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Sba Communications Annual Report, Year Ended Dec 31, 2003

Filing Date
Filed March 12, 2004
Period End
December 31, 2003
Security
SBAC
In the record · 2016–202610-K1110-Q328-K107

SBAC filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 107 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Apr ’18Apr ’18
  2. Material agreement8-K · Jan ’21Jan ’21
  3. Leadership change8-K · Feb ’23Feb ’23
  4. FY2024 annual report10-K · Feb ’25Feb ’25

01—Abstract

Summary

Summary of the 10-K filed March 12, 2004. Cited figures are marked; the original filing is the authoritative source.

SBA Communications Corporation reported a net loss of $172.2 milliona for 2003, compared with $249.0 million in 2002, on total revenues of $212.1 million.

Site leasing revenue rose to $127.8 millionb, up 11.1%, and accounted for 60.3% of total revenue and 93.1% of gross profit. Site development revenue fell to $84.2 million from $125.0 million as wireless carrier capital spending declined and competition intensified. Same-tower site leasing revenue grew 9.3% and same-tower site leasing gross profit grew 16.1% on 3,020 towers owned at December 31, 2002.

The company had 6,847 tenants on its 3,032 towers at year-end 2003. The balance sheet remains highly leveraged. Total indebtedness was $866.2 millionc against shareholders' equity of $43.9 million at December 31, 2003, and earnings did not cover fixed charges by $162 million.

Cash from operations before net cash interest was $56.7 milliond in 2003, and the company estimates it would need about $53.5 million for 2004 debt service on an as-adjusted basis. In January 2004 the company entered a new $400.0 million senior credit facility, used in part to repay the prior facility, repurchase 12% and 10¼% notes, and redeem the 12% notes on March 1, 2004. The company also issued $402.0 million of 9¾% senior discount notes due 2011 in December 2003, with net proceeds of approximately $267.1 million.

The filing also discloses a material weakness identified by Ernst & Young in prior audits related to accounting for asset and business acquisitions and dispositions, which E&Y did not find in the 2003 audit. The company stated it did not have a permanent Chief Financial Officer as of the filing date and was searching for one. Management also expects additional net losses and material charges for debt extinguishment in 2004.

02—Key points

Key Highlights

  1. Net loss narrowed to $172.2 million in 2003 from $249.0 million in 2002; total revenues declined 11.7% to $212.1 million.
  2. Site leasing revenue grew 11.1% to $127.8 million and generated 93.1% of total gross profit, while site development revenue fell to $84.2 million from $125.0 million.
  3. Same-tower site leasing revenue grew 9.3% and same-tower site leasing gross profit grew 16.1%; tenants rose to 6,847 from 6,389.
  4. Total indebtedness of $866.2 million compared with shareholders' equity of $43.9 million; earnings were insufficient to cover fixed charges by $162 million.
  5. Western tower sale of 784 towers generated gross cash proceeds of approximately $196.7 million, with the final figure expected near $194.1 million.
  6. January 2004 $400.0 million senior credit facility refinanced prior debt, and 12% senior discount notes were redeemed March 1, 2004.
  7. The company had no permanent Chief Financial Officer at filing and disclosed a material weakness identified in prior audits related to acquisition and disposition accounting.

03—Questions

Frequently Asked Questions

  1. Why did SBA's revenue decline in 2003 even though site leasing grew?

    Total revenues fell 11.7% to $212.1 million because site development revenue dropped from $125.0 million to $84.2 million. The filing attributes this to a decline in capital expenditures by wireless carriers and increased competition, which reduced both volume and pricing. Site leasing revenue rose 11.1% to $127.8 million, supported by more tenants and equipment on towers.

  2. How leveraged is the company?

    At December 31, 2003, total indebtedness was $866.2 million against shareholders' equity of $43.9 million, down from $203.5 million in equity a year earlier. The filing states that earnings were insufficient to cover fixed charges by $162 million for 2003 and that substantially all assets are pledged under the senior credit facility.

  3. What did the company do to address its debt maturities in early 2004?

    In January 2004 SBA Senior Finance closed a $400.0 million senior credit facility with a $275.0 million term loan funded at closing, a $50.0 million delayed draw term loan, and a $75.0 million revolver. Proceeds repaid the prior facility of $144.2 million outstanding, and the company repurchased 10¼% senior notes and 12% senior discount notes in the open market and redeemed the remaining 12% notes on March 1, 2004. The filing estimates about $50.0 million in 2004 cash savings from these transactions in debt service and amortization.

  4. What governance or control issues did the filing disclose?

    The filing discloses that Ernst & Young identified a material weakness in prior audits related to the process for assessing and applying accounting principles to significant asset or business acquisitions and dispositions. E&Y noted no material weakness in the 2003 audit. The company also stated that it did not have a permanent Chief Financial Officer as of the filing date and had engaged an executive search firm.

04—Continue

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