EL SEGUNDO, Calif., Nov. 05, 2015 (GLOBE NEWSWIRE) -- Landmark Infrastructure Partners LP (the “Partnership,” “we,” “us” or “our”) (Nasdaq:LMRK) today announced third quarter and nine months 2015 financial results.
Highlights:
- Increased quarterly cash distribution for the third consecutive quarter to $0.3175 per unit, a 10.4% increase over the minimum quarterly distribution (“MQD”)
- Raises distribution growth guidance to 12% to 15% over the MQD by the end of 2015 from 10% to 15% over the MQD by the end of 2015;
- Completed three drop-down acquisitions from its sponsor Landmark Dividend LLC (“Landmark”), or an affiliate of Landmark, acquiring a total of 358 tenant sites for total consideration of approximately $122 million;
- Generated Q3 2015 Adjusted EBITDA of $5.0 million and distributable cash flow of $3.8 million; and
- Maintained 98% occupancy level for the portfolio
Third Quarter and Nine Months 2015 Results
For the quarter ended September 30, 2015, the Partnership generated Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization) of approximately $5.0 million and distributable cash flow of approximately $3.8 million. Additionally, the Partnership generated a net loss of approximately $0.3 million, or a net loss of $0.01 per common unit, and EBITDA of approximately $2.4 million. The net loss and EBITDA amounts include the impact of $1.6 million of unrealized losses on derivatives and $0.8 million of acquisition-related expenses. Adjusted EBITDA, EBITDA, distributable cash flow, and net loss exclude results prior to the date of acquisitions that are attributable to assets acquired in the third quarter of 2015.
For the nine months ended September 30, 2015, the Partnership generated a net loss of approximately $2.1 million, EBITDA of approximately $4.9 million, Adjusted EBITDA of approximately $12.4 million and distributable cash flow of approximately $9.3 million. Adjusted EBITDA, EBITDA, distributable cash flow, and net loss exclude results prior to the date of acquisitions that are attributable to assets acquired in the first nine months of 2015.
“Since the IPO almost one year ago we have completed five drop-down acquisitions totaling 512 tenant sites (for total consideration of approximately $170 million), which represents an increase of approximately 73% over the original IPO portfolio,” said Tim Brazy, the Partnership’s Chief Executive Officer. “Drop-down activity accelerated in Q3, and we anticipate that it will remain at heightened levels for the remainder of 2015 and into 2016, as we deliver on the growth plans we set out earlier in the year.”
Quarterly Distribution
As previously announced, on October 22, 2015, the Board of Directors of the Partnership’s general partner declared a quarterly cash distribution of $0.3175 per limited partner unit, or $1.27 per unit on an annualized basis, for the quarter ended September 30, 2015. This quarter’s cash distribution, which represents a 10.4% increase over the MQD and a 3.3% increase compared to the second quarter 2015 distribution of $0.3075 per unit, marks the third consecutive quarter that the Partnership has increased its quarterly cash distribution since its initial public offering in November 2014. The distribution is payable on November 13, 2015 to unitholders of record as of November 3, 2015.
Capital and Liquidity
As of September 30, 2015, the Partnership had $164.5 million of outstanding borrowings under its revolving credit facility (the “Facility”) and $85.5 million of undrawn borrowing capacity under the Facility, subject to compliance with certain covenants. During the third quarter, the Partnership swapped the floating rate on $50.0 million of borrowings at an effective fixed rate of 4.24% for a seven-year period beginning October 1, 2015. The additional swap brings the total fixed borrowings under the Facility to $145.0 million with a total weighted average fixed interest rate of 4.06%.
Recent Drop-Down Acquisitions
During the third quarter of 2015, the Partnership completed three drop-down acquisitions from Landmark or an affiliate of Landmark, acquiring a total of 358 tenant sites for total consideration of approximately $122 million.
- On July 21, 2015, the Partnership completed a drop-down acquisition from Landmark of 100 tenant sites for total consideration of $35.7 million;
- On August 18, 2015, the Partnership completed its first ROFO drop-down acquisition of 193 tenant sites for total consideration of $66.4 million. The consideration for the ROFO drop-down acquisition consisted of approximately 2.0 million common units representing limited partnership interests in us, valued at $31.5 million, and $34.9 million in cash;
- On September 21, 2015, the Partnership completed a drop-down acquisition of 65 tenant sites for total consideration of $20.3 million.
Each of these acquisitions were immediately accretive to the Partnership’s distributable cash flow, and funded primarily with borrowings under the Partnership’s existing Facility, with the exception of the aforementioned units that were issued for the ROFO drop-down acquisition. Year-to-date the Partnership has completed five drop-down acquisitions from Landmark or an affiliate of Landmark, acquiring a total of 512 tenant sites for total consideration of approximately $170 million.
Guidance
The Partnership’s sponsor, Landmark, has previously expressed its intent to offer us the right to purchase assets with annual rents ranging from $15.0 million to $18.0 million over a 12-month period beginning February 26, 2015. These drop-downs, combined with organic portfolio growth expected from contractual rent escalators, leasing activity and revenue sharing arrangements, are expected to drive distribution growth of 12% to 15% over the MQD of $0.2875 per unit ($1.15 per unit on an annualized basis) by the end of 2015.
Conference Call Information
The Partnership will hold a conference call on Thursday, November 5, 2015, at 12:00 p.m. Eastern Time (9:00 a.m. Pacific Time) to discuss its third quarter and nine months 2015 financial and operating results. The call can be accessed via a live webcast at http://investor.landmarkmlp.com, 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 54765431.
A webcast replay will be available approximately two hours after the completion of the conference call through December 31, 2015 at http://investor.landmarkmlp.com. The replay is also available through November 14, 2015 by dialing 855-859-2056 or 404-537-3406 and entering the access code 54765431.
About Landmark Infrastructure Partners LP
The Partnership is a growth-oriented master limited partnership formed to acquire, own and manage a portfolio of real property interests that the Partnership leases to companies in the wireless communication, outdoor advertising and renewable power generation industries. Headquartered in El Segundo, California, the Partnership’s real property interests consist of a diversified portfolio of long-term and perpetual easements, tenant lease assignments and fee simple properties located in 48 states and the District of Columbia, entitling the Partnership to rental payments from leases on approximately 1,200 tenant sites as of September 30, 2015.
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, loss on early extinguishment of debt, 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 Adjusted EBITDA less cash interest paid, current cash income tax paid and maintenance capital expenditures. Distributable cash flow will not reflect changes in working capital balances. We believe that to understand our performance further, EBITDA, Adjusted EBITDA and distributable cash flow should be compared with our reported net income and net cash provided by operating activities in accordance with generally accepted accounting principles in the United States (“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 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.
Safe Harbor
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 the payment of our quarterly distribution, the discussion of potential acquisitions from our sponsor, and our expected distribution growth. 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, including the Partnership's annual report on Form 10-K for the year ended December 31, 2014. These risks could cause the Partnership's actual results to differ materially from those contained in any forward-looking statement.
| LANDMARK INFRASTRUCTURE PARTNERS LP | ||||||||||||||||||||
| CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| 2015 | 2014(1) | 2015 | 2014(1) | |||||||||||||||||
| Revenue | ||||||||||||||||||||
| Rental revenue | $ | 6,044,317 | $ | 4,399,714 | $ | 16,300,304 | $ | 12,860,421 | ||||||||||||
| Interest income on receivables | 200,902 | 188,585 | 605,180 | 522,994 | ||||||||||||||||
| Total revenue | 6,245,219 | 4,588,299 | 16,905,484 | 13,383,415 | ||||||||||||||||
| Expenses | ||||||||||||||||||||
| Management fees to affiliate | 18,738 | 139,142 | 91,650 | 406,302 | ||||||||||||||||
| Property operating | 7,678 | — | 19,459 | 21,805 | ||||||||||||||||
| General and administrative | 462,364 | 47,054 | 2,107,354 | 579,628 | ||||||||||||||||
| Acquisition-related | 1,003,294 | 46,012 | 2,958,276 | 106,484 | ||||||||||||||||
| Amortization | 1,423,702 | 1,116,602 | 4,176,426 | 3,294,849 | ||||||||||||||||
| Impairments | 302,008 | — | 3,578,744 | 8,450 | ||||||||||||||||
| Total expenses | 3,217,784 | 1,348,810 | 12,931,909 | 4,417,518 | ||||||||||||||||
| Other income and expenses | ||||||||||||||||||||
| Interest expense | (1,607,173 | ) | (1,519,738 | ) | (4,495,384 | ) | (4,378,694 | ) | ||||||||||||
| Loss on early extinguishment of debt | (902,625 | ) | — | (902,625 | ) | — | ||||||||||||||
| Unrealized gain (loss) on derivatives | (1,532,995 | ) | 514,394 | (1,909,817 | ) | (6,393 | ) | |||||||||||||
| Gain on sale of real property interest | — | — | 82,026 | — | ||||||||||||||||
| Total other income and expenses | (4,042,793 | ) | (1,005,344 | ) | (7,225,800 | ) | (4,385,087 | ) | ||||||||||||
| Net income (loss) | $ | (1,015,358 | ) | $ | 2,234,145 | $ | (3,252,225 | ) | $ | 4,580,810 | ||||||||||
| Less: Net income (loss) attributable to Predecessor(1) | (744,912 | ) | 2,234,145 | (1,198,734 | ) | 4,580,810 | ||||||||||||||
| Limited partners’ interest in net loss | $ | (270,446 | ) | $ | — | $ | (2,053,491 | ) | $ | — | ||||||||||
| Net loss per limited partner unit | ||||||||||||||||||||
| Common units – basic and diluted | $ | (0.01 | ) | $ | (0.13 | ) | ||||||||||||||
| Subordinated units – basic and diluted | $ | (0.06 | ) | $ | (0.38 | ) | ||||||||||||||
| Weighted average limited partner units outstanding | ||||||||||||||||||||
| Common units – basic and diluted | 8,663,688 | 6,500,519 | ||||||||||||||||||
| Subordinated units – basic and diluted | 3,135,109 | 3,135,109 | ||||||||||||||||||
| Other Data: | ||||||||||||||||||||
| Total leased tenant sites (end of period) | 1,184 | 946 | 1,184 | 946 | ||||||||||||||||
| Total available tenant sites (end of period) | 1,207 | 951 | 1,207 | 951 | ||||||||||||||||
(1) During the nine months ended September 30, 2015, the Partnership completed its acquisitions of 512 tenant sites and related real property interests (the “Acquired Assets”), from our sponsor Landmark Dividend LLC (“Landmark”) and affiliates, in exchange for total consideration of $169.7 million. Since the entities are under common control, the assets and liabilities acquired are recorded at Landmark’s historical cost, with financial statements for prior periods retroactively adjusted to furnish comparative information. Financial information prior to the closing of each transaction has been retroactively adjusted for the Acquired Assets. These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2015 to be filed with the Securities and Exchange Commission on November 5, 2015 and the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission on February 26, 2015 (except for items 6, 7 and 15 and Exhibit 23.1, which have been superseded by the Current Report on Form 8-K, filed May 11, 2015).
| LANDMARK INFRASTRUCTURE PARTNERS LP | ||||||||||
| CONSOLIDATED AND COMBINED BALANCE SHEETS | ||||||||||
| (Unaudited) | ||||||||||
| September 30, 2015 | December 31, 2014(1) | |||||||||
| Assets | ||||||||||
| Land | $ | 6,977,145 | $ | 5,924,294 | ||||||
| Real property interests | 290,301,565 | 231,561,354 | ||||||||
| Total land and real property interests | 297,278,710 | 237,485,648 | ||||||||
| Accumulated amortization of real property interests | (10,390,300 | ) | (7,135,676 | ) | ||||||
| Land and net real property interests | 286,888,410 | 230,349,972 | ||||||||
| Investments in receivables, net | 8,305,178 | 8,665,274 | ||||||||
| Cash and cash equivalents | 273,090 | 311,108 | ||||||||
| Rent receivables, net | 741,504 | 123,767 | ||||||||
| Due from Landmark and affiliates | 2,111,822 | 659,722 | ||||||||
| Deferred loan costs, net | 2,976,610 | 3,985,227 | ||||||||
| Deferred rent receivable | 499,139 | 344,162 | ||||||||
| Other intangible assets, net | 8,099,980 | 6,101,048 | ||||||||
| Other assets | 150,433 | 399,222 | ||||||||
| Total assets | $ | 310,046,166 | $ | 250,939,502 | ||||||
| Liabilities and equity | ||||||||||
| Revolving credit facility | $ | 164,500,000 | $ | 74,000,000 | ||||||
| Secured debt facility | — | 29,707,558 | ||||||||
| Accounts payable and accrued liabilities | 505,729 | 141,508 | ||||||||
| Other intangible liabilities, net | 10,742,540 | 8,938,034 | ||||||||
| Prepaid rent | 2,617,307 | 2,029,542 | ||||||||
| Derivative liabilities | 2,218,717 | 308,899 | ||||||||
| Total liabilities | 180,584,293 | 115,125,541 | ||||||||
| Commitments and contingencies | ||||||||||
| Equity | 129,461,873 | 135,813,961 | ||||||||
| Total liabilities and equity | $ | 310,046,166 | $ | 250,939,502 | ||||||
(1) Prior-period financial information has been retroactively adjusted for certain assets acquired during the nine months ended September 30, 2015. These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2015 to be filed with the Securities and Exchange Commission on November 5, 2015.
| LANDMARK INFRASTRUCTURE PARTNERS LP | |||||||||||||||||||||||
| REAL PROPERTY INTEREST TABLE | |||||||||||||||||||||||
| Available Tenant | Leased Tenant | ||||||||||||||||||||||
| Sites(1) | Sites | ||||||||||||||||||||||
| Average | Average | Average | |||||||||||||||||||||
| Remaining | Remaining | Monthly | Percentage | ||||||||||||||||||||
| Number of | Property | Lease | Tenant Site | Effective Rent | Quarterly | of Quarterly | |||||||||||||||||
| Infrastructure | Interest | Term | Occupancy | Per Tenant | Rental | Rental | |||||||||||||||||
| Real Property Interest | Locations(1) | Number | (Years) | Number | (Years)(2) | Rate(3)(4) | Site(4)(5) | Revenue(6) | Revenue(6) | ||||||||||||||
| Tenant Lease Assignment with Underlying Easement | |||||||||||||||||||||||
| Wireless Communication | 611 | 783 | 78.2 | (7 | ) | 764 | 19.5 | $ | 3,927,844 | 65 | % | ||||||||||||
| Outdoor Advertising | 201 | 249 | 85.1 | (7 | ) | 248 | 11.0 | 957,843 | 16 | % | |||||||||||||
| Renewable Power Generation | 6 | 8 | 25.8 | 8 | 22.1 | 31,005 | 1 | % | |||||||||||||||
| Subtotal | 818 | 1,040 | 79.5 | (7 | ) | 1,020 | 17.5 | $ | 4,916,692 | 82 | % | ||||||||||||
| Tenant Lease Assignment only(8) | |||||||||||||||||||||||
| Wireless Communication | 93 | 134 | 53.7 | 131 | 18.5 | $ | 907,929 | 15 | % | ||||||||||||||
| Outdoor Advertising | 10 | 10 | 81.2 | 10 | 15.1 | 70,643 | 1 | % | |||||||||||||||
| Subtotal | 103 | 144 | 55.6 | 141 | 18.2 | $ | 978,572 | 16 | % | ||||||||||||||
| Tenant Lease on Fee Simple | |||||||||||||||||||||||
| Wireless Communication | 5 | 10 | 99.0 | (7 | ) | 10 | 12.4 | $ | 66,453 | 1 | % | ||||||||||||
| Outdoor Advertising | 11 | 12 | 99.0 | (7 | ) | 12 | 9.4 | 75,882 | 1 | % | |||||||||||||
| Renewable Power Generation | 1 | 1 | 99.0 | (7 | ) | 1 | 25.4 | 6,718 | — | % | |||||||||||||
| Subtotal | 17 | 23 | 99.0 | (7 | ) | 23 | 11.4 | $ | 149,053 | 2 | % | ||||||||||||
| Total | 938 | 1,207 | 77.0 | (9 | ) | 1,184 | 17.4 | $ | 6,044,317 | 100 | % | ||||||||||||
| Aggregate Portfolio | |||||||||||||||||||||||
| Wireless Communication | 709 | 927 | 74.9 | 905 | 19.3 | 98 | % | $ | 1,702 | $ | 4,902,226 | 81 | % | ||||||||||
| Outdoor Advertising | 222 | 271 | 85.6 | 270 | 11.1 | 100 | % | 1,351 | 1,104,368 | 18 | % | ||||||||||||
| Renewable Power Generation | 7 | 9 | 22.9 | 9 | 19.6 | 100 | % | 1,614 | 37,723 | 1 | % | ||||||||||||
| Total | 938 | 1,207 | 77.0 | (9 | ) | 1,184 | 17.4 | 98 | % | $ | 1,622 | $ | 6,044,317 | 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, 2015 were 3.0, 6.5, 18.0 and 4.0 years, respectively.
(3) Represents number of leased tenant sites divided by 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, 2015. 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 67 years.
| LANDMARK INFRASTRUCTURE PARTNERS LP | ||||||||||||||||||||
| RECONCILIATION OF EBITDA, ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Three Months Ended September 30, | Nine months ended September 30, | |||||||||||||||||||
| 2015(1) | 2014(1) | 2015(1) | 2014(1) | |||||||||||||||||
| Reconciliation of EBITDA and Adjusted EBITDA to Net Income (loss) | ||||||||||||||||||||
| Net income (loss) | $ | (1,015,358 | ) | $ | 2,234,145 | $ | (3,252,225 | ) | $ | 4,580,810 | ||||||||||
| Interest expense | 1,607,173 | 1,519,738 | 4,495,384 | 4,378,694 | ||||||||||||||||
| Amortization expense | 1,423,702 | 1,116,602 | 4,176,426 | 3,294,849 | ||||||||||||||||
| EBITDA | $ | 2,015,517 | $ | 4,870,485 | $ | 5,419,585 | $ | 12,254,353 | ||||||||||||
| Impairments | 302,008 | — | 3,578,744 | 8,450 | ||||||||||||||||
| Acquisition-related | 1,003,294 | 46,012 | 2,958,276 | 106,484 | ||||||||||||||||
| Unrealized (gain) loss on derivatives | 1,532,995 | (514,394 | ) | 1,909,817 | 6,393 | |||||||||||||||
| Loss on early extinguishment of debt | 902,625 | — | 902,625 | — | ||||||||||||||||
| Gain on sale of real property interest | — | — | (82,026 | ) | — | |||||||||||||||
| Unit-based compensation | 8,750 | — | 96,250 | — | ||||||||||||||||
| Straight line rent adjustments | (43,399 | ) | (40,466 | ) | (154,977 | ) | (115,674 | ) | ||||||||||||
| Amortization of above- and below-market rents, net | (343,179 | ) | (183,344 | ) | (836,485 | ) | (517,148 | ) | ||||||||||||
| Deemed capital contribution to fund general and administrative expense reimbursement(2) | 291,115 | — | 1,465,040 | — | ||||||||||||||||
| Adjusted EBITDA | $ | 5,669,726 | $ | 4,178,293 | $ | 15,256,849 | $ | 11,742,858 | ||||||||||||
| Reconciliation of Adjusted EBITDA to Net Cash Provided by Operating Activities | ||||||||||||||||||||
| Net cash provided by operating activities | $ | 1,688,662 | $ | 3,063,314 | $ | 6,776,469 | $ | 7,352,576 | ||||||||||||
| Unit-based compensation | (8,750 | ) | — | (96,250 | ) | — | ||||||||||||||
| Unrealized gain (loss) on derivatives | (1,532,995 | ) | 514,394 | (1,909,817 | ) | (6,393 | ) | |||||||||||||
| Loss on early extinguishment of debt | (902,625 | ) | — | (902,625 | ) | — | ||||||||||||||
| Amortization expense | (1,423,702 | ) | (1,116,602 | ) | (4,176,426 | ) | (3,294,849 | ) | ||||||||||||
| Amortization of above- and below-market rents, net | 343,179 | 183,344 | 836,485 | 517,148 | ||||||||||||||||
| Amortization of deferred loan costs | (244,632 | ) | (308,075 | ) | (722,689 | ) | (853,593 | ) | ||||||||||||
| Receivables interest accretion | 2,284 | 4,914 | 21,450 | 49,356 | ||||||||||||||||
| Impairments | (302,008 | ) | — | (3,578,744 | ) | (8,450 | ) | |||||||||||||
| Gain on the sale of real property interest | — | — | 82,026 | — | ||||||||||||||||
| Allowance for doubtful accounts and loan losses | — | — | — | (4,465 | ) | |||||||||||||||
| Working capital changes | 1,365,229 | (107,144 | ) | 417,896 | 829,480 | |||||||||||||||
| Net income (loss) | $ | (1,015,358 | ) | $ | 2,234,145 | $ | (3,252,225 | ) | $ | 4,580,810 | ||||||||||
| Interest expense | 1,607,173 | 1,519,738 | 4,495,384 | 4,378,694 | ||||||||||||||||
| Amortization expense | 1,423,702 | 1,116,602 | 4,176,426 | 3,294,849 | ||||||||||||||||
| EBITDA | $ | 2,015,517 | $ | 4,870,485 | $ | 5,419,585 | $ | 12,254,353 | ||||||||||||
| Less: | ||||||||||||||||||||
| Unrealized gain on derivatives | — | (514,394 | ) | — | — | |||||||||||||||
| Gain on sale of real property interest | — | — | (82,026 | ) | — | |||||||||||||||
| Straight line rent adjustments | (43,399 | ) | (40,466 | ) | (154,977 | ) | (115,674 | ) | ||||||||||||
| Amortization of above- and below-market rents, net | (343,179 | ) | (183,344 | ) | (836,485 | ) | (517,148 | ) | ||||||||||||
| Add: | ||||||||||||||||||||
| Impairments | 302,008 | — | 3,578,744 | 8,450 | ||||||||||||||||
| Acquisition-related | 1,003,294 | 46,012 | 2,958,276 | 106,484 | ||||||||||||||||
| Unrealized loss on derivatives | 1,532,995 | — | 1,909,817 | 6,393 | ||||||||||||||||
| Loss on early extinguishment of debt | 902,625 | — | 902,625 | — | ||||||||||||||||
| Unit-based compensation | 8,750 | — | 96,250 | — | ||||||||||||||||
| Deemed capital contribution to fund general and administrative expense reimbursement(2) | 291,115 | — | 1,465,040 | — | ||||||||||||||||
| Adjusted EBITDA | $ | 5,669,726 | $ | 4,178,293 | $ | 15,256,849 | $ | 11,742,858 | ||||||||||||
| Less: | ||||||||||||||||||||
| Expansion capital expenditures(1) | (122,400,000 | ) | — | (169,655,000 | ) | — | ||||||||||||||
| Cash interest expense | (1,362,541 | ) | (1,211,663 | ) | (3,772,695 | ) | (3,525,101 | ) | ||||||||||||
| Add: | ||||||||||||||||||||
| Borrowings and capital contributions to fund expansion capital expenditures | 122,400,000 | — | 169,655,000 | — | ||||||||||||||||
| Distributable cash flow | $ | 4,307,185 | $ | 2,966,630 | $ | 11,484,154 | $ | 8,217,757 | ||||||||||||
(1) Financial information prior to the closing of the transactions has been retroactively adjusted for certain assets acquired during the nine months ended September 30, 2015. See reconciliation of operations, EBITDA, Adjusted EBITDA, and distributable cash flow for the periods presented.
(2) Under the omnibus agreement that we entered into with Landmark at the closing of our initial public offering, we agreed to reimburse Landmark for expenses related to certain general and administrative services that Landmark will provide to us in support of our business, subject to a quarterly cap equal to the greater of $162,500 and 3% of our revenue during the preceding calendar quarter. This cap on expenses will last until the earlier to occur of: (i) the date on which our revenue for the immediately preceding four consecutive fiscal quarters exceeded $80.0 million and (ii) November 19, 2019. The full amount of general and administrative expenses incurred will be reflected in our income statements, and to the extent such general and administrative expenses exceed the cap amount, the amount of such excess will be reflected in our financial statements as a capital contribution from Landmark rather than as a reduction of our general and administrative expenses, except for expenses that would otherwise be allocated to us, which are not included in our general and administrative expenses.
| LANDMARK INFRASTRUCTURE PARTNERS LP | ||||||||||||||||||||||||||||||
| RECONCILIATION OF OPERATIONS, EBITDA, ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW FOR THE PREDECESSOR AND PARTNERSHIP | ||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||
| For the Three Months Ended September 30, 2015(1) | For the Nine Months Ended September 30, 2015(1) | |||||||||||||||||||||||||||||
| Landmark | Acquired | Landmark | Acquired | |||||||||||||||||||||||||||
| Infrastructure | Assets | Consolidated | Infrastructure | Assets | Consolidated | |||||||||||||||||||||||||
| Partners LP | Predecessor | Results | Partners LP | Predecessor | Results | |||||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||||||
| Rental revenue | $ | 5,326,821 | $ | 717,496 | $ | 6,044,317 | $ | 13,148,536 | $ | 3,151,768 | $ | 16,300,304 | ||||||||||||||||||
| Interest income | 200,117 | 785 | 200,902 | 601,972 | 3,208 | 605,180 | ||||||||||||||||||||||||
| Total revenue | 5,526,938 | 718,281 | 6,245,219 | 13,750,508 | 3,154,976 | 16,905,484 | ||||||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||||||
| Management fees to affiliate | — | 18,738 | 18,738 | — | 91,650 | 91,650 | ||||||||||||||||||||||||
| Property operating | 7,568 | 110 | 7,678 | 16,462 | 2,997 | 19,459 | ||||||||||||||||||||||||
| General and administrative | 462,364 | — | 462,364 | 2,097,421 | 9,933 | 2,107,354 | ||||||||||||||||||||||||
| Acquisition-related | 817,099 | 186,195 | 1,003,294 | 1,290,451 | 1,667,825 | 2,958,276 | ||||||||||||||||||||||||
| Amortization | 1,251,433 | 172,269 | 1,423,702 | 3,393,421 | 783,005 | 4,176,426 | ||||||||||||||||||||||||
| Impairments | 302,008 | — | 302,008 | 3,578,744 | — | 3,578,744 | ||||||||||||||||||||||||
| Total expenses | 2,840,472 | 377,312 | 3,217,784 | 10,376,499 | 2,555,410 | 12,931,909 | ||||||||||||||||||||||||
| Other income and expenses | ||||||||||||||||||||||||||||||
| Interest expense | (1,404,727 | ) | (202,446 | ) | (1,607,173 | ) | (3,580,618 | ) | (914,766 | ) | (4,495,384 | ) | ||||||||||||||||||
| Loss on early extinguishment of debt | — | (902,625 | ) | (902,625 | ) | — | (902,625 | ) | (902,625 | ) | ||||||||||||||||||||
| Unrealized gain (loss) on derivatives | (1,552,185 | ) | 19,190 | (1,532,995 | ) | (1,928,908 | ) | 19,091 | (1,909,817 | ) | ||||||||||||||||||||
| Gain on the sale of real property interest | — | — | — | 82,026 | — | 82,026 | ||||||||||||||||||||||||
| Total other income and expenses | (2,956,912 | ) | (1,085,881 | ) | (4,042,793 | ) | (5,427,500 | ) | (1,798,300 | ) | (7,225,800 | ) | ||||||||||||||||||
| Net income (loss) | $ | (270,446 | ) | $ | (744,912 | ) | $ | (1,015,358 | ) | $ | (2,053,491 | ) | $ | (1,198,734 | ) | $ | (3,252,225 | ) | ||||||||||||
| Add: | ||||||||||||||||||||||||||||||
| Interest expense | 1,404,727 | 202,446 | 1,607,173 | 3,580,618 | 914,766 | 4,495,384 | ||||||||||||||||||||||||
| Amortization expense | 1,251,433 | 172,269 | 1,423,702 | 3,393,421 | 783,005 | 4,176,426 | ||||||||||||||||||||||||
| EBITDA | $ | 2,385,714 | $ | (370,197 | ) | $ | 2,015,517 | $ | 4,920,548 | $ | 499,037 | $ | 5,419,585 | |||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||
| Unrealized gain on derivatives | — | (19,190 | ) | (19,190 | ) | — | (19,091 | ) | (19,091 | ) | ||||||||||||||||||||
| Gain on sale of real property interests | — | — | — | (82,026 | ) | — | (82,026 | ) | ||||||||||||||||||||||
| Straight line rent adjustments | (33,116 | ) | (10,283 | ) | (43,399 | ) | (91,660 | ) | (63,317 | ) | (154,977 | ) | ||||||||||||||||||
| Amortization of above- and below-market rents | (311,516 | ) | (31,663 | ) | (343,179 | ) | (702,003 | ) | (134,482 | ) | (836,485 | ) | ||||||||||||||||||
| Add: | ||||||||||||||||||||||||||||||
| Impairments | 302,008 | — | 302,008 | 3,578,744 | 3,578,744 | |||||||||||||||||||||||||
| Acquisition-related expenses | 817,099 | 186,195 | 1,003,294 | 1,290,451 | 1,667,825 | 2,958,276 | ||||||||||||||||||||||||
| Loss on early extinguishment of debt | — | 902,625 | 902,625 | — | 902,625 | 902,625 | ||||||||||||||||||||||||
| Unrealized loss on derivatives | 1,552,185 | — | 1,552,185 | 1,928,908 | — | 1,928,908 | ||||||||||||||||||||||||
| Realized loss on derivatives | — | — | — | — | — | — | ||||||||||||||||||||||||
| Unit-based compensation | 8,750 | — | 8,750 | 96,250 | — | 96,250 | ||||||||||||||||||||||||
| Deemed capital contribution to fund general and administrative expense reimbursement(2) | 291,115 | 291,115 | 1,465,040 | — | 1,465,040 | |||||||||||||||||||||||||
| Adjusted EBITDA | $ | 5,012,239 | $ | 657,487 | $ | 5,669,726 | $ | 12,404,252 | $ | 2,852,597 | $ | 15,256,849 | ||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||
| Expansion capital expenditures | (122,400,000 | ) | — | (122,400,000 | ) | (169,655,000 | ) | — | (169,655,000 | ) | ||||||||||||||||||||
| Cash interest expense | (1,223,898 | ) | (138,643 | ) | (1,362,541 | ) | (3,101,651 | ) | (671,044 | ) | (3,772,695 | ) | ||||||||||||||||||
| Add: | — | |||||||||||||||||||||||||||||
| Borrowings and capital contributions to fund expansion capital expenditures | 122,400,000 | 122,400,000 | 169,655,000 | 169,655,000 | ||||||||||||||||||||||||||
| Distributable cash flow | $ | 3,788,341 | $ | 518,844 | $ | 4,307,185 | $ | 9,302,601 | $ | 2,181,553 | $ | 11,484,154 | ||||||||||||||||||
| Annualized quarterly distribution per unit | $ | 1.27 | $ | 1.23 | ||||||||||||||||||||||||||
| Distributions to common unitholders(3) | 2,750,721 | 5,996,729 | ||||||||||||||||||||||||||||
| Distributions to Landmark Dividend – subordinated units(3) | 995,397 | 2,892,138 | ||||||||||||||||||||||||||||
| Total distributions to our unitholders(3) | $ | 3,746,118 | $ | 8,888,867 | ||||||||||||||||||||||||||
| Excess of distributable cash flow over the quarterly distribution(3) | $ | 42,223 | $ | 413,734 | ||||||||||||||||||||||||||
| Coverage ratio(3) | 1.01x | 1.05x | ||||||||||||||||||||||||||||
(1) During the nine months ended September 30, 2015, the Partnership completed its acquisitions of 512 tenant sites and related real property interests from Landmark and affiliates (the “Acquired 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 Acquired Assets as if the Partnership owned the Acquired Assets in all periods while under common control. The reconciliation present our results of operations and financial position giving effect to the Acquired Assets. The combined results of the Acquired Assets prior to each transaction date are included in “Acquired Assets Predecessor.” The consolidated results of the Acquired Assets after each transaction date are included in “Landmark Infrastructure Partners LP.”
(2) 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.
(3) Coverage ratio is calculated as the distributable cash flow for the quarter divided by the distributions to the limited partners on the weighted average units outstanding.