SBA Communications Corporation

Ladies and gentlemen, thank you for standing by, and welcome to the SBA second quarter results call. At this time, all participants are in listen-only mode, and later you will have an opportunity to ask questions. Instructions will be given at that time. If you should require assistance during the call, you may press star and then zero. As a reminder, this conference is being recorded, and I would now like to turn the conference over to our host, Mark DeRuffi, Vice President of Finance. Please go ahead.

Thanks, Caroline.

Good evening, everyone, and thank you for joining us for SBA's second quarter 2021 earnings conference call. Here with me today are Jeff Stoops, our president and chief executive officer, and Brendan Cavanaugh, our chief financial officer. Some of the information we will discuss in this call is forward-looking, including but not limited to any guidance for 2021 and beyond. In today's press release and in our SEC filings, we detail material risks that may cause our future results to differ from our expectations. Our statements are as of today, August 2nd, and we have no obligation to update any forward-looking statements we may make. In addition, our comments will include non-GAAP financial measures and other key operating metrics. The reconciliation of and other information regarding these items can be found in our supplemental financial data package, which is located on the landing page of our VISTA Relations website. And with that, I will now turn the call over to Brent. Brent O' Thanks, Mark. Good evening. SBA had a tremendous quarter with results for the second quarter ahead of our expectations in most key areas. Total GAAP site leasing revenues for the second quarter were $524.1 million, and CAF site leasing revenues were $514.6 million. Foreign exchange rates were ahead of our previously forecasted FX rate estimates for the quarter, contributing $3.1 million of incremental site leasing revenue in the second quarter. They were also a tailwind on comparisons to the second quarter of 2020, positively impacting revenues by $3.5 million on a year-over-year basis. Same-tower recurring cash leasing revenue growth for the second quarter, which is calculated on a constant currency basis, was 3.4% over the second quarter of 2020, including the impact of 2.5 percent of churn. On a gross basis, same-tower growth was 5.9 percent. Domestic same-tower recurring cash leasing revenue growth over the second quarter of last year was 5.5 percent on a gross basis and 3 percent on a net basis, including 2.5 percent of churn. Domestic operational leasing activity, or bookings, representing new revenue placed under contract during the second quarter, was up significantly from the prior quarter and represented the highest quarterly level since 2014. Even with this high level of executions, our domestic new lease and new amendment application backlog finished the quarter at a multi-year high. These backlogs support our expectations for continued strong domestic operational leasing activity throughout the balance of this year. During the second quarter, amendment activity represented 34% of our domestic bookings, with 66% coming from new leases, the first time in many years that bookings from new leases outpaced that from amendments. The big four carriers of AT&T, T-Mobile, Verizon, and DISH represented 97% of total incremental domestic leasing revenue signed up during the quarter. Internationally, on a constant currency basis, Same-tower cash leasing revenue growth was 5.3% net, including 2.2% of churn or 7.5% on a gross basis. International leasing activity increased modestly from the first quarter. In Brazil, our largest international market, we had an improved quarter of leasing activity. Gross same-tower organic growth in Brazil was 8.9% on a constant currency basis. During the second quarter, 84.8% of consolidated cash site leasing revenue was denominated in U.S. dollars. The majority of non-U.S. dollar denominated revenue was from Brazil, with Brazil representing 11.5% of consolidated cash site leasing revenues during the quarter and 8.4% of cash site leasing revenue excluding revenues from pass-through expenses. Tower cash flow for the second quarter was $421.2 million. Our tower cash flow margins continue to be very strong with a second quarter domestic tower cash flow margin of 84.7% and an international tower cash flow margin of 70.8% or 91% excluding the impact of pass-through reimbursable expenses. Adjusted EBITDA in the second quarter was $400.2 million. the adjusted EBITDA margin was 70.7% in the quarter. Excluding the impact of revenues from pass-through expenses, adjusted EBITDA margin was 75%. Approximately 98% of our total adjusted EBITDA was attributable to our tower leasing business in the second quarter. During the second quarter, our services business produced record results for the company. With $51.4 million in revenue, and over $11 million of segment operating profit. The very high activity levels we saw in the first quarter strengthened further in the second quarter, resulting in a quarter end services backlog that was 30% above first quarter levels and was also the highest in our company's history. We expect to see continued high levels of services activity throughout the rest of the year, and as a result, have increased our full year outlook for site development revenue by $25 million from last quarter and by $40 million from our initial outlook. AFFO in the second quarter was $293.5 million. AFFO per share was $2.64, an increase of 15.3 percent over the second quarter of 2020. During the second quarter, we continued to expand our portfolio, acquiring 57 communication sites for total cash consideration of $67 million. We also built 98 new sites in the quarter. Subsequent to quarter end, we have purchased or agreed to purchase approximately 400 additional sites in our existing markets for an aggregate price of $95 million. And we anticipate closing on the majority of the sites under contract by the end of the year. In addition, during the second quarter, we announced that through a new joint venture arrangement, we have entered into a contract with Airtel Tanzania, a subsidiary of Airtel Africa, to purchase their approximately 1,400 towers in Tanzania. Under this agreement, Airtel will lease back space on each of the towers and will also provide a fixed minimum number of build-to-suit towers during the first five years following the closing of the acquisition. The total purchase price for the acquisition is expected to be approximately $175 million and the acquisition is anticipated to close in stages starting in the fourth quarter. For our updated 2021 outlook, we have assumed that the acquisition closes at the end of the year, and thus we have included the entire purchase price in our outlook for discretionary capital expenditures, but we have included no revenue or tower cash flow associated with these events. We expect the assets to produce approximately $18 million of adjusted EBITDA during the first full year of operations, under the joint venture. SBA will be the majority partner of the joint venture, and we are partnering with Paradigm Infrastructure Limited, a UK company founded by former senior executives of American Tower, which is focused on developing, owning, and operating shared passive wireless infrastructure in selected growth markets. We believe the combined international tower industry operating experience of SBA and Paradigm will allow us to maximize the opportunity in this new, rapidly growing market. In addition to new tower assets, we also continue to invest in the land under our sites. During the quarter, we spent an aggregate of $11.8 million to buy land and easements and to extend ground lease terms. At the end of the quarter, we owned or controlled for more than 20 years the land underneath approximately 71% of our towers. And the average remaining life under our ground leases, including renewal options under our control, is approximately 37 years. In this afternoon's earnings press release, we included our updated outlook for full year 2021. Our update increased expectations for site leasing revenue, site development revenue, adjusted EBITDA, AFFO, and AFFO per share. These increases are driven by outperformance across our business, increased network investment activities by our customers, improved foreign exchange rates, reduced non-discretionary cash capital expenditures, and reduced cash interest expense as a result of timely refinancings. Notwithstanding our strong domestic leasing bookings during the second quarter, which were ahead of our expectations, we have not increased our 2021 outlook for incremental organic domestic leasing revenue. New bookings typically begin to accrue revenue at the earlier of a date certain or commencement of construction. For outlook purposes, unless we have received notice of construction commencements, we only consider the date certain, which for the second quarter booking doubt performance generally ranges from late in the fourth quarter to sometime in the first half of 2022. As we mentioned last quarter, we anticipate our reported gross domestic same-tower revenue growth will begin to increase in the second half of the year and that we will exit 2021 at the highest rate of the year. As is always the case, our full-year 2021 outlook does not assume any further acquisitions beyond those under contract today. And the outlook also does not assume any share repurchases other than those completed as of today. However, when opportunities present, we are likely to invest in additional assets or share repurchases or both during the rest of the year. Our outlook for net cash interest expense does not contemplate any further financing activity in 2021. Finally, our outlook for AFFO per share is based on an assumed weighted average number of diluted common shares of $111.5 million, which assumption is influenced in part by estimated future share prices. With that, I will now turn things over to Mark, who will provide an update on our liquidity position and balance sheet. Thanks, Brendan.