LMRK - Earnings call transcript Q1 2019 | Landmark Infrastructure Partners LP

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Marcelo Choi

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

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

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

Tim Brazy

Marcelo. our update discuss our on FlexGrid program. you, and of first an and we're activities developments you some review give Thank going our our Today, including quarter initiatives to recent results, strategic

shifted our target tremendous to calls, discussed advantage take prior the markets. in As we've growth on transition our strategy and we've of

in fundamentals more opportunities. direct higher of to opportunities on time. take of primarily allow of stable a the development with industry to more development execute that the attractive, full be remain supports our identified. the that accretive on market emphasis which position initiatives will we've is to returns with Although us market believe partnership part property portfolio real limited focus more latitude greater puts more enjoys the LMRK accretive performing strategic initiatives in growth effectively. foundation The greater our partnership higher advantage portfolio more an and high ground essential our core capital best growing gives provide of deploy for the We the development more us the Development shift assets take projects very our very on accretively and lease benefit creative of acquisitions. selective development

rates and seeing drive delivered escalators in first continued asset we performance rental revenue from revenue results. and operating financial flow solid our we're from High strong of rent continue terms In to portfolio. of and and cash quarter occupancy growth another quarter, contractual growth the

not rental Brookfield closed we significantly the In September, year-over-year. the fact, quarter transaction last JV for Landmark had would have increased revenue

year-to-date expected Those In approximately assets of accretive contribute conversion of XXX terms annual $XXX,XXX consideration are comprised candidates million. assets many approximately potential format. and in through we've additionally advertising of acquired or to for $X for outdoor which were of March XXst, acquisitions, assets to digital development are total rents

expected, rate the While that we will we're light return cap partnership. higher quarter, acquisitions were higher drive assets this as the for targeting accretion

and data as cycle. grow higher business strong beginning wireless explosion accelerated, to activity wireless on than according and to carrier demand still investment see to has XXXX innings early that a it's existing identifying for more of our wireless fundamentally the tied networks. overall in The which infrastructure expected the we're industry, times report of XG to but the terms seven by is by the is from Cisco. we're spending seeing tenants In they consumption, XXXX in focus recent their between

our urban where locations. to strategic of invest remarks the regarding assets targeted expected to their simplifying four spectrum $XXX are more are Not efforts telecom after mobile locations made our look desire networks wireless U.S. provider for administration the by networks infrastructure. to essentially flat several key the upgrading and increase roll-out are leading densify operators CapEx FlexGrid XXXX, the administration with Chairman on and their very operators of solution. on in and lease U.S. These seven most locations focusing connectivity offer markets the carriers. in XG carriers Clearly the strong According become years as includes network surprisingly, expected that for and benefits and over governments have FlexGrid communications types These their dense local where industry the and next approximately providers wireless to billion and are XXXX located which cellular we've world's build of streamlining freeing XG solution to the other ground XG, in XG years and out significantly spending major is Accenture, spending permitting XG upgrade our fundamentals wireless standard. the concentrating see the addition, of In their leverage services to deployment favorable the are for existing U.S. up XG networks, SEC communication state primarily process and the and solutions the of of offering the

the demand uniquely is Given advantage connectivity to that's take the FlexGrid these industry. drivers, throughout transformation happening we positioned believe of major that

As FlexGrid the cell of infrastructure macro, offering carrier IoT, our designed mini light a small functions. form XG that's smart concealed we've discussed, among densification and shared deployments and other support and is pole for in that co-location macro

with very up add to in model, sites margins tower tenant on us that original a occurs. zero, initial site potentially returns lease the triple similar allows current on LMRK ground generate tenants with incremental existing almost additional to the an but cost comparable or returns attractive double our the high to fact, to expect very low, assets investment as is minimum even extremely We for will one to return assets, because yielding FlexGrid the lease

our Rapid the Canada. projects timeline, of on phases and we're work initial system number of Transit In in a Dallas terms the our including in Area

XXXX. are a transitional in far on sites revenues current meaningful though, mind from deployments complex large deployment see deployments and thing of these we're year XXst, $XX so FlexGrid includes we've March year operating however, of time the up number a date lot in and our the our initiatives and of move keep invested we've XXXX. One We're on to and confident we made which for to initial about various ramping phase. in $X.X that to half results. We're our next very for million in second and require FlexGrid reach we'll XXXX, FlexGrid expect projects projects total be year, progress these commence about and effort. impact FlexGrid very million a as solution, by scale, This in of encouraged our As on schedule will their a into as

In of addition owners FlexGrid other projects, real with also current tenants a we're our potential in various estate discussions number new of to regarding deployments.

We expect and can. add strategic locations of partners, and our overtime number business when projects, to details a we'll more FlexGrid we share to

and swap additional ground FlexGrid locations. add the opportunity give discussions market, More requests up have not the lease for growth wireless existing equipment or and expect to to we up about as leases terms. activity, their potentially to out XG lease to us certain equipment speed. our as look to with upgrade to addition modifications In to tenants drive more more but industry portfolio grows space tenants bring pick existing lease the projects, will up significantly benefit Those an cycle only continues infrastructure also and lease extending lease

growth Looking focused forward projects detailed financial for take given getting a quarter. optimistic a turn industry to FlexGrid returns who We're over drivers to in provide and of our George? sustainable the and in will trends. seeing George, current to with pipeline review XXXX, of the position the the I'll executing great positive believe we're the more very the wireless to of and that, And we're these that our call on with us market that unit holders. initiatives, delivering our advantage rest with demand we're in

George Doyle

Tim. you, Thank

As see in remarks, to our outlined from his continue Tim we portfolio. performance strong

from X% X% year-over-year the fourth For quarter, which and decline the million, of was first $XX.X lower rental revenue was quarter.

generated third quarter we As our are operating outlined an JV our on have pick Brookfield expenses, equity income Brookfield accounted through in is of for were as unconsolidated prior method $X.X the million and calls, JV in results up we Landmark investment those the the properties share to revenue JV.The equity of our assets established net rather income the consolidated revenue rental into contributed of and the approximately in not with quarter. of the that JV but the

we in end disposition completed January, the for XXXX. the that held of Additionally, assets of sale at early were

depending diluted interest per $X.XX quarter FFO year. fair was value unit first fluctuate hedges. last compared the quarter-to-quarter this of the in our AFFO. to to quarter FFO on can in $X.XX Turning and rate the of FFO change

but to unit quarter XXXX, the quarter quarter hedges impact reported we per tax first impacted XXXX. this were interest compared interest quarter a per gains approximately of XXXX. quarter unrealized first we which an rate of compared unrealized gain year. first the impacted FFO and our property reassessment that reassessment to later it diluted an $XXX,XXX, unrealized other of rate rest $X.X property is unit of loss AFFO $X.XX diluted in with these be AFFO hedges, various negatively tax the $X.XX expected on our and was items excludes in by million the During QX million repealed on of along losses last the not to this by in to The expect year. of $X.X

As of discussed peers the on year, able line to with In some objective, consider the to MLP structure. to our the internally nature remove positioning our occasions focusing that and changed managed are align we to we number of over have some metrics metrics conversion associated be of REIT a we traditionally with restructure. our an last of with the our company on an disclosures

coverage for XXXX, the relates distribution X.XX it of coverage As distribution ratio ratio, to our was first times. quarter the

by impacted property tax negatively Our coverage quarter reassessment. the this was

we times call, year. the expect outlined to we fourth the around quarter middle X As distribution our ratio during the of exceed coverage

this for to We quarter. are not changing our guidance third distribution the and be expect front covered on

with with Now facility. $XXX swaps. revolving debt turning We either of fixed notes quarter outstanding being rate quarter of We borrowings And debt the the borrowings quarter. secured XXX% or to at our rate been through of balance interest approximate our at we're end the the fixed ended $XXX debt our million million sheet. finished outstanding under credit

consolidated adjusted In our at XXst, As to continue approximately seven was of our March summary, well. EBITDA times. debt assets perform ratio to

shape good plan. in remains are well and sheet execute balance on Our to XXXX development positioned our we

your Ric [Operator the questions. question is our We from Prentiss Raymond with of Instructions] you. And Thank James. first will now take line

is line open. Your

Ric Prentiss

toward that Do Or FFO going managed press mentioned expect in and AFFO you the looking you're coverage now? distribution the an to just you it days releases? the of are you to anecdotally REIT. internally give George, obviously becoming reporting report

George Doyle

stop reach after focusing We're until it, going covered, probably on point. just we'll it's we point to that it and anecdotally give that the

address I the think it's that calls. we'll on something

Ric Prentiss

make cover and Okay. Yes, we though, do something you fine. want important obviously, to everything's sure

George Doyle

on And Right, focused agree, getting we we there. are right. absolutely

Ric Prentiss

Okay.

Second or March on item, is that question you through year-to-date that I was mostly or the April was 'XX, outdoor. Is that through million $X through FlexGrid the April? mentioned spending, Tim, through same the $X.X think, year-to-date March? million And asked

Tim Brazy

Through March, Ric.

Ric Prentiss

spend this do said much And I acquisition size least trying numbers. we're Both you outside Okay. more but know within you a view to you year? light, a of? how was bread expect of at you expect XQ thinking basket CapEx frame FlexGrid if just what to have

George Doyle

traditional Yes, quarter would unless of We're are Ric, acquiring we've lot identify not generally say going transactions done our we assets the of assets in I heavily on domestically it's venture assets of did side some more focused historically. limited for Western be acquire that a in to what first in we pools Europe. our the opportunistic on the

going next I a what of volume, but really see the of course type wouldn't over to we the months. of So opportunities acquisition depend expect on lot nine is

Tim Brazy

and we see accretive opportunities. to where well aspects have development they them Yes, more as if

Ric Prentiss

just you've might money frame of think put the And use your do 'XX right, will I kind $XX about on How and to 'XX million mentioned FlexGrid on work, much accumulative, project. as trying we you the the spending I think sheet think you it in if to much balance resources? capital got how

George Doyle

backed a where bit there's and are and Sure, guidance bit than of lot year, moving development a different these forward because that away on. straight we've some we're just the it's further kind past the we hard acquisition provided more to is we've it pieces of little in challenging through little from of activity. bit moment. get till little it projects the working quantify that's And on is -- we to we're of moving the and of forecast a the aspects bit little developments, see But that opportunity a at lot a a

Ric Prentiss

equity not course think least you raise at Okay. any equity? But to don't I you've certainly said, normal expect or

George Doyle

public plans do offering. some public right. If was to for transactions like but large large a there a potentially or ATMs an We offering to it, plan -- at this that, or have That's to UEP something do we raise point, don't capital opportunity to do would year. this us consider don't we small other

Ric Prentiss

last one me, taken they're And Okay. quick. from I bunch, a but you've know

XX FlexGrid think And should Castle, can asking about You large them? and How mentioned their or of about how we many cell building modeling can how systems, we And how small take? many clarity long are? little do of we get they should should to they be say XX How large you're complex. kind like think or how take about think we kind we nodes locations projects once months. systems Should Crown building? on a obviously these think systems you're are the these when more

George Doyle

changes. with Sure. a to programs with that to Crown programs the number as -- what a with These are XX Castle, involved mentioned happen months. -- will tenants number would There's in similar I over change leasing are telecom say activity of -- of these time the you over will XX sites

and DART, the site would what the some that's guidance, When count say that the that and look work see some could of more component range is efforts stealth range. you multi-tenant in what kiosks, up the or FlexGrid we're the more would there or to which involves the planning it on a I a two. project of would on all upper probably is time that say deployment metric further about like to end I project referring provide before will from we're we'll next quarter a infrastructure the at doing I tower think not main we we to telecom anywhere but -- the get So it say XXX take of traditional way just XXX kiosks to component, to involves that and is through also but I say only would and probably FlexGrid

Ric Prentiss

Thanks. Okay.

coming more clarity Sounds next quarters. the couple like over of

doing. get hope view So you guys a of what are

George Doyle

Absolutely.

Operator

Riley our Thank FBR. B. from you. next Burke is question with And Liam

Your line open. is

Liam Burke

for pipeline on over the Tim, on look a FlexGrid. projects what you've client obviously newer project several above announced How rollouts and does side? announced already you've

Tim Brazy

of pipeline in there. strong a it's think I different projects

in Ric are a these are different these the time business, complex take cases, as these fair and a number but some parties. As involve projects of reiterated, mentioned, and of to large opposed acquisition amount

a And together. pull little to bit so longer take

Liam Burke

multiple you margins multiple tenants I looking do do you've single tenants to And at a on think, add infrastructure? when you're how incremental of can mean, existing project? infrastructure. once quickly expect established you How you

George Doyle

there's that towers huge that would money the of be their five relative for to technologies infrastructure, These part for it's years. part to not XG And the think be it's nature and going densify the spent deployment is the think and to the macro well. We networks by covered the we quick. XXX the are -- over are These new reason fairly countries of deploying the expect technology, the in wave a of the locations XG we foot I pretty next carriers carriers to amount the that of the tall need of their most traditional say networks. current

And site additional Carriers good providers. place, or initial I carriers. network so then a I IoT fit think once for other in companies we think it's or have the

with I think it'll the fit rollout well plan.

relative optimistic we're on lease So to up sites.

Liam Burke

your any of had on that to projects? entities you the projects want Have piggyback on existing increase existing

George Doyle

Yes, we do.

tenants of So interest site working other and a signed we the sites by we that on, initial up have well. number the for as have we're tenant

much pretty gate. through out it's working well could sites of So But what we're part of some up tenant three very end being sites the it.

of in how clear quarters part provide we're these this we them progressing to the take more clarity little of through couple next of lot achieving. pushed hope and Tim and of get what to what through developments a a -- as to on we're to that's As completion bit mentioned, and time a lot engineering

Operator

question you. Thank Capital is Lee with from our And RBC Bora next Markets.

Your is line open.

Bora Lee

Thank you. Good morning.

the So us contributed could a what it's about rent I to you post was wondering, give know sense I JV increases historical the contractual growth. been X.X%.

check to wanted on Just that?

George Doyle

the When seen worked decommissions. say look very the consolidation portfolio the in has Generally you I'd right it's now. rate -- the the been running at we're portfolio. seeing past the overall, same through Generally, mostly around you've few

but that rate and equipment the hopefully say, would lot is, for a more. let's I say right we're equipment, upgrading amendment new closer which bit activity about X.X%, to be yeah, mentioned escalators should XG we're we're for of annual to across the portfolio that's Tim where quarter-over-quarter. growth to now starting organic But can is, now, the growth On what a see it's contractual up So bring little quarter. per as starting are generally, then X.X%, seeing basis, an consistent about see

Bora Lee

for the a can of say activity pickup, give now numbers that before a give -- sense can of versus What's you in And that the amendment terms year-ago? contribution? you

George Doyle

Yes, the specific I numbers a that light ago year I year don't prepared especially to was on or say we're give call. very would that. and the out before have so activity this

revenue might across as the far think on in amendments having X.X% portfolio, X.X% or we we're the it might we're average where tenants portfolio a -- when think kind about to As different up on to stronger that up lease period X% additional it. that's where a able seeing. tick we're of lease potentially what in period But we're go way actual the revenue is about obtain bumps amendment we strong period from sites or ground the generally, maybe

Bora Lee

in asset of terms And your sales.

the Just quarters I've portfolio couple regular funding? in asset you trimming noticed of thinking how sales? a about that are as or of it had of means terms you've of

George Doyle

of say I both. would combination so it's a Yes,

going decided wasn't an unsolicited had forward. was on portfolio Some raise the disposal January, that actively probably disposed many way assets bit assets another going a we potentially the portfolio we we're we it a heading. I This is marketed us right We a what then With to think as too makes of more assets capital off. a It little in near of for pursue are don't to we the very getting asset, is attractive the asset capital little our of sales disposed. asset, were sense to we going made a of we to do the opportunistic the this now the that. bid but more small for term, to probably close it align pursuing. more dispose asset where portfolio. that in future, and But were an offer good liked we And dispose we're portfolio it off and for direction to raised disposing look out of be it we're in end have

part that's thought sales. behind the of asset the So

Bora Lee

And just one last for one me.

Just ground interests, are edge view locating about this do inquiries in your inbound terms data And of an seeing ownership opportunity? centers. you of any you as

George Doyle

There's That's about years. to talking I would the on two We've going that centers that market. few say a last activity I know strategy. for different in a been there's amount good a question. three are pursuing of companies certain data edge

significant see yet out We edge center. rolled you yet. have access, certainly when access, data have got to potentially certainly look could It's nature datacenters power sense They at make you've interesting sites. our of edge in and fiber the so an fashion you a establish land,

our We maybe that yet hold as us some point of data something and centers edge a take us. drive seen that's to And to at lot are growth that haven't how actively monitoring we an looking in opportunity for as going for the opportunity But at it. it's then portfolio. revenue

Operator

from a Ric we And have you. of the Thank Prentiss line Raymond Instructions] James. from follow-up [Operator

Your open. is line

Ric Prentiss

the I on of questions. some wanted to follow-up earlier

early did quarterly much annual January you assets asset rate on said the And kind think get them? you the a basis? those How revenue of for -- on or sale we're I what cash or run was January. On

George Doyle

assets on we Sure. in sold $XXX,XXX. about January The is the revenue

Ric Prentiss

annual basis? On an

George Doyle

on quarterly On an that basis, wrong. I'm annual sorry, Oh basis. I got a

Sorry.

Ric Prentiss

And cash received it? for

George Doyle

Was approximately $XX.X million.

Ric Prentiss

then have I you figure that the Right. a out of get rate you guess that can And we dispose then it? think might what portfolio you might revenue Same kind we you -- question annual on said and smaller run for off. what

George Doyle

far it's as $X say, under -- with million as those the the I a revenue associated assets. in would Sure, it's little

Ric Prentiss

$X basis million. On an annual

you wireless? are so a doing sold Some quarter that a guess $XX you $XXX,XXX they outdoor see, million got those -- some to let's were for? similar And sorry, January that versus year, assets than $XXX,XXX I was -- -- in of I'm

George Doyle

It's wireless combination a of renewable's. and

assets different exactly a to we bit it So when they're attractive capital relative our I lease bit it's process. complete what are in And liquidate more overall talk company, little ground It's at as easy for very the very pretty on of But a about the mix. attractive assets prices the to early the cost provide would disposition know, to we'll what for. little we're at especially selling environment call, current the moment. you commentary and

Ric Prentiss

telecom on investors that infrastructure I REIT would the events? interest is space, some of say, definitely infrastructure into coming who's these showing share kind

George Doyle

Yes. of would the it's towers, lot in interest, of There's telecom whether whether things, side it's I a say, this leases. ground fiber,

You institutional pull a moment. those data in there at of in There's as lot classes definitely can interest asset well. centers the in

Ric Prentiss

you mentioned that year. later need you Alright. to would occurred it able when get appeal back appeal property tax -- coverage in, the to to came hope to range? you you have the property one this the to And Do tax

George Doyle

situation before the is land. assessment. solar this -- access -- The it's in It bad with an quarter, this just is year. on no a property There's our this value a This reassessment actually taxes a the was land -- interesting charge It's no. were third opinion, No. project. related $XXX to parcel. in This to a was

came a So you perspective, on us. some to nowhere out give of it bit

with associated see land we simply assessment. could as property of this problem tax no had well we this mean repealed. rid there's I just this land the real don't donate So it. a and get that Ultimately, getting value

adjusted still look this distribution -- QX, if at property tracking we're on we parcel, having we taxes QX to the get when even and covered. in So can't the

Ric Prentiss

for up me. last follow And

projects How are cap you to day-one talking On thinking about partners should of or about or the cash-on-cash these initial FlexGrid project, we yields lot rates of the you've this guys obviously, a focusing different progress, project it. think lot on? should on a be been making

George Doyle

invested of of that, comparable the Sure. We it range. call minimum these to the what think as current a cap think we've rate year or X% on side lease over opportunities we of things in -- so, ground cash-on-cash yield last

but We minimum be has Liam, expect And have line higher, going invested investment where have them as significantly some well. well, target some to in where ongoing as our of discussions discussions are second tenant sites and to with to preliminary as we mentioned be we've we discussions historically. the tenant I with a third

situations So the we're cash-on-cash in like that, well initial that targeting. returns beyond you're

Operator

you. in further queue. for call his Thank showing And would any Tim final I not turn Brazy I'm questions remarks. the to to like back the

Tim Brazy

all thank Well, you today. us joining for

we're discussed, our we've deliver the and remain with the ability in of in front we have active excited growth us partnership. about and confident we to opportunities As very continued

then. We you Have we good with and more again, a can you with look will day. next to as share details forward over quarters. couple Thanks speaking the of

Operator

gentlemen, concludes and for program, thank a ladies you day. you today's wonderful disconnect. may that This Have with and in And the conference. we participating all

Landmark Infrastructure Partners (LMRK) 1 May 192019 Q1 Earnings call transcript