Four Corners Property Trust, Inc. · NYSE:FCPT
Four Corners Property Trust — Investor Presentation (March 2017)
26 slides from Four Corners Property Trust's investor presentation, Mar 20, 2017
Slide 1: Four Corners Property Trust Investor Presentation March 2017
FOUR CORNERS PROPERTY TRUST NYSE: FCPT INVESTOR PRESENTATION | MARCH 2017 www.fcpt.Com
Slide 2: Forward Looking Statements and Disclaimers
FORWARD LOOKING STATEMENTS AND DISCLAIMERS Cautionary Note Regarding Forward-Looking Statements: This presentation 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 t
Slide 3: Agenda
AG E N D A Company Overview and Update Page 3 Key Investment Highlights Page 9 Diversification and Acquisition Strategy Page 16 Financial Update & Key Credit Strengths Page 23 3 | FCPT | MARCH 2017
Slide 4: Senior Management Team
SENIOR MANAGEMENT TEAM Former Board member and Chair of the Finance and Real Estate Committee at Darden Restaurants, Inc. Private investor in net lease retail real estate Member of the Board of Directors of Macy’s, Inc. William Lenehan President and CEO? Former Board member and Chairman of the Inves
Slide 5: Overview of FCPT
OVER VIEW OF FCPT Four Corners Property Trust (“FCPT”) is primarily engaged in the ownership, acquisition, and leasing of restaurant properties 484 properties, diversified by geography and brand, 416 of which are leased to Darden under long-term triple-net leases 5 initial Darden restaurant brands:
Slide 6: Progress since the spin-off and areas of focus through 2017
COMPANY UPDATE Since the spin-off was completed in late 2015, FCPT has made significant progress achieving its goals, including portfolio diversification and improved access to capital Highlights Since Spin-Off Areas of Focus through 2017 Darden Restaurants is performing well and continues to • Cont
Slide 7: FCPT Closed Acquisitions
FCPT CLOSED ACQUISITIONS FCPT Closed 2016 / 2017 YTD Acquisitions # of Term Tenant Properties Location Guarantor Info Purchase Price Cap Rate (yrs) Announced Pizza Hut 6 IL, IN 150-unit operator; 40 Pizza Huts $5,700,000 7.2% 20 7/18/2016 Wendy’s 1 TX Not disclosed $2,100,000 6.5% 10 8/2/2016 Arby’s
Slide 8: Geographically Diverse Portfolio
GEOGRAPHICALLY DIVERSEPORTFOLIO 484 Properties 44 States 19 Brands 3.5mm sq ft Portfolio at Inception Acquired Properties Note: Map and figures updated as of 3/17/2017; Excludes six owned or ground leased properties that comprise the LongHorn San Antonio Business, which are operated by a taxable REI
Slide 9: Agenda
AGENDA Company Overview and Update Page 3 Key Investment Highlights Page 9 Diversification and Acquisition Strategy Page 16 Financial Update & Key Credit Strengths Page 23 9 | FCPT | MARCH 2017
Slide 10: High Quality Portfolio
HIGH QUALITY PORT FOLIO Summary of FCPT Portfolio 484 properties Properties: • 93% Investment grade tenancy 19 brands – 12 Quick Service and 7 Casual Dining concepts 44 states Geography: Only Florida (11.7%) and Texas (11.2%) are above 10% of NOI 13.7 years Term Remaining: Under 1% of NOI with <10 y
Slide 11: Portfolio Diversification
PORT FOLIO DIVERSIFICATION Cash Rental Revenue by Brand 6% 74% 69% 12% 20% 19% June 2016: March 2017: Rental Revenue of $94.4 mm Rental Revenue of $102.1 mm1 1. Scheduled minimum contractual rent for the full year of 2017 for the portfolio as of 3/17/2017. Properties acquired in 2017 have rents annu
Slide 12: Best-in-Class Rent Coverage
BEST—IN—CLASS RENT COVERAGE FCPT EBITDAR Coverage by Spin-Off Portfolio Quartile 5.9x FCPT Portfolio Quartiles at Spin-Off (93% of current NOI as of March 2017) FCPT 4.2x Average: 4.2x (1) 3.6x Peer Avg: 3.1x 3.0x (1) FCPT’s FCPT’s FCPT’s FCPT’s 4th Quartile 3rd Quartile 2nd Quartile Top Quartile of
Slide 13: Prolific Brands and Low Rent Provide Stable Cash Flows
PROLIFIC BRANDS AN D LOW RENT PROVIDE STABLE CASH FLOWS FCPT’s initial properties have proven to be resilient through multiple market cycles with the bottom quartile of properties averaging 3.2x rent coverage from 2006 – 2015 Historical Rent Coverage – FCPT Fourth Quartile (Lowest) of Properties(1)
Slide 14: Lease Maturity Schedule
LEASE MATURITY SCHEDULE Lease Maturity Schedule (% of Rental Revenue) Weighted average lease 16.7% term of 13.7 years 15.7% 14.8% 14.4% 13.1% 10.4% 9.6% Less than 1% of rental income matures over the next 10 years 3.8% 0.5% 0.1% 0.0% 0.0% 0.1% 0.1% 0.0% 0.2% 0.0% 0.1% 0.2% 0.2% 2017 2018 2019 2020 2
Slide 15: FCPT's Portfolio Compares Favorably Across Major Metrics
FCPT’S PORTFOLIO COMPARES FAVORABLY ACROSS MAJOR METRICS EBITDAR Coverage (1) % Investment Grade Tenants (2) % Tenants 93% 100% 79% 50% 44% 98% included: 4.2x 3.8x Peer Average: 3.0x 2.7x 3.0x 2.6x 41% 46% 47% Peer Average: 35% 38% 20% 21% N/A N/A Ratings VEREIT STORE Realty Spirit N STOR SRC VER O
Slide 16: Agenda
AGENDA Company Overview and Update Page 3 Key Investment Highlights Page 9 Diversification and Acquisition Strategy Page 16 Financial Update & Key Credit Strengths Page 23 16 | FCPT | MARCH 2017
Slide 17: Business Plan and Diversification Strategy
BUSINESS PLAN AND DIVERSIFICATION STRATEGY FCPT has a core portfolio that provides stable cash flow, as well as a strong balance sheet to support diversification growth objectives 1? Start with 100% concentration in casual dining, but an extremely strong tenant with an investment grade credit rating
Slide 18: FCPT Acquisition Philosophy and Underwriting Criteria
FCPT ACQUISITION PHILOSOPHY AND UNDERWRITING CRITERIA Acquisition Philosophy • Acquire nationally recognized branded restaurants that are well located with creditworthy lease guarantors • Purchase assets only when accretive to cost of capital • Increase diversification by targeting different brands,
Slide 19: Conceptual Underwriting Strikezone
CONCEPTUAL UNDERWRITING STRIKEZONE Valuation to Score Matrix FCPT is disciplined in its underwriting, passing on properties with weak real estate, weak credit or aggressive pricing Expensive Dilutive FCPT Rate) Long Term Cap WACC in Strike (Going Zone Valuation Cheap Screened / Passed Accretive Dist
Slide 20: Vast Addressable Market Within Restaurant Industry Subsectors
VAST ADDRESSABLE MARKET WITHIN RESTAURANT INDUSTRY SUBSECTORS US GDP – $17.9 Trillion Consumption Investment Government $12.3T $3.0T $3.2T Net Exports Retail Sales -$0.5T $4.7T Food Services (13% of Retail Sales, $620bn) Family Fine Non-Quick Service Casual Dining Buffet Dining Restaurant $255bn $17
Slide 21: Rapid Franchisee Consolidation Within Restaurant Industry
RAPID FRANCHISEE CONSOLIDATION WITHIN REST AURANT INDUSTRY Units Owned by the Top 200 Franchisees Average units per Top 200 Franchisees 28,000 150 25,176 135 126 24,000 23,177 21,831 120 116 20,331 109 20,000 102 17,887 18,408 105 92 16,715 89 16,000 90 84 75 12,000 60 45 8,000 30 4,000 15 0 0 2009
Slide 22: Thoughtful Brand Selection Aimed at Protecting Cash Flow
THOUGHTFUL BRAND SELECTION AIMED ATPROTECTING CASH FLOW Average Unit Sales Volume ($000s) Casual Dining $6,000 $10,400 $5,000 Fast FCPT Prime Acquisition Casual Target Range $4,000 Quick Service $3,000 $2,000 $1,000 $0 FCPT pursues properties within the median range of Casual Dining, Fast Casual and
Slide 23: Agenda
AGENDA Company Overview and Update Page 3 Key Investment Highlights Page 9 Diversification and Acquisition Strategy Page 16 Financial Update & Key Credit Strengths Page 23 23 | FCPT | MARCH 2017
Slide 24: Summary Capitalization and Financials
SUMMARY CAPITALIZATION AND FINANCIALS Summary Capitalization and Financials Current Capitalization Current Trading Metrics Cash NOI ($mm)1 $102.1 ($mm, except per share) Share price (3/17/2017) $21.81 Implied Cap Rate 5.9% Shares and OP units outstanding 60.4 Consensus 2017 AFFO per share (average)
Slide 25: FCPT Key Investment Highlights
FCPT KEY INVESTMENT HIGHLIGHTS High Quality Well-located assets diversified geographically across 44 states in the U.S. Portfolio Darden property-level revenue 50% above casual dining peers Diversified by Recent sales of Darden branded assets demonstrates strong underlying property Geography value a
Slide 26: Four Corners Property Trust
FOUR CORNERS PROPERTY TRUST NYSE : FCPT
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