LMRK - Earnings call transcript Q3 2018 | Landmark Infrastructure Partners LP

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Operator

Good day, ladies and gentlemen, and welcome to Landmark Infrastructure Partners’ Third Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer and instructions will be provided at that time. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. I’d now like to turn the conference over to Marcelo Choi, Vice President of Investor Relations. ahead. go Please

Marcelo Choi

business, good which today all Landmark are Officer. could and we participants Chief like welcome Officer; Presenting future of to to share questions factors George take Thank our Tim following Partners morning. Brazy, Financial third I to presentation. include from would materially forward-looking to of the will Doyle, overview financial current to periods Infrastructure operating and the statements, our that Today, we'll cause risks quarter expectations. remind subject you also comment certain in an your number call you, uncertainties. today and like on differ and our We'd actual and A results are earnings will uncertainties Executive call. and Chief

complete read to file For encourage these documents the the Partnership's of SEC. a we on release and with risks, you discussion earnings

EBITDA, Additionally, definitions the we that, their and and GAAP of to such comparable flow non-GAAP public distributable earnings measures may non-GAAP measures turn FFO, these with refer reconciliations most measures. the call for Please filings I'll the over refer adjusted Tim. to our And cash release to EBITDA and during call. to AFFO, as

Arthur Brazy

Marcelo, thank you.

the we of from including strong and operating results. portfolio. year-over-year on busy strong XX our last the the as third quarter seen Rental completed quarter update operating financial and activities existing various in quarter in third you've results initiatives and the the going an joint our quarter, acquisitions venture the by quarter talk our we of In XX% financing profile extremely third our and our revenue led about grew Brookfield As you as for announcements, growth assets another strategic FlexGrid performance developments. we're months, was realized an the to us. Today, and provide well with

growing and low and the the of portfolio cash assets. escalators, renewals, well our growth combination stable of continues lease assets from to the deliver to and churn perform and contractual flows continue Our from modifications lease

by buying greater assets. assets one you portfolio as advantageous September rents In than deploying value of price assets of In do, through while annual we very them the to strong. assets assets the million the less those whole individual of favorable other the parts. renewable acquire for be a a to strategy you on we At accretion changing substantial year-to-date XX we're than portfolios, and direct opportunities conditions advertising, where will model and and and ongoing progress making $XX.X strategic partnerships; to our wireless to we're power fronts, were in Those acquisition continues seven assets. inside past. level, acquisition XXX our in very more development on number of develop now assembled international opportunities result significant has buy approximately But a terms we've believe domestic activity contribute this the and partnership importantly, We done comprised at are outdoor capital. words, of deployment growth at When for our we is portfolio the partnership assets focusing is are pricing. we've total acquiring Market acquisitions and for some of to less multiple expected acquired as time $XXX sponsor consideration buy in portfolio communication, FlexGrid see XX, million. rather Overall, pay assets sponsor directly of and our in the activities. generation more XXX continued a than the

our to stated will that an have This acquisitions deliver for continue important as direct growth of structure, at higher rate, to the cap accretion pipeline internally is LMRK and goal higher Partnership the as transition today converting positioned the an discussed we those our expect a greater better developments managed attractive and consider which toward corporate profiles We large significant and Partnership. conversion a able and previously portfolio two very believe to the is years. should developments With acquisitions be next markets, to in within well we of three grow REIT. we're we many increasingly

addition, In additional in is the later discuss George taking as call, for will on some transition. also preparation now Partnership this the steps

peer example, group management align with transparency. ourselves anticipated our and to financial better and with For reporting compare to more REIT

to about developing technology joint joint LMRK end, let's it and partnerships growth. talked benefit we our calls, Asset about manager This of asset invest milestone and that with recent we've in is talk further assets. our would for and because drive developments. a Brookfield venture accretive September, investor infrastructure infrastructure core On venture announced global ground Landmark a Management, our lease that including significant strategic some class. leading operating To Now, new asset capital, prior relationships, validates in

institutional quality investment investments our attractive are volatility and have assets lease by the alternatives. low like and infrastructure businesses to with that high investors, traditional similarly feature ground correlation characteristics credit more operating Just assets essential investment favored for traditional

for a real to establish leadership our position partnership million and the and initiatives. we wireless our to net pursue efforts core interest development compliment in providing the value. XX% the our significantly a Remember, very assets, that the million in capital, debt $XX.X expand acquisition opportunities with partnership associated partnerships Our or this strengthens at leverage business, significant assets, Landmark’s should our essentially communication of ability of see estate to supporting of strategy transaction, and In and attractive parties, cost cash, contributed strengths markets and continuation exchange enhancing venture the partnership approximately including both to the at allowing XXX equity overall industries. portfolio our in JV infrastructure Brookfield in is with NAV initial our a us the further in region, asset of $XXX our

on of delever to and the to the change in the venture our transaction a us but from execute drive for strategy joint gives rather balance represent plan. capital does not formation the sheet activities. use future the additional partnership, acquisition The and will We resources development

Turning to development our activity.

recent our FlexGrid, to with also with high in rich content transportation into an and FlexGrid announcement, DART system, the Smart a as we DARTs on Transit our Communications agreement solution traffic seen you've made Dallas the significant agreement DART. network. we've Media select entered progress entering including locations known platform, In Area into Rapid develop As October, City and kiosks within Ecosystem

out conductivity, City infrastructure information feature platform Media City real the will solutions. at with this company security providing total, locations more WiFi we DART functions. content, and operate building year. expect media and kiosks XXX local kiosks digital digital Smart will while initial public a with leading also smart and anticipated deploy end traffic be platform, high are than select advertising, partners with Media, time infrastructure to We of to kiosk installed the develop safety which the to Smart media and the cities digital around In

potential other host is a installations during expect unique we will owners that several carriers variety recent be the and It of cell over the of to completed DART and Landmark’s the the positions in both are The the the We of level an illustrates growing with support them mobile time. FlexGrid FlexGrid and customizable discussions neutral have co-location the of needs with engagement in wireless macro highly Most and number the why about revenue all it property project. most specific meet importantly, anchor a deployments from co-location DARTs and can solution and meet A XXXX tenants, operators expressed groups footprint, quickly small to can environment. currently of network ideal of of interest particular is needs a other and for as participants installations. solution project. can be wide deployed in

In cities, our DART, estate strategic discuss estate we with opportunities authorities transportation including real commercial addition continued to owners. targeted and within other other segments, real owners to

and outdoor in has with strategic Western the UK As and Europe opportunities and we successful partner regard advertising, previously, in by at buy FlexGrid area. partnership tenants. to very said anticipate cap and continues outdoor development expand the assets for further potential to European to growth our develop received we attractive well solution our significant LMRK potential has we been very pipeline the rates. With continue The of in efforts been partners advertising

portfolio market. Through billboard that opportunities We grow. in XX to September the continues $XX there a Our see this LMRK in and development lot has about UK, year, million acquisition $XX of of million this year. including approximately invested

the to year, next XXXX we by the excited and progress we're we finish see. opportunities As we've tremendous that made look and ahead up

value markets. growing strong we're that our unit business, provide to advantage George? more call able adding with position continued grow review and FlexGrid over we're in favorable on deliver the we're will the to the financial of acquisition And the conditions, portfolio, execute the significant great capabilities, market the partnership, a long-term who our our believe for opportunities, confident take turn with I'll George, quarter. strategic to new very we large of our detailed that, development our to and and a of holders. With relationships performance And and

George Doyle

Tim. you, Thank

into longer partnership discuss of into I’d positioning an the Before and sponsor to to highlight quarter's our goal internally like of an term converting the managed an the change, that I this REIT, is consider process results, partnership internalization by the we operating structure the optimal operating started structure assets for moving Infrastructure. REIT a subsidiary. we believe Landmark partnerships which In completing XXXX, by illegal

model This acquisition internalization, the higher acquisition to to development of driving quarter, additional for the previous development. we model, dropdown acquisitions versus a more all, and such portfolio partnership including an investment accretion rate have the with strategy first steps cap position shifting direct taken

flexibility peers. resembled to financial reducing of provide levels closely leverage operational the more balance sheets and more REIT Secondly,

common operating including of and in flow and growth to maintaining in believe strategic activities. managed to acquisition order metrics to for internally development unitholders organic higher including providing cash quarterly the in access the the $XX.XX to that per will including FFO an pipeline. sponsors’ full retain Third, move unit, existing lastly, Partnership ways, near-term development distribution become REIT the are benefit performance that acquisition We many to common and having REIT, AFFO fund unit

quarter our our Brookfield to QX results, financial our on information. with of had formation presentation the on impact September Turning for venture the and XX joint results significant the a that

jointly on controlled associated portfolio the to and initial part As contributed transaction venture recognize assets of million. gain transaction with and of the Brookfield, the $XXX a liabilities we of

direct are have able the of and assets than individual in these with we As we portfolio substantially lower is price model, in the at invest our past outlined assets. new to acquisition valuation

these through We to our as proceeds direct to higher able and reinvest development acquisitions substantially net be activity. cap expect rates

the a consolidated venture as investment than will joint we accounting Looking as forward, subsidiary. rather be for method equity an

we and will presentation, part the the As only include expenses from that income joint of earnings our revenue from properties report equity and as subsidiaries unconsolidated will our in venture reported the joint ventures. consolidated

of part such consolidated As metrics the count property include occupancy this as only presentation, and our will properties.

well the our strong our rent year-over-year XX% and Rental X% the third second escalators continues driven back revenue with portfolio quarter contractual lease to Turning to as and renewals. acquisition and modifications revenue third results, occupancy growth. well by quarter by as increased perform in quarter rates over activity in the

to accretive. more continue cap higher We target rate that are assets

rate of acquisitions cap average XX, September the north With X.X%. XXXX as of year-to-date, for

at cap As I compared XXXX the for XXXX. at us to assets and anticipate similar into assets remain higher to directly acquisitions higher of We to or larger noted portfolios. allows cap earlier, remainder rates acquiring rates acquire

gain AFFO, our comparability press and I results more to As previously, in and with principally release, have REIT provide outlined peers per disclosures our FFO an our increase of compared generated from to of Adjusted The $X.XX increase the property results. FFO excludes XXXX last $XX.X we in transparency expenses sale the last XXXX $X.XX items unit which new related of as EBITDA and quarter acquisition was added the course of third XX% quarter, well third AFFO our compared this this in third in over $X.XX the was quarter to we and on increase an year-over-year. acquisitions quarter the non-cash to of year. organic million was per portfolio. have in quarter real $X.XX unrealized including diluted unit on derivatives the effort completed principally of as due year. for gain adjusted increased and AFFO to EBITDA several growth in interest,

the facility. the of $XXX $XXX.X our balance end securitizations sheet, revolving finished outstanding EBITDA the at were to decline in with sheet at The in approximately to our our credit with was XXXX. sequential have due borrowings to from balances at total that Brookfield the quarter the balance debt transaction, of With quarter. our principally Turning million significantly large the under Unsecured September notes approximately of delever September debt transaction million X.Xx partnership adjusted XX we XXXX. as we

in in announced the week, earlier we're credit of refinancing that this our we facility November mature set As XXXX. process to is revolving

we today, the over credit of new As commitments $XXX have million. have facility revolving received five-year initial

new We be over spreads expect fees. lower improved with to lower terms of from non-use facility facility the LIBOR existing the in

We also completed guidance. with the facility is fourth expect XXXX currencies. dollar revised the include in joint our and close borrowings transaction venture our anticipated in updating model forward going to guidance, the to are non-U.S. transaction quarter Regarding operating our we The

entirely Looking drive forward higher acquisitions direct we will almost accretion. expect acquisitions to that be

opportunities. We our also of anticipate to represent development investment a activities substantial portion

are fourth the our developments capital deployment in projects our focus initiatives than We're near-term we As in to with have development it's accretive more the as call outlined in XXXX direct towards we acquisitions. picking progress our reducing these substantial these expected made focusing direct in on anticipated been on acquisitions. be today, quarter up our have

Given remainder development setting the spending. our year, plan we're million XXXX $XX at for million, acquisition our in including of $XXX the guidance

significant retain timing the higher capital in of in a in quarterly the maintain given of common amount in fund these The drive the we to our intend of distribution development to decrease updated per to acquisition our unit developments is order the the developments. guidance spending Additionally, development pipeline, $XX.XX function of and organic growth. opportunities

guidance. reflecting the than into greater pipeline XXXX in heading is However, our we what were development previously

improved ratio as QX expected. the Lastly, ratio as during coverage our coverage our over it quarter, relates to

have discussed development we substantial and on for today, call we dry activities. acquisition have As the powder

distribution As we substantially acquisition have to we today, execute increases. discussed activities the on coverage further expect and our development ratio we support improve

the progress into our have being anticipate activities, we until in on XXXX. of placed first meaningful not revenue generating service part we substantial Although the development made do assets

negligible we the FFO head to our on our cash with have JV flow, into and distributable us collectively the in recent impact we of initiatives. XXXX, As well fourth formation executing Brookfield strategic a line refinance expect credit quarter of position but on for

are We the our attractive opportunities prospects given macro industry. in excited we're business about telecom trends acquisition the seeing the the for in development

take We questions. now will your

Operator

Markets. comes first Instructions] [Operator you. with from question Thank Lee Our Bora Capital RBC

is line open. Your now

Bora Lee

corporate you IT organizational need Hi. taking for talk or milestones Thank a preparation question. bit, process structure being you little can wondering, for And be in you be sort to referenced just we to considered? was the this I watching what or of any but changes made structure the should out for?

Arthur Brazy

majority already in of have operate the in that the XXXX. REIT Sure. of don't or Because was as make we conversion the organization part subsidiary back the in doing that the really systems we owns lot of benefit changes to assets, of a that

organizational to with So an for and structure. would are ready most processes the as to part, REIT I operate managed minor internally a say tweaks we of few, the some

revenue, $XXX to opportunity internalization. or be we'll roughly before the need the $XXX the focus to of We think million it the I an have call range million that growth to in milestone to do revenue on really partnership. is EBITDA

I minimum So able would million that $XXX unless additional to then G&A internally we should – order say is to number the and or be we run kind need mandatory. an as in the of absorb

Bora Lee

Thank Understood. you.

Arthur Brazy

Sure.

Operator

you. Thank

comes question Riley Liam B. FBR. next Our with from Burke

open. Your now is line

Liam Burke

you. Thank morning, Tim. George. Good Yes. morning, Good

Arthur Brazy

morning. Good

George Doyle

morning. Good

Liam Burke

a the within actual network. to mentioned to be on of blueprint scalability the account used type municipalities the go project offer DART similar referenced you that application? this as a Tim, or to Can

Arthur Brazy

opportunities. FlexGrid started Americas. talking Mobile programs at new of template that benefit of had got all types It's Can estate different preferences to The this with about what lot significant the real of actually business depending was real these these partners. of been development customize for a real traffic able be part various initiatives we'll that's see there. exactly we'll a of estate We the We've different City at a their partners. featured we the owners on discussions product use World be lot see we've that could for Congress estate and how a and developing and looking and since who be objectives and different Smart

that it flexible be out from So to perspective. turns incredibly

Liam Burke

bit since a sale And shifting development, of projects cycle mean, expect, be a would would you cycle or of of development the normal little what types larger I in is model what these terms of one on business or one projects?

Arthur Brazy

timing Sure. contracts projects a shifted time. and And some we've I that up over are does opportunities But these range little to projects would is have the on here. fruition it's the course partly bit and the the larger our in couple of on last do XX working them to that of we the in getting expenditures. tend development reason say the starting of to to XX place month of bit some come of a of a see great to different the been of lot we've take years. Lining

Liam Burke

Great. Tim. Thanks Thanks George.

Arthur Brazy

Thanks.

Operator

Thank you.

question next from comes Raymond Ric James. with Prentiss Our

now line Your open. is

Jayson Bedford

This Hey for is guys. Ric. Jayson

And moved just and acquisition? cap seeing environment are in of you looking direct guys to the you As competitive acquisition. general, as are how guys at direct to rates the assets type you what the move for you

Arthur Brazy

last environment competitive The would telecom, over pretty say years. been I consistent Sure. two, the three it's for

expect I X see other assets focused is are X X compete over And of depends couple to see the the to that looking and that for investing the we the amount acquisition probably range to on that X of we be cap the of targeted able the the range. have cap us years. we're It where competition, a next companies tower in acquiring but level significant we on asset opportunities to that in with in we're that groups rates occasion on You certainly major to assets, structure invest us cap at some acquire in. but

Jayson Bedford

guys. thanks Great,

Operator

you. Thank

question comes Our with Mike from next Janney. Gyure

is open. line Your now

Michael Gyure

to Yes, a being guys. the Brookfield, other I a the of off you with good of or is would then guess with MLP? guess assets, bit do assets of that the to go potential relationship would I talk if one do Could do I deal what if start versus a envision job reader, what venture guess go and sort the characterize, it kind morning little of other the would joint guess kind where sort the you I you of how you

George Doyle

Sure.

great I the a attractive opportunities to that start contributed. stage So given a of contributed development with this kind say acquisition would opportunity of out was of and it the I'm to initial of portfolio sense the given for we made us capital that cost partnership, we portfolio the initial lot

JV those in makes forward, opportunities going bring opportunities assets of acquire presented sale invest on sense portfolios in acquisition. to an behalf bringing a further. of it depending the idea is standpoint venture in of partner But certainly Going just to in It's the will capital we're from opportunity the consider, to on different and invest the outright get sense our assets. types type at There's of or larger what in where a as formation what a to to makes cost of invest versus the venture assets. have capital a and look decision commitment Brookfield for capital or of to to joint to different to that no continue potentially

Michael Gyure

REIT, can think move that personnel guess talk should the did in people into within timing? MLP development little as or talk direct the I little MLP. ramping then about I the you within sounds or early about you we model, when Okay. we a But bit bit how and It a the and REIT I strategy still about, guess guess XXXX. and of that like not up adding we're process costs on the I acquisition the And the guess

George Doyle

development. Sure. into direct the where to overhead to is reimbursement drive the opportunities the the sponsors because all to lining any no And one it's on incurring support this development the that's play comes these There's date up been acquisition really acquisitions here of and is sponsor for sponsor the and opportunities. the in

these partnership. There that types relationship it's incurring the to other of and So is advantageous without very way for acquisitions development public no invest overhead. sponsor a in

to would the expect see below to which substantially, future, for market I we for a acquire continue So as the that partnership. foreseeable say, real assets advantage we're is great able valuations, is which because

Michael Gyure

Great, George. thanks

George Doyle

Sure.

Operator

Thank you. from Wells comes next Fritz [Operator question Instructions] Jennifer Our with Fargo.

now is open. Your line

Jennifer Fritz

microedge came you this and taking looking the Thank if call But be business seems tower there for some question at companies alternative the such data models apologize I to Great. centers it's I'd conversations you're up. that of this or ownership participate could something the that clearly given about early wondering something you days, your land? that? is just Is it and but [indiscernible] is having as

George Doyle

tower potentially infrastructure consideration of need Sure, or we absolutely. sites, think about We've and you type sites, sites. they center be have the rooftop some that infrastructure given those at would other that that could located for some the data of

what far So really stage. early its is seen we've

pursuing model investment front, will but We be and haven't seen higher for a that it's business it. a we becomes monitoring and on returns significant opportunity proven still something likely it in if we're that driving

Jennifer Fritz

Great. Thank you, George.

George Doyle

Sure. of Q&A End

Operator

not you. further any queue. questions in Thank I'm showing

So over to turn it to remarks. I'd closing back for management like

Arthur Brazy

thank you very much for today. Thank you all us joining Great. and

deliver the move look opportunities partnership you forward of to George excited have said, of our growth forward. As and information I we ability front to with the we confident we continued as sharing us. We're have the in about and in more we're

next speak will We quarter. you to

Operator

Thank much very and you. Thank does conference. today's gentlemen, for conclude participation. your Ladies this you

You may all disconnect. Have wonderful day. a

Landmark Infrastructure Partners (LMRK) 7 Nov 182018 Q3 Earnings call transcript