01—Abstract
Summary
Summary of the 10-K filed February 27, 2012. Cited figures are marked; the original filing is the authoritative source.
SBA Communications Corporation (SBAC) reported a 2011 net loss attributable to the company of $126.5 milliona, compared with $194.7 million in 2010, while total revenues rose to $698.2 million from $626.6 million.
The company is primarily an owner and operator of wireless communications towers, with site leasing contributing 88.3%b of total revenues and 97.8% of total segment operating profit for 2011. The site leasing business is supported by long-term tenant leases with rent escalators averaging 3-4% per year. Major wireless carriers AT&T, Sprint, Verizon Wireless and T-Mobile together accounted for a large share of revenue, with AT&T at 23.8% and Sprint at 19.8% of total 2011 revenues.
The balance sheet shows a deterioration in equity: shareholders' deficit was $(11.3) million at December 31, 2011, versus equity of $317.1 million a year earlier, as total debt rose to $3.35 billionc from $2.83 billion. Adjusted EBITDA, a non-GAAP measure, was $444.9 million for 2011 versus $387.4 million in 2010. Cash provided by operating activities was $249.1 million.
The company repurchased 5,917,940 shares for $225.1 milliond during 2011 and has $150.0 million remaining under its $300.0 million repurchase authorization. Looking ahead, the company announced on February 18, 2012 a purchase agreement with Mobilitie, LLC affiliates to acquire about 2,300 tower sites in the US and Central America plus nine DAS networks for $1.093 billion, consisting of $850 million in cash and 5.25 million Class A shares.
The closing was scheduled for the second quarter of 2012, and the company plans to build between 415 and 435 new towers in 2012. The filing also notes the company is not profitable and expects to continue incurring losses.
02—Key points
Key Highlights
- Total revenues of $698.2 million for 2011, up from $626.6 million in 2010; site leasing revenue was $616.3 million, or 88.3% of total revenues.
- Net loss attributable to SBA Communications Corporation of $126.5 million in 2011, improved from $194.7 million in 2010.
- Adjusted EBITDA of $444.9 million for 2011, compared with $387.4 million in 2010 (non-GAAP measure).
- Shareholders' deficit of $(11.3) million at December 31, 2011, down from $317.1 million equity at year-end 2010, while total debt rose to $3.35 billion.
- Customer concentration: AT&T (23.8%), Sprint (19.8%), Verizon Wireless (14.8%) and T-Mobile (10.7%) of 2011 total revenues.
- Pending Mobilitie acquisition of about 2,300 tower sites and nine DAS networks for $1.093 billion ($850 million cash plus 5.25 million Class A shares), expected to close in Q2 2012.
- Stock repurchases of $225.1 million in 2011 under the $300.0 million program, with $150.0 million remaining authorization.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2011, Sba Communications lost $0.18.
- Revenue$698.2M100.0%
- Cost of revenue−$202.9M29.1%
- Gross profit$495.2M70.9%
- Operating costs−$384.6M55.1%
- Operating income$110.7M15.8%
- Interest, other & tax−$237.1M34.0%
- Net income−$126.5M18.1%
Where FY2011 revenue went
$698.2M- Other operating costs: $321.8M, 46% of revenue
- Cost of revenue: $202.9M, 29% of revenue
- Operating income: $110.7M, 16% of revenue
- SG&A: $62.8M, 9.0% of revenue
Kept 16% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2011filed February 27, 2012Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $698.17M$626.62M | +11.4% |
| Cost of Revenue | $202.92M$199.44M | +1.7% |
| Gross Profit | $495.25M$427.18M | +15.9% |
| SG&A Expenses | $62.83M$58.21M | +7.9% |
| Operating Expenses | $587.51M$552.35M | +6.4% |
| Operating Income | $110.66M$74.27M | +49.0% |
| Interest Expense | $160.90M$149.92M | +7.3% |
| Net Income | -$126.46M-$194.67M | +35.0% |
| EPS (Basic) | $-1.14$-1.68 | +32.1% |
| Shares Outstanding (Basic) | 111.59M— | — |
05—Questions
Frequently Asked Questions
Why did SBAC report a shareholders' deficit at the end of 2011?
Shareholders' equity fell from $317.1 million at December 31, 2010 to a deficit of $(11.3) million at December 31, 2011. The filing attributes the company's losses principally to depreciation, amortization and accretion, interest expense (including non-cash interest), and losses from debt extinguishment and impairment charges. The company also repurchased $225.1 million of stock in 2011, which reduced equity.
How concentrated is SBAC's revenue among its customers?
Revenue is concentrated among a small number of wireless carriers. In 2011, AT&T accounted for 23.8% of total revenues, Sprint 19.8%, Verizon Wireless 14.8% and T-Mobile 10.7%. The filing warns that the loss, consolidation or financial instability of any significant customer could materially reduce revenues.
What is the Mobilitie transaction and how will it be funded?
On February 18, 2012, SBAC agreed to purchase entities owning about 2,300 tower sites in the US and Central America and nine DAS networks in the US for $1.093 billion. Consideration is $850 million in cash plus 5.25 million Class A shares. The cash is to come from cash on hand, existing credit facilities and $500 million in new financing commitments. Closing was scheduled for the second quarter of 2012.
How is the company's debt structured and when does it come due?
Total debt was $3.35 billion at December 31, 2011, and the filing lists scheduled principal payments of $5.0 million in 2012, $540.0 million in 2013, $505.0 million in 2014, $685.0 million in 2015 and $380.0 million in 2016, with $1.40 billion thereafter. Debt includes 1.875% and 4.0% convertible senior notes, 8.0% and 8.25% senior notes, 2010 Tower Securities, and a $500.0 million term loan. The company stated it believes cash on hand and operating cash flows will be sufficient to service its debt over the next twelve months.
Is SBAC expected to become profitable?
The filing states that the company is not profitable and expects to continue to incur significant losses. It attributes these losses mainly to depreciation, amortization and accretion, interest expense, and debt extinguishment losses, which may affect its ability to service indebtedness.
06—Continue