Four Corners Property Trust, Inc. · NYSE:FCPT
Four Corners Property Trust — Investor Presentation (October 2015)
41 slides from Four Corners Property Trust's investor presentation, Oct 30, 2015
Slide 1: Investor Presentation October 2015
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 1 INVESTOR PRESENTATION | OCTOBER 2015 www.fourcornerspropertytrust . com FOUR CORNERS PROPERTY TRUST N YS E : F C P T
Slide 2: Forward Looking Statements and Disclaimers
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 2 FORWARD LOOKING STATEMENTS AND DISCLAIMERS Forward Looking Statements This presentation contains forward-looking statements regarding the Company’s expected future financial condition, results of operations, cash flows, funds from operations, business s
Slide 3: Presenters
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 3 PRESENTERS William Lenehan President and CEO Gerald Morgan CFO Member of Board of Directors and former Chair of the Finance and Real Estate Committee at Darden Restaurants, Inc.1 Private investor in net lease retail real estate Member of Board of
Slide 4: Spin-Off Transaction Summary
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 4 `` Four Corners Property Trust, Inc. NYSE: FCPT San Francisco, California 42,443,994 common shares outstanding1 100% spin-off to shareholders of Darden Restaurants, Inc. (NYSE: DRI) One share of FCPT common stock for every three shares of DRI common sto
Slide 5: Overview of Four Corners Property Trust
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 5 OVERVIEW OF FOUR CORNERS PROPERTY TRUST Four Corners Property Trust (“Four Corners”, the “Company”) will be primarily engaged in the ownership, acquisition, and leasing of restaurant properties Four Corners will be the only REIT (1) specializing in
Slide 6: Key Investment Highlights
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 6 Well-located high-quality assets, diversified by geography and brand KEY INVESTMENT HIGHLIGHTS Long-term, triple-net lease structure provides stable cash flow with embedded rent growth Investment grade tenant with best in class EBITDAR coverage and appr
Slide 7: Geographic Diversification
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 7 GEOGRAPHIC DIVERSIF ICATION Seasons 52 (2) Olive Garden (300) LongHorn Steakhouse (104) (1) Bahama Breeze (11) Wildfish Seafood Grille (1) ___________________________ 1. Excludes six owned or ground leased properties that comprise the LongHorn San Anton
Slide 8: Asset Selection
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 8 ASSET SELECTION Asset filter Rationale Rigorous asset selection process results in strong initial portfolio Select filtering criteria included: – Operating below a minimum EBITDAR margin threshold – Unable to support a minimum rent threshold – Identif
Slide 9: Portfolio Overview
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 9 PORTFOLIO OVERVIEW ABR (1) by Brand (2) ABR (1) by Geography (2) 74.3% 19.9% 4.7% 0.7% 0.3% ___________________________ 1. Represents Annualized Base Rent (“ABR”) 2. Excludes six owned or ground leased properties that comprise the LongHorn San Antonio B
Slide 10: Portfolio Operating Performance
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 10 PORTFOLIO OPERATING PERFORMANCE 3.1x 3.6x 4.2x 5.9x 0.0x 2.0x 4.0x 6.0x 4th Quartile 3rd Quartile 2nd Quartile Top Quartile EBITDAR Coverage (1) Average Unit Volumes (2) $3,151 $3,935 $4,574 $5,934 $0 $2,000 $4,000 $6,000 4th Quartile 3rd Quartile 2nd
Slide 11: Compelling Demographics
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 11 $40,000 $45,000 $50,000 $55,000 $60,000 $65,000 $70,000 40,000 45,000 50,000 55,000 60,000 65,000 70,000 75,000 80,000 85,000 A v era g e H o u s e h old I n c om e Average Population NNN REIT Avg. = $98k median household income and ~63,000 average pop
Slide 12: Case Study: Olive Garden (Ontario, CA)
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 12 CASE STUDY: OLIVE GARDEN (ONTARIO, CA) • Located within the Los Angeles MSA • Immediate proximity to the Interstate 15 and Interstate 10 Interchange (463,000 VPD) • Outparcel to the Ontario Mills, a 1.4 million SF outlet mall that features AMC Theatres
Slide 13: Case Study: LongHorn Steakhouse (Hanover, MD)
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 13 CASE STUDY: LONGHORN STEAKHOUSE (HANOVER, MD) Key Statistics • Trophy property located within the Baltimore- Washington MSA • Outparcel to the Arundel Mills Outlet Mall, Maryland Live! Casino, a Walmart and a Costco • Arundel Mills is majority owned an
Slide 14: Darden: Investment Grade with Strong Financial Performance
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 14 Segment Profitability(2) Segment Profit(2) $148 $192 $53 $57 $15 $18 $32 $44 Margin 16.2% 20.3% 14.9% 14.9% 14.7% 15.7% 14.3% 17.9% Profit growth 29.4% 7.1% 16.3% 38.2% DARDEN: INVESTMENT GRADE WITH STRONG FINANCIAL PERFORMANCE Darden is rated Ba1/BB
Slide 15: Same-Restaurant Sales Growth Benchmarking
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 15 1.9% (1.7%) 2.9% 2.2% 5.0% 5.4% 6.1% 5.4% 2.2% 3.6% SAME-RESTAURANT SALES GROWTH BENCHMARKING Dard e n c o n c e pt s Ca s u a l d in in g p e e rs Most recent quarter One quarter prior Two quarters prior 0.9% 0.6% 1.0% 0.1% 4.0% 3.4% 7.2% 4.4% 2.7% 3.
Slide 16: Summary Lease Terms and Structure
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 16 SUMMARY LEASE TERMS AND STRUCTURE Average Initial Term: ~15 years, none less than 12 Initial annual cash rent: $94mm Structure: Individual property triple-net leases: Tenant responsible for repair and maintenance costs, property tax, insurance and rest
Slide 17: Positioning Relative to Net Lease Peers
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 17 POSIT IONING RELATIVE TO NET LEASE PEERS Four Corners compares favorably to its retail net lease REIT peer group ___________________________ Source: Company filings 1. STOR EBITDAR coverage represents a unit’s fixed charge coverage ratio before taking
Slide 18: Business Plan and Growth Strategy
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 18 BUSINESS PLAN AND GROWTH STRATEGY Four Corners has a core portfolio that provides stable cash flow, as well as a strong balance sheet to support external growth and diversification Harvest organic cash flow growth from initial portfolio of triple-net
Slide 19: Robust Market Opportunity
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 19 % of Total Restaurants (2) 89% 54% 15% 26% 87% 100% 100% 46% 81% 82% 10% 3% 1% 3% ROBUST MARKET OPPORTUNITY Given its size and growth profile, the U.S. restaurant industry is expected to provide attractive opportunities to grow and diversify Four Corne
Slide 20: Numerous Paths to Growth
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 20 NUMEROUS PATHS TO GROWTH Sale-leasebacks with other third-party restaurant operators Acquisitions or asset swaps in the 1031 exchange market with ability to issue OP units to sellers Acquisitions of triple-net lease properties or portfolios from other
Slide 21: Flexible Capital Structure Poised for Growth
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 21 FLEXIBLE CAPITAL STRUCTURE POISED FOR GROWTH Capitalization $350 $400 $0 $200 $400 $600 2016 2017 2018 2019 2020 2021 2022+ (In millions) Undrawn RCF Term Loan Debt Maturity Profile At closing, Four Corners will have low leverage and substantial liquid
Slide 22: Summary Pro Forma Financial Metrics
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 22 SUMMARY PRO FORMA FINANCIAL METRICS Key Real Estate Financial Metrics ($mm, except percentage and per share figures) Annualized as of June 30, 20151,2 Value per share3 Rental income (cash) $94.4 Real estate selling, general and administrative4 (10.3) R
Slide 23: Financial Highlights
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 23 FINANCIAL HIGHLIGHTS Four Corners will focus on maintaining a conservative balance sheet with financial flexibility Financial Highlights Leverage Relative to Net Lease Peers(1) 4.6x 5.5x 4.5x 5.9x 6.3x 6.7x 7.5x 4.6x 5.5x 5.7x 6.2x 6.3x 6.7x 8.4x 0.0x
Slide 24: Strong Corporate Governance
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 24 STRONG CORPORATE GOVERNANCE The Company will have an experienced, independent board and corporate governance practices in line with best-in-class REIT standards Majority independent directors Annual elections of all board members No stockholder r
Slide 25: Key Investment Highlights
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 25 Well-located high-quality assets, diversified by geography and brand KEY INVESTMENT HIGHLIGHTS Long-term, triple-net lease structure provides stable cash flow with embedded rent growth Investment grade tenant with best in class EBITDAR coverage and app
Slide 26: Company Overview Appendix
COMPANY OVERVIEW APPENDIX
Slide 27: Management Biographies
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 27 William H. Lenehan, age 39, is the President and Chief Executive Officer of Four Corners and joined Four Corners’ board in 2015. Mr. Lenehan is a real estate industry professional with significant experience in net leased properties and public compan
Slide 28: Strategic Rationale for Spin Transaction
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 28 STRATEGIC RATIONALE FOR SPIN TRANSACTION On June 23, 2015, Darden announced its plan to separate its business into two separate and independent publicly traded companies Darden will continue to own, operate and franchise a broad range of restaurant
Slide 29: Four Corners' Portfolio
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 29 Darden Pre-Transaction Sale Leaseback Transactions Four Corners Property Trust Number of restaurants 1,534 64 418 Ground lease (%) 45.9% 0.0% 0.0% Owned (%) 37.2% 100.0% 100.0% Fully leased (%) 16.9% NA NA Tenant TTM EBITDAR / Rent 7.1x 3.5x 4.2x Tenan
Slide 30: E&P Distribution
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 30 E&P DISTRIBUTION Following a conversion from a C-corporation into a REIT, the REIT must distribute by the end of its first REIT year all earnings and profits (“E&P”) accumulated during non-REIT years By December 31, 2016, Four Corners will be requi
Slide 31: Franchisee Information
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 31 FRANCHISEE INFORMATION Top 10 US franchisees Restaurant industry growth leaders1 If able to develop educated view on which individual franchisees, brands and properties are stronger credits within the non-rated set of entities, Four Corners Property Tr
Slide 32: Case Study: Olive Garden (Stone Creek, OH)
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 32 CASE STUDY: OLIVE GARDEN (STONE CREEK, OH) • Located within the Cincinnati MSA • Immediate proximity to Interstate 275 (70,000 VPD) and Colerain Avenue exchange (38,000 VPD) • Proximity to Bed Bath & Beyond, Regal Cinemas Target and TJ Maxx • Strong re
Slide 33: Case Study: Bahama Breeze (Sunrise, FL)
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 33 CASE STUDY: BAHAMA BREEZE (SUNRISE, FL) • Trophy property located within the Miami / Ft. Lauderdale MSA • Immediate proximity to the Sawgrass Expressway (72,000 VPD) • Outparcel to Sawgrass Mills, a 2.2 million SF outlet mall owned by Simon Property Gr
Slide 34: Case Study: St. Johns Town Center (Jacksonville, FL)
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 34 CASE STUDY: ST. JOHNS TOWN CENTER (JACKSONVILLE, FL) Bahama Breeze Key Statistics Season 52 Key Statistics Key Highlights • Trophy properties located within the Jacksonville MSA • Immediate proximity to the Interstate 295 (77,000 VPD) and J Turner Butl
Slide 35: Case Study: LongHorn Steakhouse (Orlando, FL)
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 35 CASE STUDY: LONGHORN STEAKHOUSE (ORLANDO, FL) Key Statistics • Located within Greater Orlando MSA • Immediate proximity to Florida State Route 408 (78,000 VPD) and North Alafaya Road (51,000 VPD) • Recently remodeled structure (2009) • Strong rent-to-s
Slide 36: Real Estate Definitions
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 36 REAL ESTATE DEFINIT IONS • Net operating income: Net Operating Income (“NOI”) represents the income stream generated by the operation of the property, independent of external factors such as financing, depreciation and amortization, capital expenditure
Slide 37: Real Estate Definitions (Cont'd)
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 37 REAL ESTATE DEFINIT IONS (CONT’D) • Straight-line rent: Accounting method which recognizes the rental income evenly over the life of the lease. An example is included below: • Cash rent: Represents rent received excluding straight-line non-cash compone
Slide 38: Real Estate Definitions
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 38 REAL ESTATE DEFINIT IONS • FFO: Funds from operations (“FFO”) is an earnings metric that starts with net income and then adds back depreciation expense under the logic that commercial real estate appreciates over time and REIT earnings would be unduly
Slide 39: Pro Forma Income Statement
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 39 PRO FORMA INCOME STATEMENT For the six months ended June 30, 2015 ($000s) Real estate business Kerrow holdings Annualized Consolidated1,2 Rental income $52,355 - $104,711 Sales, net - $9,514 19,028 Total revenue $52,355 $9,514 $123,739 Cost and expense
Slide 40: Reconciliation of Pro Forma Net Income to Pro Forma Adjusted Cash EBITDA
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 40 RECONCILIATION OF PRO FORMA NET INCOME TO PRO FORMA ADJUSTED CASH EBITDA Annualized for the six months ended June 30, 20151,2 ($000s) Real estate business Kerrow holdings Consolidated Pro forma net income $25,534 $560 $26,094 Income tax expense (benefi
Slide 41: Reconciliation of Pro Forma Net Income to Cash Available for Distribution
| FOUR CORNERS PROPERTY TRUST | OCTOBER 2015 41 RECONCILIATION OF PRO FORMA NET INCOME TO CASH AVAILABLE FOR DISTRIBUTION Reconciliation of pro forma net income to cash available for distribution ($000s) For the year ended December 31, 2014 Pro forma net income for the 12 months ended December 31, 2
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