SBA Communications Corp SBAC
Q4 2012 Earnings Call Transcript

Transcript Call Date 02/22/2013

Operator: Ladies and gentlemen, thank you for standing by, and welcome to the SBA Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Instructions will be given at that time. As a reminder, your conference is being recorded.

I'd now like to turn the conference over to your host, Mr. Mark DeRussy, Director of Finance. Please go ahead.

Mark DeRussy - Director, Finance: Good morning, everyone, and thank you for joining us for SBA's fourth quarter 2012 earnings conference call. Here with me today are Jeff Stoops, our President and Chief Executive Officer and Brendan Cavanagh, 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 2013 and beyond. These forward-looking statements may be affected by the risks and uncertainties in our business. Everything we say here today is qualified in its entirety by cautionary statements and risk factors set forth in last night's press release and our SEC filings, which documents are publicly available. These factors and others have affected historical results, may affect future results and may cause future results to differ materially from those expressed in any forward-looking statements we may make. Our statements are as of today, February 22, 2013, and we have no obligation to update any forward-looking statement we may make.

Our comments will include non-GAAP financial measures as defined in Regulation G. The reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures and other information required by Regulation G has been posted to our website,

With that, I'll turn the call over to Brendan to comment on our fourth quarter results.

Brendan T. Cavanagh - SVP and CFO: Thank you, Mark. Good morning. As you saw from our press release last night, our fourth quarter financial and operational results were excellent. We exceeded the high-end of our guidance for leasing revenue, services revenue, tower cash flow, adjusted EBITDA and AFFO.

Total revenues were $293.8 million, up 59.9% over the year earlier period. Site leasing revenues for the fourth quarter were $260.8 million or a 57.9% increase over the fourth quarter of 2011. Our leasing revenue growth was driven by organic growth and portfolio growth, including the impact of the Mobilitie and TowerCo acquisitions which closed during the second and fourth quarters respectively of 2012.

The vast majority of our site leasing revenue continues to come from the U.S. and its territories, with approximately 5.3% of total leasing revenue in the quarter coming from international operations. Site leasing segment operating profit was $198.6 million or an increase of 51.3% over the fourth quarter of 2011. Site leasing contributed 97.2% of our total segment operating profit.

Tower cash flow for the fourth quarter of 2012 was $187 million or a 46.7% increase over the year earlier period. Tower cash flow margin was 77.7% compared to 80.5% in the year earlier period. As expected, margins were slightly impacted by the addition of the less mature Mobilitie and TowerCo portfolios. With respect to the domestic Mobilitie towers, we calculate tower cash flow margins, by recording expenses as ours and grossing of revenue by the same amount in order to reflect the triple net reimbursement of these expenses by our tenants.

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