01—Abstract
Summary
Summary of the 10-K filed February 27, 2014. Cited figures are marked; the original filing is the authoritative source.
SBA Communications Corporation (SBAC) reported net loss attributable to the company of $55.9 milliona for 2013, narrowing from $181.0 million in 2012, while total revenues grew to $1.30 billion from $954.1 million.
Site leasing revenue was $1.13 billionb, or 86.8% of total revenues, and generated 96.2% of total segment operating profit. Adjusted EBITDA rose to $797.2 million from $587.9 million. The company owned 20,079 towers at December 31, 2013, had an average of 1.9 tenants per tower structure, and planned to build 400 to 420 new towers in 2014 and grow its tower portfolio by 10-15% during 2014.
Growth was driven largely by acquisitions. The company acquired 2,502 towers in 2013 and paid cash acquisition capital expenditures of $686.7 millionc, including the Oi S.A. purchase of 2,113 towers in Brazil for $317.0 million. Cash provided by operating activities increased to $497.6 million.
Total debt rose to $5.91 billiond principal from $5.44 billion, and shareholders' equity fell to $357.0 million from $653.0 million. Subsequent events included a February 2014 $1.5 billion delayed-draw Term Loan, the proceeds of which repaid the 2011 Term Loan, the 2012-2 Term Loan and the Revolving Credit Facility.
Investors should weigh the company's reliance on a few customers (Sprint 24.9%, AT&T Wireless 19.0%, T-Mobile 17.3% and Verizon Wireless 11.1% of 2013 total revenues), its high leverage, and the 4.0% Convertible Senior Notes due October 1, 2014 with a $499.9 million principal balance. The company has never paid a dividend, and it recorded a full valuation allowance against its net operating loss deferred tax assets.
02—Key points
Key Highlights
- Total revenues rose to $1.30 billion in 2013 from $954.1 million in 2012, with site leasing providing $1.13 billion (86.8% of total revenues).
- Net loss attributable to SBA Communications Corporation narrowed to $55.9 million in 2013 from $181.0 million in 2012.
- Adjusted EBITDA increased to $797.2 million in 2013 from $587.9 million in 2012.
- The company owned 20,079 towers at December 31, 2013 and had an average of 1.9 tenants per tower structure.
- Total principal amount of indebtedness was $5.91 billion at December 31, 2013, compared with $5.44 billion a year earlier, while shareholders' equity fell to $357.0 million from $653.0 million.
- Sprint (24.9%), AT&T Wireless (19.0%), T-Mobile (17.3%) and Verizon Wireless (11.1%) together accounted for the majority of 2013 total revenues, indicating customer concentration.
- Subsequent to year-end, a $1.5 billion delayed-draw Term Loan was obtained on February 7, 2014, and the company planned to build 400 to 420 new towers in 2014.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2013, Sba Communications lost $0.04.
- Revenue$1.30B100.0%
- Cost of revenue−$408.3M31.3%
- Gross profit$896.6M68.7%
- Operating costs−$667.0M51.1%
- Operating income$229.6M17.6%
- Interest, other & tax−$285.6M21.9%
- Net income−$55.9M4.3%
Where FY2013 revenue went
$1.30B- Other operating costs: $581.5M, 45% of revenue
- Cost of revenue: $408.3M, 31% of revenue
- Operating income: $229.6M, 18% of revenue
- SG&A: $85.5M, 6.6% of revenue
Kept 18% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2013filed February 27, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $1.30B$954.08M | +36.8% |
| Cost of Revenue | $408.25M$279.51M | +46.1% |
| Gross Profit | $896.61M$674.58M | +32.9% |
| SG&A Expenses | $85.48M$72.15M | +18.5% |
| Operating Expenses | $1.08B$806.94M | +33.2% |
| Operating Income | $229.65M$147.15M | +56.1% |
| Net Income | -$55.91M-$181.04M | +69.1% |
| EPS (Basic) | $-0.44$-1.51 | +70.9% |
| Shares Outstanding (Basic) | 127.77M120.28M | +6.2% |
05—Questions
Frequently Asked Questions
How did SBAC's profitability change in 2013?
The net loss attributable to SBA Communications Corporation narrowed to $55.9 million in 2013 from $181.0 million in 2012. Operating income rose to $229.6 million from $147.1 million, and loss from extinguishment of debt fell to $6.1 million from $51.8 million. Depreciation, accretion and amortization of $533.3 million remained the largest single expense.
How much of SBAC's business comes from site leasing?
Site leasing revenue was $1.13 billion in 2013, or 86.8% of total revenues. Site leasing segment operating profit was $862.2 million, which the filing describes as 96.2% of total segment operating profit.
Who are SBAC's largest customers?
In 2013, Sprint accounted for 24.9% of total revenues, AT&T Wireless 19.0%, T-Mobile 17.3% and Verizon Wireless 11.1%. The filing notes that the loss, consolidation or financial instability of any significant customer could materially reduce revenues.
What are SBAC's main debt obligations and near-term maturities?
Total debt principal was $5.91 billion at December 31, 2013. The 4.0% Convertible Senior Notes due October 1, 2014 had a principal balance of $499.9 million, and the filing estimates total debt service for the next 12 months at $762.7 million. The February 2014 $1.5 billion Term Loan was used to repay the 2011 Term Loan, the 2012-2 Term Loan and the Revolving Credit Facility.
Does SBAC pay dividends?
No. The filing states that the company has never paid a dividend on any class of common stock and expects to retain future earnings to fund growth. It also notes that its debt instruments limit its ability to pay dividends.
06—Continue