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What changed in SBA Communications's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of SBA Communications's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+317 added−291 removedSource: 10-K (2024-02-28) vs 10-K (2023-03-01)

Top changes in SBA Communications's 2023 10-K

317 paragraphs added · 291 removed · 249 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

48 edited+3 added−2 removed64 unchanged
Biggest changeIn our international markets, our tenant leases are either individual leases by tower site or governed by master lease agreements, which provide for the material terms and conditions that will govern the terms of the use of the site.
Biggest changeWireless service providers enter into (1) individual tenant site leases with us, each of which relates to the lease or use of space at an individual site or (2) master lease agreements with us, which provide for the material terms and conditions that will apply to multiple sites; although, in most cases, each individual site under a master lease agreement is also governed by its own site leasing agreement which sets forth pricing and other site specific terms.
Accordingly, our tower growth in these markets is primarily driven by (1) wireless service providers seeking to increase the quality and coverage of their networks, (2) increased consumer mobile data traffic, such as media streaming, mobile apps and games, web browsing, and email, and (3) incremental spectrum auctions as well as incremental voice and data network deployments. International Market Expansion.
Accordingly, our tower growth in these markets is primarily driven by (1) wireless service providers seeking to increase the quality and coverage of their networks, (2) increased consumer mobile data traffic, such as media streaming, mobile apps and games, web browsing, and email, and (3) incremental spectrum auctions as well as incremental voice and data network deployments. Opportunistic International Market Expansion.
Environmental Regulation. As an owner and operator of real property, we are subject to certain environmental laws that impose strict, joint and several liability for the cleanup of on-site or off-site contamination and related personal injury or property damage. We are also subject to certain environmental laws that govern tower placement and may require pre-construction environmental studies.
As an owner and operator of real property, we are subject to certain environmental laws that impose strict, joint and several liability for the cleanup of on-site or off-site contamination and related personal injury or property damage. We are also subject to certain environmental laws that govern tower placement and may require pre-construction environmental studies.
In Argentina, Colombia, Costa Rica, Peru, and Tanzania, our revenue, expenses, and capital expenditures, including tenant leases, ground leases and other property interests, and other tower-related expenses are denominated in a mix of local currency and U.S. dollars.
In Colombia, Costa Rica, Peru, and Tanzania, our revenue, expenses, and capital expenditures, including tenant leases, ground leases and other property interests, and other tower-related expenses are denominated in a mix of local currency and U.S. dollars.
This ensures we minimize our impact and remain environmentally compliant during the operational life of our assets. We believe that we are in substantial compliance with and we have no material liability under any applicable environmental laws.
This ensures we minimize our environmental impact and remain compliant during the operational life of our assets. We believe that we are in substantial compliance with and we have no material liability under any applicable environmental laws.
We make available, free of charge, access to our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statement on Schedule 14A and amendments to those materials filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), on our website under “Investors – SEC Filings,” as soon as reasonably practicable after we file electronically such material with, or furnish it to, the United States Securities and Exchange Commission (the “Commission”). 7 Table of Contents
We make available, free of charge, access to our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statement on Schedule 14A and amendments to those materials filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), on our website under “Investors – SEC Filings,” as soon as reasonably practicable after we file electronically such material with, or furnish it to, the United States Securities and Exchange Commission (the “Commission”).
Our ground leases typically either (1) contain specific annual rent escalators or (2) escalate annually in accordance with an inflationary index. In Ecuador, El Salvador, Guatemala, Nicaragua, and Panama, significantly all of our revenue, expenses, and capital expenditures arising from our new build activities are denominated in U.S. dollars.
Our ground leases typically either (1) contain specific annual rent escalators or (2) escalate annually in accordance with an inflationary index. In Ecuador, El Salvador, Guatemala, Nicaragua, and Panama, significantly all of our revenue, expenses, and capital expenditures arising from our activities are denominated in U.S. dollars.
Competition Domestic Site Leasing – In the U.S., our primary competitors for our site leasing activities are (1) large independent tower companies including American Tower Corporation and Crown Castle International; (2) a number of regional independent tower owners; (3) wireless service providers that own and operate their own towers and lease, or may in the future decide to lease, antenna space to other providers; and (4) owners and operators of alternative facilities such as rooftops, outdoor and indoor distributed antenna system (“DAS”) networks, billboards, utility poles, and electric transmission towers.
Competition Domestic Site Leasing – In the U.S., our primary competitors for our site leasing activities are (1) large independent tower companies including American Tower Corporation and Crown Castle International; (2) a number of regional independent tower owners; (3) wireless service providers that own and operate their own towers and lease, or may in the future decide to lease, antenna space to other providers; (4) owners and operators of alternative facilities such as rooftops, outdoor and indoor distributed antenna system (“DAS”) networks, billboards, utility poles, and electric transmission towers; and (5) owners and operators of alternative wireless technology systems and architectures.
As of December 31, 2022, no U.S. state or territory accounted for more than 10% of our total tower portfolio by tower count, and no U.S. state or territory accounted for more than 10% of our total revenues for the year ended December 31, 2022.
As of December 31, 2023, no U.S. state or territory accounted for more than 10% of our total tower portfolio by tower count, and no U.S. state or territory accounted for more than 10% of our total revenues for the year ended December 31, 2023.
As of December 31, 2022, we had an average of 1.9 tenants per tower structure. Capitalizing on our Scale and Management Experience. We are a large owner, operator and developer of towers, with substantial capital, human, and operating resources.
As of December 31, 2023, we had an average of 1.9 tenants per tower. Capitalizing on our Scale and Management Experience. We are a large owner, operator and developer of towers, with substantial capital, human, and operating resources.
International Site Leasing We currently own and operate towers in 15 international markets throughout South America, Central America, Canada, South Africa, the Philippines, and Tanzania.
International Site Leasing We currently own and operate towers in 14 international markets throughout South America, Central America, Canada, South Africa, the Philippines, and Tanzania.
As of December 31, 2022, approximately 70% of our tower structures were located on land that we own or control for more than 20 years and the average remaining life under our ground leases and other property interests, including renewal options under our control, was 36 years.
As of December 31, 2023, approximately 71% of our tower structures were located on land that we own or control for more than 20 years and the average remaining life under our ground leases and other property interests, including renewal options under our control, was 36 years.
Operators of towers must also take into consideration certain radio frequency (“RF”) emissions regulations that impose a variety of procedural and operating requirements. Certain proposals to operate wireless communications and radio or television 6 Table of Contents stations from tower structures are also reviewed by the FCC to ensure compliance with requirements relating to human exposure to RF emissions.
Operators of towers must also take into consideration certain radio frequency (“RF”) emissions regulations that impose a variety of procedural and operating requirements. Certain proposals to operate wireless communications and radio or television stations from tower structures are also reviewed by the FCC to ensure compliance with requirements relating to human exposure to RF emissions. Environmental Regulation .
Our tenant leases are generally for an initial term of five years to 15 years with multiple renewal periods at the option of the tenant. Our tenant leases either (1) contain 3 Table of Contents specific annual rent escalators, (2) escalate annually in accordance with an inflationary index, or (3) escalate using a combination of fixed and inflation adjusted escalators.
Our tenant leases are generally for an initial term of five years to fifteen years with multiple renewal periods at the option of the tenant. Our tenant leases typically either (1) contain specific annual rent escalators, (2) escalate annually in accordance with an inflationary index, or (3) escalate using a combination of fixed and inflation adjusted escalators.
As of December 31, 2022, we owned 39,311 towers, a substantial portion of which have been built by us or built by other tower owners or operators who, like us, have built such towers to lease space to multiple wireless service providers.
As of December 31, 2023, we owned 39,618 towers, a substantial portion of which have been built by us or built by other tower owners or operators who, like us, have built such towers to lease space to multiple wireless service providers.
As of December 31, 2022, approximately 10.1% of our tower structures had ground leases or other property interests maturing in the next 10 years. Exploring Opportunities in Evolving Technologies and Ancillary Services.
As of December 31, 2023, approximately 10.3% of our tower structures had ground leases or other property interests maturing in the next 10 years. Exploring Opportunities in Evolving Technologies and Ancillary Services.
Our operations in our international markets are primarily in the site leasing business, and we continue to focus on growing our international site leasing business through the acquisition and development of towers and organic growth. We derive international site leasing revenues from all the major carriers in each of the 15 countries in which we operate.
Our operations in our international markets are primarily in the site leasing business, 3 Table of Contents and we continue to focus on growing our international site leasing business through the acquisition and development of towers and organic growth. We derive international site leasing revenues from all the major carriers in each of the 14 countries in which we operate.
The following customers represented at least 10% of our total revenues during the last three years: For the year ended December 31, Percentage of Total Revenues 2022 2021 2020 T-Mobile 36.4% 36.2% 34.5% AT&T Wireless 19.6% 22.2% 24.1% Verizon Wireless 14.5% 14.7% 14.1% In addition to the Big 4 wireless carriers (T-Mobile, AT&T Wireless, Verizon Wireless, and DISH Wireless), we have also provided services or leased space to a number of customers including: Airtel Tanzania MTN Tigo Cellular South NII Holdings TIM Claro Oi S.A.
The following customers represented at least 10% of our total revenues during the last three years: For the year ended December 31, Percentage of Total Revenues 2023 2022 2021 T-Mobile 32.5% 36.4% 36.2% AT&T Wireless 19.5% 19.6% 22.2% Verizon Wireless 14.6% 14.5% 14.7% In addition to the Big 4 wireless carriers (T-Mobile, AT&T Wireless, Verizon Wireless, and DISH Wireless), we have also provided services or leased space to a number of customers including: Airtel Tanzania Liberty Technologies Tigo Cellular South MTN TIM Claro Oi S.A.
In addition, we own and operate towers in South America, Central America, Canada, South Africa, the Philippines, and Tanzania. Our primary business line is our site leasing business, which contributed 96.2% of our total segment operating profit for the year ended December 31, 2022.
In addition, we own and operate towers in South America, Central America, Canada, South Africa, the Philippines, and Tanzania. Our primary business line is our site leasing business, which contributed 97.4% of our total segment operating profit for the year ended December 31, 2023.
We believe that we can create substantial value by expanding our site leasing services into select international markets which we believe have a high-growth wireless industry and relatively stable political and regulatory environments.
We believe that we can create substantial value by expanding our site leasing services into select international markets which we believe have an attractive wireless industry and relatively stable political and regulatory environments.
Due to our presence in local markets, we believe we are well positioned to organically grow our site leasing business and to capture new tower build opportunities in our markets and identify and participate in site development projects across our markets. Controlling our Underlying Land Positions .
We seek to replicate this operating model internationally. Due to our presence in local markets, we believe we are well positioned to organically grow our site leasing business and to capture new tower build opportunities in our markets and identify and participate in site development projects across our markets. Controlling our Underlying Land Positions .
As of December 31, 2022, we owned 21,895 sites in our international markets, of which approximately 30% of our total towers are located in Brazil and no other international markets (each country is considered a market) represented more than 5% of our total towers.
As of December 31, 2023, we owned 22,131 sites in our international markets, of which approximately 30% of our total towers are located in Brazil and no other international markets (each country is considered a market) represented more than 5% of our total towers.
Many FAA requirements are implemented in FCC regulations. These regulations govern the construction, lighting, and painting or other marking of towers, as well as the maintenance, inspection, and record keeping related to towers, and may, depending on the characteristics of particular towers, require prior approval and registration of towers before they may be constructed, altered or used.
These regulations govern the construction, lighting, and painting or other marking of towers, as well as the maintenance, inspection, and record keeping related to towers, and may, depending on the characteristics of particular towers, require prior approval and registration of towers before they may be constructed, altered or used.
According to a report published by Ericsson in November 2022, global total mobile data traffic was estimated to reach around 90 exabytes per month by the end of 2022 and is projected to grow by nearly a factor of 3.6x to reach 324 exabytes per month in 2028. The velocity of spectrum development is expected to remain dynamic as carriers continue to deploy new bands and optimize bands that are currently in service, both of which activities we expect will require carriers to install equipment at new sites and add new equipment at existing sites.
According to a report published by Ericsson in November 2023, global total mobile data traffic was estimated to reach around 130 exabytes per month by the end of 2023 and is projected to grow by a factor of 3x to reach 403 exabytes per month in 2029. The velocity of spectrum development is expected to remain dynamic as carriers continue to deploy new bands and optimize bands that are currently in service, both of which activities we expect will require carriers to install equipment at new sites and add new equipment at existing sites.
Cellular Liberty Technologies Telkom Vodacom Sales and Marketing Our sales and marketing goals are to: use existing relationships and develop new relationships with wireless service providers to lease antenna space on and sell related services with respect to our owned towers or managed properties, enabling us to grow our site leasing business; and successfully bid and win those site development services contracts that will contribute to our operating margins and/or provide a financial or strategic benefit to our site leasing business. 4 Table of Contents We approach sales on a company-wide basis, involving many of our employees.
Cellular Freedom Mobile Telkom Vodacom ‎ 4 Table of Contents Sales and Marketing Our sales and marketing goals are to: use existing relationships and develop new relationships with wireless service providers to lease antenna space on and sell related services with respect to our owned towers or managed properties, enabling us to grow our site leasing business; and successfully bid and win those site development services contracts that will contribute to our operating margins and/or provide a financial or strategic benefit to our site leasing business.
When a tower site is impacted by any of the listed categories, we promptly complete an environmental assessment and obtain approval from the appropriate regulatory agency, which may include steps to mitigate the impact of construction or operation of the site. Our regional site managers typically inspect our tower sites annually and report on the presence of new bird nests.
When a tower site is impacted by any of the listed categories, we promptly complete an environmental assessment and obtain approval from the appropriate regulatory agency, which may include steps to mitigate the impact of construction or operation of the site. Our regional site managers regularly inspect our tower sites and report on any environmental or compliance issues.
We consider our employee relations to be good. As of December 31, 2022, we had 1,834 employees of which 625 were based outside of the U.S. and its territories. Diversity, Equity, and Inclusion. We recognize and appreciate the impact that our employees have on the success of our company, our customers, and the communities we serve.
We consider our employee relations to be good. As of December 31, 2023, we had 1,787 employees of which 644 were based outside of the U.S. and its territories. Talent Management. We recognize and appreciate the impact that our employees have on the success of our company, our customers, and the communities we serve.
We believe that the long-term and repetitive nature of our site leasing business will permit us to maintain a stable, recurring cash flow stream and reduce our exposure to cyclical changes in customer spending which arises in our site development business. Key elements of our strategy include: Organic Growth. Maximizing our Tower Capacity.
We believe that the long-term and repetitive nature of our site leasing business will permit us to maintain a stable, recurring cash flow stream and reduce our exposure to cyclical changes in customer spending which arises in our site development business. We believe that our tower operations are highly scalable.
We consider various factors when identifying a market for our international expansion, including: o Country analysis – We consider the country’s economic and political stability and whether the country’s general business, legal, and regulatory environment is conducive to the sustainability and growth of our business. o Market potential – We analyze the expected demand for wireless services and whether a country has multiple wireless service providers who are actively seeking to invest in deploying voice and data networks, as well as spectrum auctions that have occurred or that are anticipated to occur. o Risk adjusted return criteria – We consider whether buying or building towers in a country and providing our management and leasing services will meet our return criteria.
We continually evaluate various factors when identifying potential markets for new expansion or continued involvement (as noted by our exit of the Argentinian market in the fourth quarter of 2023), including: o Country analysis – We consider the country’s economic and political stability and whether the country’s general business, legal, and regulatory environment is conducive to the sustainability and growth of our business. o Market potential – We periodically analyze the expected demand for wireless services and whether a country has multiple wireless service providers who are actively seeking to invest in deploying voice and data networks, as well as spectrum auctions that have occurred or that are anticipated to occur and update this analysis when there have been material developments in the industry within the country, whether due to consolidation, spectrum allocation, new participants or changes in the legal and regulatory environment. o Risk adjusted return criteria – We continually evaluate whether buying or building towers in a country and providing our management and leasing services will meet our return criteria.
We generally have constructed or acquired towers that accommodate multiple tenants and a majority of our towers are high capacity tower structures. Most of our towers have significant capacity available for additional antennas, and we believe that increased use of our towers’ structural capacity can generate additional lease revenue and be achieved at a low incremental cost.
Most of our towers have significant capacity available for additional antennas, and we believe that increased use of our towers’ structural capacity can generate additional lease revenue and be achieved at a low incremental cost.
Our strategy is to delegate sales efforts by geographic region or to those employees of ours who have the best relationships with our customers. Most wireless service providers have national corporate headquarters with regional and local offices.
We also rely on our vice presidents, directors, and other operations personnel to sell our services and cultivate customer relationships. Our strategy is to delegate sales efforts by geographic region or to those employees of ours who have the best relationships with our customers. Most wireless service providers have national corporate headquarters with regional and local offices.
The Telecommunications Act of 1996 amended the Communications Act of 1934 by preserving state and local zoning authorities’ jurisdiction over the construction, modification, and placement of towers. The law, however, limits local zoning authority by prohibiting any action that would discriminate among different providers of personal wireless services or ban altogether the construction, modification or placement of radio communication towers.
The law, however, limits local zoning authority by prohibiting any action that would discriminate among different providers of personal wireless services or ban altogether the 6 Table of Contents construction, modification or placement of radio communication towers.
We derive domestic site leasing revenues primarily from T-Mobile, AT&T Wireless, Verizon Wireless, and DISH Wireless. In the United States, our tenant leases are generally for an initial term of five years to 10 years with multiple renewal periods at the option of the tenant. These tenant leases typically contain specific annual rent escalators, including renewal option periods.
In the United States, our tenant leases are generally for an initial term of five years to ten years with multiple renewal periods at the option of the tenant. These tenant leases typically contain specific annual rent escalators, including renewal option periods.
As part of this analysis, we consider the risk of entering into an international market (for example, the impact of foreign currency exchange rates and inflation, real estate, permitting, and taxation risks) and how our expansion meets our long-term strategic and financial objectives for the region and our business generally.
As part of this analysis, we consider the risk associated with an international market (for example, the impact of foreign currency exchange rates and inflation, real estate, permitting, and taxation risks) and how a particular market meets our long-term strategic and financial objectives and our business generally. Using our Local Presence to Build Strong Relationships with Major Wireless Service Providers.
Industry Developments We believe that growing wireless data traffic will require wireless service providers to continue to increase the capacity of their networks, and we believe that the continued capacity increases will require our customers to install equipment at new sites and 2 Table of Contents add new equipment at existing sites.
Additionally, we are exploring opportunities to leverage tower assets and infrastructure to provide energy as a service, including through the deployment of on-site battery backup systems and solar energy solutions. 2 Table of Contents Industry Developments We believe that growing wireless data traffic will require wireless service providers to continue to increase the capacity of their networks, and we believe that the continued capacity increases will require our customers to install equipment at new sites and add new equipment at existing sites.
Our international operations are also subject to various regulations and guidelines regarding employee relations and other occupational health and safety matters. As we expand our operations into additional international geographic areas, we will be subject to regulations in these jurisdictions.
Our international operations are also subject to various regulations and guidelines regarding employee relations and other occupational health and safety matters.
As of December 31, 2022, women represented 41% of our global workforce and 41% of our U.S. employees identified as a racial or ethnic minority. Talent Management. We recognize the value of attracting, developing, engaging, and retaining our talent.
As of December 31, 2023, women represented 41% of our global workforce and 43% of our U.S. employees identified as a racial or ethnic minority. We recognize the value of attracting, developing, engaging, and retaining our talent. We invest in our employees’ professional growth and development by providing resources and opportunities to develop their skills and expand their expertise.
The safety of our tower climbers has been a key focus of the company since its founding. In 2013, we opened our internal facility "Tower U" which provides a rigorous multi-day safety certification program that is required for our employed tower climbers. We are proud that our average lost-day incident rate in the U.S.
In 2013, we opened our internal training facility "Tower U" which provides a rigorous multi-day safety certification program that is required for our employed tower climbers. We are proud that our average lost-day incident rate in the U.S. (days away from work due to workplace incidents) for 2023 was below the 2022 Bureau of Labor benchmark.
We invest in our employees’ professional growth and development by providing resources and opportunities to develop their skills and expand their expertise. We see diversity of thought and experiences as critical factors to the long-term success of SBA. As such, we are committed to building a pipeline of future business leaders by strategically recruiting and retaining diverse candidates. Employee Well-Being.
We 5 Table of Contents see diversity of thought and experiences as critical factors to the long-term success of SBA. As such, we are committed to building a pipeline of future business leaders by strategically recruiting and retaining talent reflective of the communities and markets we serve. Employee Well-Being.
Availability of Reports and Other Information SBA Communications Corporation was incorporated in the State of Florida in March 1997 and is a real estate investment trust (“REIT”) for federal income tax purposes. Our corporate website is www.sbasite.com .
As we expand our operations into additional international geographic areas, we will be subject to regulations in these jurisdictions. 7 Table of Contents Availability of Reports and Other Information SBA Communications Corporation was incorporated in the State of Florida in March 1997 and is a real estate investment trust (“REIT”) for federal income tax purposes.
(days away from work due to workplace incidents) for 2022 was below the 2021 Bureau of Labor benchmark. Regulatory and Environmental Matters Federal Regulations. In the U.S., which accounted for 76.1% of our total site leasing revenue for the year ended December 31, 2022, both the Federal Communications Commission (the “FCC”) and the Federal Aviation Administration (the “FAA”) regulate towers.
Regulatory and Environmental Matters Federal Regulations. In the U.S., which accounted for 73.4% of our total site leasing revenue for the year ended December 31, 2023, both the Federal Communications Commission (the “FCC”) and the Federal Aviation Administration (the “FAA”) regulate towers. Many FAA requirements are implemented in FCC regulations.
We have a dedicated sales force that is supplemented by members of our executive management team. Our dedicated salespeople are based regionally as well as in our corporate office. We also rely on our vice presidents, directors, and other operations personnel to sell our services and cultivate customer relationships.
We approach sales on a company-wide basis, involving many of our employees. We have a dedicated sales force that is supplemented by members of our executive management team. Our dedicated salespeople are based regionally as well as in our corporate office.
Consequently, we have a broad field organization that allows us to develop and capitalize on our experience, expertise, and relationships in each of our local markets which in turn enhances our customer relationships. We seek to replicate this operating model internationally.
Given the nature of towers as location-specific communications facilities, we believe that substantially all of what we do is done best locally. Consequently, we have a broad field organization that allows us to develop and capitalize on our experience, expertise, and relationships in each of our local markets which in turn enhances our customer relationships.
The well-being of our employees is a critical element of our culture, employee engagement, and productivity. Our global compensation and benefits strategy provides programs and resources focused on overall well-being.
The well-being of our employees is a critical element of our culture, employee engagement, and productivity. Our global compensation and benefits strategy provides programs and resources focused on overall well-being. We offer a competitive total rewards package which includes market-based pay, performance-based annual incentive awards, healthcare and retirement benefits, holiday and paid time off, and tuition assistance.
Our site leasing business is classified into two reportable segments, domestic site leasing and international site leasing. Domestic Site Leasing As of December 31, 2022, we owned 17,416 sites in the United States and its territories. For the year ended December 31, 2022, we generated 76.1% of our total site leasing revenue from these sites.
Domestic Site Leasing As of December 31, 2023, we owned 17,487 sites in the United States and its territories. For the year ended December 31, 2023, we generated 73.4% of our total site leasing revenue from these sites. We derive domestic site leasing revenues primarily from T-Mobile, AT&T Wireless, Verizon Wireless, and DISH Wireless.
We have also partnered with carriers and high-traffic consumer retailers in developing systems for the offloading of data to wireless networks. Additionally, we are exploring opportunities to leverage tower assets and infrastructure to provide energy as a service, including through the deployment of on-site battery backup systems and solar energy solutions.
We have also partnered with carriers and high-traffic consumer retailers in developing systems for the offloading of data to wireless networks.
We believe that our tower operations are highly scalable. Consequently, we believe that we are able to materially increase our domestic and international tower portfolio without proportionately increasing selling, general, and administrative expenses. We intend to continue to grow our tower portfolio, domestically and internationally, through tower acquisitions and the construction of new tower structures.
We intend to continue to grow our tower portfolio, domestically and internationally, through tower acquisitions and the construction of new tower structures.
Wireless service providers enter into tenant leases with us, each of which relates to the lease or use of space at an individual site. Our site leasing business generates substantially all of our total segment operating profit, representing 96.2% or more of our total segment operating profit for the past three fiscal years.
Our site leasing business generates substantially all of our total segment operating profit, representing 96.2% or more of our total segment operating profit for the past three fiscal years. Our site leasing business is classified into two reportable segments, domestic site leasing and international site leasing.
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Using our Local Presence to Build Strong Relationships with Major Wireless Service Providers. Given the nature of towers as location-specific communications facilities, we believe that substantially all of what we do is done best locally.
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Consequently, we believe that we are able to materially increase our domestic and international tower portfolio without proportionately increasing selling, general, and administrative expenses. Key elements of our strategy include: Organic Growth.  Maximizing our Tower Capacity. We generally have constructed or acquired towers that accommodate multiple tenants and a majority of our towers are high capacity tower structures.
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We offer a competitive total rewards package which includes market-based pay, performance-based annual incentive awards, healthcare and retirement benefits, holiday and paid time off, and tuition assistance. 5 Table of Contents Health and Safety . At SBA, providing a safe and healthy work environment for the protection of our employees is paramount.
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Health and Safety . At SBA, providing a safe and healthy work environment for the protection of our employees is paramount. The safety of our tower climbers has been a key focus of the company since its founding.
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The Telecommunications Act of 1996 amended the Communications Act of 1934 by preserving state and local zoning authorities’ jurisdiction over the construction, modification, and placement of towers.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

74 edited+16 added−19 removed152 unchanged
Biggest changeAccordingly, our business is and will in the future be subject to risks associated with doing business internationally, including: • laws and regulations that dictate how we operate our towers and conduct business, including zoning, maintenance and environmental matters, and laws related to ownership of real property; • changes in a specific country’s or region’s political or economic conditions, including inflation or currency devaluation; • laws affecting telecommunications infrastructure including the sharing of such infrastructure; • laws and regulations that tax or otherwise restrict repatriation of earnings or other funds or otherwise limit distributions of capital; • changes to existing or new domestic or international tax laws, new or significantly increased municipal fees directed specifically at the ownership and operation of towers, which may be applied and enforced retroactively and could materially affect the profitability of our operations; • expropriation and governmental regulation restricting foreign ownership or requiring reversion or divestiture; • governmental regulations and restrictions impacting tower licenses, spectrum licenses and concessions, including additional restrictions on the use or revocation of such licenses, concessions or spectrum and additional conditions to receive or maintain such licenses; • laws and regulations governing our employee relations, including occupational health and safety matters and employee compensation and benefits matters; • our ability to comply with, and the costs of compliance with, anti-bribery laws such as the Foreign Corrupt Practices Act and similar local anti-bribery laws; • uncertainties regarding legal or judicial systems, including inconsistencies between and within laws, regulations and decrees, and judicial application thereof, and delays in the judicial process; • challenges arising from less-developed infrastructure in certain markets; • difficulty in recruiting and retaining trained personnel; and • our ability to provide power to our sites in those international markets that do not have an available electric grid at our tower sites.
Biggest changeAccordingly, our business is and will be subject to risks associated with doing business internationally, including: • laws and regulations that dictate how we operate our towers and conduct business and which may be uncertain, be inconsistent or adversely change, including those relating to zoning, construction, maintenance and environmental matters, and laws related to ownership of real property; • changes in a specific country’s or region’s political or economic conditions, including inflation or currency devaluation; • laws affecting telecommunications infrastructure including the sharing of such infrastructure; • laws and regulations that tax or otherwise restrict repatriation of earnings or other funds or otherwise limit distributions of capital; • changes to existing or new domestic or international tax laws, new or significantly increased municipal fees directed specifically at the ownership and operation of towers, which may be applied and enforced retroactively and could materially affect the profitability of our operations; • expropriation and governmental regulation restricting foreign ownership or requiring reversion or divestiture; • governmental regulations and restrictions impacting tower licenses, spectrum licenses and concessions, including additional restrictions on the use or revocation of such licenses, concessions or spectrum and additional conditions to receive or maintain such licenses; • laws and regulations governing our employee relations, including occupational health and safety matters and employee compensation and benefits matters; • our ability to comply with, and the costs of compliance with, anti-bribery laws such as the Foreign Corrupt Practices Act and similar local anti-bribery laws; • our ability to negotiate, and enforce, leases or other contracts on similar terms as that of our U.S. operations; • uncertainties regarding legal or judicial systems, including inconsistencies between and within laws, regulations and decrees, and judicial application thereof, and delays in the judicial process; • challenges arising from less-developed infrastructure in certain markets; • difficulty in recruiting and retaining trained personnel; and • our ability to provide power to our sites in those international markets that do not have an available electric grid at our tower sites. 12 Table of Contents We are also exposed to risks operating in countries with high levels of inflation, including the risk that inflation rates exceed our fixed escalator percentages in markets where our leases include fixed escalators and the risk that adverse economic conditions may discourage growth in consumer demand and consequently reduce our customers’ demand for our site leasing services.
In addition, acquisitions which would be material in the aggregate may exacerbate the risks inherent with our growth strategy, such as (1) an adverse financial impact if the acquired towers do not achieve the projected financial results, (2) the impact of unanticipated costs associated with the acquisitions on our results of operations, (3) increased demands on our cash resources that may impact our ability to explore other opportunities, (4) undisclosed and assumed liabilities that we may be unable to recover, (5) an adverse impact on our existing customer relationships, (6) additional expenses and exposure to new regulatory, political, and economic risks, and (7) diversion of managerial attention.
In addition, acquisitions which would be material in the aggregate may exacerbate the risks inherent with our growth strategy, such as (1) an adverse financial impact if the acquired towers do not achieve the projected financial results, (2) the impact of unanticipated costs associated with such acquisitions on our results of operations, (3) increased demands on our cash resources that may impact our ability to explore other opportunities, (4) undisclosed and assumed liabilities that we may be unable to recover, (5) an adverse impact on our existing customer relationships, (6) additional expenses and exposure to new regulatory, political, and economic risks, and (7) diversion of managerial attention.
Our operations, like those of other companies engaged in similar businesses, are subject to the requirements of various federal, state, local, and foreign environmental and occupational safety and health laws and regulations (including climate-related), including those relating to the management, use, storage, disposal, emission and remediation of, and exposure to, hazardous and non-hazardous substances, materials, and wastes.
Our operations, like those of other companies engaged in similar businesses, are subject to the requirements of various federal, state, local, and foreign environmental and occupational safety and health laws and regulations (including climate-related laws and regulations), including those relating to the management, use, storage, disposal, emission and remediation of, and exposure to, hazardous and non-hazardous substances, materials, and wastes.
Generally, for U.S. federal and state tax purposes, NOLs generated prior to the 2018 tax year can be carried forward and used for up to 20 years, and all of our tax years will remain subject to examination until three years after our NOLs are used or expire.
Generally, for U.S. federal and state tax purposes, NOLs generated prior to the 2018 tax year can be carried forward and used for up to 20 years, and all of our NOLs will remain subject to examination until three years after our NOLs are used or expire.
Our computer systems, or those of our cloud or Internet-based providers, could fail on their own accord and are subject to interruption or damage from power outages, computer and telecommunications failures, computer viruses, security breaches (including through cyber-attack, data theft, and exploiting potentially vulnerable services, such as virtual private networks and collaboration platforms as a result of increased remote working), errors, catastrophic events such as natural disasters, and other events beyond our control.
Our computer systems, or those of our cloud or Internet-based providers, could fail on their own accord and are subject to interruption or damage from power outages, computer and telecommunications failures, computer viruses, security breaches (including through cyber-attack, data theft, and exploiting potentially vulnerable services, such as virtual private networks and collaboration platforms as a result of remote working), errors, catastrophic events such as natural disasters, and other events beyond our control.
However, the amount, if any, that would be required to be paid to convert these concessions into authorizations and/or that we would be required to pay to purchase such interests has not yet been determined.
The amount, if any, that would be required to be paid to convert these concessions into authorizations and/or that we would be required to pay to purchase such interests has not yet been determined.
Damage from natural disasters and other unforeseen events could adversely affect us. Our towers are subject to physical climate-related risks associated with natural disasters (including as a result of any potential effects of climate change) such as tornadoes, fires, hurricanes, floods, and earthquakes or may collapse for any number of reasons, including structural deficiencies.
Damage from natural disasters and other unforeseen events could adversely affect us. Our towers are subject to physical climate-related risks and natural disasters (including as a result of any potential effects of climate change) such as tornadoes, fires, hurricanes, floods, and earthquakes or may collapse for any number of reasons, including structural deficiencies.
In addition, the increasing interest rates may result in higher interest expense on our current fixed rate indebtedness upon a refinancing.
In addition, increasing interest rates may result in higher interest expense on our current fixed rate indebtedness upon a refinancing.
Due to these risks, it may take longer to complete our new tower builds than anticipated, domestically and internationally, and the costs of constructing these towers may be higher than we expect, or we may not be able to add as many towers as planned in 2023.
Due to these risks, it may take longer to complete our new tower builds than anticipated, domestically and internationally, and the costs of constructing these towers may be higher than we expect, or we may not be able to add as many towers as planned in 2024.
Pursuant to the terms of our Credit Agreement, the interest rate that we pay on indebtedness incurred under the Revolving Credit Facility and the Term Loans varies based on a fixed margin over either a base rate or a Eurodollar rate which references the LIBOR rate.
Pursuant to the terms of our Credit Agreement, the interest rate that we pay on indebtedness incurred under the Revolving Credit Facility and the Term Loans varies based on a fixed margin over either a base rate or a Eurodollar rate which references the SOFR rate.
While our leases with Oi have an average of six years remaining on the current term, we expect that churn associated with these leases could occur sooner than the current term end dates depending upon negotiations with each of the carriers.
While our leases with Oi have an average of five years remaining on the current term, we expect that churn associated with these leases could occur sooner than the current term end dates depending upon negotiations with each of the carriers.
The following is a list of significant customers (representing at least 10% of revenue in any of the last three years) and the percentage of our total revenues for the specified time periods derived from these customers: For the year ended December 31, Percentage of Total Revenues 2022 2021 2020 T-Mobile 36.4% 36.2% 34.5% AT&T Wireless 19.6% 22.2% 24.1% Verizon Wireless 14.5% 14.7% 14.1% We also have customer concentrations with respect to revenues in each of our financial reporting segments: For the year ended December 31, Percentage of Domestic Site Leasing Revenue 2022 2021 2020 T-Mobile 40.6% 40.2% 40.5% AT&T Wireless 29.0% 30.5% 32.2% Verizon Wireless 20.1% 19.8% 18.5% For the year ended December 31, Percentage of International Site Leasing Revenue 2022 (1) 2021 2020 Telefonica 20.7% 16.3% 18.1% Claro 19.0% 13.7% 14.5% TIM 17.3% 7.2% 7.0% Oi S.A. 3.9% 28.3% 28.7% (1) Amounts reflect the sale of Oi’s wireless assets to Telefonica, Claro, and TIM.
The following is a list of significant customers (representing at least 10% of revenue in any of the last three years) and the percentage of our total revenues for the specified time periods derived from these customers: For the year ended December 31, Percentage of Total Revenues 2023 2022 2021 T-Mobile 32.5% 36.4% 36.2% AT&T Wireless 19.5% 19.6% 22.2% Verizon Wireless 14.6% 14.5% 14.7% We also have customer concentrations with respect to revenues in each of our financial reporting segments: For the year ended December 31, Percentage of Domestic Site Leasing Revenue 2023 2022 2021 T-Mobile 40.2% 40.6% 40.2% AT&T Wireless 28.6% 29.0% 30.5% Verizon Wireless 19.7% 20.1% 19.8% For the year ended December 31, Percentage of International Site Leasing Revenue 2023 (1) 2022 (1) 2021 Telefonica 22.5% 20.7% 16.3% Claro 20.2% 19.0% 13.7% TIM 15.7% 17.3% 7.2% Oi S.A. 3.5% 3.9% 28.3% (1) Amounts reflect the sale of Oi’s wireless assets to Telefonica, Claro, and TIM.
However, if any of our significant site leasing customers were to experience financial difficulty, substantially reduce their capital expenditures or reduce their dependence on leased tower space on our sites and fail to renew their leases with us, our revenues, future revenue growth and results of operations would be adversely affected.
However, if any of our significant site leasing customers were to experience financial difficulty, substantially reduce their capital expenditures or reduce their dependence on leased tower space on our sites and fail to renew their leases with us, our revenues, future revenue growth and results of operations would be adversely 8 Table of Contents affected.
In our international operations, the impact of these zoning, permitting, and related regulations and restrictive covenants on our new builds, co-locations, and operations could be exacerbated as some of these markets may lack established permitting processes for towers, have inconsistencies between national and local regulations, and have other barriers to timely construction and permitting of towers.
In our international operations, the impact of zoning, permitting, and related regulations and 16 Table of Contents restrictive covenants on our new builds, co-locations, and operations could be exacerbated as some of these markets may lack established permitting processes for towers, have inconsistencies between national and local regulations, and have other barriers to timely construction and permitting of towers.
From time to time, we may generate REIT taxable income greater than our cash flow as a result of differences in timing between the recognition of taxable income and the actual receipt of cash or the effect of nondeductible capital expenditures, the 19 Table of Contents creation of reserves or required debt or amortization payments.
From time to time, we may generate REIT taxable income greater than our cash flow as a result of differences in timing between the recognition of taxable income and the actual receipt of cash or the effect of nondeductible capital expenditures, the creation of reserves or required debt or amortization payments.
If we are unable to meet our contractual obligations to our customers for a material portion of our towers, our operations could be materially and adversely affected. We could have liability under environmental laws that could have a material adverse effect on our business, financial condition and results of operations.
If we are unable to meet our contractual obligations to our customers for a material portion of our towers, our operations could be materially and adversely affected. 17 Table of Contents We could have liability under environmental laws that could have a material adverse effect on our business, financial condition and results of operations.
In addition, we may incur a 100% excise tax on transactions with a TRS if they are not conducted on an arm’s length basis. Any of these taxes would decrease our earnings and our available cash.
In addition, we may incur a 100% 20 Table of Contents excise tax on transactions with a TRS if they are not conducted on an arm’s length basis. Any of these taxes would decrease our earnings and our available cash.
If DISH Wireless is unable 8 Table of Contents to successfully build-out its wireless network or is unable to successfully compete for customers once its network is built out, then our dependence on the three U.S. wireless service providers for our financial and operational growth will be exacerbated.
If DISH Wireless is unable to successfully build-out its wireless network or is unable to successfully compete for customers once its network is built out, then our dependence on the three U.S. wireless service providers for our financial and operational growth will be exacerbated.
As of December 31, 2022, the average remaining life under our ground leases and other property interests, including renewal options under our control, was approximately 36 years, and approximately 10.1% of our tower structures have ground leases or other property interests maturing in the next 10 years.
As of December 31, 2023, the average remaining life under our ground leases and other property interests, including renewal options under our control, was approximately 36 years, and approximately 10.3% of our tower structures have ground leases or other property interests maturing in the next 10 years.
In accordance with ASC 830, we remeasure foreign denominated intercompany loans with the corresponding change in the balance being recorded in Other income (expense), net in our Consolidated Statements of Operations as settlement is anticipated or planned in the foreseeable future. Consequently, if the U.S.
In accordance with Accounting Standards Codification (“ASC”) 830, we remeasure foreign denominated intercompany loans with the corresponding change in the balance being recorded in Other income (expense), net in our Consolidated Statements of Operations as settlement is anticipated or planned in the foreseeable future. Consequently, if the U.S.
During 2020, the consolidation of T-Mobile and Sprint was completed, and we began to experience non-renewal (“churn”) of certain leases as a result of this merger. We currently expect that this churn will represent an aggregate of between $140.0 million and $190.0 million of cash site leasing revenue through 2028.
During 2020, the consolidation of T-Mobile and Sprint was completed, and we began to experience non-renewal (“churn”) of certain leases as a result of this merger. We currently expect that this churn will represent an aggregate of between $125.0 million and $150.0 million of cash site leasing revenue from 2024 through 2028.
The impact of these risks is further enhanced in acquisitions of towers in international markets, where it may be more 14 Table of Contents challenging to analyze and verify all relevant information with respect to the assets being acquired. These risks could adversely affect our revenues and results of operations.
The impact of these risks is further enhanced in acquisitions of towers in international markets, where it may be more difficult to verify all relevant information with respect to the assets being acquired. These risks could adversely affect our revenues and results of operations.
The following table sets forth our total principal amount of debt and shareholders’ deficit as of December 31, 2022 and 2021: As of December 31, 2022 2021 (in thousands) Total principal amount of indebtedness $ 12,952,000 $ 12,396,000 Shareholders' deficit $ (5,276,315) $ (5,283,404) Our substantial level of indebtedness increases the possibility that we may be unable to generate cash sufficient to pay the principal, interest, or other amounts due on our indebtedness.
The following table sets forth our total principal amount of debt and shareholders’ deficit as of December 31, 2023 and 2022: As of December 31, 2023 2022 (in thousands) Total principal amount of indebtedness $ 12,388,000 $ 12,952,000 Shareholders' deficit $ (5,170,882) $ (5,276,315) Our substantial level of indebtedness increases the possibility that we may be unable to generate cash sufficient to pay the principal, interest, or other amounts due on our indebtedness.
Any significant reduction in demand for our wireless infrastructure resulting from new technologies or new architectures or changes in a customer's business model may negatively impact our revenues or otherwise have a material adverse effect.
Any significant reduction in demand for our wireless infrastructure resulting from new technologies or new architectures or changes in a customer's business model may negatively impact our revenues or otherwise have a material adverse effect on our business and results of operations.
Dollar have fluctuated significantly in recent years and may continue to do so in the future. For example, the Brazilian Real has historically been subject to substantial volatility and strengthened 4.6% when comparing the average rate for the years ended December 31, 2022 and 2021.
Dollar have fluctuated significantly in recent years and may continue to do so in the future. For example, the Brazilian Real has historically been subject to substantial volatility and strengthened 3.2% when comparing the average rate for the years ended December 31, 2023 and 2022.
In connection with a current assessment in Brazil, the taxing authorities have issued income tax deficiencies related to purchase accounting adjustments for tax years 2016 through 2019. We disagree with the assessment and have filed an appeal with the higher appellate taxing authorities as we believe the proposed adjustments are without merit.
In connection with a current assessment in Brazil, the taxing authorities have issued income tax deficiencies related to purchase accounting adjustments for tax years 2016 through 2019. We disagree with the assessment and have filed an appeal with the higher appellate taxing authorities.
Dollar strengthens against the Brazilian Real or the South African Rand, our results of operations would be adversely affected. For the years ended December 31, 2022 and 2021, we recorded a $12.9 million gain and a $44.3 million loss, net of taxes, respectively, on the remeasurement of intercompany loans due to changes in foreign exchange rates.
Dollar strengthens against the Brazilian Real, South African Rand, or the Tanzanian Shilling, our results of operations would be adversely affected. For the years ended December 31, 2023 and 2022, we recorded a $52.4 million gain and a $12.9 million gain, net of taxes, respectively, on the remeasurement of intercompany loans due to changes in foreign exchange rates.
The site leasing revenues generated by our international operations were approximately 21.2% of our total revenues during the year ended December 31, 2022, and we anticipate that our revenues from our international operations will continue to grow in the future.
The site leasing revenues generated by our international operations were approximately 24.7% of our total revenues during the year ended December 31, 2023, and we anticipate that our revenues from our international operations will continue to grow in the future.
However, as a result of consolidation in the tower industry, there are fewer of these mid-sized tower transactions available, and there is more competition to acquire existing towers. Increased competition for acquisitions may result in fewer acquisition opportunities for us, higher acquisition prices, and increased difficulty in negotiating and 11 Table of Contents consummating agreements to acquire such towers.
However, as a result of consolidation in the tower industry, there are fewer of these tower transactions available, and there is more competition to acquire existing towers. Increased competition for acquisitions may result in fewer acquisition opportunities for us, higher acquisition prices, and increased difficulty in negotiating and acquiring such towers.
As of December 31, 2022 and 2021, the aggregate amount outstanding under the intercompany loan agreements subject to remeasurement with our foreign subsidiaries was $1.5 billion and $872.9 million, respectively.
As of December 31, 2023 and 2022, the aggregate amount outstanding under the intercompany loan agreements subject to remeasurement with our foreign subsidiaries was $1.3 billion and $1.5 billion, respectively.
Many of our competitors have lower overhead expenses and therefore may be able to provide services at prices that we consider unprofitable. If margins in this segment were to decrease, our consolidated revenues and our site development segment operating profit could be adversely affected. Increasing competition may negatively impact our ability to grow our communication site portfolio long term.
Many of our competitors have lower overhead expenses and therefore may be able to provide services at prices that we consider unprofitable. If margins in this segment were to decrease, our consolidated revenues and our site development segment operating profit could be adversely affected.
We derive revenue through numerous site leasing and site development contracts. In the United States and our international markets, each site leasing contract relates to the lease of space at an individual tower and is generally for an initial term of five years to 15 years with multiple renewal periods at the option of the tenant.
In the United States and our international markets, each site leasing contract relates to the lease of space at an individual tower and is generally for an initial term of five years to fifteen years with multiple renewal periods at the option of the tenant.
Any of these taxes would decrease our earnings and our available cash. Our use of TRSs may cause us to fail to qualify as a REIT. The net income of our TRSs is not required to be distributed to us, and such undistributed TRS income is generally not subject to our REIT distribution requirements.
Our use of TRSs may cause us to fail to qualify as a REIT. The net income of our TRSs is not required to be distributed to us, and such undistributed TRS income is generally not subject to our REIT distribution requirements.
We expect a significant portion of our future revenue growth will result from investments in the deployment of new or fallow spectrum by our wireless service provider customers, including the build-out by DISH Wireless of a fourth nationwide network in the U.S.
A slowdown in demand for wireless services could materially and adversely affect our future growth and revenues. We expect a significant portion of our future revenue growth will result from investments in the deployment of new or fallow spectrum by our wireless service provider customers, including the build-out by DISH Wireless of a fourth nationwide network in the U.S.
In Brazil, Canada, Chile, South Africa, and the Philippines, significantly all of our revenue, expenses, and capital expenditures, including 12 Table of Contents tenant leases, ground leases and other property interests, and other tower-related expenses are denominated in local currency.
Specifically, most of our ground leases and other property interests, tenant leases, and tower-related expenses are paid in U.S. dollars . In Brazil, Canada, Chile, South Africa, and the Philippines, significantly all of our revenue, expenses, and capital expenditures, including tenant leases, ground leases and other property interests, and other tower-related expenses are denominated in local currency.
As of December 31, 2022, this indebtedness represented approximately $3.0 billion, or 23.3% of our total indebtedness. As a result, we are exposed to interest rate risk. Interest rates, including LIBOR and SOFR, fluctuate periodically and as such may increase in future periods.
As of December 31, 2023, this indebtedness represented approximately $2.4 billion, or 19.8% of our total indebtedness. As a result, we are exposed to interest rate risk. Interest rates, including SOFR, fluctuate periodically and as such may increase in future periods.
For the year ended December 31, 2022, approximately 23.9% of our total site leasing revenue was generated by our international operations, of which 19.4% was generated in non-U.S. dollar currencies, including 12.8% which was denominated in Brazilian Reais. The exchange rates between our foreign currencies and the U.S.
For the year ended December 31, 2023, approximately 26.6% of our total site leasing revenue was generated by our international operations, of which 23.3% was generated in non-U.S. dollar currencies, including 15.6% which was denominated in Brazilian Reais. The exchange rates between our foreign currencies and the U.S.
Due to inflationary pressures on the U.S. economy and governmental action to combat inflation, interest rates have risen significantly in the past 12 months, and it appears likely that interest rates will increase during 2023 and may continue to increase, which will likely increase our interest expense on our variable rate indebtedness and decrease our net income.
Due to inflationary pressures on the U.S. economy and governmental action to combat inflation, interest rates have risen significantly in the past two years, and interest rates may increase in the future, which will likely increase our interest expense on our variable rate indebtedness and decrease our net income.
We intend to continue growing our tower portfolio, domestically and internationally, through acquisitions and new builds. Our ability to meet our growth targets significantly depends on our ability to build or acquire existing towers that meet our investment requirements. Traditionally, our acquisition strategy has focused on acquiring towers from smaller tower companies, independent tower developers, and wireless service providers.
Our ability to meet our growth targets significantly depends on our ability to build or acquire existing towers that meet our investment requirements. Traditionally, our acquisition strategy has focused on acquiring towers from smaller tower companies, independent tower developers, and wireless service providers.
However, public perception of possible health risks associated with cellular and other wireless communications technologies (such as 5G) could slow the growth of wireless companies and deployment of new technologies, which could in turn slow our growth. In particular, negative public perception of, and regulations regarding, health risks could cause a decrease in the demand for wireless communications services.
However, public perception of possible health risks associated with cellular and other wireless communications technologies (such as 5G) could slow the growth of wireless companies and deployment of new technologies, which could in turn slow our growth.
We could suffer adverse tax and other financial consequences if taxing authorities do not agree with our tax positions. We are periodically subject to a number of tax examinations by taxing authorities in the states and countries where we do business. We also have significant net operating losses (“NOLs”) in U.S. federal and state taxing jurisdictions.
We are periodically subject to a number of tax examinations by taxing authorities in the states and countries where we do business. We also have significant net operating losses (“NOLs”) in U.S. federal and state taxing jurisdictions.
Our industry is highly competitive, and our wireless service provider customers sometimes have alternatives for leasing antenna space. We believe that tower location and capacity, quality of service, density within a geographic market, and price historically have been and will continue to be the most significant competitive factors affecting the site leasing business.
We believe that tower location and capacity, quality of service, density within a geographic market, and price historically have been and will continue to be the most significant competitive factors affecting the site leasing business.
Failure to protect our rights to the land under our towers may have a material adverse effect on our business, results of operations or financial condition. We may not be able to fully recognize the anticipated benefits of towers that we acquire. A key element of our growth strategy is to increase our tower portfolio through acquisitions.
Failure to protect our rights to the land under our towers may have a material adverse effect on our business, results of operations or financial condition. 14 Table of Contents We may not be able to fully recognize the anticipated benefits of towers that we acquire.
As a consequence of our indebtedness, (1) demands on our cash resources may increase, (2) we are subject to restrictive covenants that further limit our financial and operating flexibility, and (3) we may choose to institute self-imposed limits on our indebtedness based on certain considerations including market interest rates, our relative leverage and our strategic plans.
Subject to certain restrictions under our existing indebtedness, we and our subsidiaries may also incur significant additional indebtedness in the future, which may have the effect of increasing our total leverage. 10 Table of Contents As a consequence of our indebtedness, (1) demands on our cash resources may increase, (2) we are subject to restrictive covenants that further limit our financial and operating flexibility, and (3) we may choose to institute self-imposed limits on our indebtedness based on certain considerations including market interest rates, our relative leverage and our strategic plans.
As of December 31, 2022, we estimate the aggregate range of reasonably possible losses in excess of amounts accrued to be between zero and $89.7 million (excluding penalties and interest which, as of such date would have been $79.5 million).
As of December 31, 2023, we estimate the aggregate range of reasonably possible losses in excess of amounts accrued to be between zero and $97.8 million. This range excludes penalties and interest, which as of such date would have been $104.6 million.
However, competitive pricing pressures for tenants on towers from competitors could materially and adversely affect our lease rates or lead to non-renewals of existing leases. Furthermore, pricing pressures could lead to more prevalent network sharing, both domestically and internationally, which could reduce the demand for our tower space or lead to non-renewals of existing leases.
Competition for tenants, whether or not resulting in master lease agreements, may materially and adversely affect our lease rates or lead to non-renewal of existing leases. Furthermore, pricing pressures could lead to more prevalent network sharing, both domestically and internationally, which could reduce the demand for our tower space or lead to non-renewals of existing leases.
In Argentina, Colombia, Costa Rica, Peru, and Tanzania, our revenue, expenses, and capital expenditures, including tenant leases, ground leases and other property interests, and other tower-related expenses are denominated in a mix of local currency and U.S. dollars.
In Colombia, Costa Rica, Peru, and Tanzania, our revenue, expenses, and capital expenditures, including tenant leases, ground leases and other property interests, and other tower-related expenses are denominated in a mix of local currency and U.S. dollars. Our foreign currency denominated revenues and expenses are translated into U.S. dollars at average exchange rates for inclusion in our consolidated financial statements.
As of December 31, 2022, approximately 14.3% of our tenant leases in our international markets include fixed escalators. Currency fluctuations may negatively affect our results of operations. Our operations in Ecuador, El Salvador, Guatemala, Nicaragua, and Panama are primarily denominated in U.S. Dollars.
As of December 31, 2023, approximately 15.2% of our tenant leases in our international markets include fixed escalators. Currency fluctuations may negatively affect our results of operations. In Ecuador, El Salvador, Guatemala, Nicaragua, and Panama, significantly all of our revenue, expenses, and capital expenditures arising from our activities are denominated in U.S. dollars.
We may be subject to potentially significant fines, 17 Table of Contents penalties, or taxes if we fail to comply with any of these requirements. The current cost of complying with these laws is not material to our financial condition or results of operations.
We may be subject to potentially significant fines, penalties, or taxes if we fail to comply with any of these requirements. The current cost of complying with these laws is not material to our financial condition or results of operations. However, the requirements of these laws and regulations are complex, change frequently, and could become more stringent in the future.
We expect this sale to result in churn of between $23.0 million and $33.0 million (including churn on our recently acquired sites from Grupo TorreSur (“GTS”)).
We currently expect this sale to result in churn of between $13.0 million and $23.0 million (including churn on our acquired sites from Grupo TorreSur (“GTS”)). The range excludes the impact of $10.0 million in churn related to TIM experienced in 2023.
If the concessions are not renewed and we are unable to purchase the land, then our site leasing revenue from co-located tenants would terminate prior to the end of such leases. For the year ended December 31, 2022, we generated approximately 7.9% of our total international site leasing revenue from these 3,890 towers.
If the concessions are not renewed and we are unable to purchase the land, then our site leasing revenue from co-located tenants would terminate prior to the end of such leases.
The Senior Credit Agreement, as amended, requires SBA Senior Finance II to maintain specific financial ratios, including (1) a ratio of Consolidated Net Debt to Annualized Borrower EBITDA not to exceed 6.5 times for any fiscal quarter and (2) a ratio of Annualized Borrower EBITDA to Annualized Cash Interest Expense (calculated in accordance with the Senior Credit Agreement) of not less than 2.0 times for any fiscal quarter.
The Senior Credit Agreement, as amended, requires SBA Senior Finance II LLC (“SBA Senior Finance II”) to maintain specific financial ratios, including (1) a ratio of Consolidated Net Debt to Annualized Borrower EBITDA not to exceed 6.5 times for any fiscal quarter and (2) a ratio of Annualized Borrower EBITDA to Annualized Cash Interest Expense (calculated in accordance with the Senior Credit Agreement) of not less than 2.0 times for any fiscal quarter. 15 Table of Contents These covenants could place us at a disadvantage compared to some of our competitors which may have fewer restrictive covenants and may not be required to operate under these restrictions.
If we fail to qualify for taxation as a REIT, we may need to borrow additional funds or liquidate assets to pay any additional tax liability. Accordingly, funds available for investment and making payments on our indebtedness would be reduced. We may be required to borrow funds, sell assets, or raise equity to satisfy our REIT distribution requirements.
Accordingly, funds available for investment and making payments on our indebtedness would be reduced. 19 Table of Contents We may be required to borrow funds, sell assets, or raise equity to satisfy our REIT distribution requirements.
Our TRS assets and operations also will continue to be subject, as applicable, to federal and state corporate income taxes and to foreign taxes in the jurisdictions in which those assets and operations are located. If we continue our international expansion, we 20 Table of Contents may have additional TRS assets and operations subject to such taxes.
Our TRS assets and operations also will continue to be subject, as applicable, to federal and state corporate income taxes and to foreign taxes in the jurisdictions in which those assets and operations are located. Any of these taxes would decrease our earnings and our available cash.
We are a holding company with no business operations of our own. Our only significant assets are, and are expected to be, the outstanding capital stock and membership interests of our subsidiaries. We conduct, and expect to continue conducting, all of our business operations through our subsidiaries.
Our only significant assets are, and are expected to be, the outstanding capital stock and membership interests of our subsidiaries. We conduct, and expect to continue conducting, all of our business operations through our subsidiaries. Accordingly, our ability to pay our obligations is dependent upon dividends and other distributions from our subsidiaries to us.
If we fail to comply with these covenants, it could result in an event of default under our debt instruments. If any default 15 Table of Contents occurs, all amounts outstanding under our outstanding notes and the Senior Credit Agreement may become immediately due and payable. Our dependence on our subsidiaries for cash flow may negatively affect our business.
If any default occurs, all amounts outstanding under our outstanding notes and the Senior Credit Agreement may become immediately due and payable. Our dependence on our subsidiaries for cash flow may negatively affect our business. We are a holding company with no business operations of our own.
We are subject to a number of risks and uncertainties as a result of those acquisition activities.
A key element of our growth strategy is to increase our tower portfolio through acquisitions. We are subject to a number of risks and uncertainties as a result of those acquisition activities.
However, the requirements of these laws and regulations are complex, change frequently, and could become more stringent in the future. It is possible that these requirements will change or that liabilities will arise in the future in a manner that could have a material adverse effect on our business, financial condition, and results of operations.
It is possible that these requirements will change or that liabilities will arise in the future in a manner that could have a material adverse effect on our business, financial condition, and results of operations. We could suffer adverse tax and other financial consequences if taxing authorities do not agree with our tax positions.
Delays in the roll-out of new spectrum or deployment of new technologies could materially and adversely affect our future growth and revenues. Our ability to grow is dependent on the ability and willingness of our wireless service provider customers to invest in the roll-out of new spectrum or new technologies.
Our ability to grow is dependent on the ability and willingness of our wireless service provider customers to invest in the roll-out of new spectrum or new technologies. Much of the future capital investment by domestic wireless service providers is expected to result from the roll-out of 5G.
Consequently, the first use of any cash flow from operations generated by such subsidiaries will be payments of interest and principal, if any, under their respective indebtedness.
Most of our indebtedness is owed directly by our subsidiaries, including the mortgage loan underlying the Tower Securities and any amounts that we may borrow under the Senior Credit Agreement. Consequently, the first use of any cash flow from operations generated by such subsidiaries will be payments of interest and principal, if any, under their respective indebtedness.
Much of the future capital investment by domestic wireless service providers is expected to result from the roll-out of 5G. However, the roll-out of prior spectrum, including 3G and 4G was often delayed and the roll-out of this spectrum may encounter similar interruptions.
However, the roll-out of prior spectrum, including 3G and 4G was often delayed and the roll-out of this spectrum may encounter similar interruptions.
If our wireless service provider customers are unable to access sufficient capital, or unwilling based on the economic cost of such capital or other reasons, to invest in their infrastructure or spectrum, it could reduce our ability to meet our growth expectations.
For the year ended December 31, Percentage of Site Development Revenue 2023 2022 2021 T-Mobile 71.5% 80.1% 78.2% Verizon Wireless 16.8% 7.8% 3.3% 9 Table of Contents If our wireless service provider customers are unable to access sufficient capital, or unwilling based on the economic cost of such capital or other reasons, to invest in their infrastructure or spectrum, it could reduce our ability to meet our growth expectations.
Each wireless service provider must have substantial capital resources and capabilities to deploy new spectrum in their wireless networks, including licenses for spectrum. For example, DISH Wireless has stated that it expects capital expenditures for its 5G network deployment to total approximately $10.0 billion.
Each wireless service provider must have substantial capital resources and capabilities to deploy new spectrum in their wireless networks, including licenses for spectrum.
These factors could have a material adverse effect on our future growth and operations. 16 Table of Contents Security breaches and other disruptions could compromise our information, which would cause our business and reputation to suffer.
As a result, tower construction in some of our international markets may be delayed or halted or our acquired towers may not perform as anticipated. These factors could have a material adverse effect on our future growth and operations. Cybersecurity breaches and other disruptions could compromise our information, which would cause our business and reputation to suffer.
Our success depends to a significant extent upon performance and active participation of our key personnel. Effective December 31, 2022, two of our senior executive officers retired and were replaced with internal executives, and on February 21, 2023, we announced that Jeffrey A. Stoops, our President and Chief Executive Officer, would retire effective December 31, 2023 and that Brendan T.
Our success depends to a significant extent upon performance and active participation of our key personnel. Effective December 31, 2023, Jeffrey A. Stoops retired from his position as President and Chief Executive Officer, and Brendan T. Cavanagh assumed the position of Chief Executive Officer.
Moreover, if a connection between exposure to low levels of RF energy and possible negative health effects, including cancer, were demonstrated, we could be subject to numerous claims. Our current policies provide no coverage for claims based on RF energy exposure.
In particular, negative public perception of, and regulations regarding, health risks could cause a decrease in the demand for wireless 18 Table of Contents communications services. Moreover, if a connection between exposure to low levels of RF energy and possible negative health effects, including cancer, were demonstrated, we could be subject to numerous claims.
Wireless capital expenditures may also be adversely impacted by service provider decisions on debt levels, dividends, free cash flow goals, and a variety of other factors. The discontinuation of LIBOR could adversely affect our operating results and financial condition. LIBOR has been the subject of recent proposals for reform.
Wireless capital expenditures may also be adversely impacted by service provider decisions on debt levels, dividends, free cash flow goals, and a variety of other factors. Our variable rate indebtedness and refinancing obligations subject us to interest rate risk, which could cause our debt service obligations to increase significantly.
These covenants could place us at a disadvantage compared to some of our competitors which may have fewer restrictive covenants and may not be required to operate under these restrictions. Further, these covenants could have an adverse effect on our business by limiting our ability to take advantage of financing, new tower development, merger and acquisitions, or other opportunities.
Further, these covenants could have an adverse effect on our business by limiting our ability to take advantage of financing, new tower development, merger and acquisitions, or other opportunities. If we fail to comply with these covenants, it could result in an event of default under our debt instruments.
For example, the land underneath 3,890 towers subject to non-terminable leases in Brazil is currently subject to concessions from the Federal Republic of Brazil.
Further, for various reasons, title to property interests in some of the foreign jurisdictions in which we operate may not be as certain as title to our property interests in the United States. For example, the land underneath 3,868 towers subject to non-terminable leases in Brazil is currently subject to concessions from the Federal Republic of Brazil.
If we were subject to claims relating to exposure to RF energy, even if such claims were not ultimately found to have merit, our financial condition could be materially and adversely affected. 18 Table of Contents Risks Related to Our Status as a REIT Complying with the REIT requirements may cause us to liquidate assets or hinder our ability to pursue otherwise attractive asset acquisition opportunities.
Risks Related to Our Status as a REIT Complying with the REIT requirements may cause us to liquidate assets or hinder our ability to pursue otherwise attractive asset acquisition opportunities.
For the year ended December 31, 2022, we funded $768.2 million and repaid $122.8 million under our intercompany loan agreements. A slowdown in demand for wireless services could materially and adversely affect our future growth and revenues.
For the year ended December 31, 2023, we funded $4.2 million and repaid $223.4 million under our intercompany loan agreements. Subsequent to year end, we repaid an additional $15.0 million under our intercompany loan agreements. Delays in the roll-out of new spectrum or deployment of new technologies could materially and adversely affect our future growth and revenues.
As of December 31, 2022, we had interest rate swaps on a portion of our 2018 Term Loan that fixed $1.95 billion in notional value receiving interest at one-month LIBOR plus 175 basis points and paying a fixed rate of 1.874%. 9 Table of Contents We have a substantial level of indebtedness which may have an adverse effect on our business or limit our ability to take advantage of business, strategic or financing opportunities.
Throughout 2023, we had interest rate swaps on a portion of our 2018 Term Loan that fixed $1.95 billion in notional value receiving interest at (i) one month LIBOR plus 175 basis points and paying an all-in fixed rate of 1.874% per annum through July 31, 2023 and (ii) one month Term SOFR plus 185 basis points (inclusive of a credit spread adjustment (“CSA”) of 0.10%) and paying an all-in fixed rate of 1.900% per annum from August 1, 2023 through March 31, 2025.
However, if this temporary relief should end while our swap agreement and Credit Agreement were still outstanding and utilizing different interest rates, it may have an adverse impact on our income statement. Increasing competition in the tower industry may create pricing pressures or result in non-renewals that may materially and adversely affect us.
Increasing competition in the tower industry may create pricing pressures or result in non-renewals that may materially and adversely affect us. Our industry is highly competitive, and our wireless service provider customers sometimes have alternatives for leasing antenna space.
Cavanagh, our Executive Vice President and Chief Financial Officer, would assume the position of Chief Executive Officer.
Marc Montagner assumed the position of Executive Vice President and Chief Financial Officer, which was previously held by Mr. Cavanagh. Additionally, Jason Silberstein, our Executive Vice President, Site Leasing, will retire effective August 1, 2024.
Removed
For the year ended December 31, Percentage of Site Development Revenue 2022 2021 2020 T-Mobile 80.1% 78.2% 66.8% Our variable rate indebtedness and refinancing obligations subject us to interest rate risk, which could cause our debt service obligations to increase significantly.
Added
Our growth projections are based on our beliefs regarding future revenue from these customers, and such projections could be adversely affected by the loss, consolidation or financial instability of these customers. We derive revenue through numerous site leasing and site development contracts.
Removed
Subject to certain restrictions under our existing indebtedness, we and our subsidiaries may also incur significant additional indebtedness in the future, which may have the effect of increasing our total leverage.
Added
For example, in 2023 Oi entered into its second judicial recovery process related to Oi’s wireline business due to financial difficulties. Oi’s wireline business and their concession rights from the Federal Republic of Brazil to the land underneath 2,113 of our towers continue to be subject to the judicial recovery process.
Removed
The ability and willingness of wireless services providers to maintain or increase capital expenditures may be adversely affected by macroeconomic conditions, such as increases in interest rates and inflation, as well as the impact of governmental steps taken to combat inflation.
Added
We currently have approximately $24 million in annual revenue from Oi’s wireline business, which is principally contractually committed through 2048. It is unclear the extent to which the judicial recovery process may affect the amount, term or timing of the remaining Oi wireline revenue or our rights to the land underlying the affected towers.

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Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed7 unchanged
Biggest changeAs of December 31, 2022, we had an average of 1.9 tenants per tower structure. 22 Table of Contents
Biggest changeAs of December 31, 2023, we had an average of 1.9 tenants per tower.
As of December 31, 2022, approximately 70% of our tower structures were located on parcels of land that we own, land subject to perpetual easements, or parcels of land that have an interest that extends beyond 20 years. The average remaining life under our ground leases and other property interests, including renewal options under our control, is 36 years.
As of December 31, 2023, approximately 71% of our tower structures were located on parcels of land that we own, land subject to perpetual easements, or parcels of land that have an interest that extends beyond 20 years. The average remaining life under our ground leases and other property interests, including renewal options under our control, is 36 years.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+2 added−0 removed2 unchanged
Biggest changeWe may use these NOLs to offset our REIT taxable income, and thus any required distributions to shareholders may be reduced or eliminated until such time as our NOLs have been fully utilized.
Biggest changeWe may use these NOLs to offset our REIT taxable income, and thus 24 Table of Contents any required distributions to shareholders may be reduced or eliminated until such time as our NOLs have been fully utilized.
We now trade on the NASDAQ Global Select Market, a segment of the NASDAQ Global Market, formally known as the NASDAQ National Market System. As of February 15, 2023, there were 288 record holders of our Class A common stock.
We now trade on the NASDAQ Global Select Market, a segment of the NASDAQ Global Market, formally known as the NASDAQ National Market System. As of February 15, 2024, there were 283 record holders of our Class A common stock.
The actual amount, timing, and frequency of future dividends, will be at the sole discretion of our Board of Directors and will be declared based upon various factors, many of which are beyond our control. ITEM 6. RES ERVED
The actual amount, timing, and frequency of future dividends, will be at the sole discretion of our Board of Directors and will be declared based upon various factors, many of which are beyond our control.
Dividends As a REIT, we are required to distribute annually at least 90% of our REIT taxable income after the utilization of any available NOLs (determined before the deduction for dividends paid and excluding any net capital gain). As of December 31, 2022, $545.2 million of the federal NOLs are attributes of the REIT.
Dividends As a REIT, we are required to distribute annually at least 90% of our REIT taxable income after the utilization of any available NOLs (determined before the deduction for dividends paid and excluding any net capital gain). As of December 31, 2023, $382.3 million of the federal NOLs are attributes of the REIT.
Added
Issuer Purchases of Equity Securities The following table presents information related to our repurchases of Class A common stock during the fourth quarter of 2023: Total Total Number of Shares Approximate Dollar Value Number Average Purchased as Part of of Shares that May Yet Be of Shares Price Paid Publicly Announced Purchased Under the Period Purchased Per Share Plans or Programs (1) Plans or Programs 10/1/2023 - 10/31/2023 63,690 $ 198.84 63,690 $ 404,726,973 11/1/2023 - 11/30/2023 — $ — — $ 404,726,973 12/1/2023 - 12/31/2023 — $ — — $ 404,726,973 Total 63,690 $ 198.84 63,690 $ 404,726,973 (1) On October 28, 2021, our Board of Directors authorized a stock repurchase plan authorizing us to repurchase, from time to time, up to $1.0 billion of our outstanding Class A common stock (the “Repurchase Plan”).
Added
As of December 31, 2023, the Company had $404.7 million of authorization remaining under the Repurchase Plan. The Repurchase Plan has no expiration and will continue until otherwise modified or terminated by our Board of Directors at any time in its sole discretion. ITEM 6. RES ERVED

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

104 edited+43 added−18 removed61 unchanged
Biggest changeOperating Income (Expense): For the year ended Constant December 31, Foreign Constant Currency 2022 2021 Currency Impact Currency Change % Change (in thousands) Domestic site leasing $ 874,593 $ 758,481 $ — $ 116,112 15.3% International site leasing 82,165 54,177 2,581 25,407 46.9% Total site leasing $ 956,758 $ 812,658 $ 2,581 $ 141,519 17.4% Site development 48,482 22,723 — 25,759 113.4% Other (79,832) (52,886) — (26,946) 51.0% Total $ 925,408 $ 782,495 $ 2,581 $ 140,332 17.9% Domestic site leasing operating income increased $116.1 million for the year ended December 31, 2022, as compared to the prior year, primarily due to higher segment operating profit, decreases in depreciation, accretion, and amortization expense and selling, general, and administrative expenses, partially offset by an increase in asset impairment and decommission costs. 29 Table of Contents International site leasing operating income increased $28.0 million for the year ended December 31, 2022, as compared to the prior year.
Biggest changeThese changes were primarily due to the increase in the number of towers we acquired and built since January 1, 2022, partially offset by the impact of assets that became fully depreciated since the prior year period. 31 Table of Contents Operating Income (Expense): For the year ended Constant December 31, Foreign Constant Currency 2023 2022 Currency Impact Currency Change % Change (in thousands) Domestic site leasing $ 849,607 $ 854,680 $ — $ (5,073) (0.6%) International site leasing 111,854 82,165 649 29,040 35.3% Total site leasing $ 961,461 $ 936,845 $ 649 $ 23,967 2.6% Site development 29,322 48,482 — (19,160) (39.5%) Other (67,124) (59,919) — (7,205) 12.0% Total $ 923,659 $ 925,408 $ 649 $ (2,398) (0.3%) Domestic site leasing operating income decreased $5.1 million for the year ended December 31, 2023, as compared to the prior year, primarily due to an increase in asset impairment and decommission costs, partially offset by higher segment operating profit and decreases in depreciation, accretion, and amortization expense and acquisition and new business initiatives related adjustments and expenses.
We believe that providing these financial results and metrics on a constant currency basis, which are non-GAAP measures, gives management and investors the ability to evaluate the performance of our business without the impact of foreign currency exchange rate fluctuations.
We believe that providing these financial results and metrics on a constant currency basis, which are non-GAAP measures, gives management and investors the ability to evaluate the performance of our business without the impact of foreign currency exchange rate fluctuations.
Senior Notes The table below sets forth the material terms of our outstanding senior notes as of December 31, 2022: Senior Notes Issue Date Amount Outstanding ‎ (in millions) Interest Rate Coupon Maturity Date Interest Due Dates Optional Redemption Date 2020 Senior Notes Feb. 4, 2020 $1,500.0 3.875% Feb. 15, 2027 Feb. 15 & Aug. 15 Feb. 15, 2023 2021 Senior Notes Jan. 29, 2021 $1,500.0 3.125% Feb. 1, 2029 Feb. 1 & Aug. 1 Feb. 1, 2024 Each of our senior notes is subject to redemption, at our option, in whole or in part on or after the date set forth above.
Senior Notes The table below sets forth the material terms of our outstanding senior notes as of December 31, 2023: Senior Notes Issue Date Amount Outstanding ‎ (in millions) Interest Rate Coupon Maturity Date Interest Due Dates Optional Redemption Date 2020 Senior Notes Feb. 4, 2020 $1,500.0 3.875% Feb. 15, 2027 Feb. 15 & Aug. 15 Feb. 15, 2023 2021 Senior Notes Jan. 29, 2021 $1,500.0 3.125% Feb. 1, 2029 Feb. 1 & Aug. 1 Feb. 1, 2024 Each of our senior notes is subject to redemption, at our option, in whole or in part on or after the date set forth above.
In Argentina, Colombia, Costa Rica, Peru, and Tanzania, our revenue, expenses, and capital expenditures, including tenant leases, ground leases and other property interests, and other tower-related expenses are denominated in a mix of local currency and U.S. dollars. As indicated in the table below, our site leasing business generates substantially all of our total segment operating profit.
In Colombia, Costa Rica, Peru, and Tanzania, our revenue, expenses, and capital expenditures, including tenant leases, ground leases and other property interests, and other tower-related expenses are denominated in a mix of local currency and U.S. dollars. As indicated in the table below, our site leasing business generates substantially all of our total segment operating profit.
The Senior Credit Agreement, as amended, permits SBA Senior Finance II, without the consent of the other lenders, to request that one or more lenders provide SBA Senior Finance II with increases in the Revolving Credit Facility or additional term loans provided that after giving effect to the proposed increase in Revolving Credit Facility commitments or incremental term loans the ratio of Consolidated Net Debt to Annualized Borrower EBITDA would not exceed 6.5 times.
The Senior Credit Agreement permits SBA Senior Finance II, without the consent of the other lenders, to request that one or more lenders provide SBA Senior Finance II with increases in the Revolving Credit Facility or additional term loans provided that after giving effect to the proposed increase in Revolving Credit Facility commitments or incremental term loans the ratio of Consolidated Net Debt to Annualized Borrower EBITDA would not exceed 6.5 times.
The ongoing maintenance requirements are typically minimal and include replacing lighting systems, painting a tower, or upgrading or repairing an access road or fencing. In Ecuador, El Salvador, Guatemala, Nicaragua, and Panama, significantly all of our revenue, expenses, and capital expenditures arising from our new build activities are denominated in U.S. dollars.
The ongoing maintenance requirements are typically minimal and include replacing lighting systems, painting a tower, or upgrading or repairing an access road or fencing. In Ecuador, El Salvador, Guatemala, Nicaragua, and Panama, significantly all of our revenue, expenses, and capital expenditures arising from our activities are denominated in U.S. dollars.
Year Ended 2021 Compared to Year Ended 2020 For a discussion of our 2021 Results of Operations, including a discussion of our financial results for the fiscal year ended December 31, 2021 compared to the fiscal year ended December 31, 2020, refer to Part I, Item 7 of our annual report on Form 10-K filed with the SEC on March 1, 2022.
Year Ended 2022 Compared to Year Ended 2021 For a discussion of our 2022 Results of Operations, including a discussion of our financial results for the fiscal year ended December 31, 2022 compared to the fiscal year ended December 31, 2021, refer to Part I, Item 7 of our annual report on Form 10-K filed with the SEC on March 1, 2023.
For a discussion of our Liquidity and Capital Resources for the fiscal year ended December 31, 2021 compared to the fiscal year ended December 31, 2020, refer to Part I, Item 7 of our annual report on Form 10-K filed with the SEC on March 1, 2022.
For a discussion of our Liquidity and Capital Resources for the fiscal year ended December 31, 2022 compared to the fiscal year ended December 31, 2021, refer to Part I, Item 7 of our annual report on Form 10-K filed with the SEC on March 1, 2023.
Debt Service As of December 31, 2022, we believe that our cash on hand, capacity available under our Revolving Credit Facility, and cash flows from operations for the next twelve months will be sufficient to service our outstanding debt during the next twelve months.
Debt Service As of December 31, 2023, we believe that our cash on hand, capacity available under our Revolving Credit Facility, and cash flows from operations for the next twelve months will be sufficient to service our outstanding debt during the next twelve months.
Refer to Note 15 in our Consolidated Financial Statements included in this annual report for further detail of the site development segment. Lease Accounting ASU No. 2016-02, Leases (“Topic 842”) requires all lessees to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments.
Refer to Note 15 in our Consolidated Financial Statements included in this annual report for further detail of the site development segment. 28 Table of Contents Lease Accounting ASU No. 2016-02, Leases (“Topic 842”) requires all lessees to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments.
As of December 31, 2022, no U.S. state or territory accounted for more than 10% of our total tower portfolio by tower count, and no U.S. state or territory accounted for more than 10% of our total revenues for the year ended December 31, 2022.
As of December 31, 2023, no U.S. state or territory accounted for more than 10% of our total tower portfolio by tower count, and no U.S. state or territory accounted for more than 10% of our total revenues for the year ended December 31, 2023.
For a detailed discussion on the application of these and other accounting policies, see Note 2 of our Consolidated Financial Statements for the year ended December 31, 2022, included herein.
For a detailed discussion on the application of these and other accounting policies, see Note 2 of our Consolidated Financial Statements for the year ended December 31, 2023, included herein.
Registration Statements We have on file with the Commission a shelf registration statement on Form S-4 registering shares of Class A common stock that we may issue in connection with the acquisition of wireless communication towers or antenna sites and related assets or 34 Table of Contents companies who own wireless communication towers, antenna sites, or related assets.
Registration Statements We have on file with the Commission a shelf registration statement on Form S-4 registering shares of Class A common stock that we may issue in connection with the acquisition of wireless communication towers or antenna sites and related assets or companies who own wireless communication towers, antenna sites, or related assets.
Debt Covenants As of December 31, 2022, the Borrowers met the debt service coverage ratio required by the mortgage loan agreement and were in compliance with all other covenants as set forth in the agreement.
Debt Covenants As of December 31, 2023, the Borrowers met the debt service coverage ratio required by the mortgage loan agreement and were in compliance with all other covenants as set forth in the agreement.
(2) The rate reflected includes a 0.010% reduction in the applicable commitment fee as a result of meeting certain sustainability-linked targets as of December 31, 2021.
(2) The rate reflected includes a 0.010% reduction in the applicable commitment fee as a result of meeting certain sustainability-linked targets as of December 31, 2022.
As of December 31, 2022, approximately 70% of our tower structures were located on parcels of land that we own, land subject to perpetual easements, or parcels of land in which we have a leasehold interest that extends beyond 20 years. For any given tower, costs are relatively fixed over a monthly or an annual time period.
As of December 31, 2023, approximately 71% of our tower structures were located on parcels of land that we own, land subject to perpetual easements, or parcels of land in which we have a leasehold interest that extends beyond 20 years. For any given tower, costs are relatively fixed over a monthly or an annual time period.
The impact and any associated risks related to these policies on our 25 Table of Contents business operations is discussed throughout “Management’s Discussion and Analysis of Financial Condition and Results of Operations” where such policies affect reported and expected financial results.
The impact and any associated risks related to these policies on our business operations is discussed throughout “Management’s Discussion and Analysis of Financial Condition and Results of Operations” where such policies affect reported and expected financial results.
(2) As of the date of this filing, we had $504.7 million remaining under the current authorized share repurchase plan.
(2) As of the date of this filing, we had $404.7 million remaining under the current authorized share repurchase plan.
Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. There can be no assurance that actual results will not differ from those estimates and such differences could be significant.
Management bases its estimates on historical experience and on various other 27 Table of Contents assumptions that are believed to be reasonable under the circumstances. There can be no assurance that actual results will not differ from those estimates and such differences could be significant.
The Senior Credit Agreement, as amended, requires SBA Senior Finance II to maintain specific financial ratios, including (1) a ratio of Consolidated Net Debt to Annualized Borrower EBITDA not to exceed 6.5 times for any fiscal quarter, (2) a ratio of Consolidated Net Debt (calculated in accordance with the Senior Credit Agreement) to Annualized Borrower EBITDA for the most recently ended fiscal quarter not to exceed 6.5 times for 30 consecutive days, and (3) a ratio of Annualized Borrower EBITDA to Annualized Cash Interest Expense (calculated in accordance with the Senior Credit Agreement) of not less than 2.0 times for any fiscal quarter.
Debt Instruments and Debt Service Requirements Terms of the Senior Credit Agreement The Senior Credit Agreement requires SBA Senior Finance II to maintain specific financial ratios, including (1) a ratio of Consolidated Net Debt to Annualized Borrower EBITDA not to exceed 6.5 times for any fiscal quarter, (2) a ratio of Consolidated Net Debt (calculated in accordance with the Senior Credit Agreement) to Annualized Borrower EBITDA for the most recently ended fiscal quarter not to exceed 6.5 times for 30 consecutive days, and (3) a ratio of Annualized Borrower EBITDA to Annualized Cash Interest Expense (calculated in accordance with the Senior Credit Agreement) of not less than 2.0 times for any fiscal quarter.
Term Loan under the Senior Credit Agreement 2018 Term Loan On April 11, 2018, we, through our wholly owned subsidiary, SBA Senior Finance II LLC, obtained a term loan (the “2018 Term Loan”) under the amended and restated Senior Credit Agreement.
Term Loan under the Senior Credit Agreement 2018 Term Loan On April 11, 2018, we, through our wholly owned subsidiary, SBA Senior Finance II, issued a term loan (the “2018 Term Loan”) under the amended and restated Senior Credit Agreement.
As of December 31, 2022, we owned 39,311 towers, a substantial portion of which have been built by us or built by other tower owners or operators who, like us, have built such towers to lease space to multiple wireless service providers.
As of December 31, 2023, we owned 39,618 towers, a substantial portion of which have been built by us or built by other tower owners or operators who, like us, have built such towers to lease space to multiple wireless service providers.
Subsequent to December 31, 2022, we declared the following cash dividends: Payable to Shareholders Cash to of Record at the Close be Paid Date Declared of Business on Per Share Date to be Paid February 20, 2023 March 10, 2023 $0.85 March 24, 2023 The amount of future distributions will be determined, from time to time, by our Board of Directors to balance our goal of increasing long-term shareholder value and retaining sufficient cash to implement our current capital allocation policy, which prioritizes investment in quality assets that meet our return criteria, and then stock repurchases when we believe our stock price is below its intrinsic value.
Subsequent to December 31, 2023, we declared the following cash dividends: Payable to Shareholders Cash to of Record at the Close be Paid Date Declared of Business on Per Share Date to be Paid February 26, 2024 March 14, 2024 $0.98 March 28, 2024 The amount of future distributions will be determined, from time to time, by our Board of Directors to balance our goal of increasing long-term shareholder value and retaining sufficient cash to implement our current capital allocation policy, which prioritizes investment in quality assets that meet our return criteria, and then stock repurchases when we believe our stock price is below its intrinsic value.
Management also believes Adjusted EBITDA is frequently used by investors or other interested parties in the evaluation of REITs.
Management also 33 Table of Contents believes Adjusted EBITDA is frequently used by investors or other interested parties in the evaluation of REITs.
In addition, as of December 31, 2022, approximately 30% of our total towers are located in Brazil and no other international market (each country is considered a market) represented more than 5% of our total towers. We derive site leasing revenues from all the major carriers in each of the 16 countries in which we operate.
In addition, as of December 31, 2023, approximately 30% of our total towers are located in Brazil and no other international market (each country is considered a market) represented more than 5% of our total towers. 25 Table of Contents We derive site leasing revenues from all the major carriers in each of the 15 countries in which we operate.
We cannot assure you that a high rate of inflation in the future will not adversely affect our operating results particularly in light of the fact that our site leasing revenues are governed by long-term contracts with pre-determined pricing that we will not be able to increase in response to increases in inflation other than our contracts in South America, South Africa, the Philippines, and Tanzania which have inflationary index based rent escalators.
In addition, persistent high rates of inflation could adversely affect our future operating results particularly in light of the fact that our site leasing revenues are governed by long-term contracts with pre-determined pricing that we will not be able to increase in response to increases in inflation other than our contracts in South America, South Africa, the Philippines, and Tanzania which have inflationary index based rent escalators.
In addition, we own and operate towers in South America, Central America, Canada, South Africa, the Philippines, and Tanzania. Our primary business line is our site leasing business, which contributed 96.2% of our total segment operating profit for the year ended December 31, 2022.
In addition, we own and operate towers in South America, Central America, Canada, South Africa, the Philippines, and Tanzania. Our primary business line is our site leasing business, which contributed 97.4% of our total segment operating profit for the year ended December 31, 2023.
Amounts borrowed under the Revolving Credit Facility accrue interest, at SBA Senior Finance II’s election, at either (1) the Eurodollar Rate plus a margin that ranges from 112.5 basis points to 150.0 basis points or (2) the Base Rate plus a margin that ranges from 12.5 basis points to 50.0 basis points, in each case based on the ratio of Consolidated Net Debt to Annualized Borrower EBITDA, calculated in accordance with the Senior Credit Agreement.
Amounts borrowed under the Revolving Credit Facility accrue interest, at SBA Senior Finance II’s election, at either (1) the Eurodollar Rate (or Term SOFR as amended July 3, 2023) plus a margin that ranges from 112.5 basis points to 150.0 basis points or (2) the Base Rate plus a margin that ranges from 12.5 basis points to 50.0 basis points, in each case based on the ratio of Consolidated 37 Table of Contents Net Debt to Annualized Borrower EBITDA, calculated in accordance with the Senior Credit Agreement.
The mortgage loan will be paid from the operating cash flows from the aggregate 9,896 tower sites owned by the Borrowers as of December 31, 2022.
The mortgage loan will be paid from the operating cash flows from the aggregate 9,892 tower sites owned by the Borrowers as of December 31, 2023.
Site leasing revenue in Brazil represented 12.8% of total site leasing revenue for the period. No other individual international market represented more than 5% of our total site leasing revenue.
Site leasing revenue in Brazil represented 15.6% of total site leasing revenue for the period. No other individual international market represented more than 5% of our total site leasing revenue.
Accordingly, our only source of cash to pay our obligations, other than financings, is distributions with respect to our ownership interest in our subsidiaries from the net earnings and cash flow generated by these subsidiaries.
We conduct all of our business operations through Telecommunications’ subsidiaries. Accordingly, our only source of cash to pay our obligations, other than financings, is distributions with respect to our ownership interest in our subsidiaries from the net earnings and cash flow generated by these subsidiaries.
For the year ended Segment operating profit as a percentage of December 31, total operating profit 2022 2021 2020 Domestic site leasing 77.0% 80.7% 81.0% International site leasing 19.2% 16.7% 17.4% Total site leasing 96.2% 97.4% 98.4% We believe that the site leasing business continues to be attractive due to its long-term contracts, built-in rent escalators, high operating margins, and low customer churn (which refers to when a customer does not renew its lease or cancels its lease prior to the end of its term) other than in connection with customer consolidation or cessations of specific technology.
For the year ended Segment operating profit as a percentage of December 31, total operating profit 2023 2022 2021 Domestic site leasing 75.2% 77.0% 80.7% International site leasing 22.2% 19.2% 16.7% Total site leasing 97.4% 96.2% 97.4% We believe that the site leasing business continues to be attractive due to its long-term contracts, built-in rent escalators, high operating margins, and low customer churn (which refers to a lease that is non-renewed, cancelled, or discounted prior to the end of its term) other than in connection with customer consolidation or cessations of specific technology.
These changes were primarily due to (1) revenues from 4,908 towers acquired (including 1,445 towers from Airtel Tanzania and 2,632 sites from GTS in Brazil) and 777 towers built since January 1, 2021, (2) an increase in reimbursable pass-through expenses due primarily to increases in Tanzania fuel and energy pass-through costs and consumer price index escalators on our ground leases, and (3) organic site leasing growth from new leases, amendments, and contractual escalators, partially offset by lease non-renewals.
These changes were primarily due to (1) revenues from 3,301 towers acquired (including 2,632 sites from GTS in Brazil) and 779 towers built since January 1, 2022, (2) an increase in reimbursable pass-through expenses due primarily to increases in consumer price index escalators on our ground leases, and (3) organic site leasing growth from new leases, amendments, and contractual escalators, partially offset by lease non-renewals.
Among other things, the Borrowers are prohibited from incurring other indebtedness for borrowed money or further encumbering their assets. ‎ 37 Table of Contents The table below sets forth the material terms of our outstanding Tower Securities as of December 31, 2022: Security Issue Date Amount Outstanding ‎ (in millions) Interest ‎ Rate (1) Anticipated Repayment Date Final Maturity Date 2014-2C Tower Securities Oct. 15, 2014 $620.0 3.869% Oct. 8, 2024 Oct. 8, 2049 2019-1C Tower Securities Sep. 13, 2019 $1,165.0 2.836% Jan. 12, 2025 Jan. 12, 2050 2020-1C Tower Securities Jul. 14, 2020 $750.0 1.884% Jan. 9, 2026 Jul. 11, 2050 2020-2C Tower Securities Jul. 14, 2020 $600.0 2.328% Jan. 11, 2028 Jul. 9, 2052 2021-1C Tower Securities May 14, 2021 $1,165.0 1.631% Nov. 9, 2026 May 9, 2051 2021-2C Tower Securities Oct. 27, 2021 $895.0 1.840% Apr. 9, 2027 Oct. 10, 2051 2021-3C Tower Securities Oct. 27, 2021 $895.0 2.593% Oct. 9, 2031 Oct. 10, 2056 2022-1C Tower Securities Nov. 23, 2022 $850.0 6.599% Jan. 11, 2028 Nov. 9, 2052 (1) Interest payable monthly.
The table below sets forth the material terms of our outstanding Tower Securities as of December 31, 2023: Security Issue Date Amount Outstanding ‎ (in millions) Interest Rate (1) Anticipated Repayment Date Final Maturity Date 2014-2C Tower Securities Oct. 15, 2014 $620.0 3.869% Oct. 8, 2024 Oct. 8, 2049 2019-1C Tower Securities Sep. 13, 2019 $1,165.0 2.836% Jan. 12, 2025 Jan. 12, 2050 2020-1C Tower Securities Jul. 14, 2020 $750.0 1.884% Jan. 9, 2026 Jul. 11, 2050 2020-2C Tower Securities Jul. 14, 2020 $600.0 2.328% Jan. 11, 2028 Jul. 9, 2052 2021-1C Tower Securities May 14, 2021 $1,165.0 1.631% Nov. 9, 2026 May 9, 2051 2021-2C Tower Securities Oct. 27, 2021 $895.0 1.840% Apr. 9, 2027 Oct. 10, 2051 2021-3C Tower Securities Oct. 27, 2021 $895.0 2.593% Oct. 9, 2031 Oct. 10, 2056 2022-1C Tower Securities Nov. 23, 2022 $850.0 6.599% Jan. 11, 2028 Nov. 9, 2052 (1) Interest paid monthly.
For the discount rate, we use the rate implicit in the lease when available to discount lease payments to present value. However, our ground leases and other property interests generally do not provide a readily determinable implicit rate.
For the discount rate, we use the rate implicit in the lease when available to discount lease payments to present value. However, our ground leases and other property interests generally do not provide a readily determinable implicit rate. Therefore, we estimate the incremental borrowing rate to discount lease payments based on the lease term and lease currency.
These changes were primarily due to the impact of assets that became fully depreciated since the prior year period, partially offset by an increase in the number of towers we acquired and built since January 1, 2021.
This change was primarily due to the impact of assets that became fully depreciated since the prior year period, partially offset by an increase in the number of towers we acquired and built since January 1, 2022.
The key terms of the Revolving Credit Facility are as follows: Unused Financial Covenant Interest Rate Commitment Compliance as of Fee as of Status as of December 31, 2022 (1) December 31, 2022 (2) December 31, 2022 Revolving Credit Facility 5.610% 0.140% In Compliance (1) The rate reflected includes a 0.050% reduction in the applicable spread as a result of meeting certain sustainability-linked targets as of December 31, 2021.
The key terms of the Revolving Credit Facility are as follows: Unused Interest Rate Commitment as of Fee as of December 31, 2023 (1) December 31, 2023 (2) Revolving Credit Facility 6.435% 0.140% (1) The rate reflected includes a 0.050% reduction in the applicable spread as a result of meeting certain sustainability-linked targets as of December 31, 2022.
Operating Profit Domestic site leasing segment operating profit increased $90.7 million for the year ended December 31, 2022, as compared to the prior year, primarily due to additional profit generated by (1) towers acquired and built since January 1, 2021 and organic site leasing growth as noted above, (2) continued control of our site leasing cost of revenue, and (3) the positive impact of our ground lease purchase program.
Operating Profit Domestic site leasing segment operating profit increased $64.5 million for the year ended December 31, 2023, as compared to the prior year, primarily due to additional profit generated by (1) towers acquired and built since January 1, 2022, (2) organic site leasing growth as noted above, and (3) continued control of our site leasing cost of revenue.
Accounts receivable The accounts receivable balance for the years ended December 31, 2022 and 2021 was $184.4 million and $102.0 million, respectively, of which $59.6 million and $24.6 million related to the site development segment, respectively. We perform periodic credit evaluations of our customers.
Accounts receivable The accounts receivable balance for the years ended December 31, 2023 and 2022 was $182.7 million and $184.4 million, respectively, of which $32.3 million and $59.6 million related to the site development segment, respectively. We perform periodic credit evaluations of our customers.
SBAC’s only significant asset is 100% of the outstanding capital stock of SBA Telecommunications, LLC (“Telecommunications”), which is also a holding company that owns equity interests in entities that directly or indirectly own all of our domestic and international towers and assets. We conduct all of our business operations through Telecommunications’ subsidiaries.
LIQUIDITY AND CAPITAL RESOURCES SBAC is a holding company with no business operations of its own. SBAC’s only significant asset is 100% of the outstanding capital stock of SBA Telecommunications, LLC (“Telecommunications”), which is also a holding company that owns equity interests in entities that directly or indirectly own all of our domestic and international towers and assets.
For 2023, we expect to incur non-discretionary cash capital expenditures associated with tower maintenance and general corporate expenditures of $53.0 million to $63.0 million and discretionary cash capital expenditures, based on current or potential acquisition obligations, planned new tower construction, forecasted tower augmentations, and forecasted ground lease purchases, of $283.0 million to $303.0 million.
For 2024, we expect to incur non-discretionary cash capital expenditures associated with tower maintenance and general corporate expenditures of $51.0 million to $61.0 million and discretionary cash capital expenditures, based on current or potential acquisition obligations, planned new tower construction, forecasted tower augmentations, and forecasted ground lease purchases, of $320.0 million to $340.0 million.
Risk Retention Tower Securities The table below sets forth the material terms of our outstanding Risk Retention Tower Securities as of December 31, 2022: Security Issue Date Amount Outstanding ‎ (in millions) Interest ‎ Rate (1) Anticipated Repayment Date Final Maturity Date 2019-1R Tower Securities Sep. 13, 2019 $61.4 4.213% Jan. 12, 2025 Jan. 12, 2050 2020-2R Tower Securities Jul. 14, 2020 $71.1 4.336% Jan. 11, 2028 Jul. 9, 2052 2021-1R Tower Securities May 14, 2021 $61.4 3.598% Nov. 9, 2026 May 9, 2051 2021-3R Tower Securities Oct. 27, 2021 $94.3 4.090% Oct. 9, 2031 Oct. 10, 2056 2022-1R Tower Securities Nov. 23, 2022 $44.8 7.870% Jan. 11, 2028 Nov. 9, 2052 (1) Interest payable monthly.
Risk Retention Tower Securities The table below sets forth the material terms of our outstanding Risk Retention Tower Securities as of December 31, 2023: Security Issue Date Amount Outstanding ‎ (in millions) Interest Rate (1) Anticipated Repayment Date Final Maturity Date 2019-1R Tower Securities Sep. 13, 2019 $61.4 4.213% Jan. 12, 2025 Jan. 12, 2050 2020-2R Tower Securities Jul. 14, 2020 $71.1 4.336% Jan. 11, 2028 Jul. 9, 2052 2021-1R Tower Securities May 14, 2021 $61.4 3.598% Nov. 9, 2026 May 9, 2051 2021-3R Tower Securities Oct. 27, 2021 $94.3 4.090% Oct. 9, 2031 Oct. 10, 2056 2022-1R Tower Securities Nov. 23, 2022 $44.8 7.870% Jan. 11, 2028 Nov. 9, 2052 (1) Interest paid monthly. 40 Table of Contents To satisfy certain risk retention requirements of Regulation RR promulgated under the Exchange Act, SBA Guarantor, LLC, a wholly owned subsidiary, purchased the Risk Retention Tower Securities.
We have on file with the Commission an automatic shelf registration statement for well-known seasoned issuers on Form S-3ASR which enables us to issue shares of our Class A common stock, preferred stock, debt securities, warrants, or depositary shares as well as units that include any of these securities.
As of December 31, 2023, we had approximately 1.2 million shares of Class A common stock remaining under this registration statement. 36 Table of Contents We have on file with the Commission an automatic shelf registration statement for well-known seasoned issuers on Form S-3ASR which enables us to issue shares of our Class A common stock, preferred stock, debt securities, warrants, or depositary shares as well as units that include any of these securities.
(2) Provision for income taxes includes $2,139 and $907 of franchise taxes for the year ended 2022 and 2021, respectively, reflected in selling, general, and administrative expenses on the Consolidated Statement of Operations. Adjusted EBITDA increased $162.7 million for the year ended December 31, 2022, as compared to the prior year.
(2) Provision for income taxes includes $0.8 million and $2.1 million of franchise taxes for the year ended 2023 and 2022, respectively, reflected in selling, general, and administrative expenses on the Consolidated Statement of Operations. Adjusted EBITDA increased $124.9 million for the year ended December 31, 2023, as compared to the prior year.
On a constant currency basis, asset impairment and decommission costs increased $10.3 million for the year ended December 31, 2022.
On a constant currency basis, asset impairment and decommission costs increased $125.8 million for the year ended December 31, 2023.
Furthermore, these contracts do not typically include variable consideration; therefore, the transaction price that is recognized over time is generally the amount of the total contract.
Payment terms do not result in any significant financing arrangements. Furthermore, these contracts do not typically include variable consideration; therefore, the transaction price that is recognized over time is generally the amount of the total contract.
The exact amount of our future cash capital expenditures will depend on a number of factors, including amounts necessary to support our tower portfolio, our new tower build and acquisition programs, and our ground lease purchase program. ‎ 33 Table of Contents Financing Activities A detail of our financing activities is as follows: For the year ended December 31, 2022 2021 (in thousands) Net borrowings (repayments) under Revolving Credit Facility (1) $ 370,000 $ (30,000) Proceeds from issuance of Senior Notes, net of fees (1) — 1,485,373 Repayment of Senior Notes (1) — (1,870,909) Proceeds from issuance of Tower Securities, net of fees (1) 839,885 2,924,005 Repayment of Tower Securities (1) (640,000) (1,335,000) Repurchase and retirement of common stock (2) (431,666) (582,578) Payment of dividends on common stock (306,766) (253,580) Proceeds from employee stock purchase/stock option plans, net of taxes 28,345 14,784 Other financing activities 4,728 (12,831) Net cash (used in) provided by financing activities $ (135,474) $ 339,264 (1) For additional information regarding our debt instruments and financings, refer to “Debt Instruments and Debt Service Requirements” below.
The exact amount of our future cash capital expenditures will depend on a number of factors, including amounts necessary to support our tower portfolio, our new tower build and acquisition programs, and our ground lease purchase program. ‎ 35 Table of Contents Financing Activities A detail of our financing activities is as follows: For the year ended December 31, 2023 2022 (in thousands) Net (repayments) borrowings under Revolving Credit Facility (1) $ (540,000) $ 370,000 Proceeds from issuance of Tower Securities, net of fees (1) — 839,885 Repayment of Tower Securities (1) — (640,000) Repurchase and retirement of common stock (2) (100,010) (431,666) Payment of dividends on common stock (369,960) (306,766) Proceeds from employee stock purchase/stock option plans, net of taxes 16,715 28,345 Other financing activities (23,963) 4,728 Net cash used in financing activities $ (1,017,218) $ (135,474) (1) For additional information regarding our debt instruments and financings, refer to “Debt Instruments and Debt Service Requirements” below.
On August 4, 2020, we, through our wholly owned subsidiary, SBA Senior Finance II, entered into an interest rate swap for $1.95 billion of notional value accruing interest at one month LIBOR plus 175 basis points for a fixed rate of 1.874% per annum through the maturity date of the 2018 Term Loan.
Interest Rate Swaps On August 4, 2020, we, through our wholly owned subsidiary, SBA Senior Finance II, entered into an interest rate swap which swapped $1.95 billion of notional value accruing interest at one month LIBOR plus 175 basis points for an all-in fixed rate of 1.874% per annum through July 31, 2023.
The table below summarizes the Revolving Credit Facility’s activity during the years ended December 31, 2022 and 2021 (in thousands): For the year ended December 31, 2022 2021 Beginning outstanding balance $ 350,000 $ 380,000 Borrowings 975,000 1,935,000 Repayments (605,000) (1,965,000) Ending outstanding balance $ 720,000 $ 350,000 Subsequent to December 31, 2022, we borrowed an additional $15.0 million and repaid $165.0 million under the Revolving Credit Facility, and as of the date of this filing, $570.0 million was outstanding.
The table below summarizes the Revolving Credit Facility’s activity during the years ended December 31, 2023 and 2022 (in thousands): For the year ended December 31, 2023 2022 Beginning outstanding balance $ 720,000 $ 350,000 Borrowings 190,000 975,000 Repayments (730,000) (605,000) Ending outstanding balance $ 180,000 $ 720,000 Subsequent to December 31, 2023, we repaid $110.0 million under the Revolving Credit Facility, and as of the date of this filing, $70.0 million was outstanding.
This change was primarily due to a higher amount of interest-bearing deposits held as well as higher effective interest rates on those deposits as compared to the prior year. Interest expense increased $0.9 million for the year ended December 31, 2022, as compared to the prior year.
This change was primarily due to interest received on a loan to an unconsolidated joint venture, a higher amount of interest-bearing deposits held, as well as higher effective interest rates on those deposits as compared to the prior year. Interest expense increased $46.6 million for the year ended December 31, 2023, as compared to the prior year.
International site leasing depreciation, accretion, and amortization expense increased $32.5 million for the year ended December 31, 2022, as compared to the prior year. On a constant currency basis, depreciation, accretion, and amortization expense increased $30.7 million.
International site leasing depreciation, accretion, and amortization expense increased $39.2 million for the year ended December 31, 2023, as compared to the prior year. On a constant currency basis, depreciation, accretion, and amortization expense increased $37.8 million.
Dividend For the year ended December 31, 2022, we paid the following cash dividends: Payable to Shareholders of Record at the Close Cash Paid Aggregate Amount Date Declared of Business on Per Share Paid Date Paid February 27, 2022 March 10, 2022 $0.71 $76.9 million March 25, 2022 April 24, 2022 May 19, 2022 $0.71 $76.6 million June 14, 2022 July 31, 2022 August 25, 2022 $0.71 $76.7 million September 20, 2022 October 30, 2022 November 17, 2022 $0.71 $76.7 million December 15, 2022 Dividends paid in 2022 and 2021 were ordinary taxable dividends.
Dividend For the year ended December 31, 2023, we paid the following cash dividends: Payable to Shareholders of Record at the Close Cash Paid Aggregate Amount Date Declared of Business on Per Share Paid Date Paid February 20, 2023 March 10, 2023 $0.85 $93.9 million March 24, 2023 April 30, 2023 May 26, 2023 $0.85 $92.1 million June 21, 2023 July 30, 2023 August 24, 2023 $0.85 $92.1 million September 20, 2023 November 1, 2023 November 16, 2023 $0.85 $91.8 million December 14, 2023 Dividends paid in 2023 and 2022 were ordinary taxable dividends.
Therefore, we estimate the 26 Table of Contents incremental borrowing rate to discount lease payments based on the lease term and lease currency. We use publicly available data for instruments with similar characteristics when calculating our incremental borrowing rates. Refer to Note 2 in our Consolidated Financial Statements included in this annual report for further discussion on lease accounting.
We use publicly available data for instruments with similar characteristics when calculating our incremental borrowing rates. Refer to Note 2 in our Consolidated Financial Statements included in this annual report for further discussion on lease accounting.
International site leasing revenues increased $136.3 million for the year ended December 31, 2022, as compared to the prior year. On a constant currency basis, international site leasing revenues increased $131.8 million.
International site leasing revenues increased $111.4 million for the year ended December 31, 2023, as compared to the prior year. On a constant currency basis, international site leasing revenues increased $109.4 million.
During the year ended December 31, 2022, we did not issue any shares of Class A common stock under this registration statement. As of December 31, 2022, we had approximately 1.2 million shares of Class A common stock remaining under this registration statement.
During the year ended December 31, 2023, we did not issue any shares of Class A common stock under this registration statement.
Revolving Credit Facility under the Senior Credit Agreement The Revolving Credit Facility consists of a revolving loan under which up to $1.5 billion aggregate principal amount may be borrowed, repaid and redrawn, based upon specific financial ratios and subject to the satisfaction of other customary conditions to borrowing.
Revolving Credit Facility under the Senior Credit Agreement The Revolving Credit Facility consists of a revolving loan under which up to $1.5 billion ($2.0 billion as amended February 23, 2024) aggregate principal amount may be borrowed, repaid and redrawn, based upon specific financial ratios and subject to the satisfaction of other customary conditions to borrowing through the maturity date of July 7, 2026 (January 25, 2029 as amended).
International site leasing segment operating profit increased $82.5 million for the year ended December 31, 2022, as compared to the prior year. On a constant currency basis, international site leasing segment operating profit increased $79.0 million.
International site leasing segment operating profit increased $88.8 million for the year ended December 31, 2023, as compared to the prior year. On a constant currency basis, international site leasing segment operating profit increased $86.7 million.
Our other business line is our site development business, through which we assist wireless service providers in developing and maintaining their own wireless service networks. 23 Table of Contents Site Leasing Our primary focus is the leasing of antenna space on our multi-tenant towers to a variety of wireless service providers under long-term lease contracts in the United States, South America, Central America, Canada, South Africa, the Philippines, and Tanzania.
Site Leasing Our primary focus is the leasing of antenna space on our multi-tenant towers to a variety of wireless service providers under long-term lease contracts in the United States, South America, Central America, Canada, South Africa, the Philippines, and Tanzania.
To the extent that the mortgage loan components corresponding to the Tower Securities are not fully repaid by their respective anticipated repayment dates, the interest rate of each such component will increase by the greater of (1) 5% and (2) the amount, if any, by which the sum of (x) the 10 year U.S. treasury rate plus (y) the credit-based spread for such component (as set forth in the mortgage loan agreement) plus (z) 5%, exceeds the original interest rate for such component.
The prepayment consideration is determined based on the class of the Tower Securities to which the prepaid mortgage loan component corresponds and consists of an amount equal to the net present value associated with the portion of the principal balance being prepaid and calculated in accordance with the formula set forth in the mortgage loan agreement. 39 Table of Contents To the extent that the mortgage loan components corresponding to the Tower Securities are not fully repaid by their respective anticipated repayment dates, the interest rate of each such component will increase by the greater of (1) 5% and (2) the amount, if any, by which the sum of (x) the 10 year U.S. treasury rate plus (y) the credit-based spread for such component (as set forth in the mortgage loan agreement) plus (z) 5%, exceeds the original interest rate for such component.
Site development segment operating profit increased $28.3 million for the year ended December 31, 2022, as compared to the prior year, as a result of increased carrier activity driven primarily by T-Mobile, Verizon Wireless, and DISH Wireless.
Site development segment operating profit decreased $19.2 million for the year ended December 31, 2023, as compared to the prior year, as a result of decreased carrier activity driven primarily by T-Mobile and DISH Wireless, partially offset by an increase in activity from Verizon Wireless.
A summary of our cash flows is as follows: For the year ended December 31, 2022 2021 (in thousands) Cash provided by operating activities $ 1,285,700 $ 1,189,896 Cash used in investing activities (1,393,654) (1,423,260) Cash (used in) provided by financing activities (135,474) 339,264 Change in cash, cash equivalents, and restricted cash (243,428) 105,900 Effect of exchange rate changes on cash, cash equiv., and restricted cash (2,915) (13,082) Cash, cash equivalents, and restricted cash, beginning of year 435,626 342,808 Cash, cash equivalents, and restricted cash, end of year $ 189,283 $ 435,626 Operating Activities Cash provided by operating activities was $1.3 billion for the year ended December 31, 2022 as compared to $1.2 billion for the year ended December 31, 2021.
A summary of our cash flows is as follows: For the year ended December 31, 2023 2022 (in thousands) Cash provided by operating activities $ 1,544,393 $ 1,285,700 Cash used in investing activities (468,246) (1,393,654) Cash used in financing activities (1,017,218) (135,474) Change in cash, cash equivalents, and restricted cash 58,929 (243,428) Effect of exchange rate changes on cash, cash equiv., and restricted cash 2,734 (2,915) Cash, cash equivalents, and restricted cash, beginning of year 189,283 435,626 Cash, cash equivalents, and restricted cash, end of year $ 250,946 $ 189,283 34 Table of Contents Operating Activities Cash provided by operating activities was $1.5 billion for the year ended December 31, 2023 as compared to $1.3 billion for the year ended December 31, 2022.
Site development operating income increased $25.8 million for the year ended December 31, 2022, as compared to the prior year, primarily due to higher segment operating profit driven by more activity from T-Mobile , Verizon Wireless, and DISH Wireless, partially offset by an increase in selling, general, and administrative expenses .
Site development operating income decreased $19.2 million for the year ended December 31, 2023, as compared to the prior year, primarily due to lower segment operating profit driven by lower activity from T-Mobile and DISH Wireless and an increase in depreciation, accretion, and amortization expense, partially offset by a decrease in selling, general, and administrative expenses.
Site development revenues increased $92.1 million for the year ended December 31, 2022, as compared to prior year, as a result of increased carrier activity driven primarily by T-Mobile, Verizon Wireless, and DISH Wireless.
Site development revenues decreased $102.2 million for the year ended December 31, 2023, as compared to the prior year, as a result of decreased carrier activity driven primarily by T-Mobile and DISH Wireless, partially offset by an increase in activity from Verizon Wireless.
In addition, prior to February 15, 2023 (in the case of the 2020 Senior Notes) and February 1, 2024 (in the case of the 2021 Senior Notes), we may, at our option, use the net proceeds of certain equity offerings to redeem up to 35% of the aggregate principal amount of the notes originally issued at a redemption price of 103.875% (in the case of the 2020 Senior Notes) and 103.125% (in the case of the 2021 Senior Notes) plus accrued and unpaid interest. 38 Table of Contents Indentures Governing Senior Notes The Indentures governing the Senior Notes contain customary covenants, subject to a number of exceptions and qualifications, including restrictions on the ability of SBAC and Telecommunications to (1) incur additional indebtedness unless the Consolidated Indebtedness to Annualized Consolidated Adjusted EBITDA Ratio (as defined in the Indenture), pro forma for the additional indebtedness does not exceed, with respect to any fiscal quarter, 9.5x for SBAC, (2) merge, consolidate, or sell assets, (3) make restricted payments, including dividends or other distributions, (4) enter into transactions with affiliates, and (5) enter into sale and leaseback transactions and restrictions on the ability of the Restricted Subsidiaries of SBAC (as defined in the Indentures) to incur liens securing indebtedness.
Indentures Governing Senior Notes The Indentures governing the Senior Notes contain customary covenants, subject to a number of exceptions and qualifications, including restrictions on the ability of SBAC and Telecommunications to (1) incur additional indebtedness unless the Consolidated Indebtedness to Annualized Consolidated Adjusted EBITDA Ratio (as defined in the Indenture), pro forma for the additional indebtedness does not exceed, with respect to any fiscal quarter, 9.5x for SBAC, (2) merge, consolidate, or sell assets, (3) make restricted payments, including dividends or other distributions, (4) enter into transactions with affiliates, and (5) enter into sale and leaseback transactions and restrictions on the ability of the Restricted Subsidiaries of SBAC (as defined in the Indentures) to incur liens securing indebtedness.
We believe that over the long-term, site leasing revenues will continue to grow as wireless service providers lease additional antenna space on our towers due to increasing minutes of network use and data transfer, network expansion, and network coverage requirements. 24 Table of Contents During 2023, we expect organic site leasing revenue in both our domestic and international segments to increase over 2022 levels due in part to wireless carriers deploying unused spectrum.
We believe that over the long-term, site leasing revenues will continue to grow as wireless service providers lease additional antenna space on our towers due to increasing minutes of network use and data transfer, network expansion, and network coverage requirements.
On a constant currency basis, international site leasing operating income increased $25.4 million. These changes were primarily due to higher segment operating profit and a decrease in asset impairment and decommission costs, partially offset by increases in depreciation, accretion, and amortization expense and selling, general, and administrative expenses.
These changes were primarily due to higher segment operating profit and a decrease in acquisition and new business initiatives related adjustments and expenses, partially offset by increases in depreciation, accretion, and amortization expense, asset impairment and decommission costs, and selling, general, and administrative expenses.
(6) The year ended December 31, 2022 includes amounts paid related to the acquisition of a data center. Subsequent to December 31, 2022, we purchased or are under contract to purchase 31 communication sites for an aggregate consideration of $23.2 million in cash. We anticipate that these acquisitions will be consummated by the end of the second quarter of 2023.
Subsequent to December 31, 2023, we purchased or are under contract to purchase 281 communication sites for an aggregate consideration of $87.8 million in cash. We anticipate that these acquisitions will be consummated by the end of the third quarter of 2024.
Revenue Recognition and Accounts Receivable Site leasing revenues Revenue from site leasing is recognized on a straight-line basis over the current term of the related lease agreements, which are generally five years to 15 years. Receivables recorded related to the straight-lining of site leases are reflected in other assets on the Consolidated Balance Sheets.
We expect to conclude our analysis in the first quarter of 2024. Revenue Recognition and Accounts Receivable Site leasing revenues Revenue from site leasing is recognized on a straight-line basis over the current term of the related lease agreements, which are generally five years to fifteen years.
The increase was primarily due to an increase in operating profit, partially offset by an increase in cash outflows associated with working capital changes. 32 Table of Contents Investing Activities A detail of our cash capital expenditures is as follows: For the year ended December 31, 2022 2021 (in thousands) Acquisitions of towers and related intangible assets (1)(2)(3) $ (489,888) $ (274,752) Acquisition of right-of-use assets (2)(4) (602,574) (950,536) Land buyouts and other assets (5)(6) (83,630) (32,416) Construction and related costs (103,461) (61,202) Augmentation and tower upgrades (60,656) (33,103) Tower maintenance (41,568) (34,541) General corporate (8,758) (4,848) Other investing activities (3,119) (31,862) Net cash used in investing activities $ (1,393,654) $ (1,423,260) (1) During the year ended December 31, 2022, we closed on 1,445 sites from Airtel Tanzania for $176.1 million.
Investing Activities A detail of our cash capital expenditures is as follows: For the year ended December 31, 2023 2022 (in thousands) Acquisitions of towers and related intangible assets (1)(2) $ (81,614) $ (489,888) Acquisition of right-of-use assets (2) (5,072) (602,574) Land buyouts and other assets (3)(4) (43,275) (83,630) Construction and related costs (98,128) (103,461) Augmentation and tower upgrades (82,493) (60,656) Tower maintenance (50,463) (41,568) General corporate (5,614) (8,758) Other investing activities (5) (101,587) (3,119) Net cash used in investing activities $ (468,246) $ (1,393,654) (1) During the year ended December 31, 2022, we closed on 1,445 sites from Airtel Tanzania for $176.1 million.
Furthermore, because our towers are strategically positioned, we have historically experienced low tenant lease terminations as a percentage of revenue other than in connection with customer consolidation or cessations of a specific technology. During 2020, the consolidation of T-Mobile and Sprint was completed, and we began to experience non-renewal of certain leases as a result of this merger.
Furthermore, because our towers are strategically 26 Table of Contents positioned, we have historically experienced low tenant lease terminations as a percentage of revenue other than in connection with customer consolidation or cessations of a specific technology.
On a constant currency basis, Adjusted EBITDA increased $158.6 million. These changes were primarily due to an increase in segment operating profit, partially offset by an increase in cash selling, general, and administrative expenses. LIQUIDITY AND CAPITAL RESOURCES SBAC is a holding company with no business operations of its own.
On a constant currency basis, Adjusted EBITDA increased $122.4 million. These changes were primarily due to an increase in site leasing segment operating profit, partially offset by a decrease in site development segment operating profit and an increase in cash selling, general, and administrative expenses.
The following table illustrates our estimate of our debt service requirement over the next twelve months ended December 31, 2023 based on the amounts outstanding as of December 31, 2022 and the interest rates accruing on those amounts on such date (in thousands): Revolving Credit Facility $ 41,482 2018 Term Loan (1) 81,540 2014-2C Tower Securities 24,185 2019-1C Tower Securities 33,409 2020-1C Tower Securities 14,368 2020-2C Tower Securities 14,159 2021-1C Tower Securities 19,371 2021-2C Tower Securities 16,752 2021-3C Tower Securities 23,491 2022-1C Tower Securities 56,362 2020 Senior Notes 58,125 2021 Senior Notes 46,875 Total debt service for the next 12 months $ 430,119 (1) Total debt service on the 2018 Term Loan includes the impact of the interest rate swap entered into on August 4, 2020 which swapped $1.95 billion of notional value accruing interest at one month LIBOR plus 175 basis points for a fixed rate of 1.874% per annum through the maturity date of the 2018 Term Loan.
The following table illustrates our estimate of our debt service requirement for the twelve months ended December 31, 2024 based on the amounts outstanding as of December 31, 2023 and the interest rates accruing on those amounts on such date (in thousands): Revolving Credit Facility (1) $ 13,431 2018 Term Loan (2)(3) 83,978 2014-2C Tower Securities 639,078 2019-1C Tower Securities 33,409 2020-1C Tower Securities 14,368 2020-2C Tower Securities 14,159 2021-1C Tower Securities 19,371 2021-2C Tower Securities 16,752 2021-3C Tower Securities 23,491 2022-1C Tower Securities 56,362 2020 Senior Notes 58,125 2021 Senior Notes 46,875 Total debt service for the next 12 months (4) $ 1,019,399 41 Table of Contents (1) As of December 31, 2023, $180.0 million was outstanding under the Revolving Credit Facility.
Refer to Note 5 in our Consolidated Financial Statements included in this annual report for further detail of costs and estimated earnings in excess of billings on uncompleted contracts. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined to be probable.
These amounts are based on estimates, and the uncertainty inherent in the estimates initially is reduced as work on the contracts nears completion. Refer to Note 5 in our Consolidated Financial Statements included in this annual report for further detail of costs and estimated earnings in excess of billings on uncompleted contracts.
Consequently, the amount outstanding under the Revolving Credit Facility at the end of the period may not be reflective of the total amounts outstanding during such period.
Borrowings under the Revolving Credit Facility may be used for general corporate purposes. SBA Senior Finance II may, from time to time, borrow from and repay the Revolving Credit Facility. Consequently, the amount outstanding under the Revolving Credit Facility at the end of the period may not be reflective of the total amounts outstanding during such period.
We believe our site leasing business is characterized by stable and long-term recurring revenues, predictable operating costs, and minimal non-discretionary capital expenditures. Due to the relatively young age and mix of our tower portfolio, we expect future expenditures required to maintain these towers to be minimal.
Due to the relatively young age and mix of our tower portfolio, we expect future expenditures required to maintain these towers to be minimal.
Depreciation, Accretion, and Amortization Expenses: For the year ended Constant December 31, Foreign Constant Currency 2022 2021 Currency Impact Currency Change % Change (in thousands) Domestic site leasing $ 489,072 $ 514,234 $ — $ (25,162) (4.9%) International site leasing 209,563 177,059 1,810 30,694 17.3% Total site leasing $ 698,635 $ 691,293 $ 1,810 $ 5,532 0.8% Site development 2,521 2,295 — 226 9.8% Other 6,420 6,573 — (153) (2.3%) Total $ 707,576 $ 700,161 $ 1,810 $ 5,605 0.8% Domestic site leasing depreciation, accretion, and amortization expense decreased $25.2 million for the year ended December 31, 2022, as compared to the prior year.
Depreciation, Accretion, and Amortization Expenses: For the year ended Constant December 31, Foreign Constant Currency 2023 2022 Currency Impact Currency Change % Change (in thousands) Domestic site leasing $ 457,169 $ 489,072 $ — $ (31,903) (6.5%) International site leasing 248,758 209,563 1,375 37,820 18.0% Total site leasing $ 705,927 $ 698,635 $ 1,375 $ 5,917 0.8% Site development 3,704 2,521 — 1,183 46.9% Other 6,678 6,420 — 258 4.0% Total $ 716,309 $ 707,576 $ 1,375 $ 7,358 1.0% Domestic site leasing depreciation, accretion, and amortization expense decreased $31.9 million for the year ended December 31, 2023, as compared to the prior year.
Rental amounts received in advance are recorded as deferred revenue on the Consolidated Balance Sheets. Revenue from site leasing represents 89% of our total revenue for the year ended December 31, 2022. Site development revenues Site development projects in which we perform consulting services include contracts on a fixed price basis that are billed at contractual rates.
Site development revenues Site development projects in which we perform consulting services include contracts on a fixed price basis that are billed at contractual rates. Revenue is recognized over time based on milestones achieved, which are determined based on costs incurred. Amounts billed in advance (collected or uncollected) are recorded as deferred revenue on our Consolidated Balance Sheets.
Provision for Income Taxes: For the year ended Constant December 31, Foreign Constant Currency 2022 2021 Currency Impact Currency Change % Change (in thousands) Provision for income taxes $ (66,044) $ (14,940) $ (33,311) $ (17,793) 47.8% Provision for income taxes increased $51.1 million for the year ended December 31, 2022, as compared to the prior year.
Provision for Income Taxes: For the year ended Constant December 31, Foreign Constant Currency 2023 2022 Currency Impact Currency Change % Change (in thousands) Provision for income taxes $ (51,088) $ (66,044) $ (20,520) $ 35,476 (59.4%) Provision for income taxes decreased $15.0 million for the year ended December 31, 2023, as compared to the prior year.
These changes were primarily due to additional profit generated by (1) towers acquired and built since January 1, 2021 and organic site leasing growth as noted above and (2) the positive impact of our ground lease purchase program, partially offset by our increased site leasing cost of revenues largely as a result of our new site additions and expansion into new markets.
These changes were primarily due to (1) additional profit generated by towers acquired and built since January 1, 2022 and (2) organic site leasing growth as noted above.
Other Income (Expense): For the year ended Constant December 31, Foreign Constant Currency 2022 2021 Currency Impact Currency Change % Change (in thousands) Interest income $ 10,133 $ 3,448 $ 126 $ 6,559 190.2% Interest expense (353,784) (352,919) (27) (838) 0.2% Non-cash interest expense (46,109) (47,085) — 976 (2.1%) Amortization of deferred financing fees (19,835) (19,589) — (246) 1.3% Loss from extinguishment of debt, net (437) (39,502) — 39,065 (98.9%) Other income (expense), net 10,467 (74,284) 84,088 663 (9.6%) Total $ (399,565) $ (529,931) $ 84,187 $ 46,179 (10.0%) Interest income increased $6.7 million for the year ended December 31, 2022, as compared to the prior year.
Other Income (Expense): For the year ended Constant December 31, Foreign Constant Currency 2023 2022 Currency Impact Currency Change % Change (in thousands) Interest income $ 18,305 $ 10,133 $ 66 $ 8,106 80.0% Interest expense (400,373) (353,784) 116 (46,705) 13.2% Non-cash interest expense (35,868) (46,109) 1 10,240 (22.2%) Amortization of deferred financing fees (20,273) (19,835) — (438) 2.2% Loss from extinguishment of debt, net — (437) — 437 (100.0%) Other income, net 63,053 10,467 60,190 (7,604) 125.3% Total $ (375,156) $ (399,565) $ 60,373 $ (35,964) 8.6% Interest income increased $8.2 million for the year ended December 31, 2023, as compared to the prior year.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe most important factors that could prevent us from achieving our goals, and cause the assumptions underlying forward-looking statements and the actual results to differ materially from those expressed in or implied by those forward-looking statements include, but are not limited to, the following: • the impact of consolidation among wireless service providers, including the impact of T-Mobile and Sprint; • the ability of DISH Wireless to become and compete as a nationwide carrier; • our ability to continue to comply with covenants and the terms of our credit instruments and our ability to obtain additional financing to fund our capital expenditures; • our ability to successfully manage the risks associated with international operations, including risks relating to political or economic conditions, inflation, tax laws, currency restrictions and exchange rate fluctuations, legal or judicial systems, and land ownership; • our ability to successfully manage the risks associated with our acquisition initiatives, including our ability to satisfactorily complete due diligence on acquired towers, the amount and quality of due diligence that we are able to complete prior to closing of any acquisition, our ability to accurately anticipate the future performance of the acquired towers, our ability to receive required regulatory approval, the ability and willingness of each party to fulfill their respective closing conditions and their contractual obligations, and, once acquired, our ability to effectively integrate acquired towers into our business and to achieve the financial results projected in our valuation models for the acquired towers; • the health of the South African and Tanzanian economies and wireless communications market, and the willingness of carriers to invest in their networks in that market; • developments in the wireless communications industry in general, and for wireless communications infrastructure providers in particular, that may slow growth or affect the willingness or ability of the wireless service providers to expend capital to fund network expansion or enhancements; • our ability to secure as many site leasing tenants as anticipated, recognize our expected economies of scale with respect to new tenants on our towers, and retain current leases on towers; • our ability to secure and deliver anticipated services business at contemplated margins; • our ability to build new towers, including our ability to identify and acquire land that would be attractive for our customers and to successfully and timely address zoning, permitting, weather, availability of labor and supplies and other issues that arise in connection with the building of new towers; • competition for the acquisition of towers and other factors that may adversely affect our ability to purchase towers that meet our investment criteria and are available at prices which we believe will be accretive to our shareholders and allow us to maintain our long-term target leverage ratios while achieving our expected portfolio growth levels; • our capital allocation decisions and the impact on our ability to achieve our expected tower portfolio growth levels; • our ability to protect our rights to the land under our towers, and our ability to acquire land underneath our towers on terms that are accretive; • our ability to sufficiently increase our revenues and maintain expenses and cash capital expenditures at appropriate levels to permit us to meet our anticipated uses of liquidity for operations, debt service and estimated portfolio growth; • the impact of rising interest rates on our results of operations and our ability to refinance our existing indebtedness at commercially reasonable rates or at all; • our ability to successfully estimate the impact of regulatory and litigation matters; • natural disasters and other unforeseen damage for which our insurance may not provide adequate coverage; • a decrease in demand for our towers; • the introduction of new technologies or changes in a tenant’s business model that may make our tower leasing business less desirable to existing or potential tenants; • our ability to qualify for treatment as a REIT for U.S. federal income tax purposes and to comply with and conduct our business in accordance with such rules; • our ability to utilize available NOLs to reduce REIT taxable income; and • our ability to successfully estimate the impact of certain accounting and tax matters, including the effect on our company of adopting certain accounting pronouncements and the availability of sufficient NOLs to offset future REIT taxable income. 42 Table of Contents ITEM 8.
Biggest changeThe most important factors that could prevent us from achieving our goals, and cause the assumptions underlying forward-looking statements and the actual results to differ materially from those expressed in or implied by those forward-looking statements include, but are not limited to, the following: • developments in, and macroeconomic influences on, the wireless communications industry in general, and for wireless communications infrastructure providers in particular, that may slow growth or affect our customers’ access to sufficient capital, or ability to expend capital to fund network expansion or enhancements; • the impact of consolidation among wireless service providers, including the impact of T-Mobile and Sprint; • the ability of DISH Wireless to become and compete as a nationwide carrier; • the impact of rising interest rates on our results of operations and our ability to refinance our existing indebtedness at commercially reasonable rates or at all; • our ability to continue to comply with covenants and the terms of our credit instruments and our ability to obtain additional financing to fund our capital expenditures; • our ability to successfully manage the risks associated with international operations, including risks relating to political or economic conditions, inflation, tax laws, currency restrictions and exchange rate fluctuations, legal or judicial systems, and land ownership; • our ability to successfully manage the risks associated with our acquisition initiatives, including our ability to satisfactorily complete due diligence on acquired towers, the amount and quality of due diligence that we are able to complete prior to closing of any acquisition, our ability to accurately anticipate the future performance of the acquired towers, our ability to 44 Table of Contents receive required regulatory approval, the ability and willingness of each party to fulfill their respective closing conditions and their contractual obligations, and, once acquired, our ability to effectively integrate acquired towers into our business and to achieve the financial results projected in our valuation models for the acquired towers; • the health of the economies and wireless communications markets of the international jurisdictions we operate in, and the willingness of carriers to invest in their networks in such markets; • our ability to secure as many site leasing tenants as anticipated, recognize our expected economies of scale with respect to new tenants on our towers, and retain current leases on towers; • our ability to secure and deliver anticipated services business at contemplated margins; • our ability to build new towers, including our ability to identify and acquire land that would be attractive for our customers and to successfully and timely address zoning, permitting, weather, availability of labor and supplies and other issues that arise in connection with the building of new towers; • competition for the acquisition of towers and other factors that may adversely affect our ability to purchase towers that meet our investment criteria and are available at prices which we believe will be accretive to our shareholders and allow us to maintain our long-term target leverage ratios while achieving our expected portfolio growth levels; • our capital allocation decisions and the impact on our ability to achieve our expected tower portfolio growth levels; • our ability to protect our rights to the land under our towers, and our ability to acquire land underneath our towers on terms that are accretive; • our ability to sufficiently increase our revenues and maintain expenses and cash capital expenditures at appropriate levels to permit us to meet our anticipated uses of liquidity for operations, debt service and estimated portfolio growth; • our ability to successfully estimate the impact of regulatory and litigation matters; • natural disasters and other unforeseen damage for which our insurance may not provide adequate coverage; • a decrease in demand for our towers; • the introduction of new technologies or changes in a tenant’s business model that may make our tower leasing business less desirable to existing or potential tenants; • our ability to qualify for treatment as a REIT for U.S. federal income tax purposes and to comply with and conduct our business in accordance with such rules; • our ability to utilize available NOLs to reduce REIT taxable income; • our ability to successfully estimate the impact of certain accounting and tax matters, including the effect on our company of adopting certain accounting pronouncements and the availability of sufficient NOLs to offset future REIT taxable income ; and • other risks, including those described in Item 1A. – Risk Factors in this annual report and those described from time to time in our other filings with the SEC .
Our current primary market risk exposure is (1) interest rate risk relating to our ability to refinance our debt at commercially reasonable rates, if at all, and (2) interest rate risk relating to the impact of interest rate movements on the variable portion of our 2018 Term Loan and any borrowings that we may incur under our Revolving Credit Facility, which are at floating rates.
Our current primary market risk exposure is (1) interest rate risk relating to our ability to refinance our debt at commercially reasonable rates, if at all, and (2) interest rate risk relating to the impact of interest rate movements on the variable portion of our 2018 Term Loan, 2024 Term Loan, and any borrowings that we may incur under our Revolving Credit Facility, which are at floating rates.
Special Note Regarding Forward-Looking Statements This annual report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements concern expectations, beliefs, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts.
Special Note Regarding Forward-Looking Statements This annual report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. These statements concern expectations, beliefs, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts.
We are exposed to market risk from changes in foreign currency exchange rates in connection with our operations in Brazil, Canada, Chile, Peru, Argentina, Colombia, Costa Rica, South Africa, the Philippines, Tanzania, and to a lesser extent, our markets in Central America.
We are exposed to market risk from changes in foreign currency exchange rates in connection with our operations in Brazil, Canada, Chile, Peru, Colombia, Costa Rica, South Africa, the Philippines, Tanzania, and to a lesser extent, our markets in Central America.
In addition, in Brazil, Canada, Chile, South Africa, and the Philippines, we receive significantly all of our revenue and pay significantly all of our operating expenses in local currency. In Argentina, Colombia, Costa Rica, Peru, and Tanzania, we receive our revenue and pay our operating expenses in a mix of local currency and U.S. dollars.
In addition, in Brazil, Canada, Chile, South Africa, and the Philippines, we receive significantly all of our revenue and pay significantly all of our operating expenses in local currency. In Colombia, Costa Rica, Peru, and Tanzania, we receive our revenue and pay our operating expenses in a mix of local currency and U.S. dollars.
A change of 10% in the underlying exchange rates of our unsettled intercompany debt at December 31, 2022 would have resulted in approximately $143.7 million of unrealized gains or losses that would have been included in Other income (expense), net in our Consolidated Statements of Operations for the year ended December 31, 2022.
A change of 10% in the underlying exchange rates of our unsettled intercompany debt at December 31, 2023 would have resulted in approximately $119.7 million of unrealized gains or losses that would have been included in Other income (expense), net in our Consolidated Statements of Operations for the year ended December 31, 2023.
Specifically, this annual report contains forward-looking statements regarding: • our expectations on the future growth and financial health of the wireless industry and the industry participants, the drivers of such growth, the demand for our towers, the future capital investments of our customers (including with respect to the roll-out of 5G), future spectrum auctions, the trends developing in our industry, and competitive factors; • our ability to capture and capitalize on industry growth and the impact of such growth on our financial and operational results; • our expectations regarding consolidation of wireless service providers and the impact of such consolidation on our financial and operational results; • our intent to grow our tower portfolio domestically and internationally and expand through acquisitions, new builds and organic lease up on existing towers; • our belief that over the long-term, site leasing revenues will continue to grow as wireless service providers increase their use of our towers due to increasing minutes of network use and data transfer, network expansion and network coverage requirements; • our expectation regarding site leasing revenue growth, on an organic basis, in our domestic and international segments, and the drivers of such growth; • our focus on our site leasing business and belief that our site leasing business is characterized by stable and long-term recurring revenues, reduced exposure to changes in customer spending, predictable operating costs, and minimal non-discretionary capital expenditures; • our expectation that, due to the relatively young age and mix of our tower portfolio, future expenditures required to maintain these towers will be minimal; • our expectation that we will grow our cash flows by adding tenants to our towers at minimal incremental costs and executing monetary amendments; • our expectations regarding churn rates, including with respect to legacy Sprint leases and Oi leases; • our belief that DISH Wireless will become a nationwide carrier, and its expectations regarding the capital expenditures necessary to deploy its network; • our expectations regarding the timing for closing of pending acquisitions; • our election to be subject to tax as a REIT and our intent to continue to operate as a REIT; • our belief that our business is currently operated in a manner that complies with the REIT rules and our intent to continue to do so; • our plans regarding our distribution policy, and the amount and timing of, and source of funds for, any such distributions; • our expectations regarding the use of NOLs to reduce REIT taxable income; • our expectations regarding our capital allocation strategy, including future allocation decisions among portfolio growth, stock repurchases, and dividends, the impact of our election to be taxed as a REIT on that strategy, and our goal of increasing our Adjusted Funds From Operations per share; • our expectations regarding dividends and our ability to grow our dividend in the future and the drivers of such growth; • our expectations regarding our future cash capital expenditures, both discretionary and non-discretionary, including expenditures required for new builds and to maintain, improve, and modify our towers, ground lease purchases, and general corporate expenditures, and the source of funds for these expenditures; • our expectations regarding the timing for closing of refinancing transactions; • our expectations regarding our business strategies, including our strategy for securing rights to the land underlying our towers, and the impact of such strategies on our financial and operational results; 41 Table of Contents • our intended use of our liquidity; • our intent to maintain our target leverage levels, including in light of our dividend; • our expectations regarding our debt service in 2023 and our belief that our cash on hand, capacity under our Revolving Credit Facility, and our cash flows from operations for the next twelve months will be sufficient to service our outstanding debt during the next twelve months; and • our expectations and estimates regarding certain tax and accounting matters, including the impact on our financial statements.
Specifically, this annual report contains forward-looking statements regarding: • our expectations on the future growth and financial health of the wireless industry and the industry participants, the drivers of such growth, the demand for our towers, the future capital investments of our customers (including with respect to the roll-out of 5G), future spectrum auctions, the trends developing in our industry, and competitive factors; • our ability to capture and capitalize on industry growth and the impact of such growth on our financial and operational results; • our expectations regarding DISH Wireless; • our expectations regarding the consolidation of wireless service providers and the impact of such consolidation on our financial and operational results; 43 Table of Contents • our intent to grow our tower portfolio domestically and internationally and expand through acquisitions, new builds and organic lease up on existing towers; • our belief that over the long-term, site leasing revenues will continue to grow as wireless service providers increase their use of our towers due to increasing minutes of network use and data transfer, network expansion and network coverage requirements; • our expectation regarding site leasing revenue growth, on an organic basis, in our domestic and international segments, and the drivers of such growth; • our focus on our site leasing business and belief that our site leasing business is characterized by stable and long-term recurring revenues, reduced exposure to changes in customer spending, predictable operating costs, and minimal non-discretionary capital expenditures; • our expectation that, due to the relatively young age and mix of our tower portfolio, future expenditures required to maintain these towers will be minimal; • our expectation regarding the scalability of our operations and growth of our cash flows by adding tenants to our towers at minimal incremental costs and executing monetary amendments; • our expectations regarding churn rates, including with respect to legacy Sprint leases and Oi leases; • our expectations regarding the timing for closing of pending acquisitions; • our election to be subject to tax as a REIT and our intent to continue to operate as a REIT; • our beliefs regarding compliance with applicable laws and regulations, including environmental laws, and the impact of various legal proceedings; • our plans regarding our distribution policy, and the amount and timing of, and source of funds for, any such distributions; • our expectations regarding the use of NOLs to reduce REIT taxable income; • our expectations regarding our capital allocation strategies, including future allocation decisions among portfolio growth, stock repurchases, and dividends, the impact of our election to be taxed as a REIT on that strategy, and our goal of increasing our Adjusted Funds From Operations per share; • our expectations regarding dividends and our ability to grow our dividend in the future and the drivers of such growth; • our expectations regarding our future cash capital expenditures, both discretionary and non-discretionary, including expenditures required for new builds and to maintain, improve, and modify our towers, ground lease purchases, and general corporate expenditures, and the source of funds for these expenditures; • our expectations regarding our business strategies, including our strategy for securing rights to the land underlying our towers, and the impact of such strategies on our financial and operational results; • our intended use of our liquidity; • our intent to maintain our target leverage levels, including in light of our dividend; • our expectations regarding our debt service in 2024 and our belief that our cash on hand, capacity under our Revolving Credit Facility, and our cash flows from operations for the next twelve months will be sufficient to service our outstanding debt during the next twelve months; and • our expectations and estimates regarding certain tax and accounting matters, including the impact on our financial statements.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Financial statements and supplementary data are on pages F-1 through F-40. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Financial statements and supplementary data are on pages F-1 through F-43. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
(2) Represents interest payments based on the 2014-2C Tower Securities interest rate of 3.869%, the 2019-1C Tower Securities interest rate of 2.836%, the 2020-1C Tower Securities interest rate of 1.884%, the 2020-2C Tower Securities interest rate of 2.328%, the 2021-1C Tower Securities interest rate of 1.631%, the 2021-2C Tower Securities interest rate of 1.840%, the 2021-3C Tower Securities interest rate of 2.593%, the 2022-1C Tower Securities interest rate of 6.599%, the 2018 Term Loan at an average interest rate of 2.510% (which includes the impact of interest rate swaps) as of December 31, 2022, the Revolving Credit Facility at an average interest rate of 5.610% as of December 31, 2022, the 2020 Senior Notes interest rate of 3.875%, and the 2021 Senior Notes interest rate of 3.125%.
(3) Represents interest payments based on the 2014-2C Tower Securities interest rate of 3.869%, the 2019-1C Tower Securities interest rate of 2.836%, the 2020-1C Tower Securities interest rate of 1.884%, the 2020-2C Tower Securities interest rate of 2.328%, the 2021-1C Tower Securities interest rate of 1.631%, the 2021-2C Tower Securities interest rate of 1.840%, the 2021-3C Tower Securities interest rate of 2.593%, the 2022-1C Tower Securities interest rate of 6.599%, the 2018 Term Loan at an average interest rate of 2.645% (which includes the impact of interest rate swaps) as of December 31, 2023, the 42 Table of Contents Revolving Credit Facility at an average interest rate of 6.435% as of December 31, 2023, the 2020 Senior Notes interest rate of 3.875%, and the 2021 Senior Notes interest rate of 3.125%.
These forward-looking statements reflect our current views about future events and are subject to risks, uncertainties and assumptions. We wish to caution readers that certain important factors may have affected and could in the future affect our actual results and could cause actual results to differ significantly from those expressed in any forward-looking statement.
We wish to caution readers that certain important factors may have affected and could in the future affect our actual results and could cause actual results to differ significantly from those expressed in any forward-looking statement.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to certain market risks that are inherent in our financial instruments.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to certain market risks that are inherent in our financial instruments. These instruments arise from transactions entered into in the normal course of business.
While we cannot predict our ability to refinance existing debt or the impact interest rate movements will have on our existing debt, we continue to evaluate our financial position on an ongoing basis.
While we cannot predict our ability to refinance existing debt or the impact interest rate movements will have on our existing debt, we continue to evaluate our financial position on an ongoing basis. We have performed a sensitivity analysis assuming a hypothetical 1% increase in our variable interest rates as of December 31, 2023.
On August 4, 2020, we, through our wholly owned subsidiary, SBA Senior Finance II, entered into an interest rate swap for $1.95 billion of notional value accruing interest at one month LIBOR plus 175 basis points for a fixed rate of 1.874% per annum through the maturity date of the 2018 Term Loan.
On August 4, 2020, and amended June 21, 2023, we, through our wholly owned subsidiary, SBA Senior Finance II, entered into an interest rate swap which swapped $1.95 billion of notional value accruing interest at (i) one month LIBOR plus 175 basis points for an all-in fixed rate of 1.874% per annum through July 31, 2023, (ii) one month Term SOFR plus 185 basis points (inclusive of a CSA of 0.10%) for an all-in fixed rate of 1.900% per annum from August 1, 2023 through January 25, 2024, and (iii) one month Term SOFR plus 200 basis points for an all-in fixed rate of 2.050% per annum from January 25, 2024 through March 31, 2025.
For the year ended December 31, 2022, approximately 17.2% of our revenues and approximately 22.2% of our total operating expenses were denominated in foreign currencies. 40 Table of Contents We have performed a sensitivity analysis assuming a hypothetical 10% adverse movement in the Brazilian Real from the quoted foreign currency exchange rates at December 31, 2022.
We have performed a sensitivity analysis assuming a hypothetical 10% adverse movement in the Brazilian Real from the quoted foreign currency exchange rates at December 31, 2023. The analysis indicated that such an adverse movement would have caused our revenues and operating income to decline by approximately 1.3% and 0.9%, respectively, for the year ended December 31, 2023.
These instruments arise from transactions entered into in the normal course of business. ‎ 39 Table of Contents The following table presents the future principal payment obligations, fair values, and interest payments associated with our long-term debt instruments assuming our actual level of long-term indebtedness as of December 31, 2022: 2023 2024 2025 2026 2027 Thereafter Total Fair Value (in thousands) Revolving Credit Facility $ — $ — $ — $ 720,000 $ — $ — $ 720,000 $ 720,000 2018 Term Loan 24,000 24,000 2,244,000 — — — 2,292,000 2,280,540 2014-2C Tower Securities (1) — 620,000 — — — — 620,000 598,480 2019-1C Tower Securities (1) — — 1,165,000 — — — 1,165,000 1,095,776 2020-1C Tower Securities (1) — — — 750,000 — — 750,000 665,633 2020-2C Tower Securities (1) — — — — — 600,000 600,000 506,574 2021-1C Tower Securities (1) — — — 1,165,000 — — 1,165,000 991,705 2021-2C Tower Securities (1) — — — — 895,000 — 895,000 756,302 2021-3C Tower Securities (1) — — — — — 895,000 895,000 686,134 2022-1C Tower Securities (1) — — — — — 850,000 850,000 855,899 2020 Senior Notes — — — — 1,500,000 — 1,500,000 1,375,815 2021 Senior Notes — — — — — 1,500,000 1,500,000 1,286,250 Total debt obligation $ 24,000 $ 644,000 $ 3,409,000 $ 2,635,000 $ 2,395,000 $ 3,845,000 $ 12,952,000 $ 11,819,108 Interest payments (2) $ 406,119 $ 401,012 $ 308,241 $ 254,785 $ 152,759 $ 141,709 $ 1,664,625 (1) For information on the anticipated repayment date and final maturity date for each tower security, refer to Debt Instruments and Debt Service Requirements above.
The following table presents the future principal payment obligations, fair values, and interest payments associated with our long-term debt instruments assuming our actual level of long-term indebtedness as of December 31, 2023: 2024 2025 2026 2027 2028 Thereafter Total Fair Value (in thousands) Revolving Credit Facility (1) $ — $ — $ 180,000 $ — $ — $ — $ 180,000 $ 180,000 2018 Term Loan (1) 24,000 2,244,000 — — — — 2,268,000 2,273,670 2014-2C Tower Securities (2) 620,000 — — — — — 620,000 606,540 2019-1C Tower Securities (2) — 1,165,000 — — — — 1,165,000 1,115,313 2020-1C Tower Securities (2) — — 750,000 — — — 750,000 682,350 2020-2C Tower Securities (2) — — — — 600,000 — 600,000 520,530 2021-1C Tower Securities (2) — — 1,165,000 — — — 1,165,000 1,015,437 2021-2C Tower Securities (2) — — — 895,000 — — 895,000 772,125 2021-3C Tower Securities (2) — — — — — 895,000 895,000 686,581 2022-1C Tower Securities (2) — — — — 850,000 — 850,000 850,221 2020 Senior Notes — — — 1,500,000 — — 1,500,000 1,438,815 2021 Senior Notes — — — — — 1,500,000 1,500,000 1,338,750 Total debt obligation $ 644,000 $ 3,409,000 $ 2,095,000 $ 2,395,000 $ 1,450,000 $ 2,395,000 $ 12,388,000 $ 11,480,332 Interest payments (3) $ 375,399 $ 280,875 $ 240,136 $ 152,759 $ 72,599 $ 69,105 $ 1,190,873 (1) On January 25, 2024, we repaid our 2018 Term Loan and issued a new $2.3 billion Term Loan with a maturity date of January 25, 2031 and extended the maturity date of the Revolving Credit Facility to January 25, 2029.
The cumulative translation effect is included in equity as a component of Accumulated other comprehensive income (loss).
The cumulative translation effect is included in equity as a component of Accumulated other comprehensive income (loss). For the year ended December 31, 2023, approximately 21.7% of our revenues and approximately 26.9% of our total operating expenses were denominated in foreign currencies.
The analysis indicated that such an adverse movement would have caused our revenues and operating income to decline by approximately 1.0% and 0.6%, respectively, for the year ended December 31, 2022. As of December 31, 2022, we had intercompany debt, which is denominated in a currency other than the functional currency of the subsidiary in which it is recorded.
As of December 31, 2023, we had intercompany debt, which is denominated in a currency other than the functional currency of the subsidiary in which it is recorded.
Removed
The IBA ceased the publication of USD LIBOR for the 1 week and 2 month tenors on December 31, 2021 and will cease all other tenors on June 30, 2023. The discontinuation of LIBOR after 2021 and the replacement with an alternative reference rate may adversely impact interest rates and our interest expense could increase.
Added
(2) For information on the anticipated repayment date and final maturity date for each tower security, refer to Debt Instruments and Debt Service Requirements above.
Removed
On July 7, 2021, we amended our Revolving Credit Facility to provide mechanics relating to a transition away from LIBOR as a benchmark interest rate and the replacement of LIBOR by an alternative benchmark rate.
Added
On November 3, 2023, we entered into a forward-starting interest rate swap agreement which will swap $1.0 billion of notional value accruing interest at one month Term SOFR plus 200 basis points for an all-in fixed rate of 5.830% per annum. The swap has an effective start date of March 31, 2025 and a maturity date of April 11, 2028.
Removed
However, we have not yet amended our credit facilities for our 2018 Term Loan or the associated swap agreement to transition to an alternative benchmark rate and will need to do so before June 30, 2023.
Added
As of December 31, 2023, the analysis indicated that such an adverse movement would have caused our interest expense to increase by approximately 4.8% for the year ended December 31, 2023.
Added
These forward-looking statements reflect our current views about future events and are subject to risks, uncertainties and assumptions. We undertake no obligation to update forward-looking statements to reflect events or circumstances after the date hereof, unless otherwise required by law.

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