01—Abstract
Summary
Summary of the 10-K filed March 1, 2010. Cited figures are marked; the original filing is the authoritative source.
SBA Communications Corporation, a leading independent owner and operator of wireless communications towers, reported total revenues of $555.5 milliona for 2009, up from $475.0 million in 2008, with site leasing revenue of $477.0 million accounting for 85.9% of total revenues.
Site leasing generated 97.4% of total segment operating profit in 2009. The company owned 8,324 tower sites at December 31, 2009, up from 7,854 a year earlier, and reported an average of 2.5 tenants per tower. Adjusted EBITDA rose to $338.5 millionb from $269.2 million.
The company remained unprofitable, with a net loss attributable to SBA Communications Corporation of $140.9 millionc in 2009 (net loss of $141.1 million before noncontrolling interest), compared with $67.2 million in 2008. The loss was driven by higher interest expense, non-cash interest expense from convertible debt accounting, depreciation, accretion and amortization of $258.5 million, and net losses on debt extinguishment. Cash provided by operating activities was $219.6 million in 2009 (the cash flow statement in the financial statements shows $222.6 million).
At year-end, total debt principal was $2.77 billiond, with $940.6 million of 2006 CMBS Certificates due for anticipated repayment in November 2011. The key investor issue is refinancing risk.
If the 2006 CMBS Certificates are not refinanced by November 2011, cash flow from 3,746 pledged towers (45% of the portfolio) would be trapped, and interest rates on the mortgage would step up. Management planned to grow the tower portfolio 5% to 10% in 2010 and build 120 to 140 new towers, and entered a $500 million 2010 Credit Facility in February 2010 after terminating its prior $320 million Senior Credit Facility.
02—Key points
Key Highlights
- Total revenues of $555.5 million in 2009, up from $475.0 million in 2008; site leasing revenues of $477.0 million represented 85.9% of total revenues.
- Site leasing segment operating profit of $365.2 million accounted for 97.4% of total segment operating profit of $375.0 million in 2009.
- Net loss attributable to SBA Communications Corporation widened to $140.9 million in 2009 from $67.2 million in 2008; the company stated it expects to continue incurring significant losses.
- Adjusted EBITDA increased to $338.5 million in 2009 from $269.2 million in 2008.
- Owned 8,324 tower sites at December 31, 2009 (up from 7,854), with an average of 2.5 tenants per tower; AT&T, Sprint, Verizon Wireless and T-Mobile accounted for 23.8%, 21.9%, 15.4% and 13.7% of 2009 total revenues, respectively.
- Total principal debt of $2.77 billion at year-end 2009; $940.6 million of 2006 CMBS Certificates has an anticipated repayment date of November 2011, creating refinancing risk.
- Plans for 2010 include growing the tower portfolio by 5% to 10% and building at least 120 to 140 new towers, funded by cash on hand, operating cash flow and the new $500 million 2010 Credit Facility.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2009, Sba Communications lost $0.25.
- Revenue$555.5M100.0%
- Cost of revenue−$180.5M32.5%
- Gross profit$375.0M67.5%
- Operating costs−$320.0M57.6%
- Operating income$55.0M9.9%
- Interest, other & tax−$195.8M35.3%
- Net income−$140.9M25.4%
Where FY2009 revenue went
$555.5M- Other operating costs: $267.2M, 48% of revenue
- Cost of revenue: $180.5M, 33% of revenue
- Operating income: $55.0M, 9.9% of revenue
- SG&A: $52.8M, 9.5% of revenue
Kept 9.9% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2009filed March 1, 2010Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $555.51M$474.95M | +17.0% |
| Cost of Revenue | $180.54M— | — |
| Gross Profit | $374.97M— | — |
| SG&A Expenses | $52.78M$48.72M | +8.3% |
| Operating Expenses | $500.56M$429.37M | +16.6% |
| Operating Income | $54.95M$45.58M | +20.6% |
| Interest Expense | $130.85M$105.33M | +24.2% |
| Net Income | -$140.87M-$67.16M | −109.7% |
| EPS (Basic) | $-1.20— | — |
05—Questions
Frequently Asked Questions
How concentrated is SBA's customer base?
Revenue is concentrated among a few carriers. In 2009, AT&T accounted for 23.8% of total revenues, Sprint for 21.9%, Verizon Wireless for 15.4% and T-Mobile for 13.7%. Sprint's share declined from 32.6% in 2007, while T-Mobile's rose from 7.5%. The filing notes that the loss of any significant customer through bankruptcy, merger or otherwise could materially reduce revenue.
Why did the net loss increase in 2009?
The filing attributes the larger 2009 net loss of $141.1 million to net losses from early debt extinguishment (compared with net gains in 2008), higher interest expense, higher non-cash interest expense, and higher depreciation, accretion and amortization, partly offset by growth in site leasing segment operating profit.
What is the main debt risk for investors?
The 2006 CMBS Certificates, with $940.6 million outstanding at December 31, 2009, are scheduled for anticipated repayment in November 2011. The company does not expect sufficient operating cash flow to repay them in full and expects to refinance. If it cannot, cash flow from 3,746 pledged towers would be trapped, and the mortgage interest rate would increase by the greater of 5% or a formula-based amount.
Does SBA pay dividends?
No. The company stated it has never paid a dividend on any class of common stock and intends to retain future earnings to fund the development and growth of its business, so it does not anticipate paying cash dividends in the foreseeable future.
What was the company's liquidity position at year-end 2009?
Cash and cash equivalents were $161.3 million at December 31, 2009, up from $78.9 million. The company had $319.9 million of availability under its Senior Credit Facility, which was terminated on February 11, 2010 and replaced by a $500.0 million 2010 Credit Facility. A $250.0 million share repurchase program was authorized effective November 3, 2009.
06—Continue