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 6, 2019  

 

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.)

400 Continental Blvd., Suite 500

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))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Units, Representing Limited Partner Interests

 

LMRK

 

NASDAQ Global Market

8.0% Series A Cumulative Redeemable Preferred Units, $25.00 par value

 

LMRKP

 

NASDAQ Global Market

7.9% Series B Cumulative Redeemable Preferred Units, $25.00 par value

 

LMRKO

 

NASDAQ Global Market

Series C Floating-to-Fixed Rate Cumulative Redeemable Perpetual Convertible Preferred Units, $25.00 par value

 

LMRKN

 

NASDAQ Global Market

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 2.02 Results of Operations and Financial Condition.

On November 6, 2019, Landmark Infrastructure Partners LP issued a press release announcing its third quarter 2019 financial results. A copy of the press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference.

The information furnished pursuant to this Item 2.02, 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 2.02 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

 

Press release issued by Landmark Infrastructure Partners LP on November 6, 2019.

 

2

 

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 6, 2019

By:

 

 /s/ George P. Doyle

 

Name:

 

George P. Doyle

 

Title:

 

Chief Financial Officer and Treasurer

 

3

lmrk-ex991_6.htm

 

Exhibit 99.1

 

 

Landmark Infrastructure Partners LP Reports Third Quarter Results

 

El Segundo, California, November 6, 2019 (GLOBE NEWSWIRE) - Landmark Infrastructure Partners LP (“Landmark,” the “Partnership,” “we,” “us” or “our”) (Nasdaq: LMRK) today announced its third quarter financial results.

 

Highlights

 

•

Net income attributable to common unitholders of $0.03 per diluted unit, FFO of $0.20 per diluted unit and AFFO of $0.32 per diluted unit;

 

•

Year-to-date through October 31, 2019, completed acquisitions of 134 assets for total consideration of approximately $42 million; and

 

•

Announced a quarterly distribution of $0.3675 per common unit.

 

Third Quarter 2019 Results

“We are pleased to announce another quarter of solid financial and operating results reflecting the stability and continued performance of the assets in our portfolio.  We are making further progress with our development strategy and anticipate placing assets into service in the fourth quarter of 2019,” said Tim Brazy, Chief Executive Officer of the Partnership’s general partner.

 

Net income attributable to common unitholders per diluted unit in the third quarter of 2019 was $0.03, compared to $3.71 in the third quarter of 2018.  Net income included a gain on sale of assets of $0.5 million in the third quarter of 2019 and a gain on sale of assets of $100.0 million in the third quarter of 2018.  FFO for the third quarter of 2019 was $0.20 per diluted unit, compared to $0.29 in the third quarter of 2018.  FFO included a $2.2 million unrealized loss on interest rate hedges in the third quarter of 2019 and a $0.8 million unrealized gain on interest rate hedges in the third quarter of 2018.  AFFO per diluted unit, which excludes certain items including unrealized gains and losses on our interest rate hedges, was $0.32 in the third quarter of 2019 compared to $0.34 in the third quarter of 2018.  Rental revenue for the quarter ended September 30, 2019 was $14.4 million, a decrease of 18% compared to the third quarter of 2018.  The decline in rental revenue in the third quarter is primarily due to the contribution of assets to the Landmark/Brookfield joint venture (“JV”) in September 2018, as the JV is accounted for as an equity method investment and the revenue generated in the JV is not consolidated into the Partnership’s results.  In addition, the Partnership sold a portfolio of assets in June 2019, which also contributed to lower rental revenue.

 

For the nine months ended September 30, 2019 we generated net income of $20.5 million compared to $118.0 million during the nine months ended September 30, 2018.  Net income attributable to common unitholders for the nine months ended September 30, 2019 was $0.41 per diluted unit compared to $4.18 per diluted unit for the nine months ended September 30, 2018.  For the nine months ended September 30, 2019 we generated FFO of $0.40 per diluted unit and AFFO of $0.97 per diluted unit, compared to FFO of $0.95 per diluted unit and AFFO of $0.99 per diluted unit during the nine months ended September 30, 2018.  For the nine months ended September 30, 2019, the Partnership reported rental revenue of $43.8 million compared to $50.1 million during the nine months ended September 30, 2018.  The decline in revenue was primarily attributable to the contribution of assets to the JV in September of 2018 and the sale of a portfolio of assets in June 2019.

 

Quarterly Distributions

On October 25, 2019, 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, 2019.  The distribution is payable on November 14, 2019 to common unitholders of record as of November 4, 2019.

 

On October 22, 2019, the Board of Directors of the Partnership’s general partner declared a quarterly cash distribution of $0.4375 per Series C preferred unit, which is payable on November 15, 2019 to Series C preferred unitholders of record as of November 1, 2019.

 

 

On October 22, 2019, 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, 2019 to Series B preferred unitholders of record as of November 1, 2019.

 

On September 20, 2019, 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, 2019 to Series A preferred unitholders of record as of October 1, 2019.

 

Capital and Liquidity

As of September 30, 2019, the Partnership had $175.3 million of outstanding borrowings under its revolving credit facility (the “Facility”), and approximately $275 million of undrawn borrowing capacity under the Facility, subject to compliance with certain covenants.

 

Recent Acquisitions

Year-to-date through October 31, 2019, the Partnership acquired a total of 134 assets for total consideration of approximately $42 million.  The acquisitions were immediately accretive to AFFO and funded primarily with borrowings under the Partnership’s existing credit facility.

 

At-The-Market (“ATM”) Equity Programs

Year-to-date through October 31, 2019, the Partnership has issued 128,892 Series A preferred units and 81,778 Series B preferred units through its At-The-Market (“ATM”) issuance programs for gross proceeds of approximately $5.3 million.

 

Conference Call Information

The Partnership will hold a conference call on Wednesday, November 6, 2019, at 12:00 p.m. Eastern Time (9:00 a.m. Pacific Time) to discuss its third quarter 2019 financial and operating results.  The call can be accessed via a live webcast at https://edge.media-server.com/mmc/p/ogyxkruc, 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 3877447.

 

A webcast replay will be available approximately two hours after the completion of the conference call through November 6, 2020 at https://edge.media-server.com/mmc/p/ogyxkruc.  The replay is also available through November 15, 2019 by dialing 855-859-2056 or 404-537-3406 and entering the access code 3877447.

 

About Landmark Infrastructure Partners LP

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

  

Non-GAAP Financial Measures

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

 

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

 

Adjusted Funds from Operations ("AFFO") is a non-GAAP financial measure of operating performance used by many companies in the REIT industry.  AFFO adjusts FFO for certain non-cash items that reduce or increase net income in

 

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

 

We define EBITDA as net income before interest expense, income taxes, depreciation and amortization, and we define Adjusted EBITDA as EBITDA before unrealized and realized gain or loss on derivatives, loss on early extinguishment of debt, gain or loss on sale of real property interests, straight line rent adjustments, amortization of above and below market rents, impairments, acquisition-related expenses, unit-based compensation, repayments of investments in receivables, foreign currency transaction gain (loss), adjustments for investment in unconsolidated joint venture and the capital contribution to fund our general and administrative expense reimbursement.  We believe that to understand our performance further, EBITDA and Adjusted EBITDA should be compared with our reported net income (loss) and net cash provided by operating activities in accordance with GAAP, as presented in our consolidated financial statements.

 

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

 

 

•

our operating performance as compared to other publicly traded limited partnerships, without regard to historical cost basis or, in the case of Adjusted EBITDA, financing methods;

 

•

the ability of our business to generate sufficient cash to support our decision to make distributions to our unitholders;

 

•

our ability to incur and service debt and fund capital expenditures; and

 

•

the viability of acquisitions and the returns on investment of various investment opportunities.

 

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

 

Forward-Looking Statements

This release contains forward-looking statements within the meaning of federal securities laws.  These statements discuss future expectations, contain projections of results of operations or of financial condition or state other forward-looking information.  You can identify forward-looking statements by words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “project,” “could,” “may,” “should,” “would,” “will” or other similar expressions that convey the uncertainty of future events or outcomes.  These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the Partnership’s control and are difficult to predict.  These statements are often based upon various assumptions, many of which are based, in turn, upon further assumptions, including examination of historical operating trends made by the management of the Partnership.  Although the Partnership believes that these assumptions were reasonable when made, because assumptions are inherently subject to significant uncertainties and contingencies, which are difficult or impossible to predict and are beyond its control, the Partnership cannot give assurance that it will achieve or accomplish these expectations, beliefs or intentions.  Examples of forward-looking statements in this press release include expected acquisition opportunities from our sponsor.  When considering these

 

forward-looking statements, you should keep in mind the risk factors and other cautionary statements contained in the Partnership’s filings with the U.S. Securities and Exchange Commission (the “Commission”), including the Partnership’s annual report on Form 10-K for the year ended December 31, 2018 and Current Report on Form 8-K filed with the Commission on February 20, 2019.  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,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental revenue

 

$

14,402

 

 

$

17,560

 

 

$

43,820

 

 

$

50,051

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating

 

 

435

 

 

 

360

 

 

 

1,505

 

 

 

875

 

General and administrative

 

 

1,288

 

 

 

735

 

 

 

4,269

 

 

 

3,523

 

Acquisition-related

 

 

119

 

 

 

88

 

 

 

614

 

 

 

469

 

Amortization

 

 

3,395

 

 

 

4,293

 

 

 

10,368

 

 

 

12,548

 

Impairments

 

 

442

 

 

 

877

 

 

 

646

 

 

 

980

 

Total expenses

 

 

5,679

 

 

 

6,353

 

 

 

17,402

 

 

 

18,395

 

Other income and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income

 

 

198

 

 

 

434

 

 

 

764

 

 

 

1,280

 

Interest expense

 

 

(4,259

)

 

 

(6,906

)

 

 

(13,439

)

 

 

(19,586

)

Unrealized gain (loss) on derivatives

 

 

(2,188

)

 

 

774

 

 

 

(8,963

)

 

 

5,208

 

Equity income from unconsolidated joint venture

 

 

154

 

 

 

59

 

 

 

263

 

 

 

59

 

Gain on sale of real property interests

 

 

473

 

 

 

100,039

 

 

 

18,008

 

 

 

100,039

 

Foreign currency transaction gain

 

 

1,113

 

 

 

—

 

 

 

1,045

 

 

 

—

 

Total other income and expenses

 

 

(4,509

)

 

 

94,400

 

 

 

(2,322

)

 

 

87,000

 

Income before income tax expense

 

 

4,214

 

 

 

105,607

 

 

 

24,096

 

 

 

118,656

 

Income tax expense

 

 

228

 

 

 

460

 

 

 

3,635

 

 

 

663

 

Net income

 

 

3,986

 

 

 

105,147

 

 

 

20,461

 

 

 

117,993

 

Less: Net income attributable to noncontrolling interests

 

 

7

 

 

 

8

 

 

 

23

 

 

 

20

 

Net income attributable to limited partners

 

 

3,979

 

 

 

105,139

 

 

 

20,438

 

 

 

117,973

 

Less: Distributions to preferred unitholders

 

 

(2,985

)

 

 

(2,868

)

 

 

(8,900

)

 

 

(7,742

)

Less: General Partner's incentive distribution rights

 

 

(197

)

 

 

(197

)

 

 

(591

)

 

 

(587

)

Less: Accretion of Series C preferred units

 

 

(96

)

 

 

—

 

 

 

(546

)

 

 

—

 

Net income attributable to common and subordinated unitholders

 

$

701

 

 

$

102,074

 

 

$

10,401

 

 

$

109,644

 

Net income (loss) per common and subordinated unit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common units – basic

 

$

0.03

 

 

$

4.06

 

 

$

0.41

 

 

$

4.51

 

Common units – diluted

 

$

0.03

 

 

$

3.71

 

 

$

0.41

 

 

$

4.18

 

Subordinated units – basic and diluted

 

$

—

 

 

$

—

 

 

$

—

 

 

$

(0.59

)

Weighted average common and subordinated units outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common units – basic

 

 

25,341

 

 

 

25,138

 

 

 

25,339

 

 

 

24,405

 

Common units – diluted

 

 

25,341

 

 

 

27,741

 

 

 

25,339

 

 

 

26,658

 

Subordinated units – basic and diluted

 

 

—

 

 

 

—

 

 

 

—

 

 

 

517

 

Other Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total leased tenant sites (end of period)

 

 

1,914

 

 

 

1,818

 

 

 

1,914

 

 

 

1,818

 

Total available tenant sites (end of period)

 

 

2,011

 

 

 

1,907

 

 

 

2,011

 

 

 

1,907

 

 

 

Landmark Infrastructure Partners LP

Consolidated Balance Sheets

In thousands, except per unit data

(Unaudited)

 

 

 

September 30, 2019

 

 

December 31, 2018

 

Assets

 

 

 

 

 

 

 

 

Land

 

$

136,221

 

 

$

128,302

 

Real property interests

 

 

523,303

 

 

 

517,423

 

Construction in progress

 

 

58,507

 

 

 

29,556

 

Total land and real property interests

 

 

718,031

 

 

 

675,281

 

Accumulated amortization of real property interests

 

 

(46,753

)

 

 

(39,069

)

Land and net real property interests

 

 

671,278

 

 

 

636,212

 

Investments in receivables, net

 

 

8,741

 

 

 

18,348

 

Investment in unconsolidated joint venture

 

 

62,524

 

 

 

65,670

 

Cash and cash equivalents

 

 

4,920

 

 

 

4,108

 

Restricted cash

 

 

5,417

 

 

 

3,672

 

Rent receivables, net

 

 

5,098

 

 

 

4,292

 

Due from Landmark and affiliates

 

 

1,876

 

 

 

1,390

 

Deferred loan costs, net

 

 

4,854

 

 

 

5,552

 

Deferred rent receivable

 

 

5,970

 

 

 

5,251

 

Derivative asset

 

 

—

 

 

 

4,590

 

Other intangible assets, net

 

 

19,469

 

 

 

20,839

 

Assets held for sale (AHFS)

 

 

392

 

 

 

7,846

 

Other assets

 

 

13,467

 

 

 

8,843

 

Total assets

 

$

804,006

 

 

$

786,613

 

Liabilities and equity

 

 

 

 

 

 

 

 

Revolving credit facility

 

$

175,313

 

 

$

155,000

 

Secured notes, net

 

 

219,535

 

 

 

223,685

 

Accounts payable and accrued liabilities

 

 

8,922

 

 

 

7,435

 

Other intangible liabilities, net

 

 

7,923

 

 

 

9,291

 

Liabilities associated with AHFS

 

 

—

 

 

 

397

 

Lease liability

 

 

10,076

 

 

 

—

 

Prepaid rent

 

 

5,549

 

 

 

5,418

 

Derivative liabilities

 

 

4,765

 

 

 

402

 

Total liabilities

 

 

432,083

 

 

 

401,628

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Mezzanine equity

 

 

 

 

 

 

 

 

Series C cumulative redeemable convertible preferred units, 1,988,700 and 2,000,000

   units issued and outstanding at September 30, 2019 and December 31, 2018, respectively

 

 

47,571

 

 

 

47,308

 

Equity

 

 

 

 

 

 

 

 

Series A cumulative redeemable preferred units, 1,674,156 and 1,593,149 units

   issued and outstanding at September 30, 2019 and December 31, 2018, respectively

 

 

39,018

 

 

 

37,207

 

Series B cumulative redeemable preferred units, 2,544,793 and 2,463,015 units

   issued and outstanding at September 30, 2019 and December 31, 2018, respectively

 

 

60,926

 

 

 

58,936

 

Common units, 25,353,140 and 25,327,801 units issued and outstanding at

   September 30, 2019 and December 31, 2018, respectively

 

 

394,036

 

 

 

411,158

 

General Partner

 

 

(163,370

)

 

 

(167,019

)

Accumulated other comprehensive loss

 

 

(6,459

)

 

 

(2,806

)

Total limited partners' equity

 

 

324,151

 

 

 

337,476

 

Noncontrolling interests

 

 

201

 

 

 

201

 

Total equity

 

 

324,352

 

 

 

337,677

 

Total liabilities, mezzanine equity and equity

 

$

804,006

 

 

$

786,613

 

 

 

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

 

 

718

 

 

 

907

 

 

 

77.4

 

(7)

 

850

 

 

 

27.0

 

 

 

 

 

 

 

 

 

 

$

5,164

 

 

 

36

%

Outdoor Advertising

 

 

593

 

 

 

705

 

 

 

79.8

 

(7)

 

686

 

 

 

15.4

 

 

 

 

 

 

 

 

 

 

 

3,969

 

 

 

28

%

Renewable Power Generation

 

 

16

 

 

 

47

 

 

 

48.4

 

(7)

 

47

 

 

 

30.7

 

 

 

 

 

 

 

 

 

 

 

329

 

 

 

2

%

Subtotal

 

 

1,327

 

 

 

1,659

 

 

 

76.7

 

(7)

 

1,583

 

 

 

22.0

 

 

 

 

 

 

 

 

 

 

$

9,462

 

 

 

66

%

Tenant Lease Assignment only (8)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wireless Communication

 

 

116

 

 

 

166

 

 

 

50.5

 

 

 

147

 

 

 

16.1

 

 

 

 

 

 

 

 

 

 

$

1,024

 

 

 

7

%

Outdoor Advertising

 

 

33

 

 

 

36

 

 

 

62.3

 

 

 

35

 

 

 

13.2

 

 

 

 

 

 

 

 

 

 

 

234

 

 

 

1

%

Renewable Power Generation

 

 

6

 

 

 

6

 

 

 

68.0

 

 

 

6

 

 

 

26.9

 

 

 

 

 

 

 

 

 

 

 

57

 

 

 

1

%

Subtotal

 

 

155

 

 

 

208

 

 

 

53.1

 

 

 

188

 

 

 

15.9

 

 

 

 

 

 

 

 

 

 

$

1,315

 

 

 

9

%

Tenant Lease on Fee Simple

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wireless Communication

 

 

19

 

 

 

28

 

 

 

99.0

 

(7)

 

27

 

 

 

18.9

 

 

 

 

 

 

 

 

 

 

$

997

 

 

 

7

%

Outdoor Advertising

 

 

76

 

 

 

99

 

 

 

99.0

 

(7)

 

99

 

 

 

5.1

 

 

 

 

 

 

 

 

 

 

 

1,018

 

 

 

7

%

Renewable Power Generation

 

 

15

 

 

 

17

 

 

 

99.0

 

(7)

 

17

 

 

 

29.8

 

 

 

 

 

 

 

 

 

 

 

1,610

 

 

 

11

%

Subtotal

 

 

110

 

 

 

144

 

 

 

99.0

 

(7)

 

143

 

 

 

10.5

 

 

 

 

 

 

 

 

 

 

$

3,625

 

 

 

25

%

Total

 

 

1,592

 

 

 

2,011

 

 

 

72.2

 

(9)

 

1,914

 

 

 

20.5

 

 

 

 

 

 

 

 

 

 

$

14,402

 

 

 

100

%

Aggregate Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wireless Communication

 

 

853

 

 

 

1,101

 

 

 

67.8

 

 

 

1,024

 

 

 

25.2

 

 

 

93

%

 

$

1,952

 

 

$

7,185

 

 

 

50

%

Outdoor Advertising

 

 

702

 

 

 

840

 

 

 

78.9

 

 

 

820

 

 

 

14.1

 

 

 

98

%

 

 

2,367

 

 

 

5,221

 

 

 

36

%

Renewable Power Generation

 

 

37

 

 

 

70

 

 

 

36.5

 

 

 

70

 

 

 

29.7

 

 

 

100

%

 

 

8,985

 

 

 

1,996

 

 

 

14

%

Total

 

 

1,592

 

 

 

2,011

 

 

 

72.2

 

(9)

 

1,914

 

 

 

20.5

 

 

 

95

%

 

$

2,398

 

 

$

14,402

 

 

 

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, 2019 were 3.3, 7.2, 17.4 and 5.2 years, respectively.

(3)

Represents the number of leased tenant sites divided by the number of available tenant sites.

(4)

Occupancy and average monthly effective rent per tenant site are shown only on an aggregate portfolio basis by industry.

(5)

Represents total monthly revenue excluding the impact of amortization of above and below market lease intangibles divided by the number of leased tenant sites.

(6)

Represents GAAP rental revenue recognized under existing tenant leases for the three months ended September 30, 2019.  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 63 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,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net income

 

$

3,986

 

 

$

105,147

 

 

$

20,461

 

 

$

117,993

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization expense

 

 

3,395

 

 

 

4,293

 

 

 

10,368

 

 

 

12,548

 

Impairments

 

 

442

 

 

 

877

 

 

 

646

 

 

 

980

 

Gain on sale of real property interests, net of income taxes

 

 

(500

)

 

 

(100,039

)

 

 

(14,982

)

 

 

(100,039

)

Adjustments for investment in unconsolidated joint venture

 

 

792

 

 

 

—

 

 

 

2,568

 

 

 

—

 

Distributions to preferred unitholders

 

 

(2,985

)

 

 

(2,868

)

 

 

(8,900

)

 

 

(7,742

)

Distributions to noncontrolling interests

 

 

(7

)

 

 

(8

)

 

 

(23

)

 

 

(20

)

FFO

 

$

5,123

 

 

$

7,402

 

 

$

10,138

 

 

$

23,720

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expense reimbursement (1)

 

 

930

 

 

 

289

 

 

 

3,058

 

 

 

2,069

 

Acquisition-related expenses

 

 

119

 

 

 

88

 

 

 

614

 

 

 

469

 

Unrealized (gain) loss on derivatives

 

 

2,188

 

 

 

(774

)

 

 

8,963

 

 

 

(5,208

)

Straight line rent adjustments

 

 

145

 

 

 

33

 

 

 

414

 

 

 

177

 

Unit-based compensation

 

 

—

 

 

 

—

 

 

 

130

 

 

 

70

 

Amortization of deferred loan costs and discount on secured notes

 

 

780

 

 

 

1,123

 

 

 

2,308

 

 

 

3,004

 

Amortization of above- and below-market rents, net

 

 

(216

)

 

 

(333

)

 

 

(654

)

 

 

(1,008

)

Deferred income tax expense

 

 

56

 

 

 

369

 

 

 

109

 

 

 

420

 

Repayments of receivables

 

 

156

 

 

 

307

 

 

 

430

 

 

 

915

 

Adjustments for investment in unconsolidated joint venture

 

 

38

 

 

 

6

 

 

 

63

 

 

 

6

 

Foreign currency transaction gain

 

 

(1,113

)

 

 

—

 

 

 

(1,045

)

 

 

—

 

AFFO

 

$

8,206

 

 

$

8,510

 

 

$

24,528

 

 

$

24,634

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO per common and subordinated unit - diluted

 

$

0.20

 

 

$

0.29

 

 

$

0.40

 

 

$

0.95

 

AFFO per common and subordinated unit - diluted

 

$

0.32

 

 

$

0.34

 

 

$

0.97

 

 

$

0.99

 

Weighted average common and subordinated units outstanding - diluted

 

 

25,341

 

 

 

25,138

 

 

 

25,339

 

 

 

24,922

 

 

(1)

Under the omnibus agreement with Landmark, we agreed to reimburse Landmark for expenses related to certain general and administrative services that Landmark will provide to us in support of our business, subject to a quarterly cap equal to 3% of our revenue during the current calendar quarter. This cap on expenses will last until the earlier to occur of: (i) the date on which our revenue for the immediately preceding four consecutive fiscal quarters exceeded $120 million and (ii) November 19, 2021. The full amount of general and administrative expenses incurred will be reflected in our income statements, and to the extent such general and administrative expenses exceed the cap amount, the amount of such excess will be reimbursed by Landmark and reflected in our financial statements as a capital contribution from Landmark rather than as a reduction of our general and administrative expenses, except for expenses that would otherwise be allocated to us, which are not included in our general and administrative expenses.

 

Landmark Infrastructure Partners LP

Reconciliation of EBITDA and Adjusted EBITDA

In thousands

(Unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Reconciliation of EBITDA and Adjusted EBITDA to Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

3,986

 

 

$

105,147

 

 

$

20,461

 

 

$

117,993

 

Interest expense

 

 

4,259

 

 

 

6,906

 

 

 

13,439

 

 

 

19,586

 

Amortization expense

 

 

3,395

 

 

 

4,293

 

 

 

10,368

 

 

 

12,548

 

Income tax expense

 

 

228

 

 

 

460

 

 

 

3,635

 

 

 

663

 

EBITDA

 

$

11,868

 

 

$

116,806

 

 

$

47,903

 

 

$

150,790

 

Impairments

 

 

442

 

 

 

877

 

 

 

646

 

 

 

980

 

Acquisition-related

 

 

119

 

 

 

88

 

 

 

614

 

 

 

469

 

Unrealized (gain) loss on derivatives

 

 

2,188

 

 

 

(774

)

 

 

8,963

 

 

 

(5,208

)

Gain on sale of real property interests

 

 

(473

)

 

 

(100,039

)

 

 

(18,008

)

 

 

(100,039

)

Unit-based compensation

 

 

—

 

 

 

—

 

 

 

130

 

 

 

70

 

Straight line rent adjustments

 

 

145

 

 

 

33

 

 

 

414

 

 

 

177

 

Amortization of above- and below-market rents, net

 

 

(216

)

 

 

(333

)

 

 

(654

)

 

 

(1,008

)

Repayments of investments in receivables

 

 

156

 

 

 

307

 

 

 

430

 

 

 

915

 

Adjustments for investment in unconsolidated joint venture

 

 

1,526

 

 

 

52

 

 

 

4,670

 

 

 

52

 

Foreign currency transaction gain

 

 

(1,113

)

 

 

—

 

 

 

(1,045

)

 

 

—

 

Deemed capital contribution to fund general and administrative expense reimbursement(1)

 

 

930

 

 

 

289

 

 

 

3,058

 

 

 

2,069

 

Adjusted EBITDA

 

$

15,572

 

 

$

17,306

 

 

$

47,121

 

 

$

49,267

 

Reconciliation of EBITDA and Adjusted EBITDA to Net Cash Provided by Operating Activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

$

5,071

 

 

$

9,503

 

 

$

21,954

 

 

$

31,069

 

Unit-based compensation

 

 

—

 

 

 

—

 

 

 

(130

)

 

 

(70

)

Unrealized gain (loss) on derivatives

 

 

(2,188

)

 

 

774

 

 

 

(8,963

)

 

 

5,208

 

Amortization expense

 

 

(3,395

)

 

 

(4,293

)

 

 

(10,368

)

 

 

(12,548

)

Amortization of above- and below-market rents, net

 

 

216

 

 

 

333

 

 

 

654

 

 

 

1,008

 

Amortization of deferred loan costs and discount on secured notes

 

 

(780

)

 

 

(1,123

)

 

 

(2,308

)

 

 

(3,004

)

Receivables interest accretion

 

 

3

 

 

 

—

 

 

 

9

 

 

 

—

 

Impairments

 

 

(442

)

 

 

(877

)

 

 

(646

)

 

 

(980

)

Gain on sale of real property interests

 

 

473

 

 

 

100,039

 

 

 

18,008

 

 

 

100,039

 

Allowance for doubtful accounts

 

 

(102

)

 

 

52

 

 

 

(107

)

 

 

23

 

Equity loss from unconsolidated joint venture

 

 

154

 

 

 

59

 

 

 

263

 

 

 

59

 

Distributions of earnings from unconsolidated joint venture

 

 

(300

)

 

 

—

 

 

 

(2,883

)

 

 

—

 

Foreign currency transaction gain

 

 

1,113

 

 

 

—

 

 

 

1,045

 

 

 

—

 

Working capital changes

 

 

4,163

 

 

 

680

 

 

 

3,933

 

 

 

(2,811

)

Net income

 

$

3,986

 

 

$

105,147

 

 

$

20,461

 

 

$

117,993

 

Interest expense

 

 

4,259

 

 

 

6,906

 

 

 

13,439

 

 

 

19,586

 

Amortization expense

 

 

3,395

 

 

 

4,293

 

 

 

10,368

 

 

 

12,548

 

Income tax expense

 

 

228

 

 

 

460

 

 

 

3,635

 

 

 

663

 

EBITDA

 

$

11,868

 

 

$

116,806

 

 

$

47,903

 

 

$

150,790

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of real property interests

 

 

(473

)

 

 

(100,039

)

 

 

(18,008

)

 

 

(100,039

)

Unrealized gain on derivatives

 

 

—

 

 

 

(774

)

 

 

—

 

 

 

(5,208

)

Amortization of above- and below-market rents, net

 

 

(216

)

 

 

(333

)

 

 

(654

)

 

 

(1,008

)

Foreign currency transaction gain

 

 

(1,113

)

 

 

—

 

 

 

(1,045

)

 

 

—

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairments

 

 

442

 

 

 

877

 

 

 

646

 

 

 

980

 

Acquisition-related

 

 

119

 

 

 

88

 

 

 

614

 

 

 

469

 

Unrealized loss on derivatives

 

 

2,188

 

 

 

—

 

 

 

8,963

 

 

 

—

 

Unit-based compensation

 

 

—

 

 

 

—

 

 

 

130

 

 

 

70

 

Straight line rent adjustment

 

 

145

 

 

 

33

 

 

 

414

 

 

 

177

 

Repayments of investments in receivables

 

 

156

 

 

 

307

 

 

 

430

 

 

 

915

 

Adjustments for investment in unconsolidated joint venture

 

 

1,526

 

 

 

52

 

 

 

4,670

 

 

 

52

 

Deemed capital contribution to fund general and administrative expense reimbursement (1)

 

 

930

 

 

 

289

 

 

 

3,058

 

 

 

2,069

 

Adjusted EBITDA

 

$

15,572

 

 

$

17,306

 

 

$

47,121

 

 

$

49,267

 

 

(1)

Under the omnibus agreement with Landmark, we agreed to reimburse Landmark for expenses related to certain general and administrative services that Landmark will provide to us in support of our business, subject to a quarterly cap equal to 3% of our revenue during the current calendar quarter. This cap on expenses will last until the earlier to occur of: (i) the date on which our revenue for the immediately preceding four consecutive fiscal quarters exceeded $120 million and (ii) November 19, 2021. The full amount of general and administrative expenses incurred will be reflected in our income statements, and to the extent such general and administrative expenses exceed the cap amount, the amount of such excess will be reimbursed by Landmark and reflected in our financial statements as a capital contribution from Landmark rather than as a reduction of our general and administrative expenses, except for expenses that would otherwise be allocated to us, which are not included in our general and administrative expenses.