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Landmark Infrastructure Partners LP Reports Second Quarter Results

EL SEGUNDO, Calif., Aug. 06, 2020 (GLOBE NEWSWIRE) -- Landmark Infrastructure Partners LP (“Landmark,” the “Partnership,” “we,” “us” or “our”) (Nasdaq: LMRK) today announced its second quarter financial results.

Highlights

  • Reported rental revenue of $13.8 million, a 1% increase year-over-year;
  • Net income attributable to common unitholders of $0.61 per diluted unit, FFO of $0.19 per diluted unit and AFFO of $0.33 per diluted unit;
  • Completed the sale of European outdoor advertising portfolio for a purchase price of £95 million in June 2020;
  • Completed the initial phase of the Dallas Area Rapid Transit (“DART”) project, with the deployment of more than 70 kiosks; and
  • Announced a quarterly distribution of $0.20 per common unit.

Discontinued Operations – Sale of European Outdoor Advertising Portfolio
On June 17, 2020, Landmark completed the sale of its interests in the joint venture that held its European outdoor advertising portfolio for a purchase price of £95 million, subject to certain adjustments.  Accordingly, for all prior periods presented, the related assets and liabilities were reclassified to assets and liabilities held for sale on the consolidated balance sheets, and the related operating results are presented as income from discontinued operations on the consolidated statement of operations for all periods presented.

Second Quarter 2020 Results
Rental revenue for the quarter ended June 30, 2020 was $13.8 million, an increase of 1% compared to the second quarter of 2019.  Net income attributable to common unitholders per diluted unit in the second quarter of 2020 was $0.61, compared to $0.23 in the second quarter of 2019.  Net income for the second quarter of 2020 included a gain on sale of assets of $15.7 million, which is included in income from discontinued operations, and net income for the second quarter of 2019 included a gain on sale of assets of $11.7 million.  FFO for the second quarter of 2020 was $0.19 per diluted unit, compared to $0.07 in the second quarter of 2019.  FFO included a $1.2 million unrealized loss on interest rate hedges and a $0.7 million foreign currency transaction loss in the second quarter of 2020, and a $4.0 million unrealized loss on interest rate hedges in the second quarter of 2019.  AFFO per diluted unit, which excludes certain items including unrealized gains and losses on our interest rate hedges, was $0.33 in the second quarter of 2020 compared to $0.33 in the second quarter of 2019.

For the six months ended June 30, 2020, the Partnership reported rental revenue of $27.7 million compared to $26.9 million during the six months ended June 30, 2019.  For the six months ended June 30, 2020, we generated net income of $17.3 million compared to $16.5 million during the six months ended June 30, 2019.  Net income attributable to common unitholders for the six months ended June 30, 2020 was $0.43 per diluted unit compared to $0.38 per diluted unit for the six months ended June 30, 2019.  For the six months ended June 30, 2020, we generated FFO of $0.20 per diluted unit and AFFO of $0.66 per diluted unit, compared to FFO of $0.20 per diluted unit and AFFO of $0.64 per diluted unit during the six months ended June 30, 2019.

“We were very pleased with our financial and operating results in the second quarter, especially in light of challenges in the outdoor advertising industry,” said Tim Brazy, Chief Executive Officer of the Partnership’s general partner.  “We are also encouraged by the significant improvement in outdoor traffic data which bodes well for the recovery of the outdoor advertising industry.  With the steps we have taken to preserve liquidity and capital, including the recent sale of our European outdoor advertising portfolio, we believe that we are in a much better position today to navigate through this challenging environment.”

Quarterly Distributions
On July 24, 2020, the Board of Directors of the Partnership’s general partner declared a distribution of $0.20 per common unit, or $0.80 per common unit on an annualized basis, for the quarter ended June 30, 2020.  The distribution is payable on August 14, 2020 to common unitholders of record as of August 4, 2020.

On July 22, 2020, the Board of Directors of the Partnership’s general partner declared a quarterly cash distribution of $0.4375 per Series C preferred unit, which is payable on August 17, 2020 to Series C preferred unitholders of record as of August 3, 2020.

On July 22, 2020, 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 17, 2020 to Series B preferred unitholders of record as of August 3, 2020.

On June 19, 2020, 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 15, 2020 to Series A preferred unitholders of record as of July 1, 2020.

Capital and Liquidity
As of June 30, 2020, the Partnership had $58 million of outstanding borrowings under its revolving credit facility (the “Facility”), and approximately $392 million of undrawn borrowing capacity under the Facility, subject to compliance with certain covenants.

Recent Acquisitions
Year-to-date through June 30, 2020, the Partnership acquired a total of 7 assets for total consideration of approximately $1.3 million.  The acquisitions were immediately accretive to AFFO and funded primarily with borrowings under the Partnership’s existing credit facility.

At-The-Market (“ATM”) Equity Programs
Year-to-date through June 30, 2020, the Partnership issued 109,724 common units, 23,287 Series A preferred units and 84,139 Series B preferred units through its At-The-Market (“ATM”) issuance programs for gross proceeds of approximately $4.5 million.

Conference Call Information
The Partnership will hold a conference call on Thursday, August 6, 2020, at 12:00 p.m. Eastern Time (9:00 a.m. Pacific Time) to discuss its second quarter 2020 financial and operating results.  The call can be accessed via a live webcast at https://edge.media-server.com/mmc/p/72k8hvp8, 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 9368289.

A webcast replay will be available approximately two hours after the completion of the conference call through August 6, 2021 at https://edge.media-server.com/mmc/p/72k8hvp8. The replay is also available through August 15, 2020 by dialing 855-859-2056 or 404-537-3406 and entering the access code 9368289.

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
FFO, is a non-GAAP financial measure of operating performance of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP.  We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trust (“NAREIT”).  FFO represents net income (loss) excluding real estate related depreciation and amortization expense, real estate related impairment charges, gains (or losses) on real estate transactions, adjustments for unconsolidated joint venture, and distributions to preferred unitholders and noncontrolling interests.

FFO is generally considered by industry analysts to be the most appropriate measure of performance of real estate companies.  FFO does not necessarily represent cash provided by operating activities in accordance with GAAP and should not be considered an alternative to net earnings as an indication of the Partnership's performance or to cash flow as a measure of liquidity or ability to make distributions.  Management considers FFO an appropriate measure of performance of an equity REIT because it primarily excludes the assumption that the value of the real estate assets diminishes predictably over time, and because industry analysts have accepted it as a performance measure.  The Partnership's computation of FFO may differ from the methodology for calculating FFO used by other equity REITs, and therefore, may not be comparable to such other REITs.

Adjusted Funds from Operations ("AFFO") is a non-GAAP financial measure of operating performance used by many companies in the REIT industry.  AFFO adjusts FFO for certain non-cash items that reduce or increase net income in accordance with GAAP.  AFFO should not be considered an alternative to net earnings, as an indication of the Partnership's performance or to cash flow as a measure of liquidity or ability to make distributions. Management considers AFFO a useful supplemental measure of the Partnership's performance.  The Partnership's computation of AFFO may differ from the methodology for calculating AFFO used by other equity REITs, and therefore, may not be comparable to such other REITs.  We calculate AFFO by starting with FFO and adjusting for general and administrative expense reimbursement, acquisition-related expenses, unrealized gain (loss) on derivatives, straight line rent adjustments, unit-based compensation, amortization of deferred loan costs and discount on secured notes, deferred income tax expense, amortization of above and below market rents, loss on early extinguishment of debt, repayments of receivables, adjustments for investment in unconsolidated joint venture, adjustments for drop-down assets and foreign currency transaction gain (loss).  The GAAP measures most directly comparable to FFO and AFFO is net income.

We define EBITDA as net income before interest expense, 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, foreign currency transaction gain (loss), adjustments for investment in unconsolidated joint venture and the capital contribution to fund our general and administrative expense reimbursement.  We believe that to understand our performance further, EBITDA and Adjusted EBITDA should be compared with our reported net income (loss) and net cash provided by operating activities in accordance with GAAP, as presented in our consolidated financial statements.

EBITDA and Adjusted EBITDA 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 and Adjusted EBITDA provides information useful to investors in assessing our financial condition and results of operations.  The GAAP measures most directly comparable to EBITDA and Adjusted EBITDA are net income (loss) and net cash provided by operating activities.  EBITDA and Adjusted EBITDA 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 and Adjusted EBITDA 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 and Adjusted EBITDA in isolation or as a substitute for analysis of our results as reported under GAAP.  As a result, because EBITDA and Adjusted EBITDA may be defined differently by other companies in our industry, EBITDA and Adjusted EBITDA as presented below may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.  For a reconciliation of EBITDA and Adjusted EBITDA to the most comparable financial measures calculated and presented in accordance with GAAP, please see the “Reconciliation of EBITDA and Adjusted EBITDA” 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 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, 2019 and Current Report on Form 8-K filed with the Commission on February 27, 2020.  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,  
    2020(1)     2019(1)     2020(1)     2019(1)  
Revenue                                
Rental revenue   $ 13,844     $ 13,687     $ 27,665     $ 26,902  
Expenses                                
Property operating     354       270       863       856  
General and administrative     1,223       1,455       2,711       2,924  
Acquisition-related     86       162       91       204  
Depreciation and amortization     4,301       3,259       7,903       6,615  
Impairments     102             184       204  
Total expenses     6,066       5,146       11,752       10,803  
Other income and expenses                                
Interest and other income     96       112       271       446  
Interest expense     (4,393 )     (4,655 )     (8,691 )     (9,142 )
Loss on early extinguishment of debt                 (2,231 )      
Unrealized loss on derivatives     (481 )     (3,570 )     (6,684 )     (5,728 )
Equity income from unconsolidated joint venture     687       164       837       109  
Gain on sale of real property interests           11,673             17,535  
Total other income and expenses     (4,091 )     3,724       (16,498 )     3,220  
Income from continuing operations before income tax expense (benefit)     3,687       12,265       (585 )     19,319  
Income tax expense (benefit)     (90 )     3,112       (335 )     3,122  
Income from continuing operations     3,777       9,153       (250 )     16,197  
Income from discontinued operations, net of tax     14,856       112       17,511       278  
Net income     18,633       9,265       17,261       16,475  
Less: Net income attributable to noncontrolling interests     8       8       16       16  
Net income attributable to limited partners     18,625       9,257       17,245       16,459  
Less: Distributions to preferred unitholders     (3,037 )     (3,021 )     (6,097 )     (5,915 )
Less: General Partner's incentive distribution rights           (197 )           (394 )
Less: Accretion of Series C preferred units     (96 )     (94 )     (193 )     (450 )
Net income attributable to common unitholders   $ 15,492     $ 5,945     $ 10,955     $ 9,700  
Income from continuing operations per common unit                                
Common units – basic   $ 0.02     $ 0.23     $ (0.26 )   $ 0.37  
Common units – diluted   $ 0.02     $ 0.23     $ (0.26 )   $ 0.37  
Net income per common unit                                
Common units – basic   $ 0.61     $ 0.23     $ 0.43     $ 0.38  
Common units – diluted   $ 0.61     $ 0.23     $ 0.43     $ 0.38  
Weighted average common units outstanding                                
Common units – basic     25,476       25,339       25,468       25,338  
Common units – diluted     25,476       25,339       25,468       25,338  
Other Data                                
Total leased tenant sites (end of period)     1,814       1,912       1,814       1,912  
Total available tenant sites (end of period)     1,922       2,005       1,922       2,005  


(1) Prior period amounts have been revised to reflect classification of the European outdoor advertising portfolio as discontinued operations. As a result, operating results of the European outdoor advertising portfolio are presented as income from discontinued operations on the consolidated statements of operations for all periods presented.

Landmark Infrastructure Partners LP
Consolidated Balance Sheets
In thousands, except per unit data
(Unaudited)

    June 30, 2020     December 31, 2019(1)  
Assets                
Land   $ 107,455     $ 107,558  
Real property interests     520,029       509,181  
Construction in progress     41,655       49,116  
Total land and real property interests     669,139       665,855  
Accumulated depreciation and amortization of real property interests     (55,860 )     (48,995 )
Land and net real property interests     613,279       616,860  
Investments in receivables, net     5,380       5,653  
Investment in unconsolidated joint venture     62,062       62,059  
Cash and cash equivalents     6,409       5,885  
Restricted cash     3,103       5,619  
Rent receivables     2,948       3,673  
Due from Landmark and affiliates     2,058       1,132  
Deferred loan costs, net     4,051       4,557  
Deferred rent receivable     1,492       1,548  
Other intangible assets, net     20,661       21,936  
Assets held for sale (AHFS)           114,400  
Right of use asset, net     6,500       6,615  
Other assets     7,451       5,668  
Total assets   $ 735,394     $ 855,605  
Liabilities and equity                
Revolving credit facility   $ 58,000     $ 179,500  
Secured notes, net     278,377       217,098  
Accounts payable and accrued liabilities     4,837       3,842  
Other intangible liabilities, net     6,826       7,583  
Liabilities associated with AHFS           64,627  
Operating lease liability     6,723       6,766  
Prepaid rent     5,758       5,391  
Derivative liabilities     3,908       1,474  
Total liabilities     364,429       486,281  
Commitments and contingencies                
Mezzanine equity                
Series C cumulative redeemable convertible preferred units, 1,982,700 and 1,988,700 units
  issued and outstanding at June 30, 2020 and December 31, 2019, respectively
    47,709       47,666  
Equity                
Series A cumulative redeemable preferred units, 1,745,328 and 1,722,041 units issued and outstanding at June 30, 2020 and December 31, 2019, respectively     40,785       40,210  
Series B cumulative redeemable preferred units, 2,628,932 and 2,544,793 units issued and outstanding at June 30, 2020 and December 31, 2019, respectively     63,014       60,926  
Common units, 25,478,042 and 25,353,140 units issued and outstanding at June 30, 2020 and December 31, 2019, respectively     380,860       382,581  
General Partner     (160,323 )     (162,277 )
Accumulated other comprehensive income (loss)     (1,281 )     17  
Total limited partners' equity     323,055       321,457  
Noncontrolling interests     201       201  
Total equity     323,256       321,658  
Total liabilities, mezzanine equity and equity   $ 735,394     $ 855,605  


(1) Prior period amounts have been revised to reflect classification of the European outdoor advertising portfolio as discontinued operations. As a result, assets and liabilities of the European outdoor advertising portfolio were reclassified to assets and liabilities held for sale on the consolidated balance sheets.

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     701       907       75.9   (7)   847       26.3                     $ 5,165       38 %
Outdoor Advertising     522       678       86.6   (7)   655       16.5                       3,333       23 %
Renewable Power Generation     15       47       29.7   (7)   47       30.0                       484       3 %
Subtotal     1,238       1,632       75.3   (7)   1,549       22.4                     $ 8,982       64 %
Tenant Lease Assignment only (8)                                                                        
Wireless Communication     117       169       46.7       149       15.4                     $ 1,017       7 %
Outdoor Advertising     33       36       61.7       34       12.5                       231       2 %
Renewable Power Generation     6       6       47.1       6       26.3                       57       1 %
Subtotal     156       211       49.2       189       15.2                     $ 1,305       10 %
Tenant Lease on Fee Simple                                                                        
Wireless Communication     18       28       99.0   (7)   25       16.1                     $ 162       1 %
Outdoor Advertising     28       28       99.0   (7)   28       6.0                       226       2 %
Renewable Power Generation     14       17       99.0   (7)   17       29.1                       1,612       12 %
Digital Infrastructure     6       6       99.0   (7)   6       50.6                       1,557       11 %
Subtotal     66       79       99.0   (7)   76       18.2                     $ 3,557       26 %
Total     1,460       1,922       70.5   (9)   1,814       21.4                     $ 13,844       100 %
Aggregate Portfolio                                                                        
Wireless Communication     836       1,104       66.8       1,021       24.5       92 %   $ 1,991     $ 6,344       46 %
Outdoor Advertising     583       742       77.1       717       15.9       97 %     1,799       3,790       27 %
Renewable Power Generation     35       70       35.7       70       29.0       100 %     10,259       2,153       16 %
Digital Infrastructure     6       6       99.0       6       50.6       100 %     85,776       1,557       11 %
Total     1,460       1,922       71.0   (9)   1,814       21.4       94 %   $ 2,517     $ 13,844       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, digital infrastructure, and aggregate portfolios as of June 30, 2020 were 3.2, 7.7, 16.7, 7.3 and 5.2 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, 2020.  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 62 years.

Landmark Infrastructure Partners LP
Reconciliation of Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO)
In thousands, except per unit data
(Unaudited)

    Three Months Ended June 30,     Six Months Ended June 30,  
    2020     2019     2020     2019  
Net income   $ 18,633     $ 9,265     $ 17,261     $ 16,475  
Adjustments:                                
Depreciation and amortization expense     4,547       3,456       8,439       6,973  
Impairments     102             184       204  
Gain on sale of real property interests, net of income taxes     (15,723 )     (8,620 )     (15,723 )     (14,482 )
Adjustments for investment in unconsolidated joint venture     292       797       1,083       1,777  
Distributions to preferred unitholders     (3,037 )     (3,021 )     (6,097 )     (5,915 )
Distributions to noncontrolling interests     (8 )     (8 )     (16 )     (16 )
FFO attributable to common unitholders   $ 4,806     $ 1,869     $ 5,131     $ 5,016  
Adjustments:                                
General and administrative expense reimbursement (1)     929       1,134       2,030       2,128  
Acquisition-related expenses     117       368       432       495  
Unrealized loss on derivatives     1,192       4,013       8,483       6,775  
Straight line rent adjustments     208       159       377       269  
Unit-based compensation                 120       130  
Amortization of deferred loan costs and discount on secured notes     616       770       1,205       1,528  
Amortization of above- and below-market rents, net     (245 )     (214 )     (481 )     (438 )
Deferred income tax expense (benefit)     (9 )     53       (308 )     53  
Loss on early extinguishment of debt                 2,231        
Repayments of receivables     101       124       243       274  
Adjustments for investment in unconsolidated joint venture     39       (12 )     77       25  
Foreign currency transaction (gain) loss     728       47       (2,635 )     68  
AFFO attributable to common unitholders   $ 8,482     $ 8,311     $ 16,905     $ 16,323  
                                 
FFO per common unit - diluted   $ 0.19     $ 0.07     $ 0.20     $ 0.20  
AFFO per common unit - diluted   $ 0.33     $ 0.33     $ 0.66     $ 0.64  
Weighted average common units outstanding - diluted     25,476       25,339       25,468       25,338  


(1) Under the omnibus agreement with Landmark, 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 3% of our revenue during the current 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 $120 million and (ii) November 19, 2021. 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 reimbursed by Landmark and 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 EBITDA and Adjusted EBITDA
In thousands
(Unaudited)

    Three Months Ended June 30,     Six Months Ended June 30,  
    2020     2019     2020     2019  
Reconciliation of EBITDA and Adjusted EBITDA to Net Income                                
Net income   $ 18,633     $ 9,265     $ 17,261     $ 16,475  
Interest expense     4,631       4,692       9,332       9,180  
Depreciation and amortization expense     4,547       3,456       8,439       6,973  
Income tax expense     160       3,285       103       3,407  
EBITDA   $ 27,971     $ 20,698     $ 35,135     $ 36,035  
Impairments     102             184       204  
Acquisition-related     117       368       432       495  
Unrealized loss on derivatives     1,192       4,013       8,483       6,775  
Loss on early extinguishment of debt                 2,231        
Gain on sale of real property interests     (15,723 )     (11,673 )     (15,723 )     (17,535 )
Unit-based compensation                 120       130  
Straight line rent adjustments     208       159       377       269  
Amortization of above- and below-market rents, net     (245 )     (214 )     (481 )     (438 )
Repayments of investments in receivables     101       124       243       274  
Adjustments for investment in unconsolidated joint venture     996       1,461       2,490       3,144  
Foreign currency transaction (gain) loss     728       47       (2,635 )     68  
Deemed capital contribution to fund general and administrative expense reimbursement(1)     929       1,134       2,030       2,128  
Adjusted EBITDA   $ 16,376     $ 16,117     $ 32,886     $ 31,549  
Reconciliation of EBITDA and Adjusted EBITDA to Net Cash Provided by Operating Activities                                
Net cash provided by operating activities   $ 10,633     $ 8,716     $ 20,096     $ 16,883  
Unit-based compensation                 (120 )     (130 )
Unrealized loss on derivatives     (1,192 )     (4,013 )     (8,483 )     (6,775 )
Loss on early extinguishment of debt                 (2,231 )      
Depreciation and amortization expense     (4,547 )     (3,456 )     (8,439 )     (6,973 )
Amortization of above- and below-market rents, net     245       214       481       438  
Amortization of deferred loan costs and discount on secured notes     (616 )     (770 )     (1,205 )     (1,528 )
Receivables interest accretion           3             6  
Impairments     (102 )           (184 )     (204 )
Gain on sale of real property interests     15,723       11,673       15,723       17,535  
Adjustment for uncollectible accounts     (68 )           (150 )     (5 )
Equity income from unconsolidated joint venture     687       164       837       109  
Distributions of earnings from unconsolidated joint venture     (250 )     (1,101 )     (925 )     (2,583 )
Foreign currency transaction gain (loss)     (728 )     (47 )     2,635       (68 )
Working capital changes     (1,152 )     (2,118 )     (774 )     (230 )
Net income   $ 18,633     $ 9,265     $ 17,261     $ 16,475  
Interest expense     4,631       4,692       9,332       9,180  
Depreciation and amortization expense     4,547       3,456       8,439       6,973  
Income tax expense     160       3,285       103       3,407  
EBITDA   $ 27,971     $ 20,698     $ 35,135     $ 36,035  
Less:                                
Gain on sale of real property interests     (15,723 )     (11,673 )     (15,723 )     (17,535 )
Amortization of above- and below-market rents, net     (245 )     (214 )     (481 )     (438 )
Adjustments for investment in unconsolidated joint venture                        
Foreign currency transaction gain                 (2,635 )      
Add:                                
Impairments     102             184       204  
Acquisition-related     117       368       432       495  
Unrealized loss on derivatives     1,192       4,013       8,483       6,775  
Loss on early extinguishment of debt                 2,231        
Unit-based compensation                 120       130  
Straight line rent adjustment     208       159       377       269  
Repayments of investments in receivables     101       124       243       274  
Adjustments for investment in unconsolidated joint venture     996       1,461       2,490       3,144  
Foreign currency transaction loss     728       47             68  
Deemed capital contribution to fund general and administrative expense reimbursement (1)     929       1,134       2,030       2,128  
Adjusted EBITDA   $ 16,376     $ 16,117     $ 32,886     $ 31,549  


(1) Under the omnibus agreement with Landmark, 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 3% of our revenue during the current 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 $120 million and (ii) November 19, 2021. 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 reimbursed by Landmark and 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.


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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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