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Landmark Infrastructure Partners LP Reports Third Quarter Results

EL SEGUNDO, Calif., Nov. 07, 2018 (GLOBE NEWSWIRE) -- Landmark Infrastructure Partners LP (the “Partnership,” “we,” “us” or “our”) (Nasdaq: LMRK) today announced its third quarter financial results.

Highlights

  • Completed acquisitions with total consideration of approximately $135 million through September 30, 2018;
  • Rental revenue increased 30% to $17.6 million;
  • Net income attributable to common unitholders of $102.1 million, or $3.71 per diluted unit;
  • EBITDA of $116.9 million and Adjusted EBITDA of $17.3 million, a 30% increase in Adjusted EBITDA;
  • FFO of $0.29 per diluted unit and AFFO of $0.34 per diluted unit;
  • Formed a joint venture with Brookfield Asset Management (the “JV”) to invest in core infrastructure assets;
  • Entered into an agreement with Dallas Area Rapid Transit (“DART”) to develop a smart media communications platform which includes the deployment of kiosks and Landmark’s FlexGridTM solution;
  • Obtained commitments for an amended and restated five-year revolving credit facility with initial borrowing commitments of no less than $450.0 million; and
  • Announced a quarterly distribution of $0.3675 per common unit.

Third Quarter 2018 Results
Rental revenue for the quarter ended September 30, 2018 increased 30% to $17.6 million compared to the third quarter of 2017.  Net income for the third quarter of 2018 was $105.1 million, compared to net income of $3.8 million in the third quarter of 2017.  Net income attributable to common unitholders per diluted unit in the third quarter of 2018 was $3.71, compared to net income attributable to common unitholders per diluted unit of $0.08 in the third quarter of 2017.  FFO for the third quarter of 2018 increased to $0.29 per diluted unit, an increase of 21% from the third quarter of 2017.  AFFO for the third quarter of 2018 increased to $0.34 per diluted unit, an increase of 6% from the third quarter of 2017.  Net income for the quarter ended September 30, 2018 includes a $100.0 million gain on sale of real property interests associated with the formation of the JV.

For the nine months ended September 30, 2018, the Partnership reported rental revenue of $50.1 million, net income of $118.0 million, and net income attributable to common unitholders of $4.18 per diluted unit.  FFO for the nine months ended September 30, 2018 was $0.95 per diluted unit, an increase of 36% from the nine months ended September 30, 2017.  AFFO for the nine months ended September 30, 2018 was $0.99 per diluted unit, an increase of 5% from the nine months ended September 30, 2017.

“We are very pleased with our strong third quarter results and the excellent progress we are making on recent initiatives.  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 core infrastructure assets,” said Tim Brazy, Chief Executive Officer of the Partnership’s general partner.

REIT Internalization
As part of the plan to prepare the Partnership to consider an internalization of the sponsor, the Partnership is making significant changes to its operating model, including:

  • Shifting to a direct acquisition and development model to drive higher accretion from acquisitions and developments;
  • Reducing leverage levels to provide more operational flexibility and comparability to REIT peers;
  • Including REIT performance metrics such as FFO and AFFO per unit;
  • Maintaining the existing quarterly distribution of $0.3675 per common unit in order to retain cash flow in the near term to support higher organic growth and fund acquisition and development activities.

Quarterly Distributions
On October 26, 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 September 30, 2018.  The distribution is payable on November 14, 2018 to common unitholders of record as of November 5, 2018.

On October 22, 2018, the Board of Directors of the Partnership’s general partner declared a quarterly cash distribution of $0.4382 per Series C preferred unit, which is payable on November 15, 2018 to Series C preferred unitholders of record as of November 1, 2018. 

On October 22, 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 November 15, 2018 to Series B preferred unitholders of record as of November 1, 2018.

On September 20, 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 October 15, 2018 to Series A preferred unitholders of record as of October 1, 2018.

Recent Acquisitions
Year-to-date through September 30, 2018, the Partnership acquired a total of 217 assets for total consideration of approximately $135 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 September 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
During the third quarter the Partnership made significant progress on a number of its development initiatives and is making changes to its operating model.  In the fourth quarter and 2019, the Partnership is focusing on the completion of these development activities rather than acquiring drop-down portfolios from the sponsor, as direct acquisitions and development activities are expected to be more accretive.   As the Partnership focuses on completing these developments we are revising our outlook for acquisition volume to $175 million.  This includes approximately $35 million in new infrastructure deployments with the amount of development activity expected to accelerate into the first half of 2019.  Additionally, as part of these initiatives, the Partnership will focus on retaining capital to drive higher organic growth and fund acquisition and development activities.  While the Partnership is executing on its acquisition and development activities it expects to maintain the existing quarterly distribution to common unitholders of $0.3675 per common unit.

Conference Call Information
The Partnership will hold a conference call on Wednesday, November 7, 2018, at 12:00 p.m. Eastern Time (9:00 a.m. Pacific Time) to discuss its third quarter 2018 financial and operating results.  The call can be accessed via a live webcast at https://edge.media-server.com/m6/p/nx8q4ivw, 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 8945636.

A webcast replay will be available approximately two hours after the completion of the conference call through November 7, 2019 at https://edge.media-server.com/m6/p/nx8q4ivw.  The replay is also available through November 13, 2018 by dialing 855-859-2056 or 404-537-3406 and entering the access code 8945636.

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, and repayments of receivables.

We define EBITDA as net income before interest, income taxes, depreciation and amortization, adjustments for investment in unconsolidated joint venture, 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, cash interest expense from unconsolidated joint venture, 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 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 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 September 30,     Nine Months Ended September 30,  
    2018     2017     2018     2017  
Revenue                                
Rental revenue   $ 17,560     $ 13,499     $ 50,051     $ 38,143  
Expenses                                
Property operating     360       86       875       247  
General and administrative     735       1,422       3,523       4,267  
Acquisition-related     88       255       469       1,007  
Amortization     4,293       3,458       12,548       9,826  
Impairments     877             980       848  
Total expenses     6,353       5,221       18,395       16,195  
Other income and expenses                                
Interest and other income     434       430       1,280       1,168  
Interest expense     (6,906 )     (4,777 )     (19,586 )     (12,931 )
Unrealized gain (loss) on derivatives     774       (61 )     5,208       (111 )
Equity income from unconsolidated joint venture     59             59        
Gain on sale of real property interests     100,039             100,039        
Total other income and expenses     94,400       (4,408 )     87,000       (11,874 )
Income before income tax expense     105,607       3,870       118,656       10,074  
Income tax expense     460       72       663       72  
Net income     105,147       3,798       117,993       10,002  
Less: Net income attributable to noncontrolling interests     8       4       20       11  
Net income attributable to limited partners     105,139       3,794       117,973       9,991  
Less: Distributions to preferred unitholders     (2,868 )     (1,818 )     (7,742 )     (4,672 )
Less: General Partner's incentive distribution rights     (197 )     (109 )     (587 )     (295 )
Net income attributable to common and subordinated unitholders   $ 102,074     $ 1,867     $ 109,644     $ 5,024  
Net income (loss) per common and subordinated unit                                
Common units – basic   $ 4.06     $ 0.08     $ 4.51     $ 0.22  
Common units – diluted   $ 3.71     $ 0.08     $ 4.18     $ 0.22  
Subordinated units – basic and diluted   $     $ 0.08     $ (0.59 )   $ 0.22  
Weighted average common and subordinated units outstanding                                
Common units – basic     25,138       19,750       24,405       19,620  
Common units – diluted     27,741       22,885       26,658       22,755  
Subordinated units – basic and diluted           3,135       517       3,135  
Other Data                                
Total leased tenant sites (end of period)     1,818       2,099       1,818       2,099  
Total available tenant sites (end of period)     1,907       2,180       1,907       2,180  
                                 


   
Landmark Infrastructure Partners LP  
Consolidated Balance Sheets  
In thousands, except per unit data  
(Unaudited)  
   
    September 30, 2018     December 31, 2017  
Assets                
Land   $ 128,791     $ 114,385  
Real property interests     517,283       596,422  
Construction in progress     26,413       7,574  
Total land and real property interests     672,487       718,381  
Accumulated amortization of real property interests     (35,965 )     (37,817 )
Land and net real property interests     636,522       680,564  
Investments in receivables, net     18,964       20,782  
Investment in unconsolidated joint venture     65,670        
Cash and cash equivalents     6,907       9,188  
Restricted cash     6,205       18,672  
Rent receivables, net     4,014       4,141  
Due from Landmark and affiliates     145       629  
Deferred loan costs, net     2,199       3,589  
Deferred rent receivable     5,391       4,252  
Derivative asset     8,366       3,159  
Other intangible assets, net     21,474       17,984  
Assets held for sale (AHFS)     7,846        
Other assets     3,970       5,039  
Total assets   $ 787,673     $ 767,999  
Liabilities and equity                
Revolving credit facility   $ 140,500     $ 304,000  
Secured notes, net     225,729       187,249  
Accounts payable and accrued liabilities     7,312       4,978  
Other intangible liabilities, net     9,717       12,833  
Liabilities associated with AHFS     397        
Prepaid rent     5,563       4,581  
Total liabilities     389,218       513,641  
Commitments and contingencies                
Mezzanine equity                
Series C cumulative redeemable convertible preferred units, 2,000,000 and zero units
  issued and outstanding at September 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 September 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 September 30, 2018 and December 31, 2017, respectively
    58,936       58,936  
Common units, 25,266,060 and 20,146,458 units issued and outstanding at
  September 30, 2018 and December 31, 2017, respectively
    424,875       288,527  
Subordinated units, zero and 3,135,109 units issued and outstanding
  at September 30, 2018 and December 31, 2017, respectively
          19,641  
General Partner     (168,949 )     (150,519 )
Accumulated other comprehensive income (loss)     (1,349 )     968  
Total limited partners' equity     350,720       254,157  
Noncontrolling interests     201       201  
Total equity     350,921       254,358  
Total liabilities, mezzanine equity and equity   $ 787,673     $ 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     724     916     72.9   (7)   862       28.1                 $ 7,738     44 %
Outdoor Advertising     529     630     80.7   (7)   614       17.9                   3,933     22 %
Renewable Power Generation     24     56     28.9   (7)   56       29.6                   436     3 %
Subtotal     1,277     1,602     78.9   (7)   1,532       24.0                 $ 12,107     69 %
Tenant Lease Assignment only (8)                                                              
Wireless Communication     120     174     48.6       156       17.8                 $ 1,552     9 %
Outdoor Advertising     32     35     63.3       34       14.4                   211     1 %
Renewable Power Generation     6     6     48.9       6       27.8                   56     %
Subtotal     158     215     51.2       196       17.6                 $ 1,819     10 %
Tenant Lease on Fee Simple                                                              
Wireless Communication     19     28     99.0   (7)   28       18.0                 $ 1,221     7 %
Outdoor Advertising     43     47     99.0   (7)   47       9.2                   845     5 %
Renewable Power Generation     13     15     99.0   (7)   15       31.2                   1,568     9 %
Subtotal     75     90     99.0   (7)   90       15.5                 $ 3,634     21 %
Total     1,510     1,907     73.0   (9)   1,818       22.9                 $ 17,560     100 %
Aggregate Portfolio                                                              
Wireless Communication     863     1,118     69.0       1,046       26.3     94 %   $ 1,910   $ 10,511     60 %
Outdoor Advertising     604     712     80.9       695       17.1     98 %     2,447     4,989     28 %
Renewable Power Generation     43     77     37.5       77       29.8     100 %     8,925     2,060     12 %
Total     1,510     1,907     73.0   (9)   1,818       22.9     95 %   $ 2,415   $ 17,560     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 September 30, 2018 were 3.6, 8.7, 17.8 and 5.9 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 September 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 64 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 September 30,     Nine Months Ended September 30,  
    2018     2017     2018     2017  
Net income   $ 105,147     $ 3,798     $ 117,993     $ 10,002  
Adjustments:                                
Amortization expense     4,293       3,458       12,548       9,826  
Impairments     877             980       848  
Gain on sale of real property interests     (100,039 )           (100,039 )      
Distributions to preferred unitholders     (2,868 )     (1,818 )     (7,742 )     (4,672 )
Distributions to noncontrolling interests     (8 )     (4 )     (20 )     (11 )
FFO   $ 7,402     $ 5,434     $ 23,720     $ 15,993  
Adjustments:                                
General and administrative expense reimbursement     289       996       2,069       3,025  
Acquisition-related expenses     88       255       469       1,007  
Unrealized (gain) loss on derivatives     (774 )     61       (5,208 )     111  
Straight line rent adjustments     33       (88 )     177       (304 )
Unit-based compensation                 70       105  
Amortization of deferred loan costs and discount on secured notes     1,123       609       3,004       1,518  
Deferred income tax expense     369             420        
Amortization of above- and below-market rents, net     (333 )     (311 )     (1,008 )     (964 )
Repayments of receivables     307       343       915       868  
Adjustments for investment in unconsolidated joint venture     6             6        
AFFO   $ 8,510     $ 7,299     $ 24,634     $ 21,359  
                                 
FFO per common unit - diluted   $ 0.29     $ 0.24     $ 0.95     $ 0.70  
AFFO per common unit - diluted   $ 0.34     $ 0.32     $ 0.99     $ 0.94  
Weighted average common units outstanding - diluted     25,138       22,885       24,922       22,755  
                                 


   
Landmark Infrastructure Partners LP  
Reconciliation of EBITDA, Adjusted EBITDA and Distributable Cash Flow  
In thousands  
(Unaudited)  
   
    Three Months Ended September 30,     Nine Months Ended September 30,  
    2018     2017     2018     2017  
Reconciliation of EBITDA and Adjusted EBITDA to Net Income                                
Net income   $ 105,147     $ 3,798     $ 117,993     $ 10,002  
Interest expense     6,906       4,777       19,586       12,931  
Amortization expense     4,293       3,458       12,548       9,826  
Income tax expense     460       72       663       72  
Adjustments for investment in unconsolidated joint venture     52             52        
EBITDA   $ 116,858     $ 12,105     $ 150,842     $ 32,831  
Impairments     877             980       848  
Acquisition-related     88       255       469       1,007  
Unrealized (gain) loss on derivatives     (774 )     61       (5,208 )     111  
Gain on sale of real property interests     (100,039 )           (100,039 )      
Unit-based compensation                 70       105  
Straight line rent adjustments     33       (88 )     177       (304 )
Amortization of above- and below-market rents, net     (333 )     (311 )     (1,008 )     (964 )
Repayments of investments in receivables     307       343       915       868  
Deemed capital contribution to fund general and administrative expense reimbursement(1)     289       996       2,069       3,025  
Adjusted EBITDA   $ 17,306     $ 13,361     $ 49,267     $ 37,527  
Reconciliation of EBITDA, Adjusted EBITDA and Distributable Cash Flow to Net Cash Provided by Operating Activities                                
Net cash provided by operating activities   $ 9,503     $ 7,497     $ 31,069     $ 21,488  
Unit-based compensation                 (70 )     (105 )
Unrealized gain (loss) on derivatives     774       (61 )     5,208       (111 )
Amortization expense     (4,293 )     (3,458 )     (12,548 )     (9,826 )
Amortization of above- and below-market rents, net     333       311       1,008       964  
Amortization of deferred loan costs and discount on secured notes     (1,123 )     (609 )     (3,004 )     (1,518 )
Receivables interest accretion                       7  
Impairments     (877 )           (980 )     (848 )
Gain on sale of real property interests     100,039             100,039        
Allowance for doubtful accounts     52       (53 )     23       (79 )
Equity income from unconsolidated joint venture     59             59        
Working capital changes     680       171       (2,811 )     30  
Net income   $ 105,147     $ 3,798     $ 117,993     $ 10,002  
Interest expense     6,906       4,777       19,586       12,931  
Amortization expense     4,293       3,458       12,548       9,826  
Income tax expense     460       72       663       72  
Adjustments for investment in unconsolidated joint venture     52             52        
EBITDA   $ 116,858     $ 12,105     $ 150,842     $ 32,831  
Less:                                
Gain on sale of real property interests     (100,039 )           (100,039 )      
Unrealized gain on derivatives     (774 )           (5,208 )      
Straight line rent adjustment           (88 )           (304 )
Amortization of above- and below-market rents, net     (333 )     (311 )     (1,008 )     (964 )
Add:                                
Impairments     877             980       848  
Acquisition-related     88       255       469       1,007  
Unrealized loss on derivatives           61             111  
Unit-based compensation                 70       105  
Straight line rent adjustment     33             177        
Repayments of investments in receivables     307       343       915       868  
Deemed capital contribution to fund general and administrative expense reimbursement (1)     289       996       2,069       3,025  
Adjusted EBITDA   $ 17,306     $ 13,361     $ 49,267     $ 37,527  
Less:                                
Expansion capital expenditures     (23,043 )     (64,107 )     (154,863 )     (123,262 )
Cash interest expense     (5,783 )     (4,168 )     (16,582 )     (11,413 )
Cash interest expense from unconsolidated joint venture     (46 )           (46 )      
Cash income tax     (91 )     (72 )     (243 )     (72 )
Distributions to preferred unitholders     (2,868 )     (1,818 )     (7,742 )     (4,672 )
Distributions to noncontrolling interest holders     (8 )     (4 )     (20 )     (11 )
Add:                                
Borrowings and capital contributions to fund expansion capital expenditures     23,043       64,107       154,863       123,262  
Distributable cash flow   $ 8,510     $ 7,299     $ 24,634     $ 21,359  

____________________________________
(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 September 30,  
    2018     2017  
Revenue:                
Rental revenue   $ 17,560     $ 13,499  
Expenses:                
Property operating     360       86  
General and administrative     735       1,422  
Acquisition-related     88       255  
Amortization     4,293       3,458  
Impairments     877        
Total expenses     6,353       5,221  
Other income and expenses                
Interest and other income     434       430  
Interest expense     (6,906 )     (4,777 )
Unrealized gain (loss) on derivatives     774       (61 )
Equity income from unconsolidated joint venture     59        
Gain on sale of real property interests     100,039        
Total other income and expenses     94,400       (4,408 )
Income before income tax expense     105,607       3,870  
Income tax expense     460       72  
Net income   $ 105,147     $ 3,798  
Add:                
Interest expense     6,906       4,777  
Amortization expense     4,293       3,458  
Income tax expense     460       72  
Adjustments for investment in unconsolidated joint venture     52        
EBITDA   $ 116,858     $ 12,105  
Less:                
Gain on sale of real property interests     (100,039 )      
Unrealized gain on derivatives     (774 )      
Straight line rent adjustments           (88 )
Amortization of above- and below-market rents     (333 )     (311 )
Add:                
Impairments     877        
Acquisition-related expenses     88       255  
Unrealized loss on derivatives           61  
Straight line rent adjustments     33        
Repayments of investments in receivables     307       343  
Deemed capital contribution to fund general and administrative expense reimbursement (1)     289       996  
Adjusted EBITDA   $ 17,306     $ 13,361  
Less:                
Expansion capital expenditures     (23,043 )     (64,107 )
Cash interest expense     (5,783 )     (4,168 )
Cash interest expense from unconsolidated joint venture     (46 )      
Cash income tax     (91 )     (72 )
Distributions to preferred unitholders     (2,868 )     (1,818 )
Distributions to noncontrolling interest holders     (8 )     (4 )
Add:                
Borrowings and capital contributions to fund expansion capital expenditures     23,043       64,107  
Distributable cash flow   $ 8,510     $ 7,299  
Annualized quarterly distribution per unit   $ 1.47     $ 1.43  
Distributions to common unitholders     9,238       7,061  
Distributions to Landmark Dividend – subordinated units           1,121  
Distributions to the General Partner – incentive distribution rights           109  
Total distributions   $ 9,238     $ 8,291  
Shortfall of distributable cash flow over the quarterly distribution   $ (728 )   $ (992 )
Coverage ratio (2)     0.92 x     0.88 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)  
   
    Nine Months Ended September 30,  
    2018     2017  
Revenue:                
Rental revenue   $ 50,051     $ 38,143  
Expenses:                
Property operating     875       247  
General and administrative     3,523       4,267  
Acquisition-related     469       1,007  
Amortization     12,548       9,826  
Impairments     980       848  
Total expenses     18,395       16,195  
Other income and expenses                
Interest and other income     1,280       1,168  
Interest expense     (19,586 )     (12,931 )
Unrealized gain (loss) on derivatives     5,208       (111 )
Equity income from unconsolidated joint venture     59        
Gain on sale of real property interests     100,039        
Total other income and expenses     87,000       (11,874 )
Income before income tax expense     118,656       10,074  
Income tax expense     663       72  
Net income   $ 117,993     $ 10,002  
Add:                
Interest expense     19,586       12,931  
Amortization expense     12,548       9,826  
Income tax expense     663       72  
Adjustments for investment in unconsolidated joint venture     52        
EBITDA   $ 150,842     $ 32,831  
Less:                
Gain on sale of real property interests     (100,039 )      
Unrealized gain on derivatives     (5,208 )      
Straight line rent adjustments           (304 )
Amortization of above- and below-market rents     (1,008 )     (964 )
Add:                
Impairments     980       848  
Acquisition-related expenses     469       1,007  
Unrealized loss on derivatives           111  
Straight line rent adjustments     177        
Unit-based compensation     70       105  
Repayments of investments in receivables     915       868  
Deemed capital contribution to fund general and administrative expense reimbursement (1)     2,069       3,025  
Adjusted EBITDA   $ 49,267     $ 37,527  
Less:                
Expansion capital expenditures     (154,863 )     (123,262 )
Cash interest expense     (16,582 )     (11,413 )
Cash interest expense from unconsolidated joint venture     (46 )      
Cash income tax     (243 )     (72 )
Distributions to preferred unitholders     (7,742 )     (4,672 )
Distributions to noncontrolling interest holders     (20 )     (11 )
Add:                
Borrowings and capital contributions to fund expansion capital expenditures     154,863       123,262  
Distributable cash flow   $ 24,634     $ 21,359  
Annualized quarterly distribution per unit   $ 1.47     $ 1.42  
Distributions to common unitholders     26,907       20,895  
Distributions to Landmark Dividend – subordinated units     570       3,339  
Distributions to the General Partner – incentive distribution rights     386       231  
Total distributions   $ 27,863     $ 24,465  
Shortfall of distributable cash flow over the quarterly distribution   $ (3,229 )   $ (3,106 )
Coverage ratio (2)     0.88 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.

2141 Rosecrans Avenue, Ste 2100
El Segundo, CA 90245, USA
310.598.3173
info@landmarkmlp.com

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