lmrk-10q_20180630.htm

Table of Contents 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2018

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to                    

Commission File Number: 001-36735

 

Landmark Infrastructure Partners LP

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

61-1742322

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

2141 Rosecrans Avenue, Suite 2100,

 

 

P.O. Box 3429

 

 

El Segundo, CA 90245

 

90245

(Address of principal executive offices)

 

(Zip Code)

(310) 598-3173

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer  

 

Accelerated filer  

 

Non-accelerated filer  

 

Smaller reporting company  

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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ◻    No  ☒

The registrant had 25,130,604 common units outstanding at July 27, 2018.

 

 

 

 


Table of Contents 

 

LANDMARK INFRASTRUCTURE PARTNERS LP

Table of Contents

 

 

 

 

 

Page

 

 

 

 

 

 

 

PART I. FINANCIAL INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Financial Statements:

 

 

 

 

 

 

 

 

 

Consolidated Balance Sheets

 

3

 

 

 

 

 

 

 

Consolidated Statements of Operations

 

4

 

 

 

 

 

 

 

Consolidated Statements of Comprehensive Income

 

5

 

 

 

 

 

 

 

Consolidated Statements of Equity and Mezzanine Equity

 

6

 

 

 

 

 

 

 

Consolidated Statements of Cash Flows

 

7

 

 

 

 

 

 

 

Notes to the Consolidated Financial Statements

 

8

 

 

 

 

 

Item 2.

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

 

32

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

51

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

51

 

 

 

 

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

52

 

 

 

 

 

Item 1A.

 

Risk Factors

 

52

 

 

 

 

 

Item 6.

 

Exhibits

 

53

 

 

 

 

 

Signatures

 

 

 

54

 

2


Table of Contents 

 

PART I. FINANCIAL INFORMATION 

Item 1. Financial Statements

Landmark Infrastructure Partners LP

Consolidated Balance Sheets

(in thousands, except unit data)

 

 

 

June 30, 2018

 

 

December 31, 2017

 

Assets

 

 

 

 

 

 

 

 

Land

 

$

124,816

 

 

$

114,385

 

Real property interests

 

 

668,252

 

 

 

596,422

 

Construction in progress

 

 

23,804

 

 

 

7,574

 

Total land and real property interests

 

 

816,872

 

 

 

718,381

 

Accumulated amortization real property interests

 

 

(44,870

)

 

 

(37,817

)

Land and net real property interests

 

 

772,002

 

 

 

680,564

 

Investments in receivables, net

 

 

20,101

 

 

 

20,782

 

Cash and cash equivalents

 

 

9,767

 

 

 

9,188

 

Restricted cash

 

 

6,578

 

 

 

18,672

 

Rent receivables, net

 

 

3,446

 

 

 

4,141

 

Due from Landmark and affiliates

 

 

583

 

 

 

629

 

Deferred loan costs, net

 

 

2,671

 

 

 

3,589

 

Deferred rent receivable

 

 

4,059

 

 

 

4,252

 

Derivative assets

 

 

7,593

 

 

 

3,159

 

Other intangible assets, net

 

 

23,627

 

 

 

17,984

 

Assets held for sale (AHFS)

 

 

7,846

 

 

 

 

Other assets

 

 

4,563

 

 

 

5,039

 

Total assets

 

$

862,836

 

 

$

767,999

 

Liabilities and equity

 

 

 

 

 

 

 

 

Revolving credit facility

 

$

177,000

 

 

$

304,000

 

Secured notes, net

 

 

349,223

 

 

 

187,249

 

Accounts payable and accrued liabilities

 

 

12,039

 

 

 

4,978

 

Other intangible liabilities, net

 

 

13,146

 

 

 

12,833

 

Liabilities associated with AHFS

 

 

397

 

 

 

 

Prepaid rent

 

 

6,499

 

 

 

4,581

 

Total liabilities

 

 

558,304

 

 

 

513,641

 

Commitments and contingencies (Note 14)

 

 

 

 

 

 

 

 

Mezzanine equity

 

 

 

 

 

 

 

 

Series C cumulative redeemable convertible preferred units, 2,000,000 and zero units

   issued and outstanding at June 30, 2018 and December 31, 2017, respectively

 

 

47,534

 

 

 

 

Equity

 

 

 

 

 

 

 

 

Series A cumulative redeemable preferred units, 1,593,149 and 1,568,402 units

   issued and outstanding at June 30, 2018 and December 31, 2017, respectively

 

 

37,207

 

 

 

36,604

 

Series B cumulative redeemable preferred units, 2,463,015 units

   issued and outstanding at June 30, 2018 and December 31, 2017, respectively

 

 

58,936

 

 

 

58,936

 

Common units, 25,130,604 and 20,146,458 units issued and outstanding at

   June 30, 2018 and December 31, 2017, respectively

 

 

330,207

 

 

 

288,527

 

Subordinated units, zero and 3,135,109 units issued and outstanding

   at June 30, 2018 and December 31, 2017, respectively

 

 

 

 

 

19,641

 

General Partner

 

 

(169,239

)

 

 

(150,519

)

Accumulated other comprehensive income (loss)

 

 

(314

)

 

 

968

 

Total partners' equity

 

 

256,797

 

 

 

254,157

 

Noncontrolling interests

 

 

201

 

 

 

201

 

Total equity

 

 

256,998

 

 

 

254,358

 

Total liabilities, mezzanine equity and equity

 

$

862,836

 

 

$

767,999

 

 

See accompanying notes to consolidated financial statements.

3


Table of Contents 

 

Landmark Infrastructure Partners LP

Consolidated Statements of Operations

(In thousands, except per unit data)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental revenue

 

$

16,796

 

 

$

12,803

 

 

$

32,491

 

 

$

24,644

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating

 

 

229

 

 

 

74

 

 

 

515

 

 

 

161

 

General and administrative

 

 

1,089

 

 

 

1,437

 

 

 

2,788

 

 

 

2,845

 

Acquisition-related

 

 

196

 

 

 

285

 

 

 

381

 

 

 

752

 

Amortization

 

 

4,233

 

 

 

3,239

 

 

 

8,255

 

 

 

6,368

 

Impairments

 

 

103

 

 

 

692

 

 

 

103

 

 

 

848

 

Total expenses

 

 

5,850

 

 

 

5,727

 

 

 

12,042

 

 

 

10,974

 

Other income and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income

 

 

408

 

 

 

379

 

 

 

846

 

 

738

 

Interest expense

 

 

(6,408

)

 

 

(4,234

)

 

 

(12,680

)

 

 

(8,154

)

Unrealized gain (loss) on derivatives

 

 

1,286

 

 

 

(544

)

 

 

4,434

 

 

 

(50

)

Total other income and expenses

 

 

(4,714

)

 

 

(4,399

)

 

 

(7,400

)

 

 

(7,466

)

Income before income tax expense

 

 

6,232

 

 

 

2,677

 

 

 

13,049

 

 

 

6,204

 

Income tax expense

 

 

127

 

 

 

 

 

 

203

 

 

 

 

Net income

 

 

6,105

 

 

 

2,677

 

 

 

12,846

 

 

 

6,204

 

Less: Net income attributable to noncontrolling interest

 

 

8

 

 

 

4

 

 

 

12

 

 

 

7

 

Net income attributable to limited partners

 

 

6,097

 

 

 

2,673

 

 

 

12,834

 

 

 

6,197

 

Less: Distributions declared to preferred unitholders

 

 

(2,930

)

 

 

(1,510

)

 

 

(4,874

)

 

 

(2,854

)

Less: General partner's incentive distribution rights

 

 

(195

)

 

 

(98

)

 

 

(390

)

 

 

(187

)

Net income attributable to common and subordinated unitholders

 

$

2,972

 

 

$

1,065

 

 

$

7,570

 

 

$

3,156

 

Net income (loss) per common and subordinated unit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common units – basic

 

$

0.12

 

 

$

0.05

 

 

$

0.33

 

 

$

0.14

 

Common units – diluted

 

$

0.12

 

 

$

0.05

 

 

$

0.31

 

 

$

0.14

 

Subordinated units – basic and diluted

 

$

 

 

$

0.05

 

 

$

(0.39

)

 

$

0.14

 

Weighted average common and subordinated units outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common units – basic

 

 

25,058

 

 

 

19,650

 

 

 

24,032

 

 

 

19,554

 

Common units – diluted

 

 

25,058

 

 

 

22,785

 

 

 

24,811

 

 

 

22,689

 

Subordinated units – basic and diluted

 

 

 

 

 

3,135

 

 

 

779

 

 

 

3,135

 

Cash distributions declared per common and subordinated unit

 

$

0.3675

 

 

$

0.3550

 

 

$

0.7350

 

 

$

0.7075

 

 

See accompanying notes to consolidated financial statements.

4


Table of Contents 

 

Landmark Infrastructure Partners LP

Consolidated Statements of Comprehensive Income

(in thousands)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Net income

 

$

6,105

 

 

$

2,677

 

 

$

12,846

 

 

$

6,204

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

(2,320

)

 

 

312

 

 

 

(1,282

)

 

 

520

 

Other comprehensive income (loss)

 

 

(2,320

)

 

 

312

 

 

 

(1,282

)

 

 

520

 

Comprehensive income

 

 

3,785

 

 

 

2,989

 

 

 

11,564

 

 

 

6,724

 

Less: Comprehensive income attributable to noncontrolling interest

 

 

8

 

 

 

4

 

 

 

12

 

 

 

7

 

Comprehensive income attributable to limited partners

 

$

3,777

 

 

$

2,985

 

 

$

11,552

 

 

$

6,717

 

 

See accompanying notes to consolidated financial statements

 

 

 

5


Table of Contents 

 

Landmark Infrastructure Partners LP

Consolidated Statements of Equity And Mezzanine Equity

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

Mezzanine

 

 

 

 

 

 

 

 

 

 

 

Preferred

 

 

Preferred

 

 

 

 

 

 

 

 

 

 

Preferred

 

 

Preferred

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

Equity -

 

 

 

Common

 

 

Subordinated

 

 

Units -

 

 

Units -

 

 

Common

 

 

Subordinated

 

 

Unitholders -

 

 

Unitholders -

 

 

General

 

 

Comprehensive

 

 

Noncontrolling

 

 

Total

 

 

Series C

 

 

 

Units

 

 

Units

 

 

Series A

 

 

Series B

 

 

Unitholders

 

 

Unitholder

 

 

Series A

 

 

Series B

 

 

Partner

 

 

Income (loss)

 

 

Interest

 

 

Equity

 

 

Preferred

 

Balance as of December 31, 2016

 

 

19,451

 

 

 

3,135

 

 

 

864

 

 

 

1,840

 

 

$

294,296

 

 

$

22,524

 

 

$

19,393

 

 

$

44,256

 

 

$

(135,630

)

 

$

(509

)

 

$

 

 

$

244,330

 

 

$

 

Net investment of Drop-down Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,086

)

 

 

 

 

 

 

 

 

(9,086

)

 

 

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

520

 

 

 

 

 

 

520

 

 

 

 

Issuance of Preferred Units, net

 

 

 

 

 

 

 

 

211

 

 

 

164

 

 

 

 

 

 

 

 

 

5,164

 

 

 

3,534

 

 

 

 

 

 

 

 

 

 

 

 

8,698

 

 

 

 

Issuance of Common Units, net

 

 

292

 

 

 

 

 

 

 

 

 

 

 

 

4,591

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,591

 

 

 

 

Issuance of non-controlling interests, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

103

 

 

 

103

 

 

 

 

Distributions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(13,749

)

 

 

(2,201

)

 

 

(948

)

 

 

(1,906

)

 

 

(165

)

 

 

 

 

 

(7

)

 

 

(18,976

)

 

 

 

Capital contribution to fund general and administrative expense reimbursement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,029

 

 

 

 

 

 

 

 

 

2,029

 

 

 

 

Unit-based compensation

 

 

7

 

 

 

 

 

 

 

 

 

 

 

 

105

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

105

 

 

 

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

2,729

 

 

 

427

 

 

 

948

 

 

 

1,906

 

 

 

187

 

 

 

 

 

 

7

 

 

 

6,204

 

 

 

 

Balance as of June 30, 2017

 

 

19,750

 

 

 

3,135

 

 

 

1,075

 

 

 

2,004

 

 

$

287,972

 

 

$

20,750

 

 

$

24,557

 

 

$

47,790

 

 

$

(142,665

)

 

$

11

 

 

$

103

 

 

$

238,518

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2017

 

 

20,146

 

 

 

3,135

 

 

 

1,568

 

 

 

2,463

 

 

$

288,527

 

 

$

19,641

 

 

$

36,604

 

 

$

58,936

 

 

$

(150,519

)

 

$

968

 

 

$

201

 

 

$

254,358

 

 

$

 

Net investment of Drop-down Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(20,394

)

 

 

 

 

 

 

 

 

(20,394

)

 

 

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,282

)

 

 

 

 

 

(1,282

)

 

 

 

Issuance of Preferred Units, net

 

 

 

 

 

 

 

 

25

 

 

 

 

 

 

 

 

 

 

 

 

603

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

603

 

 

 

47,534

 

Issuance of Common Units, net

 

 

1,846

 

 

 

 

 

 

 

 

 

 

 

 

32,699

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

32,699

 

 

 

 

Conversion of subordinated units

 

 

3,135

 

 

 

(3,135

)

 

 

 

 

 

 

 

 

18,186

 

 

 

(18,186

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17,148

)

 

 

(1,152

)

 

 

(1,574

)

 

 

(2,432

)

 

 

(496

)

 

 

 

 

 

(12

)

 

 

(22,814

)

 

 

(868

)

Capital contribution to fund general and administrative expense reimbursement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,780

 

 

 

 

 

 

 

 

 

1,780

 

 

 

 

Unit-based compensation

 

 

4

 

 

 

 

 

 

 

 

 

 

 

 

70

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

70

 

 

 

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,873

 

 

 

(303

)

 

 

1,574

 

 

 

2,432

 

 

 

390

 

 

 

 

 

 

12

 

 

 

11,978

 

 

 

868

 

Balance as of June 30, 2018

 

 

25,131

 

 

 

 

 

 

1,593

 

 

 

2,463

 

 

$

330,207

 

 

$

 

 

$

37,207

 

 

$

58,936

 

 

$

(169,239

)

 

$

(314

)

 

$