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Landmark Infrastructure Partners LP Reports Second Quarter Results

EL SEGUNDO, Calif., Aug. 01, 2018 (GLOBE NEWSWIRE) -- Landmark Infrastructure Partners LP (the “Partnership,” “we,” “us” or “our”) (Nasdaq:LMRK) today announced its second quarter financial results.

Highlights

  • Completed acquisitions with total consideration of approximately $128 million through July 31, 2018;
  • Reported Q2 2018 rental revenue of $16.8 million, a 31% increase year-over-year;
  • Reported Q2 2018 net income of $6.1 million, EBITDA of $16.9 million, and Adjusted EBITDA of $16.5 million, a 30% increase in Adjusted EBITDA year-over-year;
  • Reported Q2 2018 distributable cash flow of $8.1 million, a 9% increase year-over-year;
  • Announced a quarterly distribution of $0.3675 per common unit; and
  • On June 6, the Partnership completed a $125 million wireless communication fixed rate debt placement through a securitization with a weighted-average coupon rate of 4.31%.

Second Quarter 2018 Results
Rental revenue for the quarter ended June 30, 2018 increased 31% to $16.8 million compared to the second quarter of 2017.  Net income for the second quarter of 2018 was $6.1 million, compared to net income of $2.7 million in the second quarter of 2017.  Net income attributable to common unitholders per diluted unit in the second quarter of 2018 was $0.12, compared to net income attributable to common unitholders per diluted unit of $0.05 in the second quarter of 2017.  EBITDA (earnings before interest, income taxes, depreciation and amortization) for the quarter ended June 30, 2018 increased 66% to $16.9 million compared to the second quarter of 2017.  Adjusted EBITDA for the quarter ended June 30, 2018 increased 30% to $16.5 million compared to the second quarter of 2017, and distributable cash flow increased 9% to $8.1 million compared to the second quarter of 2017.

For the six months ended June 30, 2018, the Partnership reported rental revenue of $32.5 million, net income of $12.8 million, and net income attributable to common unitholders of $0.31 per diluted unit.  The Partnership reported EBITDA of $34.0 million, Adjusted EBITDA of $32.0 million, and distributable cash flow of $16.1 million in the six-month period ended June 30, 2018.

“We’re very pleased to announce another quarter of strong operating results.  Our principal ground lease business continues to produce very stable and consistent returns, and we’re making great progress on the new initiatives that we’ve launched.  These initiatives will allow us to drive more meaningful growth to the Partnership as we leverage our relationships and our large and growing portfolio of critical infrastructure assets. We’re confident we have the relationships and financial flexibility to execute our business and grow the Partnership, and we remain focused on providing long-term value for our unitholders,” said Tim Brazy, Chief Executive Officer of the Partnership’s general partner.

Quarterly Distributions
On July 19, 2018, the Board of Directors of the Partnership’s general partner declared a cash distribution of $0.3675 per common unit, or $1.47 per common unit on an annualized basis, for the quarter ended June 30, 2018.  The distribution is payable on August 14, 2018 to common unitholders of record as of August 1, 2018.

On July 19, 2018, the Board of Directors of the Partnership’s general partner declared a quarterly cash distribution of $0.4400 per Series C preferred unit, which is payable on August 15, 2018 to Series C preferred unitholders of record as of August 1, 2018. 

On July 19, 2018, the Board of Directors of the Partnership’s general partner declared a quarterly cash distribution of $0.49375 per Series B preferred unit, which is payable on August 15, 2018 to Series B preferred unitholders of record as of August 1, 2018.

On June 21, 2018, the Board of Directors of the Partnership’s general partner declared a quarterly cash distribution of $0.5000 per Series A preferred unit, which was paid on July 16, 2018 to Series A preferred unitholders of record as of July 2, 2018.

Recent Acquisitions
Year-to-date through July 31, 2018, the Partnership acquired a total of 186 assets for total consideration of approximately $128 million. The acquisitions were immediately accretive to the Partnership’s distributable cash flow, funded primarily with borrowings under the Partnership’s existing Facility and the issuance of common units.

At-The-Market (“ATM”) Equity Programs
Year-to-date as of June 30, 2018, through its At-The-Market (“ATM”) issuance programs, the Partnership has issued 27,830 common units and 24,747 Series A preferred units for gross proceeds of approximately $0.5 million and $0.6 million, respectively.

2018 Guidance
The Partnership’s outlook for acquisition volume is $250 million to $300 million in assets.  This includes the right to purchase $200 million to $250 million in assets that the Partnership’s sponsor has expressed its intent to offer us, and approximately $50 million in new infrastructure deployments.  These acquisitions and deployments, combined with organic portfolio growth, are expected to drive distribution growth of 10% over the fourth quarter 2017 distribution of $0.3675 per common unit by the fourth quarter 2018 (distribution to be paid in February 2019).

Conference Call Information
The Partnership will hold a conference call on Wednesday, August 1, 2018, at 12:00 p.m. Eastern Time (9:00 a.m. Pacific Time) to discuss its second quarter 2018 financial and operating results.  The call can be accessed via a live webcast at https://edge.media-server.com/m6/p/ho43yvep, or by dialing 877-930-8063 in the U.S. and Canada.  Investors outside of the U.S. and Canada should dial 253-336-7764.  The passcode for both numbers is 4349739.

A webcast replay will be available approximately two hours after the completion of the conference call through August 1, 2019 at https://edge.media-server.com/m6/p/ho43yvep.  The replay is also available through August 10, 2018 by dialing 855-859-2056 or 404-537-3406 and entering the access code 4349739.

About Landmark Infrastructure Partners LP
The Partnership owns and manages a portfolio of real property interests and infrastructure assets that the Partnership leases to companies in the wireless communication, outdoor advertising and renewable power generation industries. 

Non-GAAP Financial Measures
We define EBITDA as net income before interest, income taxes, depreciation and amortization, and we define Adjusted EBITDA as EBITDA before unrealized and realized gain or loss on derivatives, loss on early extinguishment of debt, gain or loss on sale of real property interests, straight line rent adjustments, amortization of above and below market rents, impairments, acquisition-related expenses, unit-based compensation, repayments of investments in receivables, and the capital contribution to fund our general and administrative expense reimbursement.  We define distributable cash flow as Adjusted EBITDA less cash interest expense, current cash income tax expense, distributions to preferred unitholders, distributions to noncontrolling interest holders, and maintenance capital expenditures.  Distributable cash flow will not reflect changes in working capital balances. We believe that to understand our performance further, EBITDA, Adjusted EBITDA and distributable cash flow should be compared with our reported net income (loss) and net cash provided by operating activities in accordance with generally accepted accounting principles in the United States (“GAAP”), as presented in our consolidated financial statements.

EBITDA, Adjusted EBITDA and distributable cash flow are non-GAAP supplemental financial measures that management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess:

  • our operating performance as compared to other publicly traded limited partnerships, without regard to historical cost basis or, in the case of Adjusted EBITDA, financing methods;
  • the ability of our business to generate sufficient cash to support our decision to make distributions to our unitholders;
  • our ability to incur and service debt and fund capital expenditures; and
  • the viability of acquisitions and the returns on investment of various investment opportunities.

We believe that the presentation of EBITDA, Adjusted EBITDA and distributable cash flow provides information useful to investors in assessing our financial condition and results of operations.  The GAAP measures most directly comparable to EBITDA, Adjusted EBITDA and distributable cash flow are net income (loss) and net cash provided by operating activities.  EBITDA, Adjusted EBITDA and distributable cash flow should not be considered as an alternative to GAAP net income (loss), net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP.  Each of EBITDA, Adjusted EBITDA and distributable cash flow has important limitations as analytical tools because they exclude some, but not all, items that affect net income (loss) and net cash provided by operating activities, and these measures may vary from those of other companies.  You should not consider EBITDA, Adjusted EBITDA and distributable cash flow in isolation or as a substitute for analysis of our results as reported under GAAP.  As a result, because EBITDA, Adjusted EBITDA and distributable cash flow may be defined differently by other companies in our industry, EBITDA, Adjusted EBITDA and distributable cash flow as presented below may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.  For a reconciliation of EBITDA, Adjusted EBITDA and distributable cash flow to the most comparable financial measures calculated and presented in accordance with GAAP, please see the “Reconciliation of EBITDA, Adjusted EBITDA and Distributable Cash Flow” table below.

Forward-Looking Statements
This release contains forward-looking statements within the meaning of federal securities laws.  These statements discuss future expectations, contain projections of results of operations or of financial condition or state other forward-looking information.  You can identify forward-looking statements by words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “project,” “could,” “may,” “should,” “would,” “will” or other similar expressions that convey the uncertainty of future events or outcomes.  These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the Partnership’s control and are difficult to predict.  These statements are often based upon various assumptions, many of which are based, in turn, upon further assumptions, including examination of historical operating trends made by the management of the Partnership.  Although the Partnership believes that these assumptions were reasonable when made, because assumptions are inherently subject to significant uncertainties and contingencies, which are difficult or impossible to predict and are beyond its control, the Partnership cannot give assurance that it will achieve or accomplish these expectations, beliefs or intentions.  Examples of forward-looking statements in this press release include our expected distribution growth for 2018 and expected acquisition opportunities from our sponsor.  When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements contained in the Partnership’s filings with the U.S. Securities and Exchange Commission (the “Commission”), including the Partnership’s annual report on Form 10-K for the year ended December 31, 2017 and Current Report on Form 8-K filed with the Commission on February 15, 2018.  These risks could cause the Partnership’s actual results to differ materially from those contained in any forward-looking statement.

CONTACT: Marcelo Choi
  Vice President, Investor Relations
  (213) 788-4528
  ir@landmarkmlp.com


 
Landmark Infrastructure Partners LP
Consolidated Statements of Operations
In thousands, except per unit data
(Unaudited)
 
    Three Months Ended June 30,     Six Months Ended June 30,  
    2018     2017     2018     2017  
Revenue                                
Rental revenue   $ 16,796     $ 12,803     $ 32,491     $ 24,644  
Expenses                                
Property operating     229       74       515       161  
General and administrative     1,089       1,437       2,788       2,845  
Acquisition-related     196       285       381       752  
Amortization     4,233       3,239       8,255       6,368  
Impairments     103       692       103       848  
Total expenses     5,850       5,727       12,042       10,974  
Other income and expenses                                
Interest and other income     408       379       846       738  
Interest expense     (6,408 )     (4,234 )     (12,680 )     (8,154 )
Unrealized gain (loss) on derivatives     1,286       (544 )     4,434       (50 )
Total other income and expenses     (4,714 )     (4,399 )     (7,400 )     (7,466 )
Income before income tax expense     6,232       2,677       13,049       6,204  
Income tax expense     127             203        
Net income     6,105       2,677       12,846       6,204  
Less: Net income attributable to noncontrolling interests     8       4       12       7  
Net income attributable to limited partners     6,097       2,673       12,834       6,197  
Less: Distributions to preferred unitholders     (2,930 )     (1,510 )     (4,874 )     (2,854 )
Less: General Partner's incentive distribution rights     (195 )     (98 )     (390 )     (187 )
Net income attributable to common and subordinated unitholders   $ 2,972     $ 1,065     $ 7,570     $ 3,156  
Net income (loss) per common and subordinated unit                                
Common units – basic   $ 0.12     $ 0.05     $ 0.33     $ 0.14  
Common units – diluted   $ 0.12     $ 0.05     $ 0.31     $ 0.14  
Subordinated units – basic and diluted   $     $ 0.05     $ (0.39 )   $ 0.14  
Weighted average common and subordinated units outstanding                                
Common units – basic     25,058       19,650       24,032       19,554  
Common units – diluted     25,058       22,785       24,811       22,689  
Subordinated units – basic and diluted           3,135       779       3,135  
Other Data                                
Total leased tenant sites (end of period)     2,327       2,016       2,327       2,016  
Total available tenant sites (end of period)     2,415       2,093       2,415       2,093  
                                 


 
Landmark Infrastructure Partners LP
Consolidated Balance Sheets
In thousands, except per unit data
(Unaudited)
 
    June 30, 2018     December 31, 2017  
Assets                
Land   $ 124,816     $ 114,385  
Real property interests     668,252       596,422  
Construction in progress     23,804       7,574  
Total land and real property interests     816,872       718,381  
Accumulated amortization of real property interests     (44,870 )     (37,817 )
Land and net real property interests     772,002       680,564  
Investments in receivables, net     20,101       20,782  
Cash and cash equivalents     9,767       9,188  
Restricted cash     6,578       18,672  
Rent receivables, net     3,446       4,141  
Due from Landmark and affiliates     583       629  
Deferred loan costs, net     2,671       3,589  
Deferred rent receivable     4,059       4,252  
Derivative asset     7,593       3,159  
Other intangible assets, net     23,627       17,984  
Assets held for sale (AHFS)     7,846        
Other assets     4,563       5,039  
Total assets   $ 862,836     $ 767,999  
Liabilities and equity                
Revolving credit facility   $ 177,000     $ 304,000  
Secured notes, net     349,223       187,249  
Accounts payable and accrued liabilities     12,039       4,978  
Other intangible liabilities, net     13,146       12,833  
Liabilities associated with AHFS     397        
Prepaid rent     6,499       4,581  
Total liabilities     558,304       513,641  
Commitments and contingencies                
Mezzanine equity                
Series C cumulative redeemable convertible preferred units, 2,000,000 and zero units
  issued and outstanding at June 30, 2018 and December 31, 2017, respectively
    47,534        
Equity                
Series A cumulative redeemable preferred units, 1,593,149 and 1,568,402 units
  issued and outstanding at June 30, 2018 and December 31, 2017, respectively
    37,207       36,604  
Series B cumulative redeemable preferred units, 2,463,015 units
  issued and outstanding at June 30, 2018 and December 31, 2017, respectively
    58,936       58,936  
Common units, 25,130,604 and 20,146,458 units issued and outstanding at
  June 30, 2018 and December 31, 2017, respectively
    330,207       288,527  
Subordinated units, zero and 3,135,109 units issued and outstanding
  at June 30, 2018 and December 31, 2017, respectively
          19,641  
General Partner     (169,239 )     (150,519 )
Accumulated other comprehensive income     (314 )     968  
Total limited partners' equity     256,797       254,157  
Noncontrolling interests     201       201  
Total equity     256,998       254,358  
Total liabilities, mezzanine equity and equity   $ 862,836     $ 767,999  
                 


 
Landmark Infrastructure Partners LP
Real Property Interest Table
 
            Available Tenant Sites (1)     Leased Tenant Sites                                  
Real Property Interest   Number of
Infrastructure
Locations (1)
    Number     Average
Remaining
Property
Interest
(Years)
    Number     Average
Remaining
Lease
Term
(Years) (2)
    Tenant
Site

Occupancy
Rate (3)
    Average
Monthly
Effective Rent
Per Tenant
Site (4)(5)
    Quarterly
Rental
Revenue (6)
(In thousands)
    Percentage
of Quarterly
Rental
Revenue (6)
 
Tenant Lease Assignment with Underlying Easement                                                                        
Wireless Communication     1,093       1,390       77.6   (7 )   1,336       28.1                     $ 7,876       48 %
Outdoor Advertising     517       617       83.8   (7 )   602       18.1                       3,411       21 %
Renewable Power Generation     24       56       29.1   (7 )   56       29.8                       471       3 %
Subtotal     1,634       2,063       78.7   (7 )   1,994       25.1                     $ 11,758       72 %
Tenant Lease Assignment only (8)                                                                        
Wireless Communication     163       232       48.9       214       17.8                     $ 1,580       9 %
Outdoor Advertising     30       31       61.9       30       15.3                       209       1 %
Renewable Power Generation     6       6       49.1       6       28.0                       56       %
Subtotal     199       269       50.4       250       17.7                     $ 1,845       10 %
Tenant Lease on Fee Simple                                                                        
Wireless Communication     17       27       99.0   (7 )   27       18.7                     $ 908       5 %
Outdoor Advertising     37       41       99.0   (7 )   41       10.4                       716       4 %
Renewable Power Generation     13       15       99.0   (7 )   15       31.4                       1,569       9 %
Subtotal     67       83       99.0   (7 )   83       16.8                     $ 3,193       18 %
Total     1,900       2,415       76.2   (9 )   2,327       24.0                     $ 16,796       100 %
Aggregate Portfolio                                                                        
Wireless Communication     1,273       1,649       73.9       1,577       26.5       96 %   $ 2,145     $ 10,364       62 %
Outdoor Advertising     584       689       83.7       673       17.5       98 %     2,349       4,336       26 %
Renewable Power Generation     43       77       37.8       77       30.1       100 %     9,510       2,096       12 %
Total     1,900       2,415       76.2   (9 )   2,327       24.0       96 %   $ 2,443     $ 16,796       100 %
                                                                           

________________________________
(1) “Available Tenant Sites” means the number of individual sites that could be leased. For example, if we have an easement on a single rooftop, on which three different tenants can lease space from us, this would be counted as three “tenant sites,” and all three tenant sites would be at a single infrastructure location with the same address.
(2) Assumes the exercise of all remaining renewal options of tenant leases. Assuming no exercise of renewal options, the average remaining lease terms for our wireless communication, outdoor advertising, renewable power generation and aggregate portfolios as of June 30, 2018 were 3.8, 8.8, 18.1 and 5.5 years, respectively.
(3) Represents the number of leased tenant sites divided by the number of available tenant sites.
(4) Occupancy and average monthly effective rent per tenant site are shown only on an aggregate portfolio basis by industry.
(5) Represents total monthly revenue excluding the impact of amortization of above and below market lease intangibles divided by the number of leased tenant sites.
(6) Represents GAAP rental revenue recognized under existing tenant leases for the three months ended June 30, 2018.  Excludes interest income on receivables.
(7) Fee simple ownership and perpetual easements are shown as having a term of 99 years for purposes of calculating the average remaining term.
(8) Reflects “springing lease agreements” whereby the cancellation or nonrenewal of a tenant lease entitles us to enter into a new ground lease with the property owner (up to the full property interest term) and a replacement tenant lease. The remaining lease assignment term is, therefore, equal to or longer than the remaining lease term. Also represents properties for which the “springing lease” feature has been exercised and has been replaced by a lease for the remaining lease term.
(9) Excluding perpetual ownership rights, the average remaining property interest term on our tenant sites is approximately 65 years.

 
Landmark Infrastructure Partners LP
Reconciliation of EBITDA, Adjusted EBITDA and Distributable Cash Flow
In thousands
(Unaudited)
 
    Three Months Ended June 30,     Six Months Ended June 30,  
    2018     2017     2018     2017  
Reconciliation of EBITDA and Adjusted EBITDA to Net Income                                
Net income   $ 6,105     $ 2,677     $ 12,846     $ 6,204  
Interest expense     6,408       4,234       12,680       8,154  
Amortization expense     4,233       3,239       8,255       6,368  
Income tax expense     127             203        
EBITDA   $ 16,873     $ 10,150     $ 33,984     $ 20,726  
Impairments     103       692       103       848  
Acquisition-related     196       285       381       752  
Unrealized (gain) loss on derivatives     (1,286 )     544       (4,434 )     50  
Unit-based compensation                 70       105  
Straight line rent adjustments     63       27       144       (220 )
Amortization of above- and below-market rents, net     (347 )     (369 )     (675 )     (652 )
Repayments of investments in receivables     309       280       608       525  
Deemed capital contribution to fund general and administrative expense reimbursement(1)     578       1,074       1,780       2,029  
Adjusted EBITDA   $ 16,489     $ 12,683     $ 31,961     $ 24,163  
Reconciliation of EBITDA, Adjusted EBITDA and Distributable Cash Flow to Net Cash Provided by Operating Activities                                
Net cash provided by operating activities   $ 9,886     $ 7,211     $ 21,566     $ 13,990  
Unit-based compensation                 (70 )     (105 )
Unrealized gain (loss) on derivatives     1,286       (544 )     4,434       (50 )
Amortization expense     (4,233 )     (3,239 )     (8,255 )     (6,368 )
Amortization of above- and below-market rents, net     347       369       675       652  
Amortization of deferred loan costs and discount on secured notes     (990 )     (473 )     (1,881 )     (911 )
Receivables interest accretion           (2 )           7  
Impairments     (103 )     (692 )     (103 )     (848 )
Allowance for doubtful accounts     (39 )     (11 )     (29 )     (26 )
Working capital changes     (49 )     58       (3,491 )     (137 )
Net income   $ 6,105     $ 2,677     $ 12,846     $ 6,204  
Interest expense     6,408       4,234       12,680       8,154  
Amortization expense     4,233       3,239       8,255       6,368  
Income tax expense     127             203        
EBITDA   $ 16,873     $ 10,150     $ 33,984     $ 20,726  
Less:                                
Unrealized gain on derivatives     (1,286 )           (4,434 )      
Straight line rent adjustment                       (220 )
Amortization of above- and below-market rents, net     (347 )     (369 )     (675 )     (652 )
Add:                                
Impairments     103       692       103       848  
Acquisition-related     196       285       381       752  
Unrealized loss on derivatives           544             50  
Unit-based compensation                 70       105  
Straight line rent adjustment     63       27       144        
Repayments of investments in receivables     309       280       608       525  
Deemed capital contribution to fund general and administrative expense reimbursement (1)     578       1,074       1,780       2,029  
Adjusted EBITDA   $ 16,489     $ 12,683     $ 31,961     $ 24,163  
Less:                                
Expansion capital expenditures     (36,760 )     (46,710 )     (131,820 )     (59,153 )
Cash interest expense     (5,418 )     (3,761 )     (10,799 )     (7,243 )
Cash income tax     (76 )           (152 )      
Distributions to preferred unitholders     (2,930 )     (1,510 )     (4,874 )     (2,854 )
Distributions to noncontrolling interest holders     (8 )     (4 )     (12 )     (7 )
Add:                                
Borrowings and capital contributions to fund expansion capital expenditures     36,760       46,710       131,820       59,153  
Distributable cash flow   $ 8,057     $ 7,408     $ 16,124     $ 14,059  

________________________________
(1) Under the omnibus agreement that we entered into with Landmark at the closing of our initial public offering, we agreed to reimburse Landmark for expenses related to certain general and administrative services that Landmark will provide to us in support of our business, subject to a quarterly cap equal to the greater of $162,500 and 3% of our revenue during the preceding calendar quarter. This cap on expenses will last until the earlier to occur of: (i) the date on which our revenue for the immediately preceding four consecutive fiscal quarters exceeded $80.0 million and (ii) November 19, 2019. The full amount of general and administrative expenses incurred will be reflected in our income statements, and to the extent such general and administrative expenses exceed the cap amount, the amount of such excess will be reflected in our financial statements as a capital contribution from Landmark rather than as a reduction of our general and administrative expenses, except for expenses that would otherwise be allocated to us, which are not included in our general and administrative expenses.

 
Landmark Infrastructure Partners LP
Reconciliation of Operations, EBITDA, Adjusted EBITDA and Distributable Cash Flow
In thousands, except per unit data (Unaudited)
 
    Three Months Ended June 30,  
    2018     2017  
Revenue:                
Rental revenue   $ 16,796     $ 12,803  
Expenses:                
Property operating     229       74  
General and administrative     1,089       1,437  
Acquisition-related     196       285  
Amortization     4,233       3,239  
Impairments     103       692  
Total expenses     5,850       5,727  
Other income and expenses                
Interest and other income     408       379  
Interest expense     (6,408 )     (4,234 )
Unrealized gain (loss) on derivatives     1,286       (544 )
Total other income and expenses     (4,714 )     (4,399 )
Income before income tax expense     6,232       2,677  
Income tax expense     127        
Net income   $ 6,105     $ 2,677  
Add:                
Interest expense     6,408       4,234  
Amortization expense     4,233       3,239  
Income tax expense     127        
EBITDA   $ 16,873     $ 10,150  
Less:                
Unrealized gain on derivatives     (1,286 )      
Amortization of above- and below-market rents     (347 )     (369 )
Add:                
Impairments     103       692  
Acquisition-related expenses     196       285  
Unrealized loss on derivatives           544  
Straight line rent adjustments     63       27  
Repayments of investments in receivables     309       280  
Deemed capital contribution to fund general and administrative expense reimbursement (1)     578       1,074  
Adjusted EBITDA   $ 16,489     $ 12,683  
Less:                
Expansion capital expenditures     (36,760 )     (46,710 )
Cash interest expense     (5,418 )     (3,761 )
Cash income tax     (76 )      
Distributions to preferred unitholders     (2,930 )     (1,510 )
Distributions to noncontrolling interest holders     (8 )     (4 )
Add:                
Borrowings and capital contributions to fund expansion capital expenditures     36,760       46,710  
Distributable cash flow   $ 8,057     $ 7,408  
Annualized quarterly distribution per unit   $ 1.47     $ 1.42  
Distributions to common unitholders     9,209       6,976  
Distributions to Landmark Dividend – subordinated units           1,113  
Distributions to the General Partner – incentive distribution rights     195       98  
Total distributions   $ 9,404     $ 8,187  
Shortfall of distributable cash flow over the quarterly distribution   $ (1,347 )   $ (779 )
Coverage ratio (2)     0.86 x     0.90 x

_______________________________
(1) Under the omnibus agreement that we entered into with Landmark at the closing of the IPO, we agreed to reimburse Landmark for expenses related to certain general and administrative services that Landmark will provide to us in support of our business, subject to a quarterly cap equal to the greater of $162,500 and 3% of our revenue during the preceding calendar quarter. This cap on expenses will last until the earlier to occur of: (i) the date on which our revenue for the immediately preceding four consecutive fiscal quarters exceeded $80.0 million and (ii) November 19, 2019. The full amount of general and administrative expenses incurred will be reflected in our income statements, and to the extent such general and administrative expenses exceed the cap amount, the amount of such excess will be reflected in our financial statements as a capital contribution from Landmark rather than as a reduction of our general and administrative expenses, except for expenses that would otherwise be allocated to us, which are not included in our general and administrative expenses.
(2) Coverage ratio is calculated as the distributable cash flow for the quarter divided by the distributions to the common and subordinated unitholders on the weighted average units outstanding.

 
Landmark Infrastructure Partners LP
Reconciliation of Operations, EBITDA, Adjusted EBITDA and Distributable Cash Flow
In thousands, except per unit data (Unaudited)
 
    Six Months Ended June 30,  
    2018     2017  
Revenue:                
Rental revenue   $ 32,491     $ 24,644  
Expenses:                
Property operating     515       161  
General and administrative     2,788       2,845  
Acquisition-related     381       752  
Amortization     8,255       6,368  
Impairments     103       848  
Total expenses     12,042       10,974  
Other income and expenses                
Interest and other income     846       738  
Interest expense     (12,680 )     (8,154 )
Unrealized gain (loss) on derivatives     4,434       (50 )
Total other income and expenses     (7,400 )     (7,466 )
Income before income tax expense     13,049       6,204  
Income tax expense     203        
Net income   $ 12,846     $ 6,204  
Add:                
Interest expense     12,680       8,154  
Amortization expense     8,255       6,368  
Income tax expense     203        
EBITDA   $ 33,984     $ 20,726  
Less:                
Unrealized gain on derivatives     (4,434 )      
Straight line rent adjustments           (220 )
Amortization of above- and below-market rents     (675 )     (652 )
Add:                
Impairments     103       848  
Acquisition-related expenses     381       752  
Unrealized loss on derivatives           50  
Straight line rent adjustments     144        
Unit-based compensation     70       105  
Repayments of investments in receivables     608       525  
Deemed capital contribution to fund general and administrative expense reimbursement (1)     1,780       2,029  
Adjusted EBITDA   $ 31,961     $ 24,163  
Less:                
Expansion capital expenditures     (131,820 )     (59,153 )
Cash interest expense     (10,799 )     (7,243 )
Cash income tax     (152 )      
Distributions to preferred unitholders     (4,874 )     (2,854 )
Distributions to noncontrolling interest holders     (12 )     (7 )
Add:                
Borrowings and capital contributions to fund expansion capital expenditures     131,820       59,153  
Distributable cash flow   $ 16,124     $ 14,059  
Annualized quarterly distribution per unit   $ 1.47     $ 1.42  
Distributions to common unitholders     17,664       13,834  
Distributions to Landmark Dividend – subordinated units     573       2,218  
Distributions to the General Partner – incentive distribution rights     386       185  
Total distributions   $ 18,623     $ 16,237  
Shortfall of distributable cash flow over the quarterly distribution   $ (2,499 )   $ (2,178 )
Coverage ratio (2)     0.87 x     0.87 x

____________________________
(1) Under the omnibus agreement that we entered into with Landmark at the closing of the IPO, we agreed to reimburse Landmark for expenses related to certain general and administrative services that Landmark will provide to us in support of our business, subject to a quarterly cap equal to the greater of $162,500 and 3% of our revenue during the preceding calendar quarter. This cap on expenses will last until the earlier to occur of: (i) the date on which our revenue for the immediately preceding four consecutive fiscal quarters exceeded $80.0 million and (ii) November 19, 2019. The full amount of general and administrative expenses incurred will be reflected in our income statements, and to the extent such general and administrative expenses exceed the cap amount, the amount of such excess will be reflected in our financial statements as a capital contribution from Landmark rather than as a reduction of our general and administrative expenses, except for expenses that would otherwise be allocated to us, which are not included in our general and administrative expenses.
(2) Coverage ratio is calculated as the distributable cash flow for the year divided by the distributions to the common and subordinated unitholders on the weighted average units outstanding.

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Source: Landmark Infrastructure Partners LP

Landmark Infrastructure Partners is a growth-oriented master limited partnership formed by Landmark Dividend LLC to acquire, own and manage a portfolio of real property interests that we lease to companies in the wireless communication, outdoor advertising and renewable power generation industries.

400 N. Continental Blvd., Suite 500
El Segundo, CA 90245, USA
310.598.3173
info@landmarkmlp.com

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