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    SBA Communications Corp (SBAC)

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    Business Description

    SBA Communications Corporation (SBAC) is a leading independent owner and operator of wireless communications infrastructure, focusing on tower structures, rooftops, and other structures that support antennas used for wireless communications. The company operates primarily in two business segments: site leasing and site development, with site leasing being the primary revenue generator, contributing significantly to the company's operating profit . SBAC leases space to wireless service providers and manages rooftop and tower sites for property owners, while also providing network pre-design, site audits, tower construction, and equipment installation services in the United States . The company owns and operates towers in the United States and several international markets, including South America, Central America, Canada, South Africa, the Philippines, and Tanzania, with a significant presence in Brazil .

    1. Site Leasing - Leases space to wireless service providers and manages rooftop and tower sites for property owners, both domestically and internationally, contributing the majority of the company's operating profit.
      • Domestic Site Leasing - Manages and leases tower and rooftop sites within the United States.
      • International Site Leasing - Operates and leases tower sites in international markets, including Brazil, South America, Central America, Canada, South Africa, the Philippines, and Tanzania.
    2. Site Development - Provides network pre-design, site audits, tower construction, and equipment installation services in the United States, complementing the site leasing business and capturing ancillary revenues.

    Key Metrics

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    Executive Team

    NamePositionStart DateShort Bio
    Brendan T. CavanaghPresident and Chief Executive OfficerJanuary 1, 2024Brendan T. Cavanagh was appointed as President and CEO effective January 1, 2024. He previously served as EVP and CFO from September 2008 and joined SBA in 1998 .
    Marc MontagnerExecutive Vice President and Chief Financial OfficerJanuary 2024Marc Montagner has been EVP and CFO since January 2024. He has over 30 years of experience in telecommunications and finance, previously serving as EVP – Finance from October 2023 .
    Richard M. CaneExecutive Vice President and President - InternationalJanuary 2023Richard M. Cane has been EVP and President - International since January 2023. He was previously SVP - International Operations from November 2019 to December 2022 .
    Mark R. CiarfellaExecutive Vice President - U.S. OperationsJanuary 2014Mark R. Ciarfella has served as EVP - U.S. Operations since January 2014. He joined SBA in 2007 and has over 25 years of experience in the wireless telecommunication industry .
    Joshua M. KoenigExecutive Vice President, Chief Administrative Officer and General CounselJanuary 1, 2023Joshua M. Koenig has been EVP, CAO, and General Counsel since January 1, 2023. He joined SBA in 2010 and has held various legal positions within the company .
    Jason V. SilbersteinExecutive Vice President - Site LeasingJanuary 2014Jason V. Silberstein has been EVP - Site Leasing since January 2014. He joined SBA in 1994 and has held various positions, including VP - Property Management .
    Brian D. LazarusSenior Vice President and Chief Accounting OfficerUntil December 31, 2024Brian D. Lazarus has been SVP since January 2014 and CAO since September 2008. He joined SBA in 2006 and previously worked as a Corporate Controller for AllianceCare .
    Saul KrediVice President and Chief Accounting OfficerJanuary 1, 2025Saul Kredi will be VP and CAO effective January 1, 2025. He joined SBA in 2014 as Corporate Controller and was promoted to VP, Corporate Controller in February 2024 .

    Questions to Ask Management

    1. Given your acknowledgment of the advantages of scale and relevance in international markets, can you provide an update on your review of these markets and specify which ones you might consider exiting if scaling up isn't feasible?

    2. With your net debt to adjusted EBITDA leverage ratio at 6.4x, how do you plan to further reduce leverage, and do you have a specific target ratio you aim to achieve in light of the rising cost of capital?

    3. You mentioned that while your M&A team has been very busy, no major acquisitions have been secured yet; how are higher capital costs influencing your acquisition strategy, and what challenges are you encountering in finding value-enhancing opportunities?

    4. Could you elaborate on the performance of your recent investments in Tanzania and the Philippines, specifically addressing the early-stage nature of the Philippines sites and how these investments are meeting your initial underwriting expectations?

    5. Despite believing your stock is undervalued, you've prioritized debt reduction over share repurchases; how are you balancing capital allocation among debt reduction, share buybacks, and potential acquisitions, and what factors are guiding these decisions?

    Share Repurchase Program

    Program DetailsProgram 1
    Approval DateOctober 28, 2021
    End Date/DurationNo specific deadline
    Total additional amount$1.0 billion
    Remaining authorization amount$204.7 million
    DetailsPart of capital allocation strategy to increase shareholder value by repurchasing shares when the price is below intrinsic value.

    Debt Maturity Schedule

    YearAmount Due (in billions)Debt TypeInterest Rate (%)% of Total Debt
    20240.6262014-2C Tower SecuritiesN/A5.1% = (0.626 / 12.389) * 100
    20251.1652019-1C Tower Securities2.8369.4% = (1.165 / 12.389) * 100
    20250.0612019-1R Tower Securities4.2130.5% = (0.061 / 12.389) * 100
    20261.9382020-1C Tower Securities1.88415.6% = (1.938 / 12.389) * 100
    2026N/A2021-1C Tower Securities1.631N/A
    20272.4182020-2C Tower Securities2.32819.5% = (2.418 / 12.389) * 100
    2027N/A2020 Senior Notes3.875N/A
    2027N/A2021-2C Tower Securities1.840N/A
    20281.4732022-1C Tower Securities6.59911.9% = (1.473 / 12.389) * 100
    2029N/ARevolving Credit Facility5.925N/A
    2029N/A2021 Senior Notes3.125N/A
    2031N/A2024 Term Loan2.760N/A
    2031N/A2021-3C Tower Securities2.593N/A
    Thereafter4.746VariousN/A38.3% = (4.746 / 12.389) * 100

    Competitors

    Competitors mentioned in the company's latest 10K filing.

    • American Tower Corporation - Large independent tower company .
    • Crown Castle International - Large independent tower company .
    • Regional independent tower owners - Compete in site leasing activities .
    • Wireless service providers - Own and operate their own towers and may lease antenna space to other providers .
    • Owners and operators of alternative facilities - Such as rooftops, outdoor and indoor distributed antenna system (DAS) networks, billboards, utility poles, and electric transmission towers .
    • Owners and operators of alternative wireless technology systems and architectures - Compete in site leasing activities .

    Customer Concentration

    CustomerRelationshipSegmentDetails
    T-Mobile
    Site leasing & site development
    All
    32.5% of total revenue, 40.2% of domestic site leasing, 71.5% of site development.
    AT&T Wireless
    Site leasing
    Domestic site leasing
    19.5% of total revenue, 28.6% of domestic site leasing.
    Verizon Wireless
    Site leasing & site development
    All
    14.6% of total revenue, 19.7% of domestic site leasing, 16.8% of site development.
    Telefonica
    Site leasing
    International site leasing
    22.5% of international site leasing.
    Claro
    Site leasing
    International site leasing
    20.2% of international site leasing.
    TIM
    Site leasing
    International site leasing
    15.7% of international site leasing.
    Oi S.A.
    Site leasing
    International site leasing
    3.5% of international site leasing, $24 million in annual wireline revenue.

    Auditor

    NameStart DateEnd DateReason for Change
    Ernst & Young LLP2002 PresentCurrent auditor