Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

SBA Communications Corporation (NASDAQ:SBAC)

Deutsche Bank's DbAccess 21st Annual Media and Telecom Conference

March 04, 2013 10:10 am ET

Executives

Jeffrey A. Stoops - Chief Executive Officer, President and Director

Analysts

Brett Feldman - Deutsche Bank AG, Research Division

Brett Feldman - Deutsche Bank AG, Research Division

Hi, we're going to go ahead and get started here with our next session. We are happy to welcome back to the conference SBA Communications and the CEO, Jeff Stoops. Jeff, thanks for being here.

Jeffrey A. Stoops

Thanks, Brett. Appreciate it.

Question-and-Answer Session

Brett Feldman - Deutsche Bank AG, Research Division

Same format, open Q&A. I'll definitely give you guys a chance to ask some questions. I'll get the ball rolling. I'm going to start with the same thing we talked about at the start of our last session. American Tower announced a debt refinancing today. You guys have some work you need to get done in the capital markets. Can you just give us a quick update on what you're planning for this year?

Jeffrey A. Stoops

Yes. We have a convert that is due May 1 and, obviously, we've known about that and been planning for that for a while. We are going to do a secured financing, either in the bank market or the CMBS market. We are very established with kind of structures and architectures existing in both today. I will tell you the CMBS market is extremely attractive. I understand our good peer, American Tower, launched in that market today for good reason because it is an extremely good market today. And that's a market that we're, of course, looking at very carefully as well. So we, knock on wood, we expect a pretty good result here in the next month or so.

Brett Feldman - Deutsche Bank AG, Research Division

The original vintage of the CMBS deals and, in many cases, the next vintage included anticipated repayment periods. So they are 30-year deals but really you're going to get them repaid in 5. Is that still the structure that you see in the market or do you find that maybe you can just pick hard maturities and even longer tenures?

Jeffrey A. Stoops

It is the structure. It is a 30-year legal maturity at an expected repayment date of either -- what typically you can issue at, today in that market, is either 5, 7 or 10 years. And we're looking at taking this opportunity not only to lock in some good rates but also to maybe extend some tenure as well. But that is still the way that market works, I guess.

Brett Feldman - Deutsche Bank AG, Research Division

So let's turn our attention back to the actual leasing environment and we'll start with the U.S., that's still where the bulk of your business is. I do want to spend some time on what you've done internationally. But just give us a quick recap, what are you seeing in the U.S. and, in particular, what's the level of activity you've contemplated in your outlook for this year?

Jeffrey A. Stoops

The U.S. level of activity is really quite strong today. Hard to remember, maybe my memory is fading as I get older, but it's hard to remember a time when everybody was this busy. I think you have to go back many, many years. We'll start with AT&T. They continue to have a lot left to do on their 4G. Tremendous efforts underway all across the country. Mostly with amendments, some new cell siting going on. Not even sure we've begun to see their commencement of their project, VIP, do they call that? With the 10,000 new cell sites and the 40,000, it's just -- there's just a lot to do there. Verizon, similar, very strong. Verizon is a little bit ahead in terms of our portfolio and I would suspect most of my peers' portfolios. Verizon has amended about mid-60s percentile of the cell sites that they're on for SBA today. Still a fair amount of work left to do and that's before any consideration of what they might do with their AWS spectrum, which I understand there's some discussions around not only at the finance level, but we're starting to see some of that at the operational level as well. So that's a good thing. Sprint is very, very busy. Just now really hitting on -- I'm not even sure they're hitting on 8 of 8 cylinders yet operationally, but certainly more cylinders on their Network Vision project than they were 1 year ago. And for us, that's both of -- a big source of operational activity, services business, but also that's how we recognize our revenues from our agreement with Sprint on the Network Vision project because it's the actual installation of their equipment. The earlier of that date or a later drop dead date that triggers our cash recognition of revenue there. So we're expecting a bigger year from Sprint than we experienced in '12, which was actually a good year. And then finally, T-Mobile is ramping up their 4G amendment project. We're smack in the middle of that. And that's going to be a source of business for us all year long. So it's a very, very good, busy time in the tower business these days, on both the site leasing side and the services side.

Brett Feldman - Deutsche Bank AG, Research Division

And Clearwire is actually active finally. With the deployment of their LTE network, they're now taking cash from Sprint to help augment that financing. To what extent are you counting on Clearwire business this year?

Jeffrey A. Stoops

Well we're not -- from a guidance perspective, we're not really counting on it at all. From a "what are we seeing" perspective, it's up from where it was in 2012, but it's still dwarfed by what the other 4, the Big 4 are doing.

Brett Feldman - Deutsche Bank AG, Research Division

You alluded to the agreement you have with Sprint. I want to kind of recap what you've done from a Master Lease Agreement standpoint to understand what type of activity you're seeing is, I guess, I'll call it presold, meaning they have agreed to pay you in certain timeframes in the types of activity that creates new business for you. So would you mind as quickly going through what you've disclosed with, say, Sprint and T-Mobile particularly, because you do have MLAs with them?

Jeffrey A. Stoops

Yes, we have MLAs with Sprint and T-Mobile. And the reason that we have MLAs with them is it's consistent with our philosophy of being very specific around the equipment rights that we give our customers. And in each of those cases, the agreements that we have give them the right to install a predetermined, prespecified limit to the amount of equipment on the towers that we own. And that's really the big driving factor as to why we were comfortable in the first place in agreeing -- entering into those agreements. But the 2 agreements work very differently. In T-Mobile's case, they have agreed on every site of ours, where T-Mobile is a tenant, to give us an increased escalator for a period of time, and that increased escalator kicks in every November 1. So in the fourth quarter, we had 2 months of an increased escalator. Now that level will last all through 2013 until we get to the next November 1 where we'll we have another step-up. And that agreement applies, and the cash is recognized, as the escalator kicks in regardless of where T-Mobile is, whether they're ahead or behind on actually changing out or adding to their equipment on our sites. So it's a non -- it's not tied to their operational pace.

Brett Feldman - Deutsche Bank AG, Research Division

And you straight-line the revenue from a GAAP standpoint, but the cash does kick up every November?

Jeffrey A. Stoops

Yes. I mean I think, and this is a little different than some of our peers, we report revenue, of course, on a GAAP basis and GAAP requires you to straight-line the noncash portion over the length of the term. But on our adjusted EBITDA and, obviously, on our AFFO and AFFO per share, those are cash-only metrics where we stripped out any noncash benefit or burden. The Sprint agreement is a little different. Sprint has the right to change out their CDMA equipment on every one of our sites where Sprint is a tenant. And they get to -- the cash payment trigger for that is the earlier of the -- a drop dead date. And there's a series of those. The first is the -- yet to occur, it doesn't occur until January 1 of '14. So it's the earlier of that date or the date they actually do the work on the tower and switch-out the equipment. So in our case, we had only about 10% of all the Sprint CDMA sites that are covered by this agreement had actually begun to contribute on a cash revenue bases in the fourth quarter. So we will see -- we certainly expect to see a large ramp-up in that cash revenue contribution as Sprint gets about the process of really getting the work done on the switch-out for their CDMA equipment.

Brett Feldman - Deutsche Bank AG, Research Division

And just to recap, so at T-Mobile, you're somewhat insensitive to the timing of their upgrade. With Sprint, it's partially sensitive, I guess.

Jeffrey A. Stoops

Correct, on the leasing side. On the services side, we're sensitive to timing.

Brett Feldman - Deutsche Bank AG, Research Division

I'm glad you brought up services, I'm going to back to AT&T and Verizon in a second. But since you brought it up, services have been pretty big recently. This is actually your legacy business, this is kind of how you guys got into it. What are you still doing there? Do you still have your own crews? Do you outsource? How intense is the activity level? And what do you think it's going to stay like throughout this year?

Jeffrey A. Stoops

This is the best year. 2012 was the best year we've had in services in many years, and we expect 2013 to be better. This is our legacy business. We think it makes us better operators, it gives us a better nose for good tower sites, keeps us close to our customers. We think the culture of the company is well served by kind of being guys who get their hands dirty. And I -- based on the amount of business that is out there and the business that we've locked in for that segment of our business, the services side, through the Sprint agreements and the T-Mobile agreements both of which mandate most, if not all, that work on our towers to us, I think the services segment, while again it's not really the value driver in SBA, we're going to make up more EBITDA -- we're going to make more positive EBITDA dollars in services for the next couple of years than we have in the past. That I'm confident of.

Brett Feldman - Deutsche Bank AG, Research Division

Okay. So let's go back to the leasing side here. With AT&T and Verizon, you've chosen not to enter into the same type of Master Lease Agreements or whatever the holistic agreements are that you did with Sprint and T-Mobile. Just walk us through your philosophy here, how comfortable do you feel with the relationships? What are you trying to accomplish with the contracts that you have with those 2 large customers?

Jeffrey A. Stoops

Well it gets back to the basic philosophical view on those types of agreements and any agreement. Whether it's even for just 1 tower that we have, we are fundamentally opposed to open-ended equipment entitlements that are not specifically defined. And if a carrier is desirous of entering into something like that, we're happy to entertain that. It can be priced properly, and we think a good result can be had for all. But short of a specific equipment, a specific and limited equipment definition, we have really no interest in entering into those things. Now AT&T and Verizon, our 2 most active customers, so we're keeping them happy. We've reached a good relationship in terms of, certainly, speed, certainty, customer service. We've reached general views within ranges of how to price what they're looking for on our towers and we're moving down the track. So I don't think there's really going to be much change of any sort, frankly, in any of our relationships with the Big 4 in the near-term. And I think things are going very well on all fronts. We're working hard to keep them happy and meet their goals.

Brett Feldman - Deutsche Bank AG, Research Division

And just to make sure I understand, this means that every single time they do something in one of your towers, that's a revenue event, none of this is presold activity.

Jeffrey A. Stoops

Yes, not for AT&T and Verizon.

Brett Feldman - Deutsche Bank AG, Research Division

So if they go faster with an upgrade, that just means business comes to you faster.

Jeffrey A. Stoops

That's correct.

Brett Feldman - Deutsche Bank AG, Research Division

Now you mentioned with Verizon, I think that Verizon has said this before, they're talking about having signal coverage of their LTE network, matching their 3G network by the middle of this year. Although to your point, they're not necessarily hitting every one of their sites, at least not with this initial build-out because of using a lower frequency spectrums that signal coverage can happen on fewer sites at a gate. I guess that my point would be that even though Verizon will tell you that they've hit their signal coverage goal in the middle of this year, you'll probably continue to see new amendment activity from them if they're ultimately driving towards touching every site with LTE equipment.

Jeffrey A. Stoops

Yes, well -- and signal coverage is probably the most basic metric that a carrier would use to say yes, technically, I do provide service in that particular area. It's very different to then actually having the network where they want it to be in a particular area which we've watched now for 20 years requires densification and cell splitting. So I -- there's no doubt in my mind and certainly from the work that we have on our plate today and the conversations that we're having with Verizon, that we would expect them to continue to be busy all year long and well -- extends well into 2014.

Brett Feldman - Deutsche Bank AG, Research Division

But to my point, you don't care about signal coverage because your question is, have they upgraded every site they have with me or not, and your point is they may be 90% the way through their signal covers but they're only 60% through hitting your sites. So you have a lot of new business with them ahead of you presumably.

Jeffrey A. Stoops

Yes. And I mean most of the folks in this room are experienced telecom investors. I think we all know there's a big difference between the coverage maps and does it really work the way people would want it to work?

Brett Feldman - Deutsche Bank AG, Research Division

I want to go back to something that I actually raised on your conference call, because not everyone gets a chance to listen to these things. You did 2 pretty sizable transactions last year with Mobilitie and with TowerCo. What was interesting about those portfolios is that they tended to be in dense metropolitan areas and they tended to have reasonably low exposure to AT&T and Verizon versus your existing portfolio. And so, I guess, that would mean that during the upgrade phase of those carriers, those portfolios wouldn't generate as much new business as maybe your average tower. They've already talked about and AT&T, in particular, has talked about adding new cell sites to their network as well. Project VIP includes 10,000 new cell sites. Wouldn't those towers be pretty well positioned to get the business and how much have you seen?

Jeffrey A. Stoops

We think so, and we have seen a greater -- actually those towers are enjoying greater brand new tenancy interest than our portfolio legacy. Now our legacy portfolio is producing more incremental revenue because of the huge amendment push that we're in. That's where most of the incremental revenue is coming from. But the basic premise and the attraction to those towers was they were underrepresented on both the AT&T and the Verizon side, located in very difficult-to-zone and -build markets, very attractive markets, which if wireless continues to grow and 4G continues to be so wildly accepted by the consumer, we believe those will -- those -- that ready infrastructure will be very attractive to both those customers on a cell splitting basis. And we are starting to see that. Although we really don't think that phase of their development occurs until sometime in 2014 at the earliest.

Brett Feldman - Deutsche Bank AG, Research Division

Correct me if I'm wrong, I think you underwrote those deals on average lease though, right?

Jeffrey A. Stoops

Yes.

Brett Feldman - Deutsche Bank AG, Research Division

Okay. Good, I'm glad we covered that. I want to shift now and talk a little bit about what's going on international -- hold on, I do want to ask one more question on Mobilitie, I just remembered this. You have a revenue sharing agreement with Mobilitie.

Jeffrey A. Stoops

We do.

Brett Feldman - Deutsche Bank AG, Research Division

You had talked about maybe buying them out. Is there any update that you can give us on that?

Jeffrey A. Stoops

No real update. Working through some variations as to how we might approach that on the accounting side, on the economic side. So stay tuned on that.

Brett Feldman - Deutsche Bank AG, Research Division

But it's voluntary. I mean you'd want to do this transaction if you could demonstrate it was accretive, otherwise you could just choose to keep it in place. I think...

Jeffrey A. Stoops

No -- yes, absolutely. I mean we're not going to do it because either we have to or -- the only reason to do is because it will be value-creative for our shareholders.

Brett Feldman - Deutsche Bank AG, Research Division

And none of that's contemplated in your outlook right now.

Jeffrey A. Stoops

No.

Brett Feldman - Deutsche Bank AG, Research Division

All right so now I want to talk about your international business because you've sort of gone from an isolated attack against Central America which is pretty close to home actually, and you did a much bigger transaction now, creating a foothold in Brazil. Could you maybe talk a little bit about what you're seeing outside the U.S. and what you believe are some of the most interesting opportunities to grow your business beyond the U.S. market?

Jeffrey A. Stoops

In the populated parts of the world, which there's getting to be an awful lot of, particularly in comparison to the U.S., you're seeing wireless look like the U.S. market 5, 10 years ago, but actually even more accelerated in its growth because nowhere -- perhaps there are some places in Europe that have the fiber and the wireline base, but certainly not anywhere in the developing world. So everything is going to move to wireless and it's going to move quicker to wireless than it did in the United States. So what we look for are big markets with big opportunities, established wireless players, multiplicity of tenants, good zoning, land use, rule of law type jurisdictions. And we're very excited to be in Brazil because Brazil meets all of those criteria. And in fact, Brazil is much tighter in its competitive dynamic than actually the U.S. market. The Big 4 carriers in Brazil range from, I believe, it's 18% to 29%. So there's a very tight pairing there and a lot of competition. The regulator down there, Anatel, is very aggressive in terms of promoting competition. And their infrastructure and phone service, their wireless phone service there is quite a bit behind the United States. The other thing we like about that market is we fit -- I don't know if it will develop quite as robustly as the U.S. in the mom-and-pop kind of building of towers and the constant source of portfolio growth for us, but I think it probably represents the next best country where that type of activity is going to occur. You got a lot of entrepreneurs down there, a lot of folks who are going to build 5, 10, 20 towers and then look to sell them to folks like us. So we're very excited about that market. We are in the process of building out our own infrastructure there, building the management team. If I'm sitting here in a couple of years and not talking about the thousands of towers we own in Brazil, I'm going to be disappointed.

Brett Feldman - Deutsche Bank AG, Research Division

Is it just Brazil or has the platform -- or the platform that you're building in Brazil, is that a launchpad to be in Mexico and Colombia and Chile and Argentina as well?

Jeffrey A. Stoops

Yes. It could be, it could be. It's -- I don't know about Mexico. Mexico would be a bit of a different market. But it certainly could be something that we could expand over into Peru and Chile. We'd probably look for some more political stability in Argentina before we took a real hard look there. But the beauty of what we've done in Brazil is if those other opportunities come along and are right, we can seize upon them. But there's so much for us to do in Brazil that I think we've taken a quantum step forward in terms of assuring that we have a geographic footprint now where we can comfortably fulfill our 5% to 10% portfolio growth every year.

Brett Feldman - Deutsche Bank AG, Research Division

And how about developing towers? You bought your way into Brazil, meaning -- do you have any loose objectives as to what you think you could build on an annual basis for over a 5-year period in that market?

Jeffrey A. Stoops

Yes, that will be -- I mean we would look to build hundreds of towers per year in that market, once we get ramped up. We're not getting to any new builds this year given the infancy of our operation down there, but we're certainly going to work hard to get that up to speed and efficient quickly. And hopefully, we will have something built down there by year end.

Brett Feldman - Deutsche Bank AG, Research Division

Do you feel like you have sufficient scale? That was always a question you got asked over the last decade in the U.S. is, but at what are you big enough that you don't need to be any bigger from a scale standpoint? Does this deal get you big enough of in Brazil that you don't have to do another transaction just for the sake of being bigger?

Jeffrey A. Stoops

Well, we certainly don't need to be bigger operationally. I think we need to continue to be bigger to please this group. And that's what I do. And I think we -- the beauty of what we have in our model is you can continue to minimize your SG&A as a percent of revenue. You can continue to improve your EBITDA margins. You can continue to grow accretively on an AFFO per share basis. So there is -- there's no need to kind of be any bigger to run the business forever. But I do believe there's a lot of value to be created by being bigger.

Brett Feldman - Deutsche Bank AG, Research Division

And do you feel you have the financial flexibility to continue to pursue sizable deals like you did last year, including Latin America, NIHD is looking to sell the tower, for example. Are you ready to pounce on a deal if the numbers make sense?

Jeffrey A. Stoops

Yes, absolutely. And just as we have historically done and I think the market has ratified our thoughtfulness in this, we're not opposed to using equity in transactions if we think it makes the equity more valuable that day and 5 years later.

Brett Feldman - Deutsche Bank AG, Research Division

And just maybe as a last question here, international, is it principally a Brazil and Latin America centric view of how you can expand internationally now? Or are you actually thinking even bigger, where you have line of sight on Africa, Europe or some of the markets AMT has gone into?

Jeffrey A. Stoops

Yes, we -- we're not ruling any market out. I feel good about the markets that we're in in terms of the amount of wood that we can chop without having to go elsewhere. But yes, I -- there's nothing that we've ruled out. I think it's interesting the way the world seems to be turning. Towers is now a pretty well known business model. It's extremely attractive to private equity. We've got a lot of private equity that is pioneering some of these new markets, which is good because at some point, they'll be looking to divest those assets having worked a lot of the bugs and the kinks out. And those might be opportunities that we're very interested in outside of the Western Hemisphere.

Brett Feldman - Deutsche Bank AG, Research Division

I've been following you guys for a long time, so I recall lots of statements you've made in the past. So I'll bring some up. One of the things we've really stopped talking about, for good reasons, is whether we're going to see consolidation among the 3 public tower companies. But it was a topic that came up a lot back in the day and your standard was, which I thought it was a good one, was as long as you felt you could improve your equity value and grow your AFFO per share faster as a standalone company, then you didn't see any particular reason you will look to combine. You have achieved that over the last few years. What's your comfort level that at the way your business is structured right now, you still think you're positioned to be the outperformer in the group for investors?

Jeffrey A. Stoops

I think a couple of things on that. I think the quality of our execution is really good and hopefully it shows through on the numbers where we, I believe, have the most efficient structure in terms of SG&A as a percent of revenue. If you stripped out our relative services businesses, I think you'd find us at or perhaps leading on an EBITDA margin basis. I mean we're just good at execution, and I think it comes back to the fact that we grew up in this business as builders of towers. I think the way we approach capitalizing our company has helped. There were a couple of periods of time where it didn't help, 2008, 2002. We learned a lot of lessons through there. But I do think the way we now are capitalizing our company and -- it's really just math. If we can borrow at x and stay 7x, 7.5x levered and have organic growth rates that are strong, you're going to absolutely produce more AFFO per share growth than at different capital structures. So I continue to think that will drive value. But we've been right so far. I think the path that we've chosen is the right one for value creation for our shareholders. But if a different path proves better, that's why we're here. I mean it's not about dying in the chair, or there's no reason that SBA has to exist other than it exists to maximize value for shareholders. And as long as an independent path is the way to do that, that's the path we'll stay on. If not, then that would be a decision that the board would make whether it's appropriate fiduciary undertaking.

Brett Feldman - Deutsche Bank AG, Research Division

You mentioned capital structure and some of the past experiences you've had with it. Recently, the low rate environment has worked out very well for you because you have been able to take advantage of it in order to execute transactions that are immediately accretive to your AFFO per share. And unlike in the past, you've laddered maturities in a very different way. So let's just assume that eventually rates go higher -- not that they spike but that's where they would go -- how would your behavior as a business change in a higher rate environment, and maybe even contrast it with what happened the last time rates went higher.

Jeffrey A. Stoops

Yes. Well we've worked hard to ladder maturities and maintain a presence in all available markets, which I think we will continue to do. The -- what we would also do in a -- well first of all, near-term, we're probably got a bias towards fixed-rate debt versus floating-rate debt. So hopefully over the next year or 2, where we do have some work to do and some refinancings to undertake, we'll benefit there. We would gauge the cost of indebtedness to us. And I think the market perhaps assumes that every time there's a tick-up in the base rate, it's a flow-through effect. That's not really true. Actually the cost of debt to us is a function of treasuries plus a spread. And if you look historically, spreads today are actually pretty high. If you go back several years when treasury rates were higher, the absolute cost to us wasn't much different than it is today because spreads were tighter. And I do believe that would continue to be the case, particularly if the reason the rates are likely to rise is that the economies are doing better, and not as opposed to a period of distress like in 2008 where you did have spreads widen quite a bit for a short period of time. So we would watch that, what our absolute cost is. We would watch our organic growth rates are. And we would tailor that to -- if that required us to dial back our leverage, we would do that. I mean we're going to do what we think is in the right interest of shareholder value creation.

Brett Feldman - Deutsche Bank AG, Research Division

Did you feel that based on how you evolved your capital structure, you have more options for creating equity value in different rates environments? And so, for example, the last time this happened because you had a lot of stack debt maturities, things just kind of stopped. You didn't buy your stock, you didn't buy assets, you didn't refinance debt. Your stock went down, you couldn't repurchase it. Do you feel like you could be more nimble now you have a lot more liquidity? You may pivot away from acquisitions and back towards share repurchases?

Jeffrey A. Stoops

Well, we weren't sitting on our hands, we bought a bunch of debt back in 2008. We -- I think we bought debt back at about $150 million discount. So we created $150 million there through that period of time. And our history is that we've been very opportunistic and I think very willing to move for the right opportunity. I don't see that changing. Certainly we would look at all those things. And if certain opportunities presented themselves inside our capital structure, we would move on that.

Brett Feldman - Deutsche Bank AG, Research Division

All right. On that, we have 5 minutes left so I'll take a break here. If anyone has a question, just raise your hand and let them bring the microphone over. All right, I think we probably answered everything, I guess. I'll ask another topic. I know it comes out quite a bit, which is your thoughts on becoming a REIT. I think long-term you said that's kind of the destination for the business, but you have a lot of runway here with your NOLs. Has anything caused you to rethink the timeframe for doing something like that?

Jeffrey A. Stoops

No, we still -- we analyze that question a lot. We continue to conclude that there's no overly compelling reason to convert early ahead of reasonably getting close to exhausting your NOL balance, but we'll continue to watch and look at that. Through the activity last year on the acquisition side, we probably pushed that date back even further. I think we're now at about $1.3 billion of NOLs. We're probably looking at several more years of net losses on a GAAP basis, more if we continue to grow through acquisition. So I -- we've got many years I think before we're going to get there. But from a tax efficiency and a capital structure efficiency perspective, I do ultimately believe we will be a REIT because it's better than paying taxes at the corporate level.

Brett Feldman - Deutsche Bank AG, Research Division

The reason it comes up a lot is we look at your business and we compare it against it American's and what we've seen is that you have generally created higher rates of growth in AFFO per share and yet you still trade at a discount to American. And I'm just wondering, on your own end, have you reached any conclusions as to why you think that persists and whether there are incremental steps you can take like paying a dividend or maybe just being a lot bigger international? And that gap has closed a bit, but I'm just wondering as you look at that, what do you think some of your options are here for doing better?

Jeffrey A. Stoops

I think there are a number of things there. I think the dividend certainly might be a factor. We could pay a dividend today. And under today's laws, it would actually be more efficient and tax to the recipient on a lower rate than a REIT dividend. I think liquidity and size has a lot to do with that. We continue to grow our liquidity and our market cap, but it's still a little different than American's. And I challenge actually, and we'll have a number of these meetings in the one-off sessions today, I really challenge our investor base to make the compelling case, prove it to me, that we would today trade higher by being a REIT than not. And if in fact that can be reasonably proven, it's something we would take a hard look at. I mean we're not, not doing it because we don't want to, it's just because we don't really think that's going to materially change things and is worth doing given the -- some of the limitations that you have on distributions in capital structure.

Brett Feldman - Deutsche Bank AG, Research Division

I think we have a question in the back of the room.

Unknown Analyst

Yes. A question around your DAS strategy for the States and for Brazil, if you have one.

Jeffrey A. Stoops

I'm sorry, did you say DAS strategy?

Unknown Analyst

Yes.

Jeffrey A. Stoops

Yes. We have an investment in a company called ExteNet, which we made -- what is it now? It's at least 3 years, maybe longer. We like ExteNet. We continue to funnel our DAS opportunities through ExteNet. We are active with ExteNet and kind of watching their progress. And at some point, we may increase our investment in ExteNet. But right now that's kind of where we're channeling all of our DAS investments. We're not undertaking any of that on our own today.

Unknown Analyst

Would that include a strategy for Brazil since Brazil's got 2 major global events?

Jeffrey A. Stoops

Brazil would be -- we actually have an agreement with ExteNet which requires what I've just said in the United States that would not apply in Brazil. Right now, our focus is going to be on towers. But ask me that question next year.

Brett Feldman - Deutsche Bank AG, Research Division

All right, well I think we've just about run out of our time. Thanks a lot.

Jeffrey A. Stoops

Great. Thank you.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: SBA Communications' CEO Presents at Deutsche Bank's DbAccess 21st Annual Media and Telecom Conference (Transcript)
This Transcript
All Transcripts