LMRK - Earnings call transcript Q4 2019 | Landmark Infrastructure Partners LP

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Landmark Infrastructure Partners' Fourth Quarter 2019 Earnings Conference Call. [Operator Instructions]. I'd now like to hand the conference over to your speaker today, Mr. Marcelo Choi, Vice President, Investor Relations. Please go ahead, sir.

Marcelo Choi

morning. good and you, Thank We'd like Quarter Infrastructure Fourth to welcome Call. you Earnings Landmark Partners' to Today, operating share we'll an business. of the and financial overview

on George Doyle, take our Financial Officer. Tim We questions Chief Chief the Presenting Brazy, and also are: call Officer; will Executive today your presentation. following

periods I to and results uncertainties. and A participants of factors remind differ that will actual comments today to risks would forward-looking to statements, our future certain could from like uncertainties in cause include which all current our are materially subject number expectations.

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

the may adjusted most our public earnings AFFO, to refer reconciliations such measures, filings EBITDA for we definitions EBITDA as these their call. and the to and non-GAAP measures FFO, to release Additionally, during of comparable and non-GAAP refer measures. GAAP Please

to And call I'll over the with turn Tim. that,

Arthur Brazy

you, and good everyone. Marcelo, thank morning,

operating a our do, usually strategic today, we and years the into overview of I'd activities before our development our recent initiatives. with As update take a to the opportunity to and step But at and we we're discuss you of recent get on financial results details going X Landmark. and back provide the everyone like last to recap and quarter this results. brief and

the than sold joint the to over contributed were growth approximately from has rental flows. impressive as nearly company. XXX this our And public IPO assets for our delivered throughout cash Landmark-Brookfield a X,XXX amount the in the portfolio, our quarter, that anniversary And our years, in of has fourth The period. were X-year the X at the our tripled example, assets and During Partnership celebrated we size assets revenues those this number venture portfolio, more in today. excludes of to XXX

With this time from mentioned than million rental the $XX.X quarter's more quarter. revenues X-year dispositions. XXX% rental revenue, revenues the period, to same million the $X.X from this excluding During quarterly previously increased by asset

significant throughout Since unitholders income approximately generated for common constant IPO. Infrastructure LMRK $X.XX distributions. distributions for in has has its common representing issued through one the occupancy Landmark units million, portfolio, the growing extremely Landmark unit our per which of $XXX Infrastructure and also The those paid has by out of cumulative inception, high-quality of the and rates, characterized well assets. strength stable high history tenants to resiliency has been continues been cash our exceptionally and diversified and flows, perform

amount limited five our of last including, types Landmark classes. in is but the venture, Brookfield of assets, which During our years, asset further institutional also a substantial validation capital seen of investing not we've to, the joint

high it our our as anticipate Looking of trends, the the remain continue deployments. macro including forward, trends and classes to asset we portfolio given has interest to expect attributes will accelerating well wireless since XG the and we institutional investments very in positive many and IPO, perform industry driving strong

the and strategic portfolio We're on very to developments past continuing accomplishments grow as our value look increase for years forward partners and over and X proud of the unitholder programs. we our to execute our

our discuss to the like quarterly we before Now merger. T-Mobile-Sprint results, briefly touch on I'd

changed. the hasn't Our view merger on

we it fourth this business, risk believe major be our As as that for we may positive Dish to viable transaction view us as carrier. we limited net said has before, and a downside actually a

like but across as to still network of the decommission analyze expands country. Dish a We couple to fully important footprint early transaction, the too we'd its specific the anticipated of attention call first expect points. that lower implications It's to

modest. exposure Sprint portfolio and current to T-Mobile Our relatively is

leases. sites had X%, the percentage much and revenue those accounted approximately with of and year, X% last lower Partnership's quarterly of for a T-Mobile end the Sprint At Sprint and rental respectively, of direct T-Mobile overlap

we far full the more size of be T-Mobile several rationalization much and longer complicated. companies Sprint expect complexity of will years given and networks, these take their And the the X combination and the would technologies to and believe the complete. take of We networks

a specific site any be a reconfigurations result, here, the the time will we frames effects of mitigated given reasons. believe As couple portfolio decommissions from or significantly for

First site-specific is of time, all, itself and become grow changes. to LMRK's of impact during portfolio continue diversified lessening expected that to more the any

opportunities platform rationalization of reconfigured, and network is common networks create technology and X additional the Second, modification would one upgraded different expanded. revenue into income as lease the the

organic sale Perhaps escalators any an merger. effects In real growth certain ongoing lower offset service from the importantly, have newly would help licenses as from Dish and our the number to that for effective Dish effects, with be significant potential contractual addition, that position offered sites spectrum decommissioned of arrangements may the positive T-Mobile. sites ongoing the of access including fourth most will Dish cell a also given likelihood the would from and asset to acquisitions further carrier, reconstituted

and to expected of Dish XG additional the country, our up the build-out ramp coverage lease With for own demand infrastructure. expect wireless network also higher modifications its including its we network, across

Overall, revenue have we site a again, as provide as fewer our don't And in expect well may it the impact opportunities. decommissions on business. potential additional material Sprint-T-Mobile negative result merger to

to financial with delivered and Now strong regard results. operating we quarter, the fourth

and to in at and remaining XX%, continuing high portfolio occupancy rent the consistent months that continues last acquisitions generate contribute the cash escalators to portfolio stable contractual flows, XX growth. we've rates accretive Our to and with made

rents, million assets the comprised assets communication acquisitions $XX we in to outdoor XXX full Those assets. expected European and primarily total million. consideration XXXX, in domestic Regarding were wireless and approximately advertising assets are approximately acquired of of annual year for contribute $X.X

but strategy allow and these believe on to efficiently development on current initiatives. higher take development deploy advertising outlined higher invested calls, for continue directly, and larger these much outdoor to generate selectively remind higher to but communication opportunities programs and focus return, longer LMRK's we've on assets lease wireless rate which that the also like better our projects growth remains is will scale acquire risk-adjusted assets, provide returns higher prior centered complex returns. We'd As capital. everyone on growth development Landmark's We'll we ground to attractive cap more

We continue our which Landmark macro designed make initiatives, our wireless small mini FlexGrid, deployment. is smart formerly including for to stealth macro, cell development with pole and various as known infrastructure progress Vertex,

as our today DART, up Area of program system installation continues to installations with over further the Dallas first commenced kiosk the installed the permitting digital Rapid Digital coming kiosks with progress. ramp in XX Transit as has anticipated quarters. the and quarter

development into activities and to resulting as billboards of upgraded static billboards XX regard digital With in today, advertising, outdoor rental revenues. we've incremental

development the digital a have number to planned quarter's half details to that next in earnings assets and advertising, share XXXX. outdoor these of and each projects call. be DART placed in the Vertex, these we represent further We're service of For opportunities progress about to expect first make initiatives, further this excited of the are year into

with to the And call George? the that, more turn George, I'll financial provide review will who of over a us quarter. detailed with

George Doyle

you, Thank Tim.

his from rental year-over-year which in assets stable and and portfolio our as an of remarks, quarter, mentioned X% quarter. the $XX.X continue was flows the was the perform to predictable fourth X% million, once In this revenue higher Tim quarter. As cash increase third again generated

completed a the of of we quarter, the impact the we sales asset As a lease revenue of last Partially contributed had offsetting QX in year-over-year revenue, beginning completed that at was amendments the from in recent number to quarter. call I number also growth mentioned acquisitions on the XXXX. and

and $X.XX fourth in FFO quarter year. diluted to this the Turning quarter AFFO. FFO of was last unit $X.XX per compared to

year. interest our other calls, unit hedges past items, can in of FFO unrealized quarter our on $X.XX and on discussed per gains have AFFO, of quarter the as rate excludes we other in items. As was well quarter-to-quarter, fluctuate and hedges various losses the fourth the which $X.XX rate as compared in change interest to diluted this fair value these depending last

rate the been facility. After credit after notes million transaction down that deducting issued this to under either approximately X.X%, fourth notes turning $XXX to quarter. securitized transaction, at with finished approximately of paid our costs fixed our of XX And swaps. of refinancing Secured Partnership's the we completion under debt We XXXX In $XXX the secured the facility. proceeds balance have securitized in is repay We rate Now which basis below XXXX, $XXX end borrowings million. notes, interest revolving through our a approximately and the of January issued issuing at debt secured approximately the were at transaction, used approximately completed our outstanding notes. the revolving outstanding facility the the $XX in million borrowings a of million previously $XXX rate outstanding of revolving refinancing credit points XXX% sheet. borrowings fixed were or credit rate our million was quarter is of

coverage Regarding The our due improvement the escalators, and contractual and the fourth coverage accretive distribution to distribution lease primarily quarters. third ratio rent of X.XXx. fourth was ratio. the coverage XXXX, the amendments was in quarter ratio in the In acquisitions fourth quarter distribution

in As dependent we Recall that was acquisitions the would call, fourth improvement the on improve coverage in the that discussed certain distribution also to timing last expected quarter. developments. coverage we quarter's and said of be

expected acquisitions significantly rental placed payments some the relative of quarter lower the being project and a in to first to to Due on assets until assets not expectations. improvement first coverage service revenue being the out Distribution than later contributing to certain our acquired was quarter, the into few first pushed quarter. development

completed expect ahead, and benefit to first assets lease Looking escalators due a into unit organic anticipated we acquisitions be -- placed modifications, a acquisitions improvement as per contractual fourth and transaction, savings full growth the development in in to coverage quarter, through of service XXXX. throughout quarter distribution securitization rent accretive further interest refinancing we the quarter from AFFO recent grows and expected made

In quarter made to the acquisitions last we as accretive portfolio a growth, of fourth solid organic had produced benefit strong our are and summary, quarters. in from couple we able

into the our we addition, projects in were all expected as make to the quarter service first into development with progress of and in in placed placed assets with fourth to XXXX. developments quarter, be further continue service In

as We funding well our securitized balance credit projects. revolving capacity refinancing facility are also up on has sheet acquisitions transaction well a as positioned development as perspective, for recent from freed additional the our

will We your take now questions.

Operator

[Operator Instructions].

of comes Rick Prentiss from the Raymond question first line James. with Your

Richard Prentiss

of couple questions. A

slipped pipeline there about that into of like look talking acquisitions ratio the XQ in and coming that you're for XQ. First, is at for in XXXX? kind of What coverage the some X.XX acquisitions and were XQ

George Doyle

of I of type what market. $XX opportunities to look over range the course to would of looking this looking see would it's have we million from We're range. what then you million and moderate volume. today, $XX And visibility maybe as point, I on -- maybe say, to depends million. we the think at somewhere in come on $X just we're in million QX $XX year. the It it's the that

Richard Prentiss

looking of All you're And in a XXXX, code are ZIP cap they right. what rates that kind in at XQ in?

George Doyle

the In the range. generally X to in they're traditional rate X range, cap

Richard Prentiss

for did new calendar project? XXXX, to take but FlexGrid money development wise Okay. get CapEx there, in the And spend you on a much then projects? your the Sorry, on while how it'll name

George Doyle

Sure.

I lighter a spent project, say, of would billboard some what on of in spent spent A probably, project. XXXX. the the of sites the U.K. then On that's on the on the lot DART what static for the of also we fair was amount conversion FlexGrid side And we we

projects. would I that most. Most range again, $X the at of on probably it, was million project, in million say two million. around probably significant, $XX $X Vertex to So the wasn't It other the

Richard Prentiss

DART -- or like? how what what and billboards total looks about the then on the And least ballpark the some at project static

George Doyle

Sure.

$XX of For roughly the progress, million DART in the project, and -- about billboards. $XX on would it conversion and the about -- still million construction on say, I construction in digital of spent remains most we've but

Richard Prentiss

then then much progress And construction But or as the All right. in moving cash about and we XXXX out beyond, thinking spending? we at we to service? Are into looking we three are how CapEx much thinking think about for how are spending buckets? in different

George Doyle

amount fair We've components on less projects up we've these the incurred, I have the to say, for we've way been -- different that working say, lined kind is, would yes. way of of let's the and, actual the of projects services. in Sure, a date,

spend So up from spent to a much smaller. standpoint; going of component cases, finishing in lot the which now it's is of we've majority services a piece, the what we're

probably over the XXXX, of decline balance is of will a that the $XX depend over construction. what construction up. leasing we what million From of bit a progress for just progress. lot spend to it and actual pace looking starts spend little physical initiatives the to to in have, construction I as would the total significantly whether expect, But year. the demand a different we're the relatively But pops services perspective, additional around in the So course in

Richard Prentiss

Yes.

and not in, but literally down, so So like sort it's the dropping permitting, holes, and the equipment thing? mean, like -- much you probably zoning of pads digging that putting

George Doyle

Yes, that crews, Exactly. construction activity. type it's of

Richard Prentiss

of have, touched are the right. that is not quick on the you locations you how sites One you T-Mobile-Sprint spectrum detail a me, is low-band XXX XXX to have of or sure if have your of the on the megahertz, going many one that you aware I'm Tim, the but it Dish? All I that be little -- know, spectrum sold bit. Sprint to the deal. excuse available,

George Doyle

our typically don't we No, acquisition. on sites when we information capture do that the

not do know. we So

Richard Prentiss

end be sold to the a of years Because sell to right. the all year option an that at spectrum one Dish. three to That's piece as going -- over three of that's is

that one that's Dish. piece So go the of would to spectrum

there's if I then that is got called for over would you to do. it like used out Landscape. ascertain to final time, now sister you've some be the company there, think that So I way got And a

London not yet, market? it's it. although trading stock might And trading exchange, company that thoughts marketplace looks on the and What it about what like? Digital hold your I'll are what to Now mean a Landscape, the so

George Doyle

another footprint interesting say finally to pretty public we that have five we close do. that would years, it's I what has Yes, after company a

asset different are of certainly a respects. classes. number We Although more much diversified in between

bit a of We different also overlap. geographic have a

I so see ultimately their that is what marketplace. strategy performed be and will wait format, just a It be. see. far to individual and it competition as changing interesting isn't going assets, legal to dynamic see the have don't how as we'll it But to different in really So for the

as for that So today would still us, it I firm the is was listed. say, before same the opportunity probably

Richard Prentiss

Yes.

they'll mentioned And so digital You how will any or update have have on different your a structure? landscape, structure.

also -- your on MLP, but thoughts You a REIT any there thoughts guys subsidiary. time the And updated or structure have the -- what are your line?

George Doyle

our plan think REIT assets change structure. for the to make we qualify -- efficient-structure It's most, I is a an almost of tax say, the most It's U.S., the enough really to previous wouldn't structure. trying sense. managed to REIT where a could our just contemplate all large We for a ultimately say it's matter structure. that that -- getting get of the does internally to company

need Our viewpoint be to really would on the internalize, you size, hasn't before could we changed.

And be still before I contemplate EBITDA think range you need roughly down to at it. opportunity in the $XXX could road. that an million still the us looking we're as you for

Operator

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

Liam Burke

projects? to acquisitions infrastructure look? the or the new build-out. how the a manage budget does for do much You've George How capital? take on the and you do plan, allocation got both pipeline with build-out, project for you have Tim, Or of flexibility that how capital And

George Doyle

are three have relatively The projects sizable. Sure. we

take capital, now to opportunity to our of Whether another expect is But project. just then to we'll I endeavor greater large-scale existing expand would and scale the greater say, look projects. is would any because we dedicated at lease-up projects completion, would grow tenant that we're I of completing anticipate new that be right wouldn't take And these new don't think we XXXX in upon demand certainly projects. than going those I the But on opportunities. most I on project. or So large-scale

Liam Burke

anticipate through mean, -- the how your out the the steep learning portfolio, coming it's into the you -- of Okay. you curve -- understand and the buildout, do then as you've is actual here? equipment, significantly moving but implementation Or next purchased And infrastructure is I of of that expected? phase you're the now along build space a you kind where

George Doyle

surprises say, Yes, learning in with I curve. the few curve any along would would development There's there's but most say the a past. the project, I of been way, some learning is

some construction. of gone site permitting, through We where initial we've are the point leasing at the

project. good over think the most I I'm the projects But more of of will we're curve's behind things the completed. the pop getting learning So sure us. be there feeling pretty course completion the of about that now

Operator

[Operator Instructions].

Dave comes line next of from Baird. Your with Rogers question the

David Rodgers

of guidance guys given haven't George, this one really year. for is the maybe the years you full first

it. terms of year? If thoughts you the see do I in really at this of moves you the guidance kind big have kind didn't as on? as for the you What And do did, year variability look around hurdle of any the year

George Doyle

this of particularly be specific a the we X is going ago. Yes, are guidance, moved couple The of providing we that development focus tricky guidance we to completing at from have the away this quarter to initiatives initiatives. sites point. that high active on expect mean, I different company years first year -- level, the just in XXXX, do we beginning of guidance. to the But at different real each forecast a for and provide in we have go Developments

We expect the ramping that over course be of the year. to up

So detailed we'll some we're this on our XXXX guidance about the certainly point. not initiatives providing for but calls, different information provide at

David Rodgers

small that year And XX deployed? you of you're the kind you with guys the that progressed. kind expect up guess now year have Tim maybe XX that? for much think Has deployed. installed, then I it's And still how then lined prepared to rest how And return permitting view your needs get I sites that you of number, did, do how comments, in tenants be talked the about do changed? the many on I you X done? and the you a to the ground but realize DART of as permitting mentioned in

George Doyle

through very DART of the success. Yes, say had than quarter gone that fourth even probably projects fair traction as XXX and have a bit sites, the good would initial a probably permitted. we for or better has permitting little I deployment, to already range possibly the about the for that's We've kiosk it lot getting and We're as still expected. that extend you're could We're going total thinking there. likely sites in Sure. good of XXXX. a into the amount

specifically The lag a that returns DART on project, on little bit.

have to We kiosk the get running. up and

to we enough would in to But We of the targeting cap a of X to get of for typically, revenue in expect latter sizable kind X drive on a start that investments, as returns in advertising or and the them we're to I that middle part have say, the year. platform. initial would number sizable range rate place to

David Rodgers

conversion, on then And the billboard, the digital. to static

$XX the do spent year. guess, You I both last returns What million incremental and then that, that on look returns on spend? like total

George Doyle

Yes, They're in our with attractive. for would traditional target line investments. what lease ground we they're

you're single-digit we that over, So it, last amount would the Western a that looking call acquiring been high limited market. digital of Europe. since I in there opportunity a We've being just were attractive years at, conversions returns. sites digital And screens sizable doing converted are say, see and type couple of the in

So think opportunity it's we pursue. a to great

David Rodgers

just sale around maybe this and sales, me and the Are on provide for of, of returns. kind teeing you that? any some and last capacity growth T-Mobile to, the and for kind additional guys Sprint, assets the that pipeline development asset spend future with you of maybe Then for up uncertainty the see in

George Doyle

the on we projects. We -- in a component. already point. it's now expect lot this services we more lot at mentioned and And construction final spent the of the what I the spend a Q&A, as Not to of earlier have --

always if there see we we're we're portfolio. nothing to that not exiting. it. to anticipating an We're opportunity something, But something planning this at any on point, assets and the pops But So consider the currently to over we'll of dispose is very in if so course needing would opportunistic, liquidate up the year. there's

Operator

the of We Rick James. have with question from a Raymond follow-up line Prentiss

Richard Prentiss

couple quick A of follow-ups.

do the think one? and coverage distribution back that And XXXX? you With above it you of stay get specifically, in heads X.XX, where can above

George Doyle

our expectation. Yes, that's

we've coverage some the improvement revenue, contribute we in the as projects completed, acquisitions that As the to should development of start ratio. completed are see

first that The bit of a seasonality little have always quarter, quarter. we in

year. of in the ratio and get QX. wouldn't of So coverage out XXXX, expect But look exceed a the improvement Xx we that we over big part expecting the the as are we latter improve will as course I into

Richard Prentiss

earlier you Okay. for call, And details said, the more think, Tim, the some I call. on on XQ look

for us provide that going looking be you're call. What looking new with details projects? to to you to should specifically we us? keep some help those be Now are of thinking for will the every call able What you understand these on XQ able

Arthur Brazy

share the are that in of think subject additional external with be can these our George control. might time. factors, to a the where different the little confident as But in past. information variety about about as bit appropriate on headed Rick, But we there said, the a outside will we're very we I of strategy. much we've at projects X We're as the talked detail, deployments

Richard Prentiss

things is then and this up And venues discussions or the of far world estate year, on Okay. spectrum one whether the buildings. the being going a participating real teed given for any be this CBRS it's Have auction auctions, on with as different parties, you late in might you rooftops? June of that year. of as the some in Beam indoor for owners had carriers maybe as of June seen wireless is being used

George Doyle

I CBRS. not whether it's our to deployments, but that for opportunities ends and it an at to the some being opportunity interesting years on we've portfolio been opportunity. haven't rooftops. on the looked projects And we the or over different an that I We we think where type related do presents specifically deployment doing focus, date. in in-building Not done any mean, for think general, up in-building has CBRS, of have about

chatter, lot deployment. the about a I of I in say, some there. we are CBRS industry And think is would there seeing opportunity

optimistic to CBRS. incremental So from that see benefit we'll flow some portfolio we're our

Operator

call like session. question-and-answer remarks. Mr. conclude will to for Brazy That closing to I'd back the turn today's

Arthur Brazy

all for and you, us thank you today. Thank joining

the we throughout to the great especially XXXX. As our the of details time, position to next will expect and confident the strategy George We're and year. remainder continue remainder the over as that year. up and our a have opportunities we on we meaningful have throughout ramp I a us, in the excited of you of deployment have impact call we're for this results about front think and said, in with projects earnings on We're share the we those

have great day. a everybody, again, thanks So

Operator

this participating. today's conference Thank gentlemen, call. and you for concludes Ladies

You may disconnect. now

Landmark Infrastructure Partners (LMRK) 27 Feb 202019 Q4 Earnings call transcript