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Landmark Infrastructure Partners LP Reports Fourth Quarter and Full Year 2016 Results

EL SEGUNDO, Calif., Feb. 23, 2017 (GLOBE NEWSWIRE) -- Landmark Infrastructure Partners LP (the “Partnership,” “we,” “us” or “our”) (Nasdaq:LMRK) today announced its fourth quarter and full year 2016 financial results.

Highlights

  • Announced a quarterly distribution of $0.35 per common unit, representing year-over-year distribution growth of 7.7%;
  • Reported Q4 2016 revenue of $11.7 million, a 72% increase year-over-year;
  • Reported Q4 2016 net income of $8.8 million, EBITDA of $15.4 million, and Adjusted EBITDA of $10.8 million, a 68% increase in Adjusted EBITDA year-over-year;
  • Reported Q4 2016 distributable cash flow of $6.3 million, a 38% increase year-over-year;
  • On December 22, the Partnership acquired a portfolio of 37 assets from Landmark Dividend LLC (“Landmark”), for total consideration of $13.6 million; and
  • Maintained an occupancy rate of 97%.

Fourth Quarter and Full Year 2016 Results
Revenue for the quarter ended December 31, 2016 increased 72% to $11.7 million compared to the fourth quarter of 2015. Net income for the fourth quarter was $8.8 million, compared to $2.8 million in the fourth quarter of 2015. Earnings per diluted common unit in the fourth quarter of 2016 increased to $0.34, compared to $0.20 per diluted common unit in the fourth quarter of 2015. EBITDA (earnings before interest, income taxes, depreciation and amortization) for the quarter ended December 31, 2016 increased 131% to $15.4 million compared to the fourth quarter of 2015. The net income and EBITDA amounts include the impact from $6.0 million of unrealized gain on derivatives and $1.4 million of acquisition-related expenses. Adjusted EBITDA for the quarter ended December 31, 2016 increased 68% to $10.8 million compared to the fourth quarter of 2015, and distributable cash flow increased 38% to $6.3 million compared to the fourth quarter of 2015.

For the full year ended December 31, 2016, the Partnership reported revenue of $36.2 million, net income of $9.9 million, and earnings per diluted common unit of $0.41. The Partnership reported EBITDA of $31.0 million, Adjusted EBITDA of $33.5 million, and distributable cash flow of $20.7 million in the full year period ended December 31, 2016. The net income and EBITDA amounts include the impact from $2.6 million of acquisition-related expenses, $2.2 million of unrealized gain on derivatives, $1.3 million of impairments and $0.4 million of gain on sale of real property interests.

“Our fourth quarter acquisition activity was highlighted by the Recurrent Energy transaction, which was one of the largest solar land acquisitions in 2016,” said Tim Brazy, Chief Executive Officer of the Partnership’s general partner. “For the full year 2016, we acquired 593 assets for total consideration of approximately $292 million. Looking forward, we are excited about our acquisition prospects for 2017 and believe that we are well-positioned to drive future growth for the Partnership.”

Quarterly Distributions
On January 25, 2017, the Board of Directors of the Partnership’s general partner declared a cash distribution of $0.35 per common unit, or $1.40 per common unit on an annualized basis, for the quarter ended December 31, 2016. This quarter’s cash distribution, which represents a 7.7% increase year-over-year and a 3.7% increase compared to the third quarter 2016 distribution of $0.3375 per common unit, marks the eighth consecutive quarter that the Partnership has increased its quarterly cash distribution since its IPO in November 2014. The distribution was paid on February 15, 2017 to common unitholders of record as of February 6, 2017.

On January 20, 2017, the Board of Directors of the Partnership’s general partner declared a quarterly cash distribution of $0.49375 per Series B preferred unit, which was paid on February 15, 2017 to Series B preferred unitholders of record as of February 1, 2017.

On December 16, 2016, the Board of Directors of the Partnership’s general partner declared a quarterly cash distribution of $0.500 per Series A preferred unit, which was paid on January 17, 2017 to Series A preferred unitholders of record as of January 3, 2017.

Capital and Liquidity
As of December 31, 2016, the Partnership had $224.5 million of outstanding borrowings under its revolving credit facility (the “Facility”) and $57.5 million of undrawn borrowing capacity under the Facility, subject to compliance with certain covenants.

Recent Drop-Down Acquisition
During the fourth quarter of 2016, the Partnership completed a drop-down acquisition from Landmark, acquiring a total of 37 assets for total consideration of $13.6 million. The acquisition was immediately accretive to the Partnership’s distributable cash flow, and funded with borrowings under the Partnership’s existing Facility.

Recurrent Energy Transaction
On October 31, 2016, the Partnership completed the previously announced acquisition of approximately 4,000 acres of land in California underneath utility-scale solar photovoltaic projects developed by Recurrent Energy, a subsidiary of Canadian Solar Inc. (NASDAQ: CSIQ), one of the world’s largest solar power companies, for a total purchase price of approximately $73 million.

At-The-Market (“ATM”) Equity Programs
Through its At-The-Market (“ATM”) issuance programs, the Partnership issued 405,156 common units and 63,957 Series A preferred units for gross proceeds of approximately $6.9 million and $1.6 million, respectively, for the full year 2016.

2017 Guidance
The Partnership’s sponsor has expressed its intent to offer us the right to purchase $200 million of assets in 2017. These acquisitions, combined with organic portfolio growth, are expected to drive distribution growth of 10% over the fourth quarter 2016 distribution of $0.35 per common unit by the fourth quarter 2017 (distribution to be paid in February 2018).

Conference Call Information
The Partnership will hold a conference call on Thursday, February 23, 2017, at 12:00 p.m. Eastern Time (9:00 a.m. Pacific Time) to discuss its fourth quarter and full year 2016 financial and operating results. The call can be accessed via a live webcast at http://edge.media-server.com/m/p/mvn8e8tk, 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 56351254.

A webcast replay will be available approximately two hours after the completion of the conference call through February 23, 2018 at http://investor.landmarkmlp.com/phoenix.zhtml?c=253802&p=irol-calendar. The replay is also available through March 4, 2017 by dialing 855-859-2056 or 404-537-3406 and entering the access code 56351254.

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 owns and manages a diversified portfolio of real property interests, which includes long-term and perpetual easements, tenant lease assignments and fee simple properties, primarily located in the United States.

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

Forward-Looking Statements
This release contains forward-looking statements within the meaning of federal securities laws. These statements discuss future expectations, contain projections of results of operations or of financial condition or state other forward-looking information. You can identify forward-looking statements by words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “project,” “could,” “may,” “should,” “would,” “will” or other similar expressions that convey the uncertainty of future events or outcomes. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the Partnership’s control and are difficult to predict. These statements are often based upon various assumptions, many of which are based, in turn, upon further assumptions, including examination of historical operating trends made by the management of the Partnership. Although the Partnership believes that these assumptions were reasonable when made, because assumptions are inherently subject to significant uncertainties and contingencies, which are difficult or impossible to predict and are beyond its control, the Partnership cannot give assurance that it will achieve or accomplish these expectations, beliefs or intentions. Examples of forward-looking statements in this press release include our expected distribution growth for 2017, the deployment of proceeds from the recent equity offering, and 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, 2016 and Current Report on Form 8-K filed with the Commission on February 23, 2017. 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 (1)
IN THOUSANDS, EXCEPT PER UNIT DATA
(Unaudited)
Three Months Ended December 31, Year Ended December 31,
2016 2015 2016 2015
Revenue
Rental revenue $ 11,498 $ 9,271 $ 41,171 $ 33,597
Interest income on receivables 316 190 1,225 795
Total revenue 11,814 9,461 42,396 34,392
Expenses
Management fees to affiliate 92 196 480
Property operating 9 4 107 36
General and administrative 867 816 3,755 2,923
Acquisition-related 1,492 904 2,906 4,016
Amortization 3,016 2,477 11,191 8,651
Impairments 40 323 1,275 3,902
Total expenses 5,424 4,616 19,430 20,008
Other income and expenses
Interest expense (3,640) (3,091) (13,923) (10,958)
Loss on early extinguishment of debt (969) (1,703) (1,872)
Realized loss on derivatives (126) (99) (140)
Unrealized gain (loss) on derivatives 6,042 1,649 2,306 (446)
Gain on sale of real property interests 155 374 237
Total other income and expenses 2,402 (2,382) (13,045) (13,179)
Net income $ 8,792 $ 2,463 $ 9,921 $ 1,205
Less: Pre-acquisition net income (loss) from Drop-down
Assets(1)
(5) (326) 48 469
Net income attributable to limited partners 8,797 2,789 9,873 736
Less: Distributions to preferred unitholders (1,327) (2,660)
Less: General Partner's incentive distribution rights (77) (110)
Net income attributable to common and subordinated unitholders $ 7,393 $ 2,789 $ 7,103 $ 736
Net income (loss) per common and subordinated unit
Common units – basic $ 0.34 $ 0.21 $ 0.46 $ 0.16
Common units – diluted $ 0.34 $ 0.20 $ 0.41 $ 0.07
Subordinated units – basic and diluted $ 0.33 $ 0.17 $ 0.23 $ (0.16)
Weighted average common and subordinated units outstanding
Common units – basic 18,727 10,694 13,986 7,558
Common units – diluted 21,862 13,829 17,121 10,693
Subordinated units – basic and diluted 3,135 3,135 3,135 3,135
Other Data:
Total leased tenant sites (end of period) 1,956 1,844 1,956 1,844
Total available tenant sites (end of period) 2,022 1,877 2,022 1,877


(1) During the years ended December 31, 2016 and 2015, the Partnership completed five and eight drop-down acquisitions, respectively, (the “Drop-down Assets”) from our sponsor Landmark Dividend LLC and affiliates (collectively “Landmark”). 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 Drop-down 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 Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission on February 23, 2017.



LANDMARK INFRASTRUCTURE PARTNERS LP
CONSOLIDATED AND COMBINED BALANCE SHEETS
IN THOUSANDS, EXCEPT UNIT AND PER UNIT DATA
(Unaudited)
December 31, 2016 December 31, 2015(1)
Assets
Land$ 88,845 $ 12,887
Real property interests 490,030 453,165
Total land and real property interests 578,875 466,052
Accumulated amortization of real property interests (25,967) (16,381)
Land and net real property interests 552,908 449,671
Investments in receivables, net 17,440 12,136
Cash and cash equivalents 2,711 1,984
Restricted cash 2,851
Rent receivables, net 2,372 1,340
Due from Landmark and affiliates 566 2,206
Deferred loan costs, net 2,797 3,090
Deferred rent receivable 1,379 865
Derivative assets 1,860
Other intangible assets, net 15,730 13,120
Other assets 2,446 1,207
Total assets$ 603,060 $ 485,619
Liabilities and equity
Revolving credit facility$ 224,500 $ 233,000
Secured debt facilities, net 74,136
Secured notes, net 112,435
Accounts payable and accrued liabilities 4,374 1,787
Other intangible liabilities, net 13,061 14,380
Prepaid rent 3,984 4,131
Derivative liabilities 376 823
Total liabilities 358,730 328,257
Commitments and contingencies
Equity
Series A cumulative redeemable preferred units, 863,957 and zero units issued and
outstanding at December 31, 2016 and 2015, respectively
19,393
Series B cumulative redeemable preferred units, 1,840,000 and zero units issued and
outstanding at December 31, 2016 and 2015, respectively
44,256
Common units, 19,450,555 and 11,820,144 units issued and outstanding at December 31,
2016 and 2015, respectively
294,296 179,045
Subordinated units, 3,135,109 units issued and outstanding 22,524 25,942
General Partner (135,630) (47,633)
Accumulated other comprehensive income (loss) (509) 8
Total equity 244,330 157,362
Total liabilities and equity$ 603,060 $ 485,619


(1) Financial information prior to the closing of the drop-down transactions has been retroactively adjusted for certain assets acquired from Landmark and affiliates as the transactions are between entities under common control. These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission on February 23, 2017.



LANDMARK INFRASTRUCTURE PARTNERS LP
REAL PROPERTY INTEREST TABLE
Available Tenant Leased Tenant
Sites(1) Sites
Average Average Average
Remaining Remaining Monthly Quarterly Percentage
Number of Property Lease Tenant Site Effective Rent Rental of Quarterly
Infrastructure Interest Term Occupancy Per Tenant Revenue Rental
Real Property Interest Locations(1) Number (Years) Number (Years)(2) Rate(3) Site(4)(5) (in thousands)(6) Revenue(6)
Tenant Lease Assignment with
Underlying Easement
Wireless Communication 946 1,226 79.0(7) 1,184 30.2 $ 6,573 57%
Outdoor Advertising 402 481 87.0(7) 471 18.3 1,787 16%
Renewable Power Generation 20 51 30.6(7) 51 30.0 514 4%
Subtotal 1,368 1,758 80.5(7) 1,706 27.0 $ 8,874 77%
Tenant Lease Assignment only(8)
Wireless Communication 141 195 51.1 181 19.4 $ 1,229 11%
Outdoor Advertising 19 19 71.5 19 16.2 152 1%
Subtotal 160 214 52.9 200 19.1 $ 1,381 12%
Tenant Lease on Fee Simple
Wireless Communication 8 15 99.0(7) 15 18.5 $ 89 1%
Outdoor Advertising 19 23 99.0(7) 23 10.4 104 1%
Renewable Power Generation 10 12 99.0(7) 12 32.6 1,050 9%
Subtotal 37 50 99.0(7) 50 18.0 $ 1,243 11%
Total 1,565 2,022 78.0(9) 1,956 25.9 $ 11,498 100%
Aggregate Portfolio
Wireless Communication 1,095 1,436 75.4 1,380 28.7 96% $ 1,776 $ 7,891 69%
Outdoor Advertising 440 523 86.9 513 17.9 98% 1,351 2,043 18%
Renewable Power Generation 30 63 35.9 63 30.9 100% 4,062 1,564 13%
Total 1,565 2,022 78.0(9) 1,956 25.9 97% $ 1,727 $ 11,498 100%


(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 December 31, 2016 were 4.0, 8.4, 20.0 and 5.4 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 December 31, 2016. 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 68 years.


LANDMARK INFRASTRUCTURE PARTNERS LP
RECONCILIATION OF EBITDA, ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW (1)
IN THOUSANDS
(Unaudited)
Three Months Ended December 31, Year ended December 31,
2016 2015 2016 2015
Reconciliation of EBITDA and Adjusted EBITDA to Net Income
Net income $ 8,792 $ 2,463 $ 9,921 $ 1,205
Interest expense 3,640 3,091 13,923 10,958
Amortization expense 3,016 2,477 11,191 8,651
EBITDA $ 15,448 $ 8,031 $ 35,035 $ 20,814
Impairments 40 323 1,275 3,902
Acquisition-related 1,492 904 2,906 4,016
Unrealized (gain) loss on derivatives (6,042) (1,649) (2,306) 446
Realized loss on derivatives 126 99 140
Loss on early extinguishment of debt 969 1,703 1,872
Gain on sale of real property interests (155) (374) (237)
Unit-based compensation 9 105 105
Straight line rent adjustments (255) (46) (514) (338)
Amortization of above- and below-market rents, net (315) (335) (1,338) (1,467)
Deemed capital contribution to fund general and administrative expense reimbursement(2) 544 645 2,578 2,110
Adjusted EBITDA $ 10,912 $ 8,822 $ 39,169 $ 31,363
Reconciliation of EBITDA, Adjusted EBITDA and Distributable Cash Flow to Net Cash Provided by Operating Activities
Net cash provided by operating activities $ 3,890 $ 4,464 $ 21,465 $ 15,955
Unit-based compensation (9) (105) (105)
Unrealized gain (loss) on derivatives 6,042 1,649 2,306 (446)
Loss on early extinguishment of debt (969) (1,703) (1,872)
Amortization expense (3,016) (2,477) (11,191) (8,651)
Amortization of above- and below-market rents, net 315 335 1,338 1,467
Amortization of deferred loan costs and discount on secured notes (447) (419) (1,703) (1,902)
Receivables interest accretion 6 12 36 33
Impairments (40) (323) (1,275) (3,902)
Gain on sale of real property interests 155 374 237
Allowance for doubtful accounts and investments in receivables (68) (182)
Working capital changes 2,110 45 561 391
Net income $ 8,792 $ 2,463 $ 9,921 $ 1,205
Interest expense 3,640 3,091 13,923 10,958
Amortization expense 3,016 2,477 11,191 8,651
EBITDA $ 15,448 $ 8,031 $ 35,035 $ 20,814
Less:
Unrealized gain on derivatives (6,042) (1,649) (2,306)
Gain on sale of real property interests (155) (374) (237)
Straight line rent adjustment (255) (46) (514) (338)
Amortization of above- and below-market rents, net (315) (335) (1,338) (1,467)
Add:
Impairments 40 323 1,275 3,902
Acquisition-related 1,492 904 2,906 4,016
Unrealized loss on derivatives 446
Realized loss on derivatives 126 99 140
Loss on early extinguishment of debt 969 1,703 1,872
Unit-based compensation 9 105 105
Deemed capital contribution to fund general and administrative expense reimbursement(2) 544 645 2,578 2,110
Adjusted EBITDA $ 10,912 $ 8,822 $ 39,169 $ 31,363
Less:
Expansion capital expenditures (93,178) (99,003) (291,509) (268,218)
Cash interest expense (3,193) (2,672) (12,220) (9,056)
Distributions to preferred unitholders (1,327) (2,660)
Add:
Borrowings and capital contributions to fund expansion capital expenditures 93,178 99,003 291,509 268,218
Distributable cash flow $ 6,392 $ 6,150 $ 24,289 $ 22,307


(1) Financial information prior to the closing of the drop-down transactions has been retroactively adjusted for certain assets acquired from Landmark during the year ended December 31, 2016. 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 (1)
IN THOUSANDS (Unaudited)
For the Three Months Ended December 31,
2016 2015
Landmark Drop-down Landmark Drop-down
Infrastructure Assets Consolidated Infrastructure Assets Consolidated
Partners LP Predecessor Results Partners LP Predecessor Results
Revenue:
Rental revenue $ 11,427 $ 71 $ 11,498 $ 6,660 $ 2,611 $ 9,271
Interest income on receivables 309 7 316 181 9 190
Total revenue 11,736 78 11,814 6,841 2,620 9,461
Expenses:
Management fees to affiliate 92 92
Property operating 9 9 8 (4) 4
General and administrative 867 867 816 816
Acquisition-related 1,438 54 1,492 666 238 904
Amortization 2,987 29 3,016 1,825 652 2,477
Impairments 40 40 323 323
Total expenses 5,341 83 5,424 3,638 978 4,616
Other income and expenses
Interest expense (3,640) (3,640) (2,051) (1,040) (3,091)
Loss on early extinguishment of debt (969) (969)
Realized loss on derivatives (126) (126)
Unrealized gain (loss) on derivatives 6,042 6,042 1,482 167 1,649
Gain on sale of real property interests 155 155
Total other income and expenses 2,402 2,402 (414) (1,968) (2,382)
Net income (loss) $ 8,797 $ (5) $ 8,792 $ 2,789 $ (326) $ 2,463
Add:
Interest expense 3,640 3,640 2,051 1,040 3,091
Amortization expense 2,987 29 3,016 1,825 652 2,477
EBITDA $ 15,424 $ 24 $ 15,448 $ 6,665 $ 1,366 $ 8,031
Less:
Unrealized gain on derivatives (6,042) (6,042) (1,482) (167) (1,649)
Gain on sale of real property interests (155) (155)
Straight line rent adjustments (251) (4) (255) 8 (54) (46)
Amortization of above- and below-market rents (343) 28 (315) (257) (78) (335)
Add:
Impairments 40 40 323 323
Acquisition-related expenses 1,438 54 1,492 666 238 904
Loss on early extinguishment of debt 969 969
Realized loss on derivatives 126 126
Unit-based compensation 9 9
Deemed capital contribution to fund general and administrative expense
reimbursement(2)
544 544 645 645
Adjusted EBITDA $ 10,810 $ 102 $ 10,912 $ 6,422 $ 2,400 $ 8,822
Less:
Expansion capital expenditures (93,178) (93,178) (99,003) (99,003)
Cash interest expense (3,193) (3,193) (1,857) (815) (2,672)
Distributions to preferred unitholders (1,327) (1,327)
Add:
Borrowings and capital contributions to fund expansion capital expenditures 93,178 93,178 99,003 99,003
Distributable cash flow $ 6,290 $ 102 $ 6,392 $ 4,565 $ 1,585 $ 6,150
Annualized quarterly distribution per unit $ 1.40 $ 1.30
Distributions to common unitholders 6,554 3,476
Distributions to Landmark Dividend – subordinated units 1,097 1,019
Distributions to the General Partner - incentive distribution rights 75
Total distributions $ 7,726 $ 4,495
Excess (shortfall) of distributable cash flow over the quarterly distribution $ (1,436) $ 70
Coverage ratio(3) 0.81x 1.02x

(1) During the years ended December 31, 2016 and 2015, the Partnership completed five and eight drop-down acquisitions, respectively, from Landmark and affiliates (the “Drop-down Assets”). The assets and liabilities acquired are recorded at the historical cost of Landmark, as the transactions are between entities under common control, the statements of operations of the Partnership are adjusted retroactively as if the transactions occurred on the earliest date during which the entities were under common control. The historical financial statements have been retroactively adjusted to reflect the results of operations, financial position, and cash flows of the Drop-down Assets as if the Partnership owned the Drop-down Assets in all periods while under common control. The reconciliation presents our results of operations and financial position giving effect to the Drop-down Assets. The combined results of the Drop-down Assets prior to each transaction date are included in “Drop-down Assets Predecessor.” The consolidated results of the Drop-down Assets after each transaction date are included in “Landmark Infrastructure Partners LP.”
(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 common and subordinated unitholders on the weighted average units outstanding.


LANDMARK INFRASTRUCTURE PARTNERS LP
RECONCILIATION OF OPERATIONS, EBITDA, ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW FOR THE PREDECESSOR AND
PARTNERSHIP (1)
IN THOUSANDS (Unaudited)
For the Year Ended December 31,
2016 2015
Landmark Drop-down Landmark Drop-down
Infrastructure Assets Consolidated Infrastructure Assets Consolidated
Partners LP Predecessor Results Partners LP Predecessor Results
Revenue:
Rental revenue $ 35,208 $ 5,963 $ 41,171 $ 19,808 $ 13,789 $ 33,597
Interest income 1,029 196 1,225 783 12 795
Total revenue 36,237 6,159 42,396 20,591 13,801 34,392
Expenses:
Management fees to affiliate 196 196 480 480
Property operating 105 2 107 24 12 36
General and administrative 3,755 3,755 2,913 10 2,923
Acquisition-related 2,648 258 2,906 1,957 2,059 4,016
Amortization 9,703 1,488 11,191 5,218 3,433 8,651
Impairments 1,275 1,275 3,902 3,902
Total expenses 17,486 1,944 19,430 14,014 5,994 20,008
Other income and expenses
Interest expense (11,472) (2,451) (13,923) (5,632) (5,326) (10,958)
Loss on early extinguishment of debt (1,703) (1,703) (1,872) (1,872)
Realized loss on derivatives (99) (99) (140) (140)
Unrealized gain (loss) on derivatives 2,220 86 2,306 (446) (446)
Gain on sale of real property interests 374 374 237 237
Total other income and expenses (8,878) (4,167) (13,045) (5,841) (7,338) (13,179)
Net income $ 9,873 $ 48 $ 9,921 $ 736 $ 469 $ 1,205
Add:
Interest expense 11,472 2,451 13,923 5,632 5,326 10,958
Amortization expense 9,703 1,488 11,191 5,218 3,433 8,651
EBITDA $ 31,048 $ 3,987 $ 35,035 $ 11,586 $ 9,228 $ 20,814
Less:
Unrealized gain on derivatives (2,220) (86) (2,306)
Gain on sale of real property interests (374) (374) (237) (237)
Straight line rent adjustments (356) (158) (514) (84) (254) (338)
Amortization of above- and below-market rents (1,173) (165) (1,338) (959) (508) (1,467)
Add:
Impairments 1,275 1,275 3,902 3,902
Acquisition-related expenses 2,648 258 2,906 1,957 2,059 4,016
Loss on early extinguishment of debt 1,703 1,703 1,872 1,872
Unrealized loss on derivatives 446 446
Realized loss on derivatives 99 99 140 140
Unit-based compensation 105 105 105 105
Deemed capital contribution to fund general and administrative expense
reimbursement(2)
2,578 2,578 2,110 2,110
Adjusted EBITDA $ 33,531 $ 5,638 $ 39,169 $ 18,826 $ 12,537 $ 31,363
Less:
Expansion capital expenditures (291,509) (291,509) (268,218) (268,218)
Cash interest expense (10,185) (2,035) (12,220) (4,958) (4,098) (9,056)
Distributions to preferred unitholders (2,660) (2,660)
Add:
Borrowings and capital contributions to fund expansion capital expenditures 291,509 291,509 268,218 268,218
Distributable cash flow $ 20,686 $ 3,603 $ 24,289 $ 13,868 $ 8,439 $ 22,307
Annualized quarterly distribution per unit $ 1.35 $ 1.25
Distributions to common unitholders 18,881 9,428
Distributions to Landmark Dividend – subordinated units 4,232 3,911
Distributions to the General Partner - incentive distribution rights 83
Total distributions $ 23,196 $ 13,339
Excess (shortfall) of distributable cash flow over the quarterly distribution $ (2,510) $ 529
Coverage ratio(3) 0.89x 1.04x


(1) The historical financial statements have been retroactively adjusted to reflect the results of operations, financial position, and cash flows of the Drop-down Assets as if the Partnership owned the Drop-down Assets in all periods while under common control. The reconciliation presents our results of operations and financial position giving effect to the Drop-down Assets. The combined results of the Drop-down Assets prior to each transaction date are included in “Drop-down Assets Predecessor.” The consolidated results of the Drop-down Assets after each transaction date are included in “Landmark Infrastructure Partners LP.”
(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 common and subordinated unitholders on the weighted average units outstanding.

CONTACT: Marcelo Choi Vice President, Investor Relations (310) 598-3173 ir@landmarkmlp.com

Source:Landmark Infrastructure Partners LP