lmrk-8k_20171114.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934  

Date of Report (Date of earliest event reported): November 14, 2017  

 

Landmark Infrastructure Partners LP

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

001-36735

 

61-1742322

(State or other jurisdiction

 

(Commission

 

(IRS Employer

of incorporation or organization)

 

File Number)

 

Identification No.)

2141 Rosecrans Avenue, Suite 2100

El Segundo, CA 90245

(Address of principal executive office) (Zip Code)

 

(310) 598-3173

(Registrants’ telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 


 

Item 7.01 Regulation FD Disclose

On November 14, 2017, Landmark Infrastructure Partners LP (the “Partnership”) posted an updated partnership overview presentation on its website at www.landmarkmlp.com. A copy of the presentation is furnished herewith as Exhibit 99.1 and incorporated herein by reference.

Information on the Partnership’s website is not incorporated by reference in this Current Report. The information furnished pursuant to this Item 7.01, including Exhibit 99.1 hereto, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in Item 7.01 of this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as otherwise expressly stated in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit

 

 

Number

 

Description

99.1

 

Landmark Infrastructure Partners LP Investor Presentation, dated November 14, 2017.

 

 


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

Landmark Infrastructure Partners LP

 

 

 

 

 

By:

 

Landmark Infrastructure Partners GP LLC,  

 

 

 

its general partner 

 

 

 

 

Dated: November 14, 2017

By:

 

 /s/ George P. Doyle

 

Name:

 

George P. Doyle

 

Title:

 

Chief Financial Officer and Treasurer

 

 

lmrk-ex991_6.htm

Exhibit 99.1

 

 

Landmark Infrastructure Partners LP Investor Presentation | November 2017



 

Landmark Infrastructure Partners LP Disclaimer This presentation may contain forwardlooking statements that involve risks and uncertainties. These forwardlooking statements include information about possible or assumed future results of Landmark Infrastructure Partner LP’s (“LMRK” or the “Partnership”) business, future events, financial condition or performance, expectations, competitive environment, availability of resources, regulation, liquidity, results of operations, strategies, plans and objectives.  These forwardlooking statements also include, without limitation, statements concerning projections, predictions, expectations, estimates, or forecasts as to LMRK’s business, financial and operational results, and future economic performance, as well as statements of management’s goals and objectives and other similar expressions concerning matters that are not historical facts. The words “may,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” or similar expressions or their negatives, as well as statements in future tense, are intended to identify forwardlooking statements. You should not place undue reliance on these forwardlooking statements. Statements regarding the following subjects are forwardlooking by their nature: market trends and LMRK’s business strategy, projected operating results and ability to obtain future financing arrangements. Forwardlooking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved.  A forward-looking statement may include a statement of the beliefs, assumptions and expectations of future performance, at the time those statements are made or management’s good faith belief as of that time with respect to future events. While LMRK believes it has chosen these beliefs, assumptions and expectations in good faith and that they are reasonable, these beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to LMRK or under LMRK’s control. If a change occurs (such as a change in general economic conditions, competitive conditions in our industry, actions taken by our customers and competitors, our ability to successfully implement our business plan, our ability to successfully make acquisitions, interest rates, customer defaults, or any other factors), LMRK’s business, financial condition, liquidity and results of operations may vary materially from those expressed in the forwardlooking statements in this presentation. You should carefully consider these risks before you make an investment decision with respect to the Partnership, including our common units representing limited partner interests (“common units”), along with the following factors that could cause actual results to vary from our forwardlooking statements: the factors in our Annual Report on Form 10-K for the year ended December 31, 2016, including those set forth under the section captioned “Risk Factors”; general volatility of the capital markets and the market price of the common units; changes in LMRK’s business strategy; availability, terms and deployment of capital; availability of qualified personnel; changes in LMRK’s industry, interest rates or the general economy; and the degree and nature of LMRK’s competition. Forward looking statements speak only as of the date the statements are made. You should not put undue reliance on any forwardlooking statements. LMRK assumes no obligation to update forwardlooking statements to reflect actual results, changes in assumptions, or changes in other factors affecting forwardlooking information, except to the extent required by applicable securities laws. This document includes certain non-GAAP financial measures as defined under SEC Regulation G. A reconciliation of those measures to the most directly comparable generally accepted accounting principles (“GAAP”) measures is provided in this presentation. 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, gain on sale of real property interests, straight line rent adjustments, amortization of above- and below-market rents, impairments, acquisition-related expenses, unit-based compensation and after the capital contribution to fund our general and administrative expense reimbursement. We define distributable cash flow as Adjusted EBITDA less cash interest paid, current cash income tax paid, preferred distribution paid and maintenance capital expenditures. 2



 

Landmark Infrastructure Partners LP Partnership Snapshot Landmark Infrastructure Partners LP (Nasdaq: LMRK) Common Unit Price1: $17.35 Market Capitalization2: $397 million Current Yield1: 8.2% $0.2875 per unit Minimum Quarterly Distribution (MQD): Most Recent Distribution3: $0.3575 per unit for Q3 2017 (11th Consecutive Quarterly Distribution Increase) Year-to-date⁽⁴⁾, we have acquired 164 assets for total consideration of approximately $125 million LMRK currently has 2,183 tenant sites⁽⁴⁾ (representing more than 200% growth since the initial public offering in November 2014) Acquisitions: Series A Preferred Unit Price1: $25.14 (Nasdaq: LMRKP) LMRKP Yield1: 8.0% $25.04 (Nasdaq: LMRKO) Series B Preferred Unit Price1: LMRKO Yield1: 7.9% As of November 9, 2017. Based on total outstanding common and subordinated units of approximately 22.9 million, as of October 31, 2017. Announced October 18, 2017. As of October 31, 2017. 1. 2. 3. 4. 3



 

Landmark Infrastructure Partners LP Partnership Milestones Drop-Down Acquisition #4; First ROFO Drop-Down 8/18/2015 LMRK Initial Public Offering 11/19/2014 Drop-Down  Acquisition #10 8/8/2016 Drop-Down Acquisition #1 3/4/2015 Drop-Down  Acquisitions #6,7; ROFO Drop-Downs 11/19/2015 Drop-Down  Acquisition #13 12/22/2016 Drop-Down Acquisition #2 4/8/2015 Drop-Down  Acquisition #8 12/18/2015 Drop-Down  Acquisition #14 6/8/2017 Drop-Down  Acquisition #16 9/28/2017 Drop-Down  Acquisitions #11,12; ROFO Drop-Down 8/30/2016 Drop-Down  Acquisition #9 4/20/2016 Drop-Down  Acquisition #15 7/28/2017 2015 2016 2017 Recurrent Solar Acquisition 10/31/2016 Drop-Down Acquisition #3 7/21/2015 Ericsson/Landmark Microgrid Announcement 5/18/2017 REIT Subsidiary Structure Completed 7/31/2017 Drop-Down Acquisition #5 9/21/2015 Penteon/Landmark Partnership Announcement 6/14/2017 Unit Exchange  Program (UEP) Launch 3/21/2016 4



 

Landmark Infrastructure Partners LP Overview of Our Assets Our portfolio consists of real property interests and critical infrastructure leased to tower companies and wireless carriers in the wireless communication industry, outdoor advertising operators in the outdoor advertising industry and power companies in the renewable power generation industries Effectively triple net leases Organic growth through contractual rent escalators, lease modifications, lease-up and renewals 99% property operating margins, no maintenance capex  Utility Power Project Rent Real Property Interest Owner Wireless  Carrier "A" Wireless  Carrier "B" Advertiser “Face A” Advertiser “Face B” Rent Rent Rent Rent Tower Owner Outdoor Advertiser (Billboard Owner) Rent Rent Real Property Interest Owner Real Property Interest Owner 5



 

Landmark Infrastructure Partners LP Wireless Infrastructure Opportunities The Partnership’s Sponsor and Ericsson recently announced the selection of Ericsson to deploy the Zero Site microgrid solution across North America Self-contained, neutral-host smart pole is designed for carrier and other wireless operator colocation The Zero Site is designed for macro, mini macro and small cell deployments and will support IoT, carrier densification needs, private LTE networks and other wireless solutions Ericsson microgrid includes battery storage applications and grid-control software The Partnership will selectively deploy the Zero Site solution on its existing real estate interests along with new acquisition opportunities Cellular Radio Access Wi-Fi Radio Access Wi-Fi Radio Access Utility Radio Access Private Radio Access Zero Site 6



 

Landmark Infrastructure Partners LP Our asset portfolio represents less than 1% of the total U.S. market Significant: Over 360,000 locations Growing: New wireless sites alone added each year are expected to be greater than our entire existing portfolio1 Fragmented:  Most individual property owners in this industry have only 1 or 2 locations  #1 tower company and #1 billboard company own 10% or less of the land under their own assets2 Wireless Communication Outdoor Advertising Renewable Power Generation More than 165,000 locations3 More than 48,000 locations3 More than 153,000 locations1 U.S. Wind and Solar Capacity⁽⁴⁾ U.S. Tower Locations U.S. Outdoor Advertising Revenue (gigawatts) ($ in billions) (thousands) 30% 170 $11.3 Solar Wind + Solar (% of Total Capacity) Wind 26.1% $10.9 $10.5 $10.1 25% $9.7 $9.4 360 $9.0 $8.7 153 $8.3 $8.0 $7.7 20% 152 152 300 150 151 9.8% 150 $7.3 $7.0 $6.9 8.3% 240 15% 7.2% 6.3% 180 6.0% 10% 4.6% 21 13 120 10 6 3 5% 2 2012 2014 2016 2020P 2015 2013 60 2014 2013 2015 2017P 2018P 2019P 2020P 2021P 2022P 2023P 2026P 2016 2024P 2025P 46 81 186 59 60 64 72 0 0% 2050P 2011 2012 2013 2014 2015 2016 Per SNL Kagan, U.S. tower locations are expected to grow by 2.6% per year from 2016 to 2020. Rank based on total market capitalization; Per SNL Kagan, American Tower and Lamar (as of 12/31/16) held ownership interests in approximately 9% and 10%, respectively, of the land underlying their assets. Source: SNL Kagan, Outdoor Advertising Association of America (“OAAA”) and American Wind Energy Association (“AWEA”) Source: Annual Energy Outlook 2017 - Energy Information Administration (“EIA”). 1. 2. 3. 4. 7



 

Landmark Infrastructure Partners LP Our Portfolio We are a growth-oriented real property and infrastructure firm formed by Landmark Dividend LLC (our “Sponsor”) to acquire, own and manage a diversified, growing portfolio of real property interests and critical infrastructure assets Asset Portfolio  2,183 Tenant Sites1,2 Tier 13 Tenants < 10 Leased Tenant Sites 10 – 20 Leased Tenant Sites 21 – 39 Leased Tenant Sites 40 – 99 Leased Tenant Sites 100+ Leased Tenant Sites As of October 31, 2017. 41 tenant sites in international locations. “Tier 1” tenants are large, publicly-traded companies (or their affiliates) that have a national footprint. For our renewable power generation segment, Tier 1 tenants include credit-rated utility companies or high-quality off-takers, who are the counterparty to the power purchase agreement with our renewable power generation tenants. 1. 2. 3. 8



 

Landmark Infrastructure Partners LP Highlights Stable and Predictable Distributions1 Long-lived assets with effectively triple net leases 96% occupancy, 99% historical lease renewal rate Stable Cash Flow Strategic Locations Leased to Tier 1 Tenants Difficult-to-replicate locations in major population centers  84% of revenues from Tier 1 tenants2 for their essential operations 2,183 tenant sites3 in our existing portfolio Diversified across 50 states, Washington, D.C., and various international locations Significant  Diversification Multiple Growth Drivers Contractual rent escalators Rent increases through lease modifications, renewals, lease-up and revenue sharing Organic Growth with  No Capex Additional ~860 assets⁽⁴⁾ under management with Landmark Dividend and affiliates, plus third-party acquisition opportunities Sponsor owns a 15% interest⁽⁵⁾ Aligned Sponsor Committed to Growth As of September 30, 2017. “Tier 1” tenants are large, publicly-traded companies (or their affiliates) that have a national footprint. For our renewable power generation segment, Tier 1 tenants include credit-rated utility companies or high-quality off-takers, who are the counterparty to the power purchase agreement with our renewable power generation tenants. As of October 31, 2017. As of September 30, 2017. Includes approximately 580 assets that are subject to the Partnership’s right of first offer (ROFO). As of October 31, 2017. Includes both common and subordinated units. 1. 2. 3. 4. 5. 9



 

Landmark Infrastructure Partners LP Stable Cash Flow from Long-Lived Assets Effectively triple net leases Long-Lived Assets2 < 1% property operating expenses1 No property tax or insurance obligations No maintenance capital expenditures Remaining Real Property Interest Term  (% of Rents)  76+ years⁽⁵⁾ 96% occupancy2 99% historical lease renewal rate Approximately 70% of total borrowings fixed including:2 $195 million through swaps with a 4.19% combined rate $112 million in secured notes at a fixed rate of 4.27%  40-49 yrs | 17% 50-99 yrs | 28% Perpetual | 36% 20-29 yrs | 7% 30-39 yrs | 8% <20 yrs | 4% Remaining Lease Term  (% of Rents) Annual G&A expense cap3 High margins > 90% Adjusted EBITDA margin⁽⁴⁾ 25+ years⁽⁶⁾ For the two-year period ended September 30, 2017, property operating expenses were less than 1% of revenue. As of September 30, 2017. Based on the earlier of five years or until our trailing four quarter revenue exceeds $80 million, excludes acquisition services.  For the twelve-month period ended September 30, 2017. Average remaining term as of September 30, 2017. Assumes 99-year term for perpetual assets. Including remaining renewal options. 1. 2. 3. 15+ yrs | 60% 10-14 yrs | 17% 4. 5-9 yrs | 12% <5 yrs | 11% 5. 6. 10



 

Landmark Infrastructure Partners LP Strategic Locations 1. …underlying operationally critical assets… 2. …into which tenants made significant investments... Wireless: Highly interconnected networks; Growing capacity/coverage Key traffic locations, favorable zoning restrictions with “grandfather clauses” Solar/wind corridors, proximity to transmission interconnects Typically $200,000 to $300,0001 for tower plus cost of wireless equipment Billboards: vs. $2,1002 average monthly ground rent Renewables:  3. …in major markets... 4. …that are difficult to replicate and costly to relocate  Top Market Locations (by BTA Rank)3 (% of quarterly rental revenue) Significant zoning, permitting and regulatory hurdles in finding suitable new locations Time and cost of construction at a new site Vacating tenant must often return the property to its original condition New York, NY 17% 101+ 13% Los Angeles, CA 13% Top 21-100 22% Chicago, IL 7% Top 4-20 28% 1. Source: SNL Kagan. Asset portfolio average monthly GAAP rent per tenant site for the quarter ended September 30, 2017. As of September 30, 2017. Excludes tenant sites in the renewable power generation industry. BTA rank is not a relevant metric for the renewable power generation industry. 2. 3. 11



 

Quarterly Rental Revenue Breakdown(2)Landmark Infrastructure Partners LP Highly Desired by Tier 1 Tenants Large, publicly-traded companies with national footprints1 No single tenant accounts for more than 15% of revenue Quarterly Rental Revenue Breakdown2 Outdoor Advertising Renewable Power Generation Southern California Edison  Pacific Gas & Electric Duke Energy Others Total 7% 2% 1% 4% 14% Clear Channel Outdoor OUTFRONT Media Lamar Advertising  Others Total  10% 4% 3% 6% 23% Tower Companies Wireless Carriers Crown Castle  American Tower SBA Communications Others Total 9% 6% 2% 1% 18% T-Mobile  AT&T Mobility Sprint Verizon  Others  Total 11% 11% 9% 9% 5% 45% Tenants are often subsidiaries or affiliates of such publicly-traded companies. For our renewable power generation segment, Tier 1 tenants include credit-rated utility companies or high-quality off-takers, who are the counterparty to the power purchase agreement with our renewable power generation tenants. Represents GAAP rental revenue recognized under existing tenant leases for the three months ended September 30, 2017. Excludes interest income on receivables. 1. 2. 12



 

Landmark Infrastructure Partners LP Multiple Growth Drivers Organic Growth With No Capex Acquisitions From Third Parties Acquisitions From Sponsor Lease Modifications, Lease-Up and Renewals ~860 AUM with Sponsor & Affiliates1 Ongoing Sponsor Acquisitions Contractual Escalators Third-Party Portfolios Tax-Deferred Exchange As of September 30, 2017; Includes approximately 580 assets that are subject to the Partnership’s right of first offer (ROFO). 1. 13



 

Landmark Infrastructure Partners LP Organic Growth with No Capital Expenditures 93% of our leases have contractual rent escalators 86% fixed rate increases with an average annual escalation rate of approximately 2.5% Contractual Rent Escalators1 7% tied to CPI Total Wireless Capital Expenditures2 Wireless technology upgrades ($ in billions) $32.9 $33.0 $31.7 $29.0 Expansion of premises $28.4 Increased Rent Through Lease Modifications and Renewals  $26.5 $23.2 Digital billboard conversions Lamar and Clear Channel spent over 30% of capex on digital billboards3 Below-market leases 2010 2013 2016 2015 2014 2012 2011 U.S. Outdoor Advertising Revenue Increase in billboard advertising revenue Participation in Tenant Revenue Growth ($ in billions) $11.3 $10.9 $10.5 Rooftop equipment modifications or expansion of premises $10.1 $9.7 $9.4 $9.0 $8.7 $8.3 $8.0 $7.7 $7.3 $7.0 $6.9 $6.7 Source: SNL Kagan and OAAA. '12 '13 '14 '15 '17P '18P '19P '20P '21P '16 '26P '25P '23P '22P '24P 1. As of September 30, 2017. Includes amounts disclosed by publicly-traded wireless carriers. Per fiscal year 2016 10-K filings. 2. 3. 14



 

Landmark Infrastructure Partners LP Assets Under Management with Sponsor and Affiliates AUM with Sponsor and affiliates alone would significantly increase the size of our existing portfolio Approximately 860 available assets1 Substantially similar characteristics to our current asset portfolio Geographically diverse (49 states and Australia) Average remaining real property interest term of 76+ years 2 Average remaining lease term of 24+ years3 100% occupancy Wireless Communication69%Outdoor Advertising15%Renewable Power Generation16% Renewable Power Generation16% Tenant Sites 2,183 860 3,043 Asset Portfolio4:  Sponsor & Affiliates1:  Combined:  Outdoor Advertising15% Wireless Communication69% % of Total U.S. Market 3,043 / 360,000 = ~0.8% ~860 Tenant Sites As of September 30, 2017; Includes approximately 580 assets that are subject to the Partnership’s right of first offer (ROFO). Assumes term of 99 years for perpetual assets. Including renewal options. As of October 31, 2017 1. 2. 3. 4. 15



 

Landmark Infrastructure Partners LP Aligned Sponsor Driving Growth Given its substantial cash investment and significant ownership position in us, we expect our strategic Sponsor to promote and support the success of our business Sponsor contributed ~$60 million at the IPO, invested ~$39 million in cash and ~$21 million in roll-over equity Sponsor owns our General Partner, all of the IDRs and an 15% LP interest1 in us Sponsor’s Organizational Structure Sponsor’s Footprint (U.S., Australia, Canada and the U.K.)2 159 Employees1 Origination team members Landmark Office Acquisitions Asset Origination, Due Diligence and Closing Staff Count: 115 Lead  Generation Appointment Setting Price  Negotiation Sales Force Management Underwriting Funding Document Negotiation Closing Administration Asset Sales, Finance and Administration Staff Count: 44 United Kingdom Canada Australia Capital Raising Capital  Management Investor Relations Investor Reporting Information Technology Accounting, Tax & Treasury Human  Resources Asset Management As of October 31, 2017. Including JV Partners. 1. 2. 16



 

Landmark Infrastructure Partners LP Sponsor Expertise in an Industry with High Barriers to Entry Significant time, cost and expertise is required for high volume asset origination in our fragmented industries Assets acquired by the Sponsor are typically $50,000 to $500,000 in value Origination Illustration Sponsor’s Proprietary Platform has Enabled it to Increase the Amount of its Acquisitions Every Year Since Inception Asset Management Underwriting and Closing Lead  Generation Asset  Origination Approximately 15,000 Meetings Per Year Proprietary, internally- sourced National acquisition force Proprietary database of transactions Proprietary database of current market leases Comprehensive underwriting Approximately  3,500 Transactions Negotiated Scalable and Customized IT Systems, Processes and Corporate Infrastructure Support the Platform 500 to 700 Sites Closed ~10-12%1 of Transactions 1 to 2 real property interests per transaction. 1. 17



 

Landmark Infrastructure Partners LP Third-Party Acquisitions Tax-efficient MLP/REIT capital structure Directly acquire third-party assets by leveraging the Sponsor’s origination and acquisition platform Large portfolios Direct from property owners Alternative Currency (Unit Exchange Program) Common units used for tax deferred exchanges Benefits to sellers include: Cash flow diversification Defer taxable gains Potential growth in value  Option to sell their common units when they wish to obtain cash Expand our Universe of Potential Acquisition Opportunities to Drive Accretive Growth 18



 

Landmark Infrastructure Partners LP Disciplined and Flexible Financial Strategy Stable rents from effectively triple net leases High-quality due diligence to maintain 99% renewal rates 99% property operating margins with no maintenance capex Maintain Predictable And Stable Cash Flows Contractual escalators Lease rate increases from lease renewals of below-market leases Accretive drop-down acquisitions from Sponsor originations Accretive acquisitions of third-party portfolios Deliver Consistent Distribution Growth Target leverage: < 50% debt-to-total market capitalization Appropriate fixed vs. floating interest rate exposure Policies to ensure consistent and growing distributions Efficient tax structure with no UBTI or state-sourced income Disciplined Financial Policies 19



 

Landmark Infrastructure Partners LP Appendix 20



 

Landmark Infrastructure Partners LP 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, gain on sale of real property interests, straight line rent adjustments, amortization of above and below market rents, impairments, acquisition-related expenses, unit-based compensation, and the capital contribution to fund our general and administrative expense reimbursement. We define distributable cash flow as Ad-justed EBITDA less cash interest paid, current cash income tax paid, preferred distributions paid and maintenance capital expenditures. Distributable cash flow will not reflect changes in working capital balances. EBITDA, Adjusted EBITDA and distributable cash flow should not be considered an alternative to net income (determined in accordance with GAAP) as an indication of our performance, and we believe that to understand our performance further, EBITDA, Adjusted EBITDA and distributable cash flow should be compared with our reported net income in accordance with GAAP, as presented in our combined 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 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, net cash provided by (used in) 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 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. 21



 

Landmark Infrastructure Partners LP Reconciliation of EBITDA, Adjusted EBITDA and Distributable Cash FlowNine Months Ended September30,20172016(1)LandmarkLandmarkDrop-downInfrastructureInfrastructureAssetsConsolidatedPartners LPPartners LPPredecessorResultsRevenue:Rental revenue$38,143$23,665$5,892$29,557Expenses:Management fees to affiliate——196196Property operating24795297General and administrative4,2672,777—2,777Acquisition-related1,0071,2102041,414Amortization9,8266,7161,4598,175Impairments8481,235—1,235Total expenses16,19512,0331,86113,894Other income and expensesInterest and other income1,168720189909Interest expense(12,931)(7,831)(2,451)(10,282Loss on early extinguishment of debt——(1,703)(1,703Realized loss on derivatives——(99)(99Unrealized gain (loss) on derivatives(111)(3,821)85(3,736Gain on sale of real property interests—374—374Total other income and expenses(11,874)(10,558)(3,979)(14,537Income before income tax10,0741,074521,126Income tax expense72———Net income$10,002$1,074$52$1,126Add:Interest expense12,9317,8312,45110,282Amortization expense9,8266,7161,4598,175Income tax expense72———EBITDA$32,831$15,621$3,962$19,583Less:Gain on sale of real property interests—(374)—(374Unrealized gain on derivatives——(85)(85Straight line rent adjustments(304)(104)(155)(259Amortization of above-and below-market rents(964)(830)(193)(1,023Add:Impairments8481,235—1,235Acquisition-related expenses1,0071,2102041,414Loss on early extinguishment of debt——1,7031,703Unrealized loss on derivatives1113,821—3,821Realized loss on derivatives——9999Unit-based compensation105105—105Deemed capital contribution to fund general and administrativeexpense reimbursement(2)3,0252,034—2,034Adjusted EBITDA$36,659$22,718$5,535$28,253Less:Expansion capital expenditures123,262(198,331)—(198,331Cash interest expense(11,413)(6,991)(2,035)(9,026Cash income tax(72)———Distributions to preferred unitholders(4,672)(1,334)—(1,334Distributions to noncontrolling interest holders(11)———Add:Borrowings and capital contributions to fund expansion capital expenditures(123,262)198,331—198,331Distributable cash flow$20,491$14,393$3,500$17,893 During the year ended December 31, 2016, the Partnership completed five drop-down acquisitions from Landmark and affiliates (the “Drop-down Assets”). The assets and liabilities acquired are recorded at the historical cost of Landmark, as the transactions are between entities under common control, the statements of operations of the Partnership are adjusted retroactively as if the transactions occurred on the earliest date during which the entities were under common control. The historical financial statements have been retroactively adjusted to reflect the results of operations, financial position, and cash flows of the Drop-down Assets as if the Partnership owned the Drop-down Assets in all periods while under common control. The reconciliation presents our results of operations and financial position giving effect to the Drop-down Assets. The combined results of the Drop-down Assets prior to each transaction date are included in “Drop-down Assets Predecessor.” The consolidated results of the Drop-down Assets after each transaction date are included in “Landmark Infrastructure Partners LP.” 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. 1. 2. 22



 

Landmark Infrastructure Partners LP Average of 22 Years of Experience with High Volume, Small Balance Real Property Asset Originations Years in Real Property Experience Title Name Select Prior Experience Tim Brazy CEO Co-Founder 30 Founder and CEO of Church Mortgage Acceptance Company (CMAC) Founder and Managing Partner of Atherton Capital and Shepherd Capital CoFounder and President of FMAC Former real estate investment banker with Nomura / Eastdil MBA from Stanford Business School; B.S. from Caltech George Doyle CFO & Treasurer 13 EVP, CFO and Treasurer at Clearview Hotel Trust SVP and Chief Accounting Officer at HCP, Inc., an S&P 500 REIT Senior Manager at KPMG LLP B.A. in Business Administration from Western Washington University; CPA Dan Parsons COO 20 20 years serving as CIO of a major mortgage company where he developed and implemented asset origination and servicing systems MBA from USC 23



 

Landmark Infrastructure Partners LP Organizational Structure1 Landmark (Sponsor)  Subordinated and Common Units Public Unitholders Common Units 15% LP Interest2 85% LP Interest2 100% LLC Interest Landmark Infrastructure Partners GP LLC  (our General Partner)  Landmark Infrastructure Partners LP  (NASDAQ: LMRK, the Partnership) Non-economic GP, and IDRs Recent Changes to Organizational Structure1: Landmark Infrastructure REIT Subsidiary Moved the Partnership’s assets under a REIT subsidiary Simplified Schedule K-1 Unrelated Business Taxable Income (“UBTI”) substantially eliminated Simplified state filing requirements Real Property  Interest Assets 1. Reflects changes to organizational structure completed on July 31, 2017.  As of October 31, 2017. 2. 24