8-K
Four Corners Property Trust, Inc. (FCPT)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) : February 12, 2020
FOUR CORNERS PROPERTY TRUST, INC.
(Exact name of registrant as specified in its charter)
| Maryland | 001-37538 | 47-4456296 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
591 Redwood Highway, Suite 1150, Mill Valley, California 94941
(Address of principal executive offices, including zip code)
(415) 965-8030
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of Exchange on Which Registered |
|---|---|---|
| Common Stock, $0.0001 par value per share | FCPT | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On February 12, 2020, Four Corners Property Trust, Inc. (the “Company”) announced its financial results for the quarter and twelve months ended December 31, 2019. A copy of the Company’s press release is attached hereto as Exhibit 99.1 and a copy of the Company’s Supplemental Financial & Operating Information for the quarter and twelve months ended December 31, 2019 is attached hereto as Exhibit 99.2.
The information in this Item 2.02 and Exhibits 99.1 and 99.2 to this Form 8-K is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall they be deemed to be incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
| Item 9.01 | Financial Statements and Exhibits. |
|---|
(d) Exhibits
| Exhibit<br><br>No. | Exhibit Description |
|---|---|
| 99.1 | Press Release dated February 12, 2020 |
| 99.2 | Supplemental Financial & Operating Information for the Quarter and Twelve Months Ended December 31, 2019 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FOUR CORNERS PROPERTY TRUST, INC. | |
|---|---|
| By: | /s/ JAMES L. BRAT |
| James L. Brat<br><br>General Counsel and Secretary |
Date: February 12, 2020
EXHIBIT LIST
| Exhibit<br><br>No. | Exhibit Description |
|---|---|
| 99.1 | Press Release dated February 12, 2020 |
| 99.2 | Supplemental Financial & Operating Information for the Quarter and Twelve Months Ended December 31, 2019 |
fcpt2019q4earningspr1292
FCPT Announces Fourth Quarter 2019 Financial and Operating Results MILL VALLEY, CA – February 12, 2020 / Business Wire – Four Corners Property Trust, Inc. (“FCPT” or the “Company”, NYSE: FCPT) today announced financial results for the three months and the year ended December 31, 2019. Management Comments “FCPT had a very productive 2019. The company invested nearly $200 million in properties that met or exceeded our return objectives, serving to both expand and position the company further toward one of our stated strategic objectives of diversification,” said CEO Bill Lenehan. “We begin 2020 with a significant volume of announced but not yet closed outparcel transactions of approximately $132 million, positioning the company to extend the growth we saw in 2019. We are encouraged to pursue this growth given the strength of our balance sheet.” Financial Results Rental Revenue and Net Income Attributable to Common Shareholders • Rental revenue for the fourth quarter increased 8.1% over the prior year to $35.9 million. Rental revenue consisted of $33.8 million in cash rents and $2.1 million of straight-line and other non-cash rent adjustments. • Net income attributable to common shareholders was $18.9 million for the fourth quarter, or $0.27 per diluted share. These results compare to net income attributable to common shareholders of $21.2 million in the prior year, or $0.31 per diluted share, including a $4.4 million gain on the sale of a property. • Net income attributable to common shareholders was $72.6 million for the year ended December 31, 2019, or $1.06 per diluted share. These results compare to net income attributable to common shareholders of $82.4 million, or $1.28 per diluted share, including $15.3 million of gains on the sale of properties, for the prior year. Funds from Operations (FFO) • NAREIT-defined FFO per diluted share for the fourth quarter was $0.37, representing a $0.01 per share increase compared to the fourth quarter in 2018. • NAREIT-defined FFO per diluted share for the year ended December 31, 2019 was $1.44, representing a $0.03 per share increase compared to the prior year. Adjusted Funds from Operations (AFFO) • AFFO per diluted share for the fourth quarter was $0.36, representing a $0.02 per share increase compared to the fourth quarter in 2018. • AFFO per diluted share for the year ended December 31, 2019 was $1.39, representing a $0.03 per share increase compared to the prior year. General and Administrative (G&A) Expense • G&A expense for the fourth quarter was $3.2 million, which included $0.8 million of stock-based compensation. These results compare to G&A expense in the fourth quarter of 2018 of $3.4 million, including $0.9 million of stock-based compensation. • Cash G&A expense (after excluding stock-based compensation) for the fourth quarter was $2.4 million, representing 7.0% of cash rental income for the quarter, compared to 8.2% in the fourth quarter of 2018. Dividends • FCPT declared a dividend of $0.305 per common share for the fourth quarter of 2019, representing a 6.1%
increase over the prior quarter rate. Portfolio Activities Acquisitions • During the fourth quarter of 2019, FCPT acquired 50 properties and leasehold interests for a combined purchase price of $120.6 million at an initial weighted average cash yield of 6.4% and a weighted average remaining lease term of 10 years. • For the year ended December 31, 2019, FCPT acquired 90 properties and leasehold interests for a combined purchase price of $199.0 million at an initial weighted average cash yield of 6.5% and a weighted average remaining lease term of 10 years. • In the fourth quarter, FCPT announced the signing of separate purchase agreements with Brookfield Properties (NASDAQ: BPY, TSX: BPY.UN), Seritage Growth Properties (NYSE: SRG), and PREIT (NYSE: PEI) to purchase up to a combined 61 properties for approximately $144.7 million. These transactions were priced at a mid-six percent capitalization rate on net operating income and included 17 non-restaurant brands. These transactions are all subject to customary closing conditions, diligence and regulatory approvals. • From the previously announced outparcel transactions with Washington Prime Group, Brookfield, Seritage and PREIT, FCPT expects to close in 2020 on properties with an additional 65 leases for a $131.9 million combined purchase price. Liquidity and Capital Markets Capital Raising • During the fourth quarter, FCPT settled the previously announced forward sale agreement under the ATM program of 1,603,478 shares of common stock at a weighted average offering price of $28.97 for gross proceeds of $46.5 million. Liquidity • At December 31, 2019, FCPT had $203.1 million of available liquidity including cash and cash equivalents and undrawn credit line capacity. Credit Facility and Unsecured Note • At December 31, 2019, FCPT had $677 million of outstanding debt, consisting of $400 million of term loans, $225 million of unsecured fixed rate notes, and $52 million drawn on FCPT’s $250 million revolving credit facility. Real Estate Portfolio • As of December 31, 2019, the Company’s rental portfolio consisted of 699 properties located in 46 states. The properties are 99.7% occupied (measured by square feet) under long-term, net leases with a weighted average remaining lease term of approximately 11.1 years and an estimated portfolio weighted average EBITDAR to Lease Rent coverage of 4.7x. Conference Call Information Company management will host a conference call and audio webcast on Thursday, February 13 at 11:00 a.m. Eastern Time, to discuss the results.
Interested parties can listen to the call via the following: Internet: Go to http://dpregister.com/10138915 at least 15 minutes prior to start time of the call, in order to register and to download any necessary audio software. Please note for those that register, the dial-in number will be provided upon registration. Phone: 1-888-346-5243 (domestic) / 1-412-317-5120 (international). Participants not pre-registered must ask to be joined into the Four Corners Property Trust call. Replay: Available through May 15, 2020 by dialing 1-877-344-7529 (domestic) / 1-412-317- 0088 (international), Replay Access Code 10138915. About FCPT FCPT, headquartered in Mill Valley, CA, is a real estate investment trust primarily engaged in the acquisition and leasing of restaurant properties. The Company seeks to grow its portfolio by acquiring additional real estate to lease, on a net basis, for use in the restaurant and retail industries.
Cautionary Note Regarding Forward-Looking Statements This press release contains forward-looking statements within the meaning of the federal securities laws. Forward- looking statements include all statements that are not historical statements of fact and those regarding the Company’s intent, belief or expectations, including, but not limited to, statements regarding: operating and financial performance; announced transactions; and expectations regarding the making of distributions and the payment of dividends. Words such as “anticipate(s),” “expect(s),” “intend(s),” “plan(s),” “believe(s),” “may,” “will,” “would,” “could,” “should,” “seek(s)” and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements. Forward-looking statements speak only as of the date on which such statements are made and, except in the normal course of the Company’s public disclosure obligations, the Company expressly disclaims any obligation to publicly release any updates or revisions to any forward-looking statements to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which any statement is based. Forward-looking statements are based on management’s current expectations and beliefs and the Company can give no assurance that its expectations or the events described will occur as described. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by such forward-looking statements. For a further discussion of these and other factors that could cause the company’s future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the company’s most recent annual report on Form 10-K, and other risks described in documents subsequently filed by the company from time to time with the Securities and Exchange Commission. Notice Regarding Non-GAAP Financial Measures: In addition to U.S. GAAP financial measures, this press release and the referenced supplemental financial and operating report contain and may refer to certain non-GAAP financial measures. These non-GAAP financial measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures and statements of why management believes these measures are useful to investors are included in the supplemental financial and operating report, which can be found in the investor relations section of our website. Supplemental Materials and Website: Supplemental materials on the Fourth Quarter 2019 operating results and other information on the Company are available on the investors relations section of FCPT’s website at www.investors.fcpt.com. FCPT Bill Lenehan, 415-965-8031 CEO Gerry Morgan, 415-965-8032 CFO
Four Corners Property Trust Consolidated Statements of Income (In thousands, except share and per share data) Three Months Ended December 31, Year Ended December 31, 2019 2018 2019 2018 (Unaudited) Revenues: Rental revenue $ 35,850 $ 33,156 $ 139,682 $ 123,665 Restaurant revenue 5,031 4,879 20,551 19,970 Total revenues 40,881 38,035 160,233 143,635 Operating expenses: General and administrative 3,168 3,447 13,934 13,206 Depreciation and amortization 6,780 7,571 26,312 23,884 Property expenses 508 143 1,579 433 Restaurant expenses 4,890 4,645 19,632 19,014 Total operating expenses 15,346 15,806 61,457 56,537 Interest expense (6,547) (5,293) (26,516) (19,959) Other income, net 72 77 944 781 Realized gain on sale, net - 4,392 - 15,271 Income tax expense (67) (74) (265) (262) Net income 18,993 21,331 72,939 82,929 Net income attributable to noncontrolling interest (79) (129) (323) (531) Net Income Attributable to Common Shareholders $ 18,914 $ 21,202 $ 72,616 $ 82,398 Basic net income per share $ 0.27 $ 0.31 $ 1.06 $ 1.29 Diluted net income per share $ 0.27 $ 0.31 $ 1.06 $ 1.28 Regular dividends declared per share $ 0.3050 $ 0.2875 $ 1.1675 $ 1.1125 Weighted-average shares outstanding: Basic 68,907,749 67,712,311 68,430,841 64,041,255 Diluted 69,117,820 68,113,011 68,632,010 64,388,929
Four Corners Property Trust Consolidated Balance Sheets (In thousands, except share data) December 31, 2019 December 31, 2018 ASSETS Real estate investments: Land $ 690,575 $ 569,057 Buildings, equipment and improvements 1,277,159 1,236,224 Total real estate investments 1,967,734 1,805,281 Less: Accumulated depreciation (635,630) (614,584) Total real estate investments, net 1,332,104 1,190,697 Intangible lease assets, net 57,917 18,998 Total real estate investments and intangible lease assets, net 1,390,021 1,209,695 Cash and cash equivalents 5,083 92,041 Straight-line rent adjustment 39,350 30,141 Derivative assets 1,451 5,982 Other assets 10,165 5,239 Total Assets $ 1,446,070 $ 1,343,098 LIABILITIES AND EQUITY Liabilities: Long-term debt ($677,000 and $625,000 principal, respectively) $ 669,940 $ 615,892 Dividends payable 21,325 19,580 Rent received in advance 10,463 1,609 Derivative liabilities 5,005 - Other liabilities 12,596 7,053 Total liabilities 719,329 644,134 Equity: Preferred stock, $0.0001 par value per share, 25,000,000 shares authorized, zero shares issued and outstanding - - Common stock, $0.0001 par value per share, 500,000,000 shares authorized, 70,020,660 and 68,204,405 shares issued and outstanding, respectively 7 7 Additional paid-in capital 686,181 639,116 Accumulated other comprehensive (loss) income (3,539) 5,956 Noncontrolling interest 5,691 7,867 Retained earnings 38,401 46,018 Total equity 726,741 698,964 Total Liabilities and Equity $ 1,446,070 $ 1,343,098
Four Corners Property Trust FFO and AFFO (Unaudited) (In thousands, except share and per share data) Three Months Ended December 31, Year Ended December 31, 2019 2018 2019 2018 Funds from operations (FFO): Net income $ 18,993 $ 21,331 $ 72,939 $ 82,929 Depreciation and amortization 6,677 6,022 26,158 22,287 Realized gain on sales of real estate - (4,392) - (15,271) Provision for impairment - 1,530 - 1,530 Realized gain on exchange of real estate (1) - - - (228) FFO (as defined by NAREIT) $ 25,670 $ 24,491 $ 99,097 $ 91,247 Straight-line rent (2,199) (2,431) (9,207) (9,288) Stock-based compensation 810 930 3,602 3,967 Non-cash amortization of deferred financing costs 512 466 2,050 1,834 Other non-cash interest income 1 2 (4) 29 Non-real estate investment depreciation 103 19 154 67 Amortization of above and below market leases, net 109 18 158 64 Adjusted Funds from Operations (AFFO) $ 25,006 $ 23,495 $ 95,850 $ 87,920 (2) Fully diluted shares outstanding 69,407,212 68,522,331 68,937,263 64,798,250 FFO per diluted share $ 0.37 $ 0.36 $ 1.44 $ 1.41 AFFO per diluted share $ 0.36 $ 0.34 $ 1.39 $ 1.36 (1) Non-cash gain recognized for GAAP purposes on the transfer of nonfinancial assets related to an excess land parcel exchange. (2) Assumes the issuance of common shares for OP units held by non-controlling interest.
q42019supplemental210202
FOUR CORNERS PROPERTY TRUST NYSE: FCPT SUPPLEMENTAL FINANCIAL & OPERATING INFORMATION | Q4 2019 www.fcpt.com 1 | FCPT | Q4 2019
CAUTIONARY NOTE REGARDING FORWARD- LOOKING STATEMENTS This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include all statements that are not historical statements of fact and those regarding the Company’s intent, belief or expectations, including, but not limited to, statements regarding: operating and financial performance; announced transactions; and expectations regarding the making of distributions and the payment of dividends. Words such as “anticipate(s),” “expect(s),” “intend(s),” “plan(s),” “believe(s),” “may,” “will,” “would,” “could,” “should,” “seek(s)” and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements. Forward-looking statements speak only as of the date on which such statements are made and, except in the normal course of the Company’s public disclosure obligations, the Company expressly disclaims any obligation to publicly release any updates or revisions to any forward-looking statements to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which any statement is based. Forward-looking statements are based on management’s current expectations and beliefs and the Company can give no assurance that its expectations or the events described will occur as described. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by such forward-looking statements. For a further discussion of these and other factors that could cause the Company’s future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the Company’s most recent annual report on Form 10-K, and other risks described in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission. 2 | FCPT | Q4 2019
TABLE OF CONTENTS Financial Summary Page Consolidating Balance Sheet 4 Consolidated Income Statement 5 FFO and AFFO Reconciliation 6 Net Asset Value Components 7 Capitalization and Key Credit Metrics 8 Debt Summary 9 Debt Maturity Schedule 10 Debt Covenants 11 Real Estate Portfolio Summary Property Locations by Brand 12 Brand Diversification 13 Geographic Diversification 14 Lease Maturity Schedule 15 Exhibits Glossary and Non-GAAP Definitions 16 Reconciliation of Net Income to Adjusted EBITDAre 17 3 | FCPT | Q4 2019
CONSOLIDATING BALANCE SHEET As of 12/31/2019 As of 12/31/2018 ($000s, except shares and per share data) Real Estate Restaurant Consolidated Consolidated Unaudited Operations Operations Elimination FCPT FCPT ASSETS Real estate investments: Land $ 687,514 $ 3,061 $ - $ 690,575 $ 569,057 Buildings, equipment and improvements 1,265,341 11,818 - 1,277,159 1,236,224 Total real estate investments 1,952,855 14,879 - 1,967,734 1,805,281 Less: accumulated depreciation (630,250) (5,380) - (635,630) (614,584) Real estate investments, net 1,322,605 9,499 - 1,332,104 1,190,697 Intangible real estate assets, net 57,917 - - 57,917 18,998 Total real estate investments and intangible real estate assets, net 1,380,522 9,499 - 1,390,021 1,209,695 Cash and cash equivalents 4,032 1,051 - 5,083 92,041 Straight-line rent adjustment 39,350 - - 39,350 30,141 Other assets 5,648 4,517 - 10,165 5,239 Derivative assets 1,451 - - 1,451 5,982 Investment in subsidiary 10,028 - (10,028) - - Intercompany receivable 297 - (297) - - Total Assets $ 1,441,328 $ 15,067 $ (10,325) $ 1,446,070 $ 1,343,098 LIABILITIES AND EQUITY Liabilities: Term loan ($400,000, net of deferred financing costs) $ 395,012 $ - $ - $ 395,012 $ 393,279 Revolving facility ($250,000 capacity) 52,000 - - 52,000 - Unsecured notes ($225,000, net of deferred financing costs) 222,928 - - 222,928 222,613 Rent received in advance 10,463 - - 10,463 1,609 Derivative liabilities 5,005 - - 5,005 - Dividends payable 21,325 - - 21,325 19,580 Other liabilities 6,826 5,770 - 12,596 7,053 Intercompany payable - 297 (297) - - Total liabilities $ 713,559 $ 6,067 $ (297) $ 719,329 $ 644,134 Equity: Preferred stock $ - $ - $ - $ - $ - Common stock 7 - - 7 7 Additional paid-in capital 686,181 10,028 (10,028) 686,181 639,116 Accumulated other comprehensive (loss) income (3,539) - - (3,539) 5,956 Noncontrolling interest 5,691 - - 5,691 7,867 Retained earnings 39,429 (1,028) - 38,401 46,018 Total equity $ 727,769 $ 9,000 $ (10,028) $ 726,741 $ 698,964 Total Liabilities and Equity $ 1,441,328 $ 15,067 $ (10,325) $ 1,446,070 $ 1,343,098 4 | FCPT | Q4 2019
CONSOLIDATED INCOME STATEMENT ($000s, except shares and per share data) Three Months Ended December 31, Year Ended December 31, Unaudited 2019 2018 2019 2018 Revenues: Rental revenue $ 35,850 $ 33,156 $ 139,682 $ 123,665 Restaurant revenue 5,031 4,879 20,551 19,970 Total revenues 40,881 38,035 160,233 143,635 Operating expenses: General and administrative 3,168 3,447 13,934 13,206 Depreciation and amortization 6,780 7,571 26,312 23,884 Property expenses 508 143 1,579 433 Restaurant expenses 4,890 4,645 19,632 19,014 Total operating expenses 15,346 15,806 61,457 56,537 Interest expense (6,547) (5,293) (26,516) (19,959) Other income 72 77 944 781 Realized gain on sale, net - 4,392 - 15,271 Income tax expense (67) (74) (265) (262) Net income 18,993 21,331 72,939 82,929 Net income attributable to noncontrolling interest (79) (129) (323) (531) Net Income Attributable to Common Shareholders $ 18,914 $ 21,202 $ 72,616 $ 82,398 Basic net income per share $ 0.27 $ 0.31 $ 1.06 $ 1.29 Diluted net income per share $ 0.27 $ 0.31 $ 1.06 $ 1.28 Regular dividends declared per share $ 0.3050 $ 0.2875 $ 1.1675 $ 1.1125 Weighted-average shares outstanding: Basic 68,907,749 67,712,311 68,430,841 64,041,255 Diluted 69,117,820 68,113,011 68,632,010 64,388,929 5 | FCPT | Q4 2019
FFO & AFFO RECONCILIATION ($000s, except shares and per share data) Three Months Ended December 31, Year Ended December 31, Unaudited 2019 2018 2019 2018 Net income $ 18,993 $ 21,331 $ 72,939 $ 82,929 Depreciation and amortization 6,677 6,022 26,158 22,287 Realized gain on sales of real estate - (4,392) - (15,271) Provision for impairment - 1,530 - 1,530 Realized gain on exchange of real estate (1) - - - (228) FFO (as defined by NAREIT) $ 25,670 $ 24,491 $ 99,097 $ 91,247 Straight-line rent (2,199) (2,431) (9,207) (9,288) Stock-based compensation 810 930 3,602 3,967 Non-cash amortization of deferred financing costs 512 466 2,050 1,834 Other non-cash interest income 1 2 (4) 29 Non-real estate investment depreciation 103 19 154 67 Amortization of above and below market leases, net 109 18 158 64 Adjusted Funds From Operations (AFFO) $ 25,006 $ 23,495 $ 95,850 $ 87,920 Fully diluted shares outstanding(2) 69,407,212 68,522,331 68,937,263 64,798,250 FFO per diluted share $ 0.37 $ 0.36 $ 1.44 $ 1.41 AFFO per diluted share $ 0.36 $ 0.34 $ 1.39 $ 1.36 ___________________________ (1) Non-cash gain recognized for GAAP purposes on the transfer of nonfinancial assets related to an excess land parcel exchange. (2) Assumes the issuance of common shares for OP units held by non-controlling interests. 6 | FCPT | Q4 2019
NET ASSET VALUE COMPONENTS Purchase Total Square Avg. Rent Per Tenant Lease Term Annual Cash Base % Total Price # of Feet Square Foot EBITDAR Remaining Rent Cash Base Real Estate Portfolio as of 12/31/2019 ($000s) Properties (000s) ($) Coverage(1) (Yrs)(2) ($000s)(3) Rent(3) Olive Garden - 304 2,593 29 5.4x 10.7 74,171 53.2% LongHorn Steakhouse - 109 608 34 4.6x 9.6 20,471 14.7% Other Brands - Non-Darden - 273 1,313 31 3.1x 12.9 40,606 29.1% Other Brands - Darden - 13 120 35 3.9x 8.9 4,167 3.0% Total Owned Portfolio - 699 4,633 30 4.7x 11.1 139,415 100.0% Q4'19 Transaction Activity(4) Properties acquired 118,464 49 278 27 N/A 9.6 7,455 5.3% Land acquisition of Kerrow operated restaurant (5) 2,107 1 - - - - - - No sales in Q4 2019 Tangible Assets Book Value ($000s) Cash, cash equivalents, and restricted cash $ 5,083 Other tangible assets 6,185 Total Tangible Assets $ 11,268 Debt Face Value ($000s) Term loan $ 400,000 June 2024 note 50,000 December 2026 note 50,000 June 2027 note 75,000 December 2028 note 50,000 Revolving credit facility 52,000 Total Debt $ 677,000 Tangible Liabilities Book Value ($000s) Dividends payable $ 21,325 Rent received in advance, accrued interest, and other accrued expenses 16,791 Total Tangible Liabilities $ 38,116 Shares Outstanding Common stock (shares outstanding as of 12/31/2019) 70,020,660 Operating partnership units (OP units outstanding as of 12/31/2019) 289,392 Total Common Stock and OP Units Outstanding 70,310,052 ___________________________ (1) See glossary on page 16 for tenant EBITDAR and EBITDAR coverage definitions; 90% of portfolio ABR included in calculations based on portfolio reporting obligations. (2) Lease term weighted by annual cash base rent (ABR) as defined in glossary. (3) Current scheduled minimum contractual rent as of 12/31/2019. (4) FCPT acquired 49 properties and leasehold interests in Q4 2019; FCPT had no dispositions in the quarter. (5) FCPT purchased the land of a Kerrow operated Longhorn Steakhouse that previously had a third-party lease. 7 | FCPT | Q4 2019
CAPITALIZATION & KEY CREDIT METRICS % of Market Q4 2019 Capitalization ($000s, except shares and per share data) Capitalization Equity: Share price (12/31/2019) $ 28.19 Shares and OP units outstanding (12/31/2019) 70,310,052 Equity Value $ 1,982,040 74.5% Debt: Term loan $ 400,000 15.0% Revolving credit facility 52,000 2.0% Unsecured notes 225,000 8.5% Total Debt $ 677,000 25.5% Total Market Capitalization $ 2,659,040 100.0% Less: cash (5,083) Implied Enterprise Value $ 2,653,957 Dividend Data (fully diluted) Q4 2019 2019 Common dividend per share $0.3050 $1.1675 AFFO per share $0.36 $1.39 AFFO payout ratio 84.7% 84.0% (1) (2) Credit Metrics Net Debt Adjusted EBITDAre Ratio Net debt to Adjusted EBITDAre $ 671,917 $ 129,592 5.2x ___________________________ (1) Principal debt amount less cash and cash equivalents. (2) Current quarter annualized. See glossary on page 16 for definitions of EBITDAre and Adjusted EBITDAre and page 17 for reconciliation to net income. 8 | FCPT | Q4 2019
DEBT SUMMARY Balance as of Cash Interest Rate Weighted December 31, 2019 as of December 31, Average (4) Debt Type Maturity Date ($000s) % of Debt 2019 Maturity (Yrs.) Credit Facility(1) Revolving facility Nov-21 $ 52,000 7.7% 3.36% 1.9 Term loan Nov-22 150,000 22.2% 3.06% 2.9 Term loan Nov-23 150,000 22.2% 2.96% 3.9 Term loan Mar-24 100,000 14.8% 2.96% 4.2 Principal Amount $ 452,000 Unsecured Notes(2) June 2017 Jun-24 $ 50,000 7.4% 4.68% 4.4 June 2017 Jun-27 75,000 11.1% 4.93% 7.4 December 2018 Dec-26 50,000 7.4% 4.63% 7.0 December 2018 Dec-28 50,000 7.4% 4.76% 9.0 Principal Amount $ 225,000 Mortgages Payable(3) None - - - - Total/Weighted Average $ 677,000 100.0% 3.61% 4.6 Unamortized Deferred Financing Costs Credit facility $ (4,988) Unsecured notes (2,072) Debt Carrying Value (GAAP) $ 669,940 Fixed rate $ 525,000 77.5% Variable rate $ 152,000 22.5% Credit Rating (Fitch): BBB- ___________________________ (1) Borrowings under the term loan accrue interest at an average rate of LIBOR plus 1.29%. FCPT has entered into interest rate swaps that fix 75% of the term loan's rate exposure through November 2022, 63% through November 2023, and 38% through March 2024. The all-in cash interest rate on the 75% of the term loan that is fixed is approximately 3.0%, 3.4%, and 3.4% for 2020, 2021, and 2022, respectively. A LIBOR rate of 1.76% as of 12/31/2019 is used for the 25% of term loans that are not hedged. (2) These notes are senior unsecured fixed rate obligations of the Company. (3) As of 12/31/2019, FCPT had no mortgage debt and 100% of FCPT properties were unencumbered. (4) Excludes amortization of deferred financing costs on the credit facility and unsecured notes. 9 | FCPT | Q4 2019
FCPT DEBT MATURITY SCHEDULE Current Debt Maturity Schedule Staggered 4.6-year weighted (1) average term for notes/bonds Undrawn Revolver Capacity 78% fixed rate debt Drawn Revolver 3.6% weighted average cash interest rate Unsecured Term Loan $198 million available on revolver Unsecured Notes $250 $150 $150 $150 $100 $75 $50 $50 52 $50 $0 2020 2021 2022 2023 2024 2025 2026 2027 2028 % of Total Debt 0% 8% 22% 22% 22% 0% 7% 11% 7% Outstanding ___________________ Figures as of 12/31/2019. (1) The revolving credit facility expires on November 9, 2021 subject to FCPT’s availability to extend the term for two additional six-month periods to November 9, 2022. 10 | FCPT | Q4 2019
DEBT COVENANTS As of December 31, 2019 The following is a summary of the key financial covenants for our unsecured credit facility. These calculations are not based on U.S. GAAP measurements and are presented to demonstrate compliance with current credit covenants. Covenants Requirement Q4 2019 Limitation on incurrence of total debt ≤ 60% of consolidated capitalization value 32.8% Limitation on incurrence of secured debt ≤ 40% of consolidated capitalization value 0.0% Fixed charge coverage ratio ≥ 1.50x 5.4x Limitation on unencumbered leverage ≤ 60% 32.5% Unencumbered interest coverage ratio ≥ 1.75x 6.0x 11 | FCPT | Q4 2019
PROPERTY LOCATIONS BY BRAND Lease Count: (1) (51) 702 Leases (1) 58 Brands ___________________________ Figures as of 12/31/2019 (1) FCPT owns 699 properties as of 12/31/2019 with 702 leases. 12 | FCPT | Q4 2019
BRAND DIVERSIFICATION FCPT Portfolio Brands FCPT total ABR(1): Square Feet % of $139.4 million (1) Rank Brand Name Number (000s) ABR 1 Olive Garden 304 2,593 53.2% 2 Longhorn Steakhouse 109 608 14.7% 3 Chili's 61 336 9.0% 15% 4 Red Lobster 21 155 3.4% 109 units 5 Burger King 22 70 2.2% 6 Buffalo Wild Wings 18 111 2.2% 7 Bahama Breeze 9 84 2.1% 8 Bob Evans 17 93 1.9% 9% 9 KFC 20 57 1.2% 61 units 10 Arby's 13 41 1.0% 53% 11 BJ's Restaurant 6 49 0.9% 12 Taco Bell 11 28 0.7% 304 units 3% 13 units Other Darden2 13 Seasons 52 2 18 0.5% 14 Outback Steakhouse 5 33 0.5% 15 McDonald's 5 23 0.5% Other Restaurants 16 McAlister's Deli 4 15 0.4% 19% 17 Wendy's 6 21 0.4% 202 units 18 Texas Roadhouse 5 36 0.3% 39 brands 19 Starbucks 5 11 0.3% 20 Chick-Fil-A 4 19 0.3% 21 Pizza Hut 6 15 0.3% 22 Steak 'N Shake 4 15 0.3% 23 Popeyes 4 12 0.3% 24 Eddie V's 1 9 0.2% Non-Restaurant Retail 25 Panera 3 17 0.2% 1% / 13 units / 12 brands 26-58 Other 37 152 2.8% (3) Total Lease Portfolio 702 4,619 100% ___________________ 1. Represents current scheduled minimum Annual Cash Base Rent (ABR) as of 12/31/2019, as defined in glossary. 2. Other Darden represents Bahama Breeze, Cheddar’s, Seasons 52, and Eddie V’s branded restaurants. 13 | FCPT | Q4 2019
GEOGRAPHIC DIVERSIFICATION ND WA MT MN ME SD WI ID MI VT NH OR WY NY IA MA NE CT RI PA OH NV IL IN NJ UT CO MD DE KS MO WV KY VA CA TN OK NC (1) AR % ABR AZ NM SC ≥10.0% MS AL GA 5.0%–10.0% LA TX 3.0%–5.0% 2.0%–3.0% 1.0 %–2.0% FL <1.0% No Properties State % ABR Leases TX 12.5% 72 IL 3.4% 32 CO 2.2% 20 AZ 11 1.7% KS 1.0% 5 FL 10.8% 63 PA 3.0% 19 MD 2.2% 16 OK 10 1.7% Other 7.7% 51 OH 6.9% 50 CA 2.8% 14 SC 2.1% 14 MN 9 1.6% GA 6.3% 43 NC 2.6% 18 NY 2.0% 13 NV 8 1.6% MI 4.3% 38 VA 2.4% 19 WI 2.0% 18 LA 9 1.5% IN 4.0% 42 MS 2.4% 18 AL 1.7% 15 AR 8 1.2% TN 3.6% 28 IA 2.3% 22 KY 1.7% 11 WV 6 1.1% ___________________________ (1) Annual cash base rent (ABR) as defined in glossary. 14 | FCPT | Q4 2019
LEASE MATURITY SCHEDULE Lease Maturity Schedule (% Annualized Cash Base Rent1) 16.1% 99.7% occupied2 as of 12/31/2019 14.1% 13.1% 11.3% 11.4% Weighted average lease term of 10.6% 11.1 years 7.5% Less than 5.1% of rental income matures prior to 2027 3.0% 3.3% 2.5% 1.0% 0.9% 1.0% 0.9% 1.0% 0.5% 0.7% 0.7% 0.2% 0.2% 0.1% 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 ___________________ Note: Excludes renewal options. All data as of 12/31/2019. 1. Annual cash base rent (ABR) as defined in glossary. 2. Occupancy based on portfolio square footage. 15 | FCPT | Q4 2019
GLOSSARY AND NON-GAAP DEFINITIONS Non-GAAP Definitions and Cautionary Note Regarding Forward-Looking Statements: This document includes certain non-GAAP financial measures that employed by other REITs. condition and results from operations, the utility of FFO as a measure management believes are helpful in understanding our business, as of our performance is limited. FFO is a non-GAAP measure and further described below. Our definition and calculation of non-GAAP Tenant EBITDAR is calculated as EBITDA plus rental expense. should not be considered a measure of liquidity including our ability financial measures may differ from those of other REITs and therefore EBITDAR is derived from the most recent data provided by tenants to pay dividends or make distributions. In addition, our calculations of may not be comparable. The non-GAAP measures should not be that disclose this information, representing approximately 90% of our FFO are not necessarily comparable to FFO as calculated by other considered an alternative to net income as an indicator of our ABR. For Darden, EBITDAR is updated once annually by multiplying REITs that do not use the same definition or implementation performance and should be considered only a supplement to net the most recent individual property level sales information (reported guidelines or interpret the standards differently from us. Investors in income, and to cash flows from operating, investing or financing by Darden twice annually to FCPT) by the brand average EBITDA our securities should not rely on these measures as a substitute for any activities as a measure of profitability and/or liquidity, computed in margin reported by Darden in its most recent comparable period, and GAAP measure, including net income. accordance with GAAP. then adding back property level rent. FCPT does not independently verify financial information provided by its tenants. Adjusted Funds From Operations “AFFO” is a non-GAAP ABR refers to annual cash base rent as of 12/31/2019 and represents measure that is used as a supplemental operating measure specifically monthly contractual cash rent, excluding percentage rents, from Tenant EBITDAR coverage is calculated by dividing our reporting for comparing year over year ability to fund dividend distribution leases, recognized during the final month of the reporting period, tenants’ most recently reported EBITDAR by annual in-place cash from operating activities. AFFO is used by us as a basis to address our adjusted to exclude amounts received from properties sold during that base rent. ability to fund our dividend payments. We calculate adjusted funds period and adjusted to include a full month of contractual rent for from operations by adding to or subtracting from FFO: properties acquired during that period. Funds From Operations (“FFO”) is a supplemental measure of our 1. Transaction costs incurred in connection with the acquisition of performance which should be considered along with, but not as an real estate investments EBITDA represents earnings (GAAP net income) plus interest alternative to, net income and cash provided by operating activities as 2. Stock-based compensation expense expense, income tax expense, depreciation and amortization. a measure of operating performance and liquidity. We calculate FFO 3. Amortization of deferred financing costs in accordance with the standards established by NAREIT. FFO 4. Other non-cash interest expense EBITDAre is a non-GAAP measure computed in accordance with represents net income (loss) (computed in accordance with GAAP), 5. Non-real estate depreciation the definition adopted by the National Association of Real Estate excluding gains (or losses) from sales of property and undepreciated 6. Merger, restructuring and other related costs Investment Trusts (“NAREIT”) as EBITDA (as defined above) land and impairment write-downs of depreciable real estate, plus real 7. Impairment charges on non-real estate assets excluding gains (or losses) on the disposition of depreciable real estate estate related depreciation and amortization (excluding amortization 8. Amortization of capitalized leasing costs and real estate impairment losses. of deferred financing costs) and after adjustments for unconsolidated 9. Straight-line rent revenue adjustment partnerships and joint ventures. We also omit the tax impact of non- 10. Amortization of above and below market leases Adjusted EBITDAre is computed as EBITDAre (as defined above) FFO producing activities from FFO determined in accordance with the 11. Debt extinguishment gains and losses excluding transaction costs incurred in connection with the acquisition NAREIT definition. 12. Recurring capital expenditures and tenant improvements of real estate investments and gains or losses on the extinguishment of debt. Our management uses FFO as a supplemental performance measure AFFO is not intended to represent cash flow from operations for the because, in excluding real estate related depreciation and amortization period, and is only intended to provide an additional measure of We believe that presenting supplemental reporting measures, or non- and gains and losses from property dispositions, it provides a performance by adjusting the effect of certain items noted above GAAP measures, such as EBITDA, EBITDAre and Adjusted performance measure that, when compared year over year, captures included in FFO. AFFO is a widely-reported measure by other REITs; EBITDAre, is useful to investors and analysts because it provides trends in occupancy rates, rental rates and operating costs. We offer however, other REITs may use different methodologies for important information concerning our on-going operating this measure because we recognize that FFO will be used by investors calculating AFFO and, accordingly, our AFFO may not be performance exclusive of certain non-cash and other costs. These non- as a basis to compare our operating performance with that of other comparable to other REITs. GAAP measures have limitations as they do not include all items of REITs. However, because FFO excludes depreciation and income and expense that affect operations. Accordingly, they should amortization and captures neither the changes in the value of our Properties refers to properties available for lease. not be considered alternatives to GAAP net income as a performance properties that result from use or market conditions, nor the level of measure and should be considered in addition to, and not in lieu of, capital expenditures and capitalized leasing commissions necessary to GAAP financial measures. Our presentation of such non-GAAP maintain the operating performance of our properties, all of which measures may not be comparable to similarly titled measures have real economic effect and could materially impact our financial 16 | FCPT | Q4 2019
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDARE ($000s, except shares and per share data) Three Months Ended December 31, Year Ended December 31, Unaudited 2019 2018 2019 2018 Net Income $ 18,993 $ 21,331 $ 72,939 $ 82,929 Adjustments: Interest expense 6,547 5,293 26,516 19,959 Income tax expense 67 74 265 262 Depreciation and amortization 6,780 7,571 26,312 23,884 EBITDA(1) 32,387 34,269 126,032 127,034 Adjustments: Gain on dispositions and exchange of real estate - (4,392) - (15,271) Provision for impairment of real estate - 1,530 - 1,530 EBITDAre (1) 32,387 31,407 126,032 113,293 Adjustments: Real estate transaction costs 11 - 85 - Gain or loss on extinguishment of debt - - - - Adjusted EBITDAre (1) 32,398 31,407 126,117 113,293 Annualized Adjusted EBITDAre $ 129,592 $ 125,628 $ 126,117 $ 113,293 ___________________________ (1) See glossary on page 16 for non-GAAP definitions. 17 | FCPT | Q4 2019
FOUR CORNERS PROPERTY TRUST NYSE: FCPT SUPPLEMENTAL FINANCIAL & OPERATING INFORMATION | Q4 2019 www.fcpt.com 18 | FCPT | Q4 2019