Slide 1: SBA Communications Corporation October 2004
SBA Communications Corporation October 2004
Slide 2: Introduction
Introduction Jeff Stoops President & Chief Executive Officer and Tony Macaione Chief Financial Officer
Slide 3: SEC Safe Harbor Disclosure
SEC Safe Harbor Disclosure Statements made in the course of this presentation that state the Company's or management's intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. It is important to note that the Company’s actual results could differ material
Slide 4: SBA Today
SBA Today = 3,045 towers (1) = Proven business plan, execution capabilities and experience = Focus — organic growth, leverage reduction, increased cash flows = High quality assets with ample remaining capacity = 70% tower cash flow margins; 17+% tower cash flow growth = 2004 tower cash flow guidance
Slide 5: SBA Tower Portfolio
SBA Tower Portfolio ‘
Slide 6: Tower Industry Fundamentals
Tower Industry Fundamentals Industry Dynamics Remain Strong Mission critical to wireless carrier industry Strong recurring cash flow from multi-year lease contracts High margins and significant projected free cash flow Substantial barriers to entry Exclusive assets provide pricing power Low maintena
Slide 7: Asset Quality – Key Strength
Asset Quality – Key Strength 60% of portfolio built by SBA All towers built or bought with multi-tenant focus Average capacity – 4+ tenants Current use – 2.3 tenants per tower Maintenance capex – approximately $1,000 per tower per year Average remaining ground lease term (with renewal options) – 32
Slide 8: The Shift to Leasing
The Shift to Leasing Leasing Revenues Growing in Size and as a Percentage of Total Revenues $ in millions $160 $140 $120 $100 $80 $60 $40 $20 $0 28% $44 38% $85 48% $115 60% $128 65% $142 70% 60% 50% 40% 30% 20% 10% (1) 2000 2001 2002 2003 2004E Leasing Revenue Leasing Revenue as a % of Total Revenu
Slide 9: Per Tower Revenue Growth
Per Tower Revenue Growth $ in thousands $50,000 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 CAGR = 10% $46,573 $44,751 $43,465 $41,972 $42,526 $41,009 $39,331 $39,979 3Q 2002 4Q 2002 1Q 2003 2Q 2003 3Q 2003 4Q 2003 1Q 2004 Q2 2004 Leasing Revenue Per Tower
Slide 10: Consistent Tower Cash Flow Growth
Consistent Tower Cash Flow Growth Increasing Leasing Revenues and Controlled Leasing Expenses Lead to TCF Growth $ in millions $40 $35 $30 $25 $20 $15 $10 $5 $0 $35.5 $34.0 $32.2 $32.9 $31.0 $31.7 $29.7 $30.2 $24.8 $22.6 $23.7 $21.1 $21.7 $20.3 $18.7 $19.2 $11.0 $11.0 $10.7 $10.6 $10.5 $10.3 $10.2 $
Slide 11: Strong Margin Expansion
Strong Margin Expansion Tower Cash Flow Margin $ in millions $100 $80 $60 $40 $20 $0 3-year CAGR o f and Margin Expansion of 520 bps 61.9% 64.1% 64.7% 67.1% 70.8% 70% 68% 66% 64% 62% 60% Percent Margin 2000 2001 2002 2003 2004(E)(1) Tower Cash Flow Tower Cash Flow Margin (1)Mid-point of guidance giv
Slide 12: Tenant Growth
Tenant Growth Results Driven by Strong New Tenant Rents Number of Tenants 7,000 6,000 5,000 4,000 Rent per Month $1,600 $1,500 $1,400 $1,300 $1,200 1Q’01 2Q’01 3Q’01 4Q’01 1Q’02 2Q’02 3Q’02 4Q’02 1Q’03 2Q’03 3Q’03 4Q’03 1Q’04 2Q’04 Number of Tenants Rent Per Month
Slide 13: Tenant Quality
Tenant Quality Tenant Revenue Percentage By Customer Other Non-Telephony 5% Sprint PCS 21% (1) AT&T Wireless 17% Cingular 13% Nextel 10% Verizon 10% T-Mobile 8% Arch 3% ALLTEL 4% Other Telephony 9% (1) Includes all Sprint Affiliates.
Slide 14: Adjusted EBITDA Growth
Adjusted EBITDA Growth(1) $ in millions $21.0 $20.0 $19.0 $18.0 $17.0 $16.0 $15.0 $14.0 $14.8 $15.9 $15.8 $16.7 $17.2 $19.5 $19.8 Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004 Q2 2004 Q3 2004E(2) (1) After discontinued operations treatment (2) Midpoint of third quarter guidance given July 29, 2004
Slide 15: Low Ongoing Capex
Low Ongoing Capex Move beyond major build-out and acquisition related capex Annual maintenance capex $1,000 per tower going forward (in millions) $50 $40 $30 $20 $10 $0 72% 36% 20% 30% 14% 6% 6% 5% 3% 3% $46.1 $24.9 $13.5 $18.9 $8.4 $3.2 $3.1 $2.9 $2.0 $1.5 80% 70% 60% 50% 40% 30% 20% 10% 0% 1Q’02 2
Slide 16: Reduction in Leverage
Reduction in Leverage Leverage Ratio 17.0 16.0 15.0 14.0 13.0 12.0 11.0 10.0 9.0 16.5x 13.3x 12.9x 12.4x 12.6x 11.0x Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004 Q2 2004 Calculated as net debt divided by quarterly Adjusted EBITDA Annualized
Slide 17: SBA – Goals
SBA – Goals For The Foreseeable Future Reduce leverage each year and transfer enterprise value to shareholders Resume discretionary portfolio growth while maintaining comfortable liquidity cushion Maximize tower cash flow and adjusted EBITDA growth Steadily increase equity free cash flow per share O
Slide 18: Multiple Paths to Increase Free Cash Flow
Multiple Paths to Increase Free Cash Flow More tenants More equipment from existing tenants Escalators and renewals Reduce tower expense Reduce capex Increase services revenue Increase services margin Refinance debt at lower rates Reduce overhead expense Buy underlying ground leases Repurchase high