01—Abstract
Summary
Summary of the 10-K filed February 27, 2013. Cited figures are marked; the original filing is the authoritative source.
SBA Communications Corporation (SBAC) reported that it is a leading independent owner and operator of wireless communications towers, with principal operations in the United States and its territories and additional towers in Canada, Central America and South America.
Site leasing generated 88.7% of 2012 total revenues ($846.1 milliona of $954.1 million) and 97.4% of total segment operating profit. The company owned 17,491 tower sites at December 31, 2012, up from 10,524 a year earlier, largely due to the Mobilitie acquisition (2,281 towers, $1.1 billion total consideration) and the TowerCo II acquisition (3,256 towers, $1.2 billion in cash plus 4,588,840 shares), along with the purchase of 800 towers in Brazil. Total revenues rose 36.7% to $954.1 million, but the company remained unprofitable, with a 2012 net loss attributable to SBA of $181.0 million.
The balance sheet expanded sharply as total debt grew to $5.44 billionb in principal (from $3.51 billion) and total assets reached $6.60 billion. Shareholders' equity turned positive at $653.0 million from a deficit of $(11.3) million a year earlier. Adjusted EBITDA, a non-GAAP measure, was $587.9 million versus $444.9 million in 2011.
Operating cash flow was $340.9 millionc, while investing outflows of $2.28 billion reflected acquisitions. The company's customer base is concentrated: Sprint (21.2%), AT&T (20.4%), T-Mobile (12.7%) and Verizon Wireless (12.7%) accounted for the stated shares of 2012 total revenues. Management plans to build 380 to 400 new towers in 2013 and grow the portfolio 5% to 10%, funded by operating cash flow, the Revolving Credit Facility and capacity under its debt agreements.
The company disclosed that $468.8 milliond of 1.875% convertible notes mature May 1, 2013, and that it elected in February 2013 to settle that conversion obligation in cash. The company has never paid a dividend, and its 2012 debt service requirement for the next twelve months was $719.1 million.
02—Key points
Key Highlights
- Site leasing revenue rose to $846.1 million in 2012 from $616.3 million, and accounted for 88.7% of total revenues and 97.4% of total segment operating profit.
- Owned tower sites increased to 17,491 at December 31, 2012, from 10,524 at December 31, 2011, driven by 6,630 towers acquired during 2012.
- Net loss attributable to SBA Communications Corporation was $181.0 million in 2012, compared with $126.5 million in 2011.
- Adjusted EBITDA was $587.9 million for 2012, up from $444.9 million in 2011.
- Total principal indebtedness reached $5.44 billion at December 31, 2012, versus $3.51 billion a year earlier; shareholders' equity was $653.0 million, compared with a deficit of $(11.3) million.
- Customer concentration remains high: Sprint 21.2%, AT&T 20.4%, T-Mobile 12.7% and Verizon Wireless 12.7% of 2012 total revenues.
- The company plans to build 380 to 400 new towers in 2013 and grow its tower portfolio 5% to 10%, and it has never paid a dividend.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2012, Sba Communications lost $0.19.
- Revenue$954.1M100.0%
- Cost of revenue−$279.5M29.3%
- Gross profit$674.6M70.7%
- Operating costs−$527.4M55.3%
- Operating income$147.1M15.4%
- Interest, other & tax−$328.2M34.4%
- Net income−$181.0M19.0%
Where FY2012 revenue went
$954.1M- Other operating costs: $455.3M, 48% of revenue
- Cost of revenue: $279.5M, 29% of revenue
- Operating income: $147.1M, 15% of revenue
- SG&A: $72.1M, 7.6% of revenue
Kept 15% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed February 27, 2013Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $954.08M$698.17M | +36.7% |
| Cost of Revenue | $279.51M$202.92M | +37.7% |
| Gross Profit | $674.58M$495.25M | +36.2% |
| SG&A Expenses | $72.15M$62.83M | +14.8% |
| Operating Expenses | $806.94M$587.51M | +37.3% |
| Operating Income | $147.15M$110.66M | +33.0% |
| Interest Expense | $196.24M$160.90M | +22.0% |
| Net Income | -$181.04M-$126.46M | −43.2% |
| EPS (Basic) | $-1.51$-1.14 | −32.5% |
| Shares Outstanding (Basic) | 120.28M111.59M | +7.8% |
05—Questions
Frequently Asked Questions
Why did SBAC's revenue and tower count increase so much in 2012?
The increase was driven mainly by acquisitions. In 2012 SBAC acquired 6,630 towers, including the Mobilitie acquisition (2,281 towers, with $850.0 million in cash and 5,250,000 shares) and the TowerCo II acquisition (3,256 towers, with $1.2 billion in cash and 4,588,840 shares). Total revenues increased 36.7% to $954.1 million.
Is SBAC profitable?
No. The filing reports a net loss attributable to SBA Communications Corporation of $181.0 million for 2012 and states that the company expects to continue incurring losses. The losses are principally attributed to depreciation, amortization and accretion, interest expense, and losses from debt extinguishment.
How concentrated is SBAC's customer base?
Concentration is significant. Sprint (21.2%), AT&T (20.4%), T-Mobile (12.7%) and Verizon Wireless (12.7%) each represented at least 10% of 2012 total revenues. The filing notes that the loss, consolidation or financial instability of any of these customers could materially reduce revenues.
What debt obligations does SBAC face in the near term?
Total debt principal was $5.44 billion at December 31, 2012. The 1.875% Convertible Senior Notes ($468.8 million principal) mature May 1, 2013, and SBAC elected in February 2013 to settle its conversion obligation in cash. The estimated debt service for the next twelve months was $719.1 million, which management believes can be covered by cash on hand, Revolving Credit Facility availability and operating cash flows.
What are SBAC's growth plans for 2013?
Management intends to build between 380 and 400 new towers in 2013, domestically and internationally, and to grow its tower portfolio by 5% to 10% through acquisitions and new construction. Expected cash capital expenditures for 2013 include $16.0 million to $21.0 million of non-discretionary spending and $355.0 million to $385.0 million of discretionary spending.
06—Continue