SBA Communications Corporation Reports 4th Quarter 2013 Results; Provides 1st Quarter and Updated Full Year 2014 Outlook

SBA Communications Corporation Reports 4th Quarter 2013 Results; Provides 1st Quarter and Updated Full Year 2014 Outlook  BOCA RATON, Fla., Feb. 25, 2014 (GLOBE NEWSWIRE) -- SBA Communications Corporation (Nasdaq:SBAC) ("SBA" or the "Company") today reported results for the quarter ended December 31, 2013. Highlights of the results include:  Fourth quarter over year earlier period:    *Site leasing revenue growth of 12%   *Tower Cash Flow growth of 16%   *Net loss decreased from $53 million to $19 million   *Adjusted EBITDA growth of 18%   *AFFO Per Share growth of 22%  "We ended 2013 with a strong fourth quarter," commented Jeffrey A. Stoops, President and CEO. "Our U.S. business was very busy, with our wireless customers continuing the strong pace of equipment installation that we have experienced all through the year. That strong pace has continued into 2014. We grew our international business materially in the fourth quarter, primarily in Brazil, where we closed one large acquisition with Oi and agreed to another large acquisition which is scheduled to close March 31. With that transaction and others, we expect to grow our site portfolio by over 10% in 2014. With continued expected strength in organic growth and material portfolio growth, we are able to increase key elements of our 2014 Outlook. We are expecting another strong year for SBA in 2014."  Operating Results  Total revenues in the fourth quarter of 2013 were $335.4 million compared to $293.8 million in the year earlier period, an increase of 14.0%. Site leasing revenue of $292.5 million (including $9.8 million of pass through reimbursable expenses) was up 12.1% over the year earlier period. Site leasing Segment Operating Profit of $225.7 million increased 13.6% over the year earlier period. Site leasing contributed 96.1% of the Company's total Segment Operating Profit in the fourth quarter of 2013. Site development revenues were $42.9 million in the fourth quarter of 2013 compared to $33.1 million in the year earlier period, a 29.6% increase. Site development Segment Operating Profit Margin was 21.4% in the fourth quarter of 2013 compared to 17.6% in the year earlier period.  Tower Cash Flow for the fourth quarter of 2013 was $217.6 million, a 16.4% increase over the year earlier period. Tower Cash Flow Margin for the fourth quarter of 2013 was 78.3% compared to 77.7% in the year earlier period.  Net loss for the fourth quarter of 2013 was $19.2 million or $0.15 per share compared to a $52.6 million loss or $0.42 per share in the year earlier period.  Adjusted EBITDA in the fourth quarter of 2013 was $209.4 million compared to $177.0 million in the year earlier period, an increase of 18.3%. Adjusted EBITDA Margin was 65.3% in the fourth quarter of 2013 compared to 64.7% in the year earlier period.  Net Cash Interest Expense was $63.3 million in the fourth quarter of 2013 compared to $58.8 million in the year earlier period.  AFFO increased 23.1% to $139.1 million in the fourth quarter of 2013 compared to $112.9 million in the year earlier period. AFFO per share increased 21.6% to $1.07 in the fourth quarter of 2013 compared to $0.88 in the year earlier period.  Investing Activities  During the fourth quarter of 2013, SBA purchased 2,138 communication sites for $321.1 million in cash. SBA also built 119 communication sites during the fourth quarter of 2013. As of December 31, 2013, SBA owned or operated 20,079 communication sites. In addition, the Company spent $15.0 million to purchase land and easements and to extend lease terms with respect to land underlying its communication sites. Total cash capital expenditures for the fourth quarter of 2013 were $403.9 million, consisting of $5.7 million of non-discretionary cash capital expenditures (tower maintenance and general corporate) and $398.2 million of discretionary cash capital expenditures (new tower builds, tower augmentations, communication site acquisitions and related earn-outs, purchasing land and easements, and capital expenditures associated with the purchase of a new headquarters building).  Subsequent to the fourth quarter of 2013, the Company acquired 154 communication sites and related assets and liabilities for an aggregate consideration of $230.1 million in cash. Including the Oi transaction which is anticipated to close on March 31, 2014, the Company has agreed to purchase 2,059 communication sites for an aggregate amount of $683.8 million. The Company anticipates that these acquisitions will be consummated by the end of the third quarter of 2014.  Financing Activities and Liquidity  SBA ended the fourth quarter with $5.9 billion of total debt, $174.9 million of cash and cash equivalents, short-term restricted cash, and short-term investments, and $5.7 billion of Net Debt (as defined below). SBA's Net Debt and Net Secured Debt to Annualized Adjusted EBITDA Leverage Ratios were 6.8x and 4.4x, respectively.  On February 7, 2014, the Company, through its wholly owned subsidiary, SBA Senior Finance II LLC, obtained a new delayed draw $1.5 billion, seven-year, senior secured Term Loan B (the "2014 Term Loan B") under its existing Senior Credit Agreement. The 2014 Term Loan B was issued at 99.75% of par value and will mature in March 2021. It accrues interest, at the Company's election, at either the Base Rate plus 1.50% per annum (with a Base Rate floor of 1.75%) or the Eurodollar Rate plus 2.50% per annum (with a Eurodollar Rate floor of 0.75%). The first funding of $750 million occurred February 7, 2014, and the second funding is expected to occur in March 2014. Principal of the 2014 Term Loan B is to be repaid in equal quarterly installments in March, June, September, and December (commencing in June 2014) in an aggregate amount equal to $3.8 million per quarter with the remaining balance payable upon maturity in March 2021.  Net proceeds from the 2014 Term Loan B were used to (1) repay in full the remaining $180.5 million balance of the 2011 Term Loan B, (2) repay in full the remaining $110.0 million balance of the 2012-2 Term Loan B, and (3) to repay the $390.0 million outstanding balance under the Company's Revolving Credit Facility. The remaining net proceeds will be used (1) to pay the cash consideration in connection with SBA's previously announced acquisition of 2,007 communication sites from Oi S.A. in Brazil and (2) for general corporate purposes.  As of the date of this press release, the Company had no amounts outstanding under the Revolving Credit Facility, and the amount available under the facility was $770.0 million, subject to compliance with specified financial ratios and the satisfaction of other customary conditions to borrowing.  During the fourth quarter, the Company settled its remaining obligations for the warrants sold in connection with the 1.875% Notes for $55.5 million in cash and 192,516 shares of its Class A Common Stock.  During the fourth quarter, SBA did not repurchase any shares of its Class A common stock. The Company currently has $150.0 million of repurchase authorization remaining under its existing $300.0 million stock repurchase program.  Outlook  The Company is providing its first quarter 2014 Outlook and updating its Full Year 2014 Outlook for anticipated results. The Outlook provided is based on a number of assumptions that the Company believes are reasonable at the time of this press release. Information regarding potential risks that could cause the actual results to differ from these forward-looking statements is set forth below and in the Company's filings with the Securities and Exchange Commission.  The Company's Full Year 2014 Outlook assumes approximately $44.0 million of non-cash straight-line leasing revenue. The 2014 Outlook for site leasing revenue, Tower Cash Flow, Adjusted EBITDA and AFFO includes an assumed negative impact of $16.2 million associated with iDEN lease terminations, which from a timing perspective have been assumed to occur on the basis least favorable to SBA per previously negotiated contractual rights. The 2014 Outlook assumes the acquisitions of only those communication sites under contract at the time of this press release. The Company intends to spend additional capital in 2014 on acquiring revenue producing assets not yet identified or under contract, the impact of which is not reflected in the 2014 guidance. The Company's Full Year 2014 Outlook includes new tower builds in the U.S. and internationally of 400 to 420 communication sites. The Full Year 2014 Outlook includes the impact of the 2014 Term Loan B and also contemplates approximately $1.3 billion of new financing during 2014 at an estimated annual interest rate of 4.0% with proceeds being used to (i) call the Company's 8.25% Senior Notes in August 2014, and (ii) settle for cash all of the obligations under the Company's 4.0% Convertible Senior Notes due October 1, 2014 and the related warrants upon maturity. Finally, the Company's Outlook also assumes an average foreign currency exchange rate of 2.40 Brazilian Reais to 1.0 U.S. Dollar for the first quarter of 2014 and Full Year 2014.                          Quarter ending           Full                         March31, 2014           Year 2014                         ($'s in millions) Site leasing revenue     $300.5    to  $305.5  $1,281.0  to  $1,301.0 ^(1) Site development         $27.0     to  $32.0   $120.0    to  $140.0 revenue Total revenues          $327.5    to  $337.5  $1,401.0  to  $1,441.0 Tower Cash Flow         $226.5    to  $231.5  $962.0    to  $982.0 Adjusted EBITDA         $212.5    to  $217.5  $909.0    to  $929.0 Net cash interest        $65.0     to  $67.0   $279.0    to  $289.0 expense ^(2) Non-discretionary cash capital expenditures     $5.0      to  $6.0    $20.0     to  $25.0 ^(3) AFFO                    $138.0    to  $146.0  $589.0    to  $625.0 Discretionary cash capital expenditures     $940.0    to  $960.0  $1,120.0  to  $1,150.0 ^(4)                                                               (1) The Company's Outlook for site leasing revenue reflects $10.0 and $40.0 million of pass through reimbursable expenses, at the midpoint, for the quarter ending March 31, 2014 and full year 2014 Outlook, respectively. (2) Net cash interest expense is defined as interest expense less interest income. Net cash interest expense does not include amortization of deferred financing fees or non-cash interest expense. (3) Consists of tower maintenance and general corporate capital expenditures. (4) Consists of new tower builds, tower augmentations, communication site acquisitions and related earn-outs, ground lease purchases, and capital expenditures associated with the purchase of a new corporate headquarters building. Excludes expenditures for revenue producing assets not under contract at the date of this press release.  Conference Call Information  SBA Communications Corporation will host a conference call on Wednesday, February 26, 2014 at 10:00 AM (Eastern) to discuss the quarterly results. The call may be accessed as follows:  When:                Wednesday, February 26, 2014 at 10:00 AM (Eastern) Dial-in number:       (800) 398-9386 Conference call name: SBA Fourth Quarter Results Replay:               February 26, 2014 at 12:30 PM through March 12, 2014 at                       11:59 PM (Eastern) Number:              USA (800) 475-6701, International (320) 365-3844 Access Code:          317301 Internet access:     www.sbasite.com  Information Concerning Forward-Looking Statements  This press release includes forward-looking statements, including statements regarding the Company's expectations or beliefs regarding (i) continued strength in the leasing and services segments for 2014, (ii) portfolio and organic growth for 2014, both domestically and internationally, (iii) the Company's financial and operational guidance for the first quarter of 2014 and full year 2014 and the ability to improve upon its full year 2014 Outlook, (iv) timing for closing for currently pending acquisitions, including the Oi transaction, (v) spending additional capital in 2014 on acquiring revenue producing assets not yet identified or under contract, (vi) customer activity levels during 2014, (vii) Brazil's foreign exchange rates, (viii) the impact associated with iDEN lease terminations, and (ix) the amount and terms of any future financing and that such financing will be sufficient for its anticipated uses.These forward-looking statements may be affected by the risks and uncertainties in the Company's business. This information is qualified in its entirety by cautionary statements and risk factor disclosures contained in the Company's Securities and Exchange Commission filings, including the Company's annual report on Form 10-K filed with the Commission on February 27, 2013.  The Company wishes to caution readers that certain important factors may have affected and could in the future affect the Company's actual results and could cause the Company's actual results for subsequent periods to differ materially from those expressed in any forward-looking statement made by or on behalf of the Company. With respect to the Company's expectations regarding all of these statements, including its financial and operational guidance, such risk factors include, but are not limited to: (1) the ability and willingness of wireless service providers to maintain or increase their capital expenditures; (2) the Company's ability to effectively integrate acquired communication sites into its business and to achieve the financial results projected in its valuation models for the acquired communication sites; (3) the Company's ability to refinance its 8.25% Senior Notes and its 4.0% Notes on expected terms; (4) the Company's ability to secure and retain as many site leasing tenants as planned at anticipated lease rates; (5) the impact of continued consolidation among wireless service providers on the Company's leasing revenue; (6) the Company's ability to successfully manage the risks associated with international operations, including risks associated with foreign currency exchange rates; (7) the Company's ability to secure and deliver anticipated services business at contemplated margins; (8) the Company's ability to maintain expenses and cash capital expenditures at appropriate levels for its business; (9) the Company's ability to acquire land underneath communication sites on terms that are accretive; (10) the Company's ability to realize economies of scale from its communication sites portfolio; (11) the Company's ability to comply with covenants and the terms of its credit instruments; (12) the economic climate for the wireless communications industry in general and the wireless communications infrastructure providers in particular; (13) the continued dependence on communications sites and outsourced site development services by the wireless carriers; and (14) the Company's ability to protect its rights to land under its communication sites. With respect to the Company's plan for new builds, these factors also include zoning and regulatory approvals, weather, availability of labor and supplies and other factors beyond the Company's control that could affect the Company's ability to build 400 to 420 communication sites in 2014. With respect to its expectations regarding the ability to close pending communication site acquisitions, these factors also include satisfactorily completing due diligence, the ability to receive required regulatory approval, the ability and willingness of each party to fulfill their respective closing conditions and their contractual obligations and the availability of cash on hand or borrowing capacity under the Revolving Credit Facility to fund the consideration.  This press release contains non-GAAP financial measures. Reconciliation of each of these non-GAAP financial measures and the other Regulation G information is presented below under "Non-GAAP Financial Measures."  This press release will be available on our website at www.sbasite.com.  About SBA Communications Corporation  SBA Communications Corporation is a first choice provider and leading owner and operator of wireless communications infrastructure in North, Central, and South America. By "Building Better Wireless," SBA generates revenue from two primary businesses – site leasing and site development services. The primary focus of the Company is the leasing of antenna space on its multi-tenant communication sites to a variety of wireless service providers under long-term lease contracts. For more information please visit: www.sbasite.com.  CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts)                                                                                                                                                     For the three months      For the fiscal year                         ended December 31,        ended December 31,                         2013         2012         2013          2012                         (unaudited)  (unaudited)  (unaudited)    Revenues:                                                      Site leasing             $292,525   $260,762   $1,133,013  $846,094 Site development         42,871       33,079       171,853       107,990 Total revenues           335,396      293,841      1,304,866     954,084                                                               Operating expenses:                                            Cost of revenues (exclusive of depreciation, accretion,                                       and amortization shown below): Cost of site leasing     66,844       62,164       270,772       188,951 Cost of site development 33,693       27,263       137,481       90,556 Selling, general, and    21,710       19,625       85,476        72,148 administrative ^(1) Acquisition              7,821        18,558       19,198        40,433 relatedexpenses Asset impairment and     12,555       3,828        28,960        6,383 decommission costs Depreciation, accretion, 133,328      131,357      533,334       408,467 and amortization Total operating expenses 275,951      262,795      1,075,221     806,938                                                               Operating income         59,445       31,046       229,645       147,146                                                               Other income (expense):                                        Interest income          182          709          1,794         1,128 Interest expense         (63,482)     (59,513)     (249,051)     (196,241) Non-cash interest        (9,934)      (17,829)     (49,085)      (70,110) expense Amortization of deferred (4,053)      (3,576)      (15,560)      (12,870) financing fees Loss from extinguishment (336)        (2,007)      (6,099)       (51,799) of debt, net Other income (expense)   (3,736)      422          31,138        5,654 Total other expense      (81,359)     (81,794)     (286,863)     (324,238)                                                               Loss before provision    (21,914)     (50,748)     (57,218)      (177,092) for income taxes                                                               Benefit (provision) for  2,750        (1,786)      1,309         (6,594) income taxes                                                               Net loss from continuing (19,164)     (52,534)     (55,909)      (183,686) operations                                                               Income (loss) from discontinued operations, —            (52)         —             2,296 net of income taxes                                                               Net loss                 (19,164)     (52,586)     (55,909)      (181,390)                                                               Net loss attributable to the noncontrolling       —            97           —             353 interest                                                               Net loss attributable to SBA Communications       $(19,164)  $(52,489)  $(55,909)   $(181,037) Corporation                                                               Basic and diluted per                                          common share amounts: Loss from continuing     $(0.15)    $(0.42)    $(0.44)     $(1.53) operations Income from discontinued —            —            —             0.02 operations Net loss per common      $(0.15)    $(0.42)    $(0.44)     $(1.51) share                                                               Basic and diluted weighted average number  128,406      126,598      127,769       120,280 of common shares                                                               (1) Includes non-cash compensation of $4,139 and $3,328 for the three months ended December 31, 2013 and 2012, respectively, and $16,975 and $13,781 for the fiscal year ended December 31, 2013 and 2012, respectively.   CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)                                                                                                                                                                                       December 31, December 31,                                                     2013         2012                                                     (unaudited)   ASSETS                                                            Current assets:                                                   Cash and cash equivalents                            $122,112   $233,099 Restricted cash                                      47,305       27,708 Short-term investments                               5,446        5,471 Accounts receivable, net of allowance of $686 and    71,339       39,099 $246 at December 31, 2013 and 2012, respectively Costs and estimated earnings in excess of billings   27,864       23,644 on uncompleted contracts Prepaid and other current assets                     69,586       59,836 Total current assets                                 343,652      388,857                                                                  Property and equipment, net                          2,578,444    2,671,317 Intangible assets, net                               3,387,198    3,134,133 Deferred financing fees, net                         73,042       66,324 Other assets                                         400,852      355,280 Total assets                                         $6,783,188 $6,615,911                                                                  LIABILITIES AND SHAREHOLDERS' EQUITY                              Current Liabilities:                                              Accounts payable                                     $24,302    $27,694 Accrued expenses                                     86,131       42,052 Current maturities of long-term debt                 481,886      475,351 Deferred revenue                                     94,658       76,668 Accrued interest                                     46,689       46,233 Other current liabilities                            14,007       195,690 Total current liabilities                            747,673      863,688                                                                  Long-term liabilities:                                            Long-term debt                                       5,394,721    4,880,752 Other long-term liabilities                          283,828      206,769 Total long-term liabilities                          5,678,549    5,087,521                                                                  Redeemable noncontrolling interests                  —            11,711                                                                  Shareholders' equity:                                             Preferred stock - par value $.01, 30,000 shares      —            — authorized, no shares issued or outstanding Common stock - Class A, par value $.01, 400,000 shares authorized, 128,432 and 126,933 shares issued 1,284        1,269 and outstanding at December 31, 2013 and 2012, respectively Additional paid-in capital                           2,907,446    3,111,107 Accumulated deficit                                  (2,518,085)  (2,462,176) Accumulated other comprehensive income (loss), net   (33,679)     2,791 Total shareholders' equity                           356,966      652,991 Total liabilities and shareholders' equity           $6,783,188 $6,615,911   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)                                                                                                                     For the three months ended                                                    ended December 31,                                                    2013          2012 CASH FLOWS FROM OPERATING ACTIVITIES:                             Net loss                                            $(19,164)   $(52,586) Adjustments to reconcile net loss to net cash                     provided by operating activities: Income from discontinued operations, net of income  —             52 taxes Depreciation, accretion, and amortization           133,328       131,357 Non-cash interest expense                           9,934         17,829 Deferred income tax (benefit) expense               (3,972)       (96) Non-cash asset impairment and decommission costs    10,722        3,828 Non-cash compensation expense                       4,195         3,382 Amortization of deferred financing fees             4,053         3,576 Loss from extinguishment of debt, net               336           2,007 Other non-cash items reflected in the Statements of 157           (844) Operations Changes in operating assets and liabilities, net of               acquisitions: Accounts receivable and costs and estimated earnings in excess of billings on uncompleted       5,434         (4,584) contracts, net Prepaid and other assets                            (12,836)      (34,375) Accounts payable and accrued expenses               (3,371)       1,115 Accrued interest                                    4,514         11,226 Other liabilities                                   21,209        21,503 Net cash provided by operating activities           154,539       103,390                                                                  CASH FLOWS FROM INVESTING ACTIVITIES:                             Acquisitions and related earn-outs                  (338,338)     (1,275,666) Capital expenditures                                (65,520)      (38,804) Proceeds from sale of DAS networks                  —             5,700 Return of principal on long-term notes              26,000        — Other investing activities                          2,114         (1,088) Net cash used in investing activities               (375,744)     (1,309,858)                                                                  CASH FLOWS FROM FINANCING ACTIVITIES:                             Borrowings under Revolving Credit Facility          215,000       100,000 Repayment of Term Loans                             (2,500)       (3,750) Proceeds from employee stock purchase/stock option  38            10,207 plans Payments on settlement of convertible debt          —             (107,493) Payments for settlement of common stock warrants    (55,488)      — Other financing activities                          291           (1,657) Net cash provided by (used in) financing activities 157,341       (2,693)                                                                  Effect of exchange rate changes on cash and cash    (3,433)       1,267 equivalents Net cash provided by discontinued operations                      Operating Activities:                               —             (52)                                                                  NET INCREASE (DECREASE) IN CASH AND CASH            (67,297)      (1,207,946) EQUIVALENTS CASH AND CASH EQUIVALENTS:                                        Beginning of period                                 189,409       1,441,045 End of period                                       $122,112    $233,099                                                                                                             For the three     For the fiscal                                           months ended      year ended                                           December 31, 2013 December 31, 2013                                           (in thousands)                                                             Tower new build construction               $21,724         $77,427 Tower upgrades/augmentations               14,850            47,970 Purchase of headquarters building          23,294            24,516 Non-discretionary capital expenditures:                      Maintenance/improvement capital            3,377             12,909 expenditures General corporate expenditures             2,275             6,071 Total non-discretionary capital            5,652             18,980 expenditures Total capital expenditures                 $65,520         $168,893  Non-GAAP Financial Measures  The press release contains non-GAAP financial measures including (i) Site Leasing Segment Operating Profit, Site Development Segment Operating Profit, and Segment Operating Profit Margin; (ii) Tower Cash Flow and Tower Cash Flow Margin; (iii) Adjusted EBITDA, Annualized Adjusted EBITDA, and Adjusted EBITDA Margin; (iv) Net Debt, Net Secured Debt, Leverage Ratio, and Secured Leverage Ratio (collectively, our "Non-GAAP Debt Measures"); and (v) Funds from Operations ("FFO"), Adjusted Funds from Operations ("AFFO"), and AFFO per share.  We have included these non-GAAP financial measures because we believe that they provide investors additional tools in understanding our financial performance and condition.Specifically, we believe that:  (1) Segment Operating Profit is an indicator of the operating performance of our site leasing and site development segments;  (2) Tower Cash Flow is an indicator of the performance of our site leasing operations;  (3) Adjusted EBITDA, FFO, AFFO, and AFFO per share are useful indicators of the financial performance of our core businesses; and  (4) Our Non-GAAP Debt Measures provide investors a more complete understanding of our net debt and leverage position as they include the full principal amount of our debt which will be due at maturity.  In addition, Tower Cash Flow, Adjusted EBITDA, and our Non-GAAP Debt Measures are components of the calculations used by our lenders to determine compliance with certain covenants under our Senior Credit Agreement, 8.25% Notes, 5.625% Notes, and 5.75% Notes.These non-GAAP financial measures are not intended to be an alternative to any of the financial measures provided in our results of operations or our balance sheet as determined in accordance with GAAP.  We believe that FFO, AFFO, and AFFO per share, which are also being used by American Tower Corporation and Crown Castle International (our two public company peers in the communication site industry), provide investors useful indicators of the financial performance of our core business and permit investors an additional tool to evaluate the performance of our business against those of our two principal competitors.FFO, AFFO and AFFO per share are not necessarily indicative of the operating results that would have been achieved had we converted to a REIT.In addition, our FFO, AFFO, and AFFO per share may not be comparable to those reported in accordance with National Association of Real Estate Investment Trusts or by the other communication site companies as the calculation of these non-GAAP measures requires us to estimate the impact had we converted to a REIT, including estimates of the tax provision adjustment to reflect our estimate of our cash taxes had we been a REIT.  Segment Operating Profit and Segment Operating Profit Margin  The reconciliation of Site Leasing Segment Operating Profit and Site Development Segment Operating Profit and the calculation of Segment Operating Profit Margin are as follows:                                 Site Leasing Segment  Site Development Segment                                For the three months  For the three months                                ended December 31,    ended December 31,                                2013       2012       2013         2012                                (in thousands)                                                                 Segment revenue                 $292,525 $260,762 $42,871    $33,079 Segment cost of revenues (excluding depreciation,        (66,844)   (62,164)   (33,693)     (27,263) accretion, and amortization) Segment operating profit        $225,681 $198,598 $9,178     $5,816                                                                 Segment operating profit margin 77.1%      76.2%      21.4%        17.6%  Tower Cash Flow and Tower Cash Flow Margin  The tables below set forth the reconciliation of Tower Cash Flow to its most comparable GAAP measurement and the calculation of Tower Cash Flow Margin. Tower Cash Flow for each of the periods set forth in the Outlook section above will be calculated in the same manner.                                                          For the three months                                                         ended December 31,                                                         2013       2012                                                         (in thousands) Site leasing revenue                                     $292,525 $260,762 Site leasing cost of revenues (excluding depreciation,   (66,844)   (62,164) accretion, and amortization) Site leasing segment operating profit                    225,681    198,598 Non-cash straight-line leasing revenue                   (14,721)   (20,100) Non-cash straight-line ground lease expense              6,635      8,464 Tower Cash Flow                                          $217,595 $186,962  The calculation of Tower Cash Flow Margin is as follows:                                                          For the three months                                                         ended December 31,                                                         2013       2012                                                         (in thousands) Site leasing revenue                                     $292,525 $260,762 Non-cash straight-line leasing revenue                   (14,721)   (20,100) Site leasing revenue minus non-cash straight-line        $277,804 $240,662 leasing revenue Tower Cash Flow                                          $217,595 $186,962 Tower Cash Flow Margin                                   78.3%      77.7%  Adjusted EBITDA, Annualized Adjusted EBITDA and Adjusted EBITDA Margin  The table below sets forth the reconciliation of Adjusted EBITDA to its most comparable GAAP measurement.Adjusted EBITDA for each of the periods set forth in the Outlook section above will be calculated in the same manner:                                           For the three months                                          ended December 31,                                          2013               2012                                          (in thousands) Net loss                                  $(19,164)        $(52,586) Non-cash straight-line leasing revenue    (14,721)           (20,100) Non-cash straight-line ground lease       6,635              8,464 expense Non-cash compensation                     4,195              3,382 Loss from extinguishment of debt, net     336                2,007 Other (income) expense                    3,736              (422) Acquisition related expenses              7,821              18,558 Asset impairment and decommission costs   12,555             3,828 Interest income                           (182)              (709) Total interest expense ^(1)               77,469             80,918 Depreciation, accretion, and amortization 133,328            131,357 Provision for taxes ^(2)                  (2,628)            2,267 Income from discontinued operations       —                 52 Adjusted EBITDA                           $209,380         $177,016 Annualized Adjusted EBITDA ^(3)           $837,520         $708,064                                                             (1) Total interest expense includes interest expense, non-cash interest expense, and amortization of deferred financing fees. (2) For the three months ended December 31, 2013 and 2012, these amounts included $122 and $481, respectively, of franchise taxes reflected in the Statements of Operations in selling, general and administrative expenses. (3) Annualized Adjusted EBITDA is calculated as Adjusted EBITDA for the most recent quarter multiplied by four.  The calculation of Adjusted EBITDA Margin is as follows:                                                          For the three months                                                         ended December 31,                                                         2013       2012                                                         (in thousands) Total revenues                                           $335,396 $293,841 Non-cash straight-line leasing revenue                   (14,721)   (20,100) Total revenues minus non-cash straight-line leasing      $320,675 $273,741 revenue Adjusted EBITDA                                          $209,380 $177,016 Adjusted EBITDA Margin                                   65.3%      64.7%  Funds from Operations ("FFO") and Adjusted Funds from Operations ("AFFO")  The tables below set forth the reconciliations of FFO and AFFO to their most comparable GAAP measurement. AFFO for each of the periods set forth in the Outlook section above will be calculated in the same manner:                                            For the three months                                           ended December 31,                                           2013              2012                                           (in thousands) Net loss                                   $(19,164)       $(52,586) Plus: Net loss from discontinued           —                52 operations Adjusted tax provision ^(1)                (3,964)           947 Real estate related depreciation,          132,116           130,356 amortization, and accretion FFO                                        $108,988        $78,769                                                             Adjustments to FFO:                                          Non-cash straight-line leasing revenue     (14,721)          (20,100) Non-cash straight-line ground lease        6,635             8,464 expense Non-cash compensation                      4,195             3,382 Non-real estate related depreciation,      1,212             1,001 amortization, and accretion Amortization of deferred financing costs   13,987            21,406 and debt discounts Loss from extinguishment of debt, net      336               2,007 Other (income) expense                     3,736             (422) Acquisition related expenses               7,821             18,558 Asset impairment and decommission costs    12,555            3,828 Non-discretionary cash capital             (5,652)           (3,944) expenditures AFFO                                       139,092           112,949                                                             Weighted average number of common shares   129,631           128,109 ^(2)                                                             AFFO per share                             $1.07           $0.88                                                             (1) Adjusts the income tax provision during the period, to reflect our estimate of cash income taxes (primarily foreign taxes) that would have been payable had we been a REIT. (2) For purposes of the AFFO per share calculation, the basic weighted average number of common shares has been adjusted to include the dilutive effect of stock options and restricted stock units.  Net Debt, Leverage Ratio, and Secured Leverage Ratio  Net Debt is calculated using the notional principal amount of outstanding debt. Under GAAP policies, the notional principal amount of the Company's outstanding debt is not necessarily reflected on the face of the Company's financial statements.  The Debt and Leverage calculations are as follows:                                                                 December 31,                                                                2013                                                                (in thousands) 2010-1 Tower Securities                                         $680,000 2010-2 Tower Securities                                         550,000 2012-1 Tower Securities                                         610,000 2013-1C Tower Securities                                        425,000 2013-2C Tower Securities                                        575,000 2013-1D Tower Securities                                        330,000 Revolving Credit Facility                                       215,000 2011 Term Loan B (carrying value of $180,234)                   180,529 2012-1 Term Loan A                                              185,000 2012-2 Term Loan B (carrying value of $109,745)                 109,971 Total secured debt                                              3,860,500                                                                 4.0% Convertible Senior Notes (carrying value of $468,394)      499,944 8.25% 2019 Senior Notes (carrying value of $242,387)            243,750 5.625% 2019 Senior Notes                                        500,000 5.75% 2020 Senior Notes                                         800,000 BNDES Loans                                                     5,847 Total unsecured debt                                            2,049,541 Total debt                                                      $5,910,041                                                                 Leverage Ratio                                                   Total debt                                                      $5,910,041 Less: Cash and cash equivalents, short-term restricted cash and (174,863) short-term investments Net debt                                                        $5,735,178                                                                 Divided by: Annualized Adjusted EBITDA                          $837,520                                                                 Leverage Ratio                                                  6.8x                                                                 Secured Leverage Ratio                                           Total secured debt                                              $3,860,500 Less: Cash and cash equivalents, short-term restricted cash and (174,863) short-term investments Net Secured Debt                                                $3,685,637                                                                 Divided by: Annualized Adjusted EBITDA                          $837,520                                                                 Secured Leverage Ratio                                          4.4x  CONTACT: Mark DeRussy, CFA          Capital Markets          561-226-9531                   Lynne Hopkins          Media Relations          561-226-9431