Company: SBAC
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001034054-25-000002
Chunk: 34

Company: SBA COMMUNICATIONS CORP
Filing Date: 2025-02-26
Form: 10-K
Item: Item 9B
Chunk 34
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 can be exercised exclusively at the tenant’s election. The only common exception is if the Company no longer has a right to the ground underlying the site, the lease agreements permit the Company to terminate the lease. Despite high frequency of renewal of options to extend the lease by its tenants, the Company has concluded that the exercise of a renewal option by a tenant is generally not a reasonably certain occurrence; therefore, only the current committed term is included in the determination of the lease term.Certain tenant leases provide for a reimbursement of costs incurred by the Company. The Company pays these costs directly and is not relieved of the primary obligation for the expenses. These reimbursements are recorded as revenue on the Statements of Operations.Deferred Lease CostsASC 842, Leases, defines initial direct costs as incremental costs that would not have been incurred if the lease had not been obtained. These costs, including commissions paid related to the origination of specific tenant leases, are deferred and amortized over the remaining lease term. Initial direct costs were approximately $2.1 million, $3.2 million, and $3.3 million for the years ended December 31, 2024, 2023, and 2022, respectively. Amortization expense related to deferred initial direct costs was $1.9 million, $2.3 million, and $1.9 million for the years ended December 31, 2024, 2023, and 2022, respectively. As of December 31, 2024 and 2023, unamortized deferred initial direct costs were $8.8 million and $8.7 million, respectively, and are included in Other assets on the Consolidated Balance Sheets.Derivatives and Hedging ActivitiesThe Company enters into interest rate swaps to hedge the future interest expense from variable rate debt and reduce the Company’s exposure to fluctuations in interest rates. At inception, the Company evaluates the interest rate swaps to determine whether they qualify for hedge accounting. In accordance with ASC 815, Derivatives and Hedging, hedge accounting should be provided only if the derivative hedging instrument is expected to be, and actually is, effective at offsetting changes in fair values or cash flows of the hedged item. The effective portion of the gain or loss is recorded in Accumulated other comprehensive loss, net on the Consolidated Balance Sheets. The ineffective portion of the gain or loss from the interest rate swap is recognized in earnings immediately. On a quarterly basis, the Company evaluates whether the cash flow hedge remains highly