Radius Global Infrastructure Reports 2022 Financial Results

Revenue Increased 31% YoY

Radius Global Infrastructure, Inc. (Nasdaq: RADI) (“Radius” or the “Company”), one of the largest international owners and acquirors of real property interests and contractual rights underlying essential digital infrastructure assets, today reported financial results for the quarter and year ended December 31, 2022.

Bill Berkman, Co-Chairman and CEO of Radius Global Infrastructure, commented:

“We are pleased to report record revenue of $135.5 million in 2022, up 31% from 2021, with gross profit increasing to $128.5 million, up 27% over the prior year. In 2022, our outstanding team of originators helped us to acquire communication sites through cash investments in real property interest and related intangible assets of $520.7 million, resulting in Acquisition Capex1 of $531.1 million that generated $37.5 million of annual rent. This acquisition of annual rent produced a yield of 6.4% on a net growth spend basis, which includes origination selling, general and administrative expenses.

In the fourth quarter, we increased revenue by 28% year-over-year, which included net organic growth of 4.7% from the existing portfolio on a constant currency basis, driven by our contractual inflation-linked rent escalators of 5.1%. We also grew Annualized In-Place Rents by 34% to a record $157.6 million. These high quality, primarily triple net and inflation-protected cash flow streams underlying mission-critical communications sites, combined with approximately $330 million of liquidity currently available to deploy for making additional accretive acquisitions, provide us with an excellent platform to execute our digital infrastructure ground lease aggregation strategy in 2023 and beyond.”

QUARTERLY RESULTS

Revenue increased 28% to $37.0 million for the three months ended December 31, 2022, as compared to revenue of $29.0 million for the three months ended December 31, 2021. The increase was primarily attributable to the additional revenue streams from investments in real property interests made during the past year, partially offset by unfavorable foreign exchange rate effects as compared with the fourth quarter of 2021.

Gross Profit rose 24% to $34.6 million during the three months ended December 31, 2022, as compared to gross profit of $27.9 million in the corresponding prior year period, while the Company generated a gross profit (or ground cash flow) margin of approximately 94% during the three months ended December 31, 2022. Ground cash flow margin has been impacted by expenses associated with fee simple interests acquired, primarily for property taxes.

Annualized In-Place Rents (“AIPR”) increased to $157.6 million as of December 31, 2022, an increase of $39.7 million or 34% over AIPR of $117.9 million as of December 31, 2021. On a constant currency basis, AIPR would have increased 40% year-over-year to $165.3 million as of December 31, 30, 2022.

FULL-YEAR RESULTS

Revenue increased 31% to $135.5 million for the year ended December 31, 2022, as compared to revenue of $103.6 million for the year ended December 31, 2021.

Gross Profit rose 27% to $128.5 million in the year ended December 31, 2022, as compared to gross profit of $101.1 million in the prior year.

Investments in Real Property Interests and Related Intangible Assets, as identified in the Company’s Consolidated Statements of Cash Flows, was $520.7 million and $469.7 million for the year ended December 31, 2022 and 2021, respectively. This represented an increase of $51.0 million, or 11%, for the year ended December 31, 2022 over the prior year.

Acquisition Capex was $531.1 million and $474.0 million for the year ended December 31, 2022 and 2021, respectively, or an increase of $57.1 million, or 12%, for the year ended December 31, 2022 over the prior year.

Please refer to the GAAP financial disclosures and reconciliations to non-GAAP financial measurement set forth below and in the Company’s Form 10-K for the year ended December 31, 2022 The Company pays for its acquisitions of real property (and other) interests either with a one-time payment at the time of acquisition or, under certain circumstances, with a combination of upfront payments and future contractually committed payments over a period of time, in each case pursuant to the individual acquisition agreement. In the Condensed Consolidated Statements of Cash Flows, the one-time and upfront cash payments are reported as Investments in Real Property Interests and Related Intangible Assets. The total cash spent and the commitment for future payments in any given period for the acquisition of real property (and other) interests, adjusted for changes in foreign currency, is our Acquisition Capex. Acquisition Capex is a non-GAAP metric, albeit one the Company believes is valuable to readers of the Company’s financial statements in assessing the Company’s financial performance and growth. Please refer to the table below for a full reconciliation of Investments in Real Property Interests and Related Intangible Assets to Acquisition Capex.

LIQUIDITY

As of December 31, 2022, Radius had $353.5 million of total cash and cash equivalents, restricted cash, and short-term investments. Of this amount, approximately $330 million was available to deploy for asset acquisitions. Radius also had $1.3 billion of available uncommitted borrowing capacity under various debt facilities in addition to the ability to access the worldwide credit and capital markets, subject to market conditions, in order to issue additional debt or equity if needed or desired.

FINANCING TRANSACTIONS

The summary below presents significant financing activities that occurred in 2022.

  • In January 2022, Radius borrowed €225 million ($257.5 million as of the funding date) of the €750 million available under a new financing facility that Radius entered into in December 2021. The initial borrowing accrues interest at a fixed annual rate of approximately 3.2%, which is payable quarterly and will mature in January 2030.
  • In April 2022, Radius borrowed $165 million under a new credit facility that matures in April 2027. Radius used the proceeds of this new facility to repay amounts outstanding under an existing credit facility that was scheduled to mature in October 2023. The initial borrowing accrues interest at a fixed annual rate of approximately 3.64%, which will be payable monthly. This compares to a cash pay interest rate of 4.25% under the previous credit facility. Concurrent with the closing of the transaction, Radius received an ‘A’ rating from Fitch for the facility, which has a leverage cap of 9.75x eligible annual cash flow (defined as Annualized In-Place Rents less a servicing fee), as compared to 7.75x under the previous credit facility.

OUTLOOK FOR 2023

Based on the current pipeline of investment opportunities, management is targeting the deployment of at least $400 million of Acquisition Capex in 2023. As the Company has previously noted, there may be quarterly variability in the amount of capital deployed.

About the Company

Radius Global Infrastructure, Inc., through its various subsidiaries, is a multinational owner and acquiror of triple net rental streams and real properties leased to wireless operators, wired operators, wireless tower companies, and other digital infrastructure operators as part of their infrastructure required to deliver a wide range of services.

For further information see https://www.radiusglobal.com.

FORWARD-LOOKING STATEMENTS AND DISCLAIMERS

Certain matters discussed in this press release, including the attachments, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are subject to risks and uncertainties. For these statements, we claim the protections of the safe harbor for forward-looking statements contained in such Sections. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, capital expenditures, Acquisition Capex, plans and objectives, including with respect to capital allocation and other financial and organizational matters. In some cases, these forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believe,” “expect,” “anticipate,” “estimate,” “outlook,” “plan,” “continue,” “intend,” “should,” “may”, “will,” “in 2023 and beyond,” or similar expressions, their negative or other variations or comparable terminology.

Forward-looking statements are subject to significant risks and uncertainties and are based on beliefs, assumptions and expectations based upon our historical performance and on our current plans, estimates and expectations in light of information available to us. Any forward-looking statement speaks only as of the date on which it is made. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business, prospects, growth strategy and liquidity. Actual results may differ materially from those set forth in the forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

Certain important factors that we think could cause our actual results to differ materially from those expressed in or contemplated by the forward-looking statements are summarized below. Other factors besides those summarized could also adversely affect us. We operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for management to predict all such risks and uncertainties or how they may affect us. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Important other factors that could cause our actual results to differ materially from those expressed in or contemplated by the forward-looking statements include, but are not limited to: the extent that wireless carriers (mobile network operators, or “MNOs”) or tower companies consolidate their operations, exit the wireless communications business or share site infrastructure to a significant degree; the extent that new technologies reduce demand for wireless infrastructure; competition for assets; whether the tenant leases for the wireless communication tower, antennae or other digital communications infrastructure located on our real property interests are renewed with similar rates or at all; the extent of unexpected lease cancellations, given that most of the tenant leases associated with our assets may be terminated upon limited notice by the MNO or tower company and unexpected lease cancellations could materially impact cash flow from operations; economic, political, cultural, and regulatory risks and other risks to our operations outside the U.S., including risks associated with fluctuations in foreign currency exchange rates and local inflation rates; the effect of the Electronic Communications Code in the United Kingdom, which may limit the amount of lease income we generate in the United Kingdom; the extent that we continue to grow at an accelerated rate, which may prevent us from achieving profitability or positive cash flow at a company level (as determined in accordance with GAAP) for the foreseeable future, particularly given our history of net losses and negative net cash flow; the fact that we have incurred a significant amount of debt and may in the future incur additional indebtedness; the extent that the terms of our debt agreements limit our flexibility in operating our business; and the other factors, risks and uncertainties described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and in our subsequent filings under the Exchange Act.

RADIUS GLOBAL INFRASTRUCTURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in USD thousands, except share and per share amounts)

 

 

Successor

 

 

 

Predecessor

 

 

 

Year

ended

December 31,

2022

 

 

Year

ended

December 31,

2021

 

 

Period from

February 10,

2020 to

December 31,

2020

 

 

 

Period from

January 1,

2020 to

February 9,

2020

 

Revenue

 

$

135,456

 

 

$

103,609

 

 

$

62,923

 

 

 

$

6,836

 

Cost of service

 

 

6,949

 

 

 

2,493

 

 

 

619

 

 

 

 

34

 

Gross profit

 

 

128,507

 

 

 

101,116

 

 

 

62,304

 

 

 

 

6,802

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

96,572

 

 

 

73,154

 

 

 

60,565

 

 

 

 

4,344

 

Share-based compensation

 

 

20,989

 

 

 

15,802

 

 

 

83,421

 

 

 

 

 

Amortization and depreciation

 

 

79,321

 

 

 

64,440

 

 

 

43,005

 

 

 

 

2,584

 

Impairment - decommissions

 

 

3,950

 

 

 

2,998

 

 

 

1,975

 

 

 

 

530

 

Total operating expenses

 

 

200,832

 

 

 

156,394

 

 

 

188,966

 

 

 

 

7,458

 

Operating loss

 

 

(72,325

)

 

 

(55,278

)

 

 

(126,662

)

 

 

 

(656

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Realized and unrealized gain (loss) on foreign currency debt

 

 

66,140

 

 

 

33,656

 

 

 

(40,434

)

 

 

 

11,500

 

Interest expense, net

 

 

(67,167

)

 

 

(47,365

)

 

 

(25,201

)

 

 

 

(3,623

)

Other income (expense), net

 

 

4,445

 

 

 

(992

)

 

 

1,916

 

 

 

 

(277

)

Gain on extinguishment of debt

 

 

931

 

 

 

 

 

 

1,264

 

 

 

 

 

Total other income (expense), net

 

 

4,349

 

 

 

(14,701

)

 

 

(62,455

)

 

 

 

7,600

 

Income (loss) before income tax expense (benefit)

 

 

(67,976

)

 

 

(69,979

)

 

 

(189,117

)

 

 

 

6,944

 

Income tax expense (benefit)

 

 

(3,948

)

 

 

(327

)

 

 

2,825

 

 

 

 

767

 

Net income (loss)

 

 

(64,028

)

 

 

(69,652

)

 

 

(191,942

)

 

 

$

6,177

 

Net loss attributable to noncontrolling interest

 

 

(3,341

)

 

 

(4,757

)

 

 

(9,851

)

 

 

 

 

 

Net loss attributable to stockholders

 

 

(60,687

)

 

 

(64,895

)

 

 

(182,091

)

 

 

 

 

 

Stock dividend payment to holders of Series A Founders Preferred Stock

 

 

(40,832

)

 

 

(31,391

)

 

 

 

 

 

 

 

 

Net loss attributable to common stockholders

 

$

(101,519

)

 

$

(96,286

)

 

$

(182,091

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(1.08

)

 

$

(1.35

)

 

$

(3.12

)

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

93,756,936

 

 

 

71,083,353

 

 

 

58,425,000

 

 

 

 

 

 

See accompanying notes to condensed consolidated financial statements.

RADIUS GLOBAL INFRASTRUCTURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in USD thousands, except share and per share amounts)

 

 

December 31,

2022

 

 

December 31,

2021

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

224,258

 

 

$

456,146

 

Restricted cash

 

 

1,971

 

 

 

2,085

 

Short-term investments

 

 

39,205

 

 

 

 

Total cash, cash equivalents, restricted cash, and short-term investments

 

 

265,434

 

 

 

458,231

 

Trade receivables, net

 

 

8,200

 

 

 

7,933

 

Prepaid expenses and other current assets

 

 

28,773

 

 

 

20,685

 

Total current assets

 

 

302,407

 

 

 

486,849

 

Real property interests, net:

 

 

 

 

 

 

 

 

Right-of-use assets - finance leases, net

 

 

379,052

 

 

 

301,865

 

Telecom real property interests, net

 

 

1,569,676

 

 

 

1,174,186

 

Real property interests, net

 

 

1,948,728

 

 

 

1,476,051

 

Intangible assets, net

 

 

12,121

 

 

 

7,914

 

Property and equipment, net

 

 

1,241

 

 

 

1,789

 

Goodwill

 

 

80,509

 

 

 

80,509

 

Deferred tax asset

 

 

306

 

 

 

160

 

Restricted cash, long-term

 

 

88,054

 

 

 

173,962

 

Other long-term assets

 

 

20,124

 

 

 

9,701

 

Total assets

 

$

2,453,490

 

 

$

2,236,935

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

48,767

 

 

$

36,995

 

Rent received in advance

 

 

26,551

 

 

 

24,485

 

Finance lease liabilities, current

 

 

15,589

 

 

 

10,567

 

Telecom real property interest liabilities, current

 

 

7,975

 

 

 

3,828

 

Total current liabilities

 

 

98,882

 

 

 

75,875

 

Finance lease liabilities

 

 

22,277

 

 

 

24,766

 

Telecom real property interest liabilities

 

 

4,483

 

 

 

12,884

 

Long-term debt, net of debt discount and deferred financing costs

 

 

1,503,352

 

 

 

1,272,225

 

Deferred tax liability

 

 

131,229

 

 

 

62,296

 

Other long-term liabilities

 

 

10,473

 

 

 

5,231

 

Total liabilities

 

 

1,770,696

 

 

 

1,453,277

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Series A Founder Preferred Stock, $0.0001 par value; 1,600,000 shares authorized; 1,600,000 shares issued and outstanding as of December 31, 2022 and 2021, respectively

 

 

 

 

 

 

Series B Founder Preferred Stock, $0.0001 par value; 1,386,033 shares authorized; 1,386,033 shares issued and outstanding as of December 31, 2022 and 2021, respectively

 

 

 

 

 

 

Class A Common Stock, $0.0001 par value; 1,590,000,000 shares authorized; 95,283,563 and 92,159,612 shares issued and outstanding as of December 31, 2022 and 2021, respectively

 

 

10

 

 

 

9

 

Class B Common Stock, $0.0001 par value; 200,000,000 shares authorized; 12,795,694 and 11,551,769 shares issued and outstanding as of December 31, 2022 and 2021, respectively

 

 

 

 

 

 

Additional paid-in capital

 

 

1,060,055

 

 

 

1,038,740

 

Accumulated other comprehensive loss

 

 

(85,936

)

 

 

(27,784

)

Accumulated deficit

 

 

(338,819

)

 

 

(278,132

)

Total stockholders’ equity attributable to Radius Global Infrastructure, Inc.

 

 

635,310

 

 

 

732,833

 

Noncontrolling interest

 

 

47,484

 

 

 

50,825

 

Total liabilities and stockholders’ equity

 

$

2,453,490

 

 

$

2,236,935

 

See accompanying notes to condensed consolidated financial statements.

RADIUS GLOBAL INFRASTRUCTURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in USD thousands)

 

 

Successor

 

 

Predecessor

 

 

Year

ended

December 31,

2022

 

Year

ended

December 31,

2021

 

Period from

February 10,

2020 to

December 31,

2020

 

 

Period from

January 1,

2020 to

February 9,

2020

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(64,028

)

 

$

(69,652

)

 

$

(191,942

)

 

 

$

6,177

 

Adjustments to reconcile net income (loss) to net cash used in operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization and depreciation

 

 

79,321

 

 

 

64,440

 

 

 

43,005

 

 

 

 

2,584

 

Amortization of finance lease and telecom real property interest liabilities discount

 

 

1,458

 

 

 

1,380

 

 

 

1,279

 

 

 

 

213

 

Impairment - decommissions

 

 

3,950

 

 

 

2,998

 

 

 

1,975

 

 

 

 

530

 

Realized and unrealized loss (gain) on foreign currency debt

 

 

(66,140

)

 

 

(33,656

)

 

 

40,434

 

 

 

 

(11,500

)

Amortization of debt discount and deferred financing costs

 

 

6,201

 

 

 

1,923

 

 

 

192

 

 

 

 

280

 

Provision for bad debt expense

 

 

223

 

 

 

682

 

 

 

323

 

 

 

 

26

 

Share-based compensation

 

 

20,989

 

 

 

15,802

 

 

 

83,421

 

 

 

 

 

Deferred income taxes

 

 

(11,232

)

 

 

(3,350

)

 

 

(962

)

 

 

 

339

 

Gain on extinguishment of debt

 

 

(931

)

 

 

 

 

 

(1,264

)

 

 

 

 

Change in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade receivables, net

 

 

(1,408

)

 

 

(1,961

)

 

 

(53

)

 

 

 

(682

)

Prepaid expenses and other assets

 

 

(9,240

)

 

 

(6,485

)

 

 

(5,911

)

 

 

 

935

 

Accounts payable, accrued expenses and other long-term liabilities

 

 

22,035

 

 

 

7,201

 

 

 

(15,316

)

 

 

 

(4,605

)

Rent received in advance

 

 

5,723

 

 

 

6,184

 

 

 

2,282

 

 

 

 

2,251

 

Net cash used in operating activities

 

 

(13,079

)

 

 

(14,494

)

 

 

(42,537

)

 

 

 

(3,452

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid in APW Acquisition, net of cash acquired

 

 

 

 

 

 

 

 

(277,065

)

 

 

 

 

Investments in real property interests and related intangible assets

 

 

(520,681

)

 

 

(469,725

)

 

 

(175,665

)

 

 

 

(5,064

)

Advance deposits made for real property interest investments

 

 

(12,956

)

 

 

 

 

 

 

 

 

 

 

Proceeds from sales of real property interests

 

 

573

 

 

 

 

 

 

 

 

 

 

 

Purchases of short-term investments

 

 

(39,003

)

 

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(549

)

 

 

(987

)

 

 

(1,049

)

 

 

 

(40

)

Payment (advances) on note receivable, net

 

 

 

 

 

 

 

 

17,500

 

 

 

 

(17,500

)

Net cash used in investing activities

 

 

(572,616

)

 

 

(470,712

)

 

 

(436,279

)

 

 

 

(22,604

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings under debt agreements

 

 

427,003

 

 

 

587,735

 

 

 

163,720

 

 

 

 

 

Repayments of term loans and other debt

 

 

(112,129

)

 

 

(237

)

 

 

(48,065

)

 

 

 

(250

)

Purchase of capped call options

 

 

 

 

 

(33,221

)

 

 

 

 

 

 

 

Debt issuance costs

 

 

(12,730

)

 

 

(15,352

)

 

 

(3,721

)

 

 

 

 

Proceeds from issuance of common stock, net of issuance costs

 

 

 

 

 

191,461

 

 

 

 

 

 

 

 

Proceeds from exercises of stock options and warrants

 

 

327

 

 

 

188,871

 

 

 

 

 

 

 

 

Repayments of finance lease and telecom real property interest liabilities

 

 

(14,888

)

 

 

(16,464

)

 

 

(12,081

)

 

 

 

(3,149

)

Net cash provided by (used in) financing activities

 

 

287,583

 

 

 

902,793

 

 

 

99,853

 

 

 

 

(3,399

)

Effect of foreign currency exchange rates on cash and cash equivalents and restricted cash

 

 

(19,798

)

 

 

(842

)

 

 

5,783

 

 

 

 

(232

)

Net change in cash and cash equivalents and restricted cash

 

 

(317,910

)

 

 

416,745

 

 

 

(373,180

)

 

 

 

(29,687

)

Cash and cash equivalents and restricted cash at beginning of period

 

 

632,193

 

 

 

215,448

 

 

 

588,628

 

 

 

 

78,046

 

Cash and cash equivalents and restricted cash at end of period

 

$

314,283

 

 

$

632,193

 

 

$

215,448

 

 

 

$

48,359

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash and non-cash transactions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

60,550

 

 

$

41,659

 

 

$

22,574

 

 

 

$

4,684

 

Cash paid for income taxes

 

$

3,582

 

 

$

2,321

 

 

$

2,748

 

 

 

$

1,112

 

See accompanying notes to condensed consolidated financial statements.

Non-GAAP Financial Measures

We use certain additional financial measures not defined by GAAP that provide supplemental information we believe is useful to analysts and investors to evaluate our financial performance and ongoing results of operations, when considered alongside other GAAP measures such as revenue, gross profit, operating income and net cash provided by operating activities. These non-GAAP measures exclude the financial impact of items management does not consider in assessing our ongoing operating performance, and thereby facilitate review of our operating performance on a period-to-period basis.

EBITDA and Adjusted EBITDA

EBITDA and Adjusted EBITDA are non-GAAP measures. EBITDA is defined as net income (loss) before net interest expense, income tax expense (benefit), and depreciation and amortization. Adjusted EBITDA is calculated by taking EBITDA and further adjusting for non-cash impairment—decommissions expense, realized and unrealized gains and losses on foreign currency debt, realized and unrealized foreign exchange gains/losses associated with non-debt transactions and balances denominated in a currency other than the functional currency, share-based compensation expense and transaction-related costs recorded in selling, general and administrative expenses incurred for incremental business acquisition pursuits (successful and unsuccessful) and related financing and integration activities. Management believes the presentation of EBITDA and Adjusted EBITDA provides valuable additional information for users of the financial statements in assessing our financial condition and results of operations. Each of EBITDA and Adjusted EBITDA has important limitations as analytical tools because they exclude some, but not all, items that affect net income, therefore the calculation of these financial measures may be different from the calculations used by other companies and comparability may therefore be limited. You should not consider EBITDA, Adjusted EBITDA or any of our other non-GAAP financial measures as an alternative or substitute for our results.

The following are reconciliations of EBITDA and Adjusted EBITDA to net income (loss), the most comparable GAAP measure:

(in thousands)

 

Year Ended

December 31,

2022

 

Year Ended

December 31,

2021

(unaudited)

 

 

 

 

 

 

 

 

Net loss

 

$

(64,028

)

 

$

(69,652

)

Amortization and depreciation

 

 

79,321

 

 

 

64,440

 

Interest expense, net

 

 

67,167

 

 

 

47,365

 

Income tax benefit

 

 

(3,948

)

 

 

(327

)

EBITDA

 

 

78,512

 

 

 

41,826

 

Impairment - decommissions

 

 

3,950

 

 

 

2,998

 

Realized/unrealized gain on foreign currency debt

 

 

(66,140

)

 

 

(33,656

)

Share-based compensation expense

 

 

20,989

 

 

 

15,802

 

Non-cash foreign currency adjustments

 

 

4,569

 

 

 

2,430

 

Transaction-related costs

 

 

7,365

 

 

 

1,836

 

Adjusted EBITDA

$

49,245

$

31,236

Acquisition Capex

Acquisition Capex is a non-GAAP financial measure. Our payments for acquisitions of real property interests consist of either a one-time payment upon the acquisition or up-front payments with contractually committed payments made over a period of time, pursuant to each real property interest agreement. In all cases, we contractually acquire all rights associated with the underlying revenue-producing assets upon entering into the agreement to purchase the real property interest and records the related assets in the period of acquisition. Acquisition Capex therefore represents the total cash spent and committed to be spent for the acquisitions of revenue-producing assets during the period measured. Management believes the presentation of Acquisition Capex provides valuable additional information for users of the financial statements in assessing our financial performance and growth, as it is a comprehensive measure of our investments in the revenue-producing assets that we acquire in a given period. Acquisition Capex has important limitations as an analytical tool, because it excludes certain fixed and variable costs related to our selling, marketing, data accumulation, legal and underwriting activities included in selling, general and administrative expenses in the consolidated statements of operations, including corporate overhead expenses. Further, this financial measure may be different from calculations used by other companies and comparability may therefore be limited. You should not consider Acquisition Capex or any of the other non-GAAP measures we utilize as an alternative or substitute for our results.

The following is a reconciliation of Acquisition Capex to the amounts included as an investing cash flow in the consolidated statements of cash flows for investments in real property interests and related intangible assets, the most comparable GAAP measure, which generally represents up-front payments made in connection with the acquisition of these assets during the period. The primary adjustment to the comparable GAAP measure is “committed contractual payments for investments in real property interests and intangible assets”, which represents the total amount of future payments that we were contractually committed to make in connection with our acquisitions of real property interests and intangible assets that occurred during the period. Additionally, foreign exchange translation adjustments impact the determination of Acquisition Capex.

(in thousands)

 

Year Ended

December 31,

2022

 

Year Ended

December 31,

2021

(unaudited)

 

 

 

 

 

 

 

 

Investments in real property interests and related intangible assets

 

$

520,681

 

 

$

469,725

 

Committed contractual payments for investments in real property interests and intangible assets

 

 

17,277

 

 

 

21,162

 

Foreign exchange translation impacts and other

 

 

(6,878

)

 

 

(16,899

)

Acquisition Capex

 

$

531,080

 

 

$

473,988

 

Annualized In-Place Rents

Annualized in-place rents is a non-GAAP measure that measures performance based on annualized contractual revenue from the rents expected to be collected on leases owned and acquired (“in-place”) as of the measurement date. Annualized in-place rents is calculated using the implied monthly revenue from all revenue producing leases that are in place as of the measurement date multiplied by twelve. Implied monthly revenue for each lease is calculated based on the most recent rental payment under such lease. Management believes the presentation of annualized in-place rents provides valuable additional information for users of the financial statements in assessing our financial performance and growth. In particular, management believes the presentation of annualized in-place rents provides a measurement at the applicable point of time as opposed to revenue, which is recorded in the applicable period on revenue-producing assets in place as they are acquired. Annualized in-place rents has important limitations as an analytical tool because it is calculated at a particular moment in time, the measurement date, but implies an annualized amount of contractual revenue. As a result, following the measurement date, among other things, the underlying leases used in calculating the annualized in-place rents financial measure may be terminated, new leases may be acquired, or the contractual rents payable under such leases may not be collected. In these respects, among others, annualized in-place rents differs from “revenue”, which is the closest comparable GAAP measure and which represents all revenues (contractual or otherwise) earned over the applicable period. Revenue is recorded as earned over the period in which the lessee is given control over the use of the wireless communication sites or other digital infrastructure and recorded over the term of the lease. You should not consider annualized in-place rents or any of the other non-GAAP measures we utilize as an alternative or substitute for our results. The following is a comparison of annualized in-place rents to revenue, the most comparable GAAP measure:

(in thousands)

 

Year Ended

December 31,

2022

 

Year Ended

December 31,

2021

Revenue for year ended December 31

 

$

135,456

 

 

$

103,609

 

Annualized in-place rents as of December 31

 

$

157,553

 

 

$

117,924

 

______________________________

1 Please see page 10 for a definition of Acquisition Capex and reconciliation to Investments in Real Property Interests and Related Intangible Assets, the most comparable GAAP measure.

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