01—Abstract
Summary
Summary of the 10-K filed March 2, 2015. Cited figures are marked; the original filing is the authoritative source.
SBA Communications Corporation (SBAC) reported a net loss of $24.3 milliona for 2014, improved from a net loss of $55.9 million in 2013, while total revenues rose 17.0% to $1.53 billion.
Site leasing revenue reached $1.36 billionb, and the company ended the year with 24,292 towers, including 9,168 international towers across Brazil, Canada, Central America. Domestic site leasing generated 85.1% of site leasing revenue, and site leasing accounted for 96.3% of total segment operating profit. Adjusted EBITDA was $998.8 million, up from $797.2 million in 2013.
The balance sheet carries substantial leverage. Total principal debt was $7.87 billionc at December 31, 2014, against shareholders' deficit of $(660.8) million, compared with equity of $356.9 million a year earlier. Major 2014 financings included a $1.5 billion senior secured Term Loan, $750.0 million of 4.875% senior notes, and $1.54 billion of Secured Tower Revenue Securities.
Cash provided by operating activities was $671.6 milliond, while cash used in investing activities was $1.76 billion, mainly for acquisitions. Cash and cash equivalents fell to $39.4 million at year-end. The company has never paid a dividend.
The company expects to build between 575 and 595 new towers in 2015 and to grow its tower portfolio by 5-10%. It expects 2015 discretionary cash capital expenditures of $509.0 million to $529.0 million.
Management stated that cash on hand, operating cash flow and revolver availability will be sufficient to service debt over the next twelve months. Subsequent to year-end, the Revolving Credit Facility was increased from $770.0 million to $1.0 billion and its maturity extended to February 5, 2020.
02—Key points
Key Highlights
- Total revenues of $1.53 billion in 2014, up 17.0% from $1.30 billion in 2013.
- Net loss narrowed to $24.3 million from $55.9 million in 2013; the company has reported losses historically.
- Adjusted EBITDA of $998.8 million versus $797.2 million in 2013.
- Total principal debt of $7.87 billion and a shareholders' deficit of $(660.8) million at December 31, 2014.
- Customer concentration: Sprint 23.4%, AT&T Wireless 23.0%, T-Mobile 15.5% and Verizon Wireless 12.0% of 2014 total revenues.
- Portfolio of 24,292 towers at year-end, with 9,168 international towers, and a 2015 plan to build 575-595 new towers.
- Revolving Credit Facility increased to $1.0 billion and extended to February 5, 2020, after year-end.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2014, Sba Communications lost $0.02.
- Revenue$1.53B100.0%
- Cost of revenue−$428.5M28.1%
- Gross profit$1.10B71.9%
- Operating costs−$762.0M49.9%
- Operating income$336.5M22.0%
- Interest, other & tax−$360.8M23.6%
- Net income−$24.3M1.6%
Where FY2014 revenue went
$1.53B- Other operating costs: $658.7M, 43% of revenue
- Cost of revenue: $428.5M, 28% of revenue
- Operating income: $336.5M, 22% of revenue
- SG&A: $103.3M, 6.8% of revenue
Kept 22% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2014filed March 2, 2015Financial Statements
FY2014 against FY2013
| Line item | FY2014FY2013 | Change |
|---|---|---|
| Revenue | $1.53B$1.30B | +17.0% |
| Cost of Revenue | $428.49M$408.25M | +5.0% |
| Gross Profit | $1.10B$896.61M | +22.5% |
| SG&A Expenses | $103.32M$85.48M | +20.9% |
| Operating Expenses | $1.19B$1.08B | +10.7% |
| Operating Income | $336.52M$229.65M | +46.5% |
| Net Income | -$24.30M-$55.91M | +56.5% |
| EPS (Basic) | $-0.19$-0.44 | +56.8% |
| EPS (Diluted) | $-0.19— | — |
| Shares Outstanding (Basic) | 128.92M127.77M | +0.9% |
| Shares Outstanding (Diluted) | 128.92M— | — |
05—Questions
Frequently Asked Questions
How did SBAC's profitability change in 2014?
SBAC's net loss was $24.3 million in 2014, compared with $55.9 million in 2013, a decrease of $31.6 million. The filing attributes the improvement mainly to higher total segment operating profit and lower non-cash interest expense, partly offset by higher SG&A, debt extinguishment losses, depreciation and interest expense.
How leveraged is the company?
Total principal debt was $7.87 billion at December 31, 2014, against a shareholders' deficit of $(660.8) million. The filing notes that the company has a significant amount of indebtedness relative to its equity, and its Senior Credit Agreement requires a Consolidated Total Debt to Annualized Borrower EBITDA ratio not exceeding 6.5 times.
Who are SBAC's largest customers?
Sprint (23.4%), AT&T Wireless (23.0%), T-Mobile (15.5%) and Verizon Wireless (12.0%) each represented at least 10% of 2014 total revenues. The filing notes that the loss, consolidation or financial instability of any of these customers could materially reduce revenue.
What are the company's plans for 2015?
SBAC intends to build 575 to 595 new tower structures and grow its tower portfolio by 5-10%. It expects discretionary cash capital expenditures of $509.0 million to $529.0 million and non-discretionary expenditures of $30.0 million to $40.0 million, funded from cash on hand, operating cash flow and revolver borrowings or new financings.
Does SBAC pay dividends?
No. The filing states that SBAC has never paid a dividend on any class of common stock, expects to retain future earnings to fund growth, and that its ability to pay dividends is limited by the terms of its debt instruments.
06—Continue