,476 | 22,266 |
| Short-term investments | 5,749 | 5,773 |
|
Accounts receivable, net of allowance of |
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23,916 | 22,100 |
| Other current assets | 31,925 | 31,901 |
| Total current assets | 604,620 | 129,356 |
| Property and equipment, net | 1,575,262 | 1,583,393 |
| Intangible assets, net | 1,644,434 | 1,639,784 |
| Other long-term assets | 262,313 | 253,866 |
| Total assets | $ 4,086,629 | $ 3,606,399 |
| LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) | ||
| Current liabilities: | ||
| Current maturities of long-term debt, net | $ 5,000 | $ 5,000 |
| Accounts payable and accrued expenses | 32,835 | 36,501 |
| Accrued interest | 24,670 | 32,351 |
| Other current liabilities | 51,428 | 53,029 |
| Total current liabilities | 113,933 | 126,881 |
| Long-term liabilities: | ||
| Long-term debt, net | 3,565,226 | 3,349,485 |
| Other long-term liabilities | 135,854 | 129,282 |
| Total long-term liabilities | 3,701,080 | 3,478,767 |
| Redeemable noncontrolling interests | 12,044 | 12,064 |
| Shareholders' equity (deficit) | 259,572 | (11,313) |
| Total liabilities and shareholders' equity (deficit) | $ 4,086,629 | $ 3,606,399 |
| 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 | $ (22,651) | $ (34,376) | |
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||
| Depreciation, accretion and amortization | 82,100 | 74,878 | |
| Non-cash interest expense | 16,991 | 15,393 | |
| Deferred income tax expense (benefit) | 17 | (298) | |
| Asset impairment | 349 | -- | |
| Non-cash compensation expense | 3,057 | 2,781 | |
| Provision for doubtful accounts | 149 | -- | |
| Amortization of deferred financing fees | 2,433 | 2,199 | |
| Loss from extinguishment of debt, net | -- | 1,696 | |
| Other non-cash items reflected in the Statements of Operations | (83) | 590 | |
| Changes in operating assets and liabilities, net of acquisitions: | |||
| Accounts receivable and costs and estimated earnings in excess of billings on | |||
| uncompleted contracts, net | (1,259) | 1,260 | |
| Prepaid and other assets | (10,143) | (1,319) | |
| Accounts payable and accrued expenses | (3,293) | (1,446) | |
| Accrued interest | (7,681) | (7,631) | |
| Other liabilities | 6,054 | (539) | |
| Net cash provided by operating activities | 66,040 | 53,188 | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||
| Acquisitions and related earn-outs | (51,148) | (90,297) | |
| Capital expenditures | (24,852) | (20,155) | |
| Purchase of investments | (1,198) | -- | |
| Proceeds from sales/maturities of investments | 1,225 | 1,686 | |
| Proceeds from disposition of fixed assets | 54 | 18 | |
| Release of restricted cash relating to tower removal obligations | 29 | -- | |
| Net cash used in investing activities | (75,890) | (108,748) | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||
| Proceeds from issuance of common stock | 283,902 | -- | |
| Repurchase and retirement of common stock | -- | (75,036) | |
| Borrowings under the Revolving Credit Facility | 200,000 | 175,000 | |
| Principal payment under capital lease obligations | (291) | -- | |
| Repayment of Term Loan | (1,250) | -- | |
| Proceeds from employee stock purchase/stock option plans | 5,763 | 4,919 | |
| Payment of deferred financing fees | (33) | (79) | |
| Payment of restricted cash relating to CMBS Certificates | -- | (648) | |
| Purchase of noncontrolling interests | -- | (717) | |
| Repurchase of 1.875% Convertible Notes | -- | (17,038) | |
| Net cash provided by financing activities | 488,091 | 86,401 | |
| Effect of exchange rate changes on cash and cash equivalents | (3) | 9 | |
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 478,238 | 30,850 | |
| CASH AND CASH EQUIVALENTS: | |||
| Beginning of period | 47,316 | 64,254 | |
| End of period | $ 525,554 | $ 95,104 | |
| For the three | For the three | |
| months ended | months ended | |
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| (in thousands) | ||
| SELECTED CAPITAL EXPENDITURE DETAIL: | ||
| Tower new build construction | $ 17,639 | $ 14,271 |
| Operating tower expenditures: | ||
| Tower upgrades/augmentations | 4,423 | 2,348 |
| Maintenance/improvement capital expenditures | 2,099 | 1,920 |
| 6,522 | 4,268 | |
| General corporate expenditures | 691 | 1,616 |
| Total capital expenditures | $ 24,852 | $ 20,155 |
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"), (v) Equity Free Cash Flow and Equity Free Cash Flow Per Share and (vi) 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:
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, Bridge Loan Credit Agreement and senior 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 |
|||
| 2012 | 2011 | 2012 | 2011 | |
| (in thousands) | (in thousands) | |||
| Segment revenue | $ 172,923 | $ 146,484 | $ 19,567 | $ 21,265 |
| Segment cost of revenues (excluding | ||||
| depreciation, accretion and amortization) | (35,407) | (31,976) | (16,786) | (18,728) |
| Segment operating profit | $ 137,516 | $ 114,508 | $ 2,781 | $ 2,537 |
| Segment operating profit margin | 79.5% | 78.2% | 14.2% | 11.9% |
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 |
|||
| 2012 | 2011 | ||
| (in thousands) | |||
| Site leasing revenue | $ 172,923 | $ 146,484 | |
| Site leasing cost of revenue (excluding depreciation, | |||
| accretion, and amortization) | (35,407) | (31,976) | |
| Site leasing segment operating profit | 137,516 | 114,508 | |
| Non-cash straight-line leasing revenue | (8,156) | (1,790) | |
| Non-cash straight-line ground lease expense | 3,073 | 2,993 | |
|
Tower |
$ 132,433 | $ 115,711 | |
| The calculation of Tower Cash Flow Margin is as follows: | |||
| For the three months | |||
|
ended |
|||
| 2012 | 2011 | ||
| (in thousands) | |||
| Site leasing revenue | $ 172,923 | $ 146,484 | |
| Non-cash straight-line leasing revenue | (8,156) | (1,790) | |
| Site leasing revenue minus non-cash straight-line leasing revenue | $ 164,767 | $ 144,694 | |
|
Tower |
$ 132,433 | $ 115,711 | |
|
Tower |
80.4% | 80.0% | |
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 |
|
|
| Interest income | (47) | (30) |
| Total interest expense (1) | 61,672 | 55,373 |
| Depreciation, accretion, and amortization | 82,100 | 74,878 |
| Provision for taxes (2) | 1,760 | 1,198 |
| Loss from extinguishment of debt, net | -- | 1,696 |
| Asset impairment | 349 | -- |
| Acquisition related expenses | 344 | 2,373 |
| Non-cash compensation | 3,057 | 2,780 |
| Non-cash straight-line leasing revenue | (8,156) | (1,790) |
| Non-cash straight-line ground lease expense | 3,073 | 2,993 |
| Other (income) expense | (12) | 545 |
| Adjusted EBITDA |
|
|
| Annualized Adjusted EBITDA (3) |
|
|
| (1) Total interest expense includes interest expense, non-cash interest expense and amortization of deferred financing fees. | ||
|
(2) For the three months ended reflected in the Statements of Operations in selling, general and administrative expenses. |
||
| (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 |
||
| 2012 | 2011 | |
| (in thousands) | ||
| Total revenues | $ 192,490 | $ 167,749 |
| Non-cash straight-line leasing revenue | (8,156) | (1,790) |
| Total revenues minus non-cash straight-line leasing revenue | $ 184,334 | $ 165,959 |
| Adjusted EBITDA | $ 121,489 | $ 105,640 |
| Adjusted EBITDA Margin | 65.9% | 63.7% |
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 |
|
|
| Adjusted tax provision(a) | 1,206 | 321 |
| Real estate related depreciation, amortization and accretion | 81,263 | 74,188 |
| FFO |
|
|
| Adjustments to FFO: | ||
| Straight-line leasing revenue | (8,156) | (1,790) |
| Straight-line ground lease expense | 3,073 | 2,993 |
| Stock-based compensation expense | 3,057 | 2,780 |
| Non-real estate related depreciation, amortization and accretion | 837 | 690 |
| Amortization of deferred financing costs and debt discounts | 19,424 | 17,592 |
| Loss from extinguishment of debt | -- | 1,696 |
| Other (income) expense | (12) | 545 |
| Acquisition and integration costs | 344 | 2,373 |
| Asset impairment | 349 | -- |
| Non-discretionary cash capital expenditures | (2,790) | (3,536) |
| AFFO |
|
|
| Weighted average number of common shares(b) | 112,729 | 115,661 |
| AFFO per share | $ 0.67 | $ 0.55 |
|
(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. |
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(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. |
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Equity Free Cash Flow and Equity Free Cash Flow Per Share
The table below sets forth the reconciliation of Equity Free Cash Flow for the three months ended
| For the three months | ||
|
ended |
||
| 2012 | 2011 | |
| (in thousands) | ||
| Adjusted EBITDA | $ 121,489 | $ 105,640 |
| Net cash interest expense | (42,201) | (37,751) |
| Non-discretionary cash capital expenditures | (2,790) | (3,536) |
| Cash taxes paid | (673) | (768) |
| Equity Free Cash Flow | $ 75,825 | $ 63,585 |
| Weighted average number of common shares | 111,431 | 114,416 |
| Equity Free Cash Flow Per Share | $ 0.68 | $ 0.56 |
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:
|
|
|
| (in thousands) | |
|
2010-1 |
$ 680,000 |
|
2010-2 |
550,000 |
|
Term Loan (carrying value of |
496,250 |
| Revolving Credit Facility | 200,000 |
| Total secured debt | 1,926,250 |
|
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 |
375,000 |
|
2019 Senior Notes (carrying value of |
375,000 |
| Total unsecured debt | 1,785,000 |
| Total debt | $ 3,711,250 |
| Leverage Ratio | |
| Total debt | $ 3,711,250 |
| Less: Cash and cash equivalents, short-term restricted cash | |
| and short-term investments | (548,779) |
| Net debt | $ 3,162,471 |
| Divided by: Annualized Adjusted EBITDA | $ 485,956 |
| Leverage Ratio | 6.5x |
| Secured Leverage Ratio | |
| Total secured debt | $ 1,926,250 |
| Less: Cash and cash equivalents, short-term restricted cash | |
| and short-term investments | (548,779) |
| Net Secured Debt | $ 1,377,471 |
| Divided by: Annualized Adjusted EBITDA | $ 485,956 |
| Secured Leverage Ratio | 2.8x |
CONTACT:Source:Mark DeRussy , CFA Capital Markets 561-226-9531Lynne Hopkins Media Relations 561-226-9431
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