American Realty Capital Trust Inc
American Realty Capital Trust — IPO Roadshow (June 2012)
27 slides from American Realty Capital Trust's IPO roadshow presentation, Jun 11, 2012
Slide 1: American Realty Capital Trust, Inc. (NASDAQ: ARCT)
June 2012 NASDAQ: “ARCT” American Realty Capital Trust, Inc . NASDAQ: ARCT
Slide 2: Introductory Notes
June 2012 2 The data and other information described in these slides speaks as of the date of the slides or an earlier date indicated . Future performance may not be consistent with past performance, and is subject to change and inherent risks and uncertainties . This presentation contains certain s
Slide 3: ARCT Value Proposition
June 2012 3 • Managed over $7 billion of successful real estate programs • Served on publicly - traded real estate companies • Experienced with net leased properties • Low leverage • Large unencumbered asset pool • Financial capacity • Revolver / liquidity Best - In - Class Portfolio • Corporate inv
Slide 4: Proven, Focused Business Plan
June 2012 4 Proven, Focused Business Plan High Quality Portfolio Conservative Capital Structure Overview of Recent Events
Slide 5: Proven, Focused Business Plan
June 2012 5 Proven, Focused Business Plan Focused Strategy • Investment grade tenants • High relative risk - adjusted current returns • 100% occupancy rates • Low operating costs • Contractual same store rent growth • Low capital expenditures Risk Management • Tenant quality • Well - located propert
Slide 6: Execution and Results
June 2012 6 Execution and Results Certainty of Income • Net leases • 100% occupied • 92% rated corporate tenants • 74% investment grade corporate tenants • Minimum operating expense exposure • 0.5% lease roll - over through 2017 • Fixed rate debt • Contractual rent increases, averaging 1.26% per yea
Slide 7: Proven Management Team
June 2012 7 Proven Management Team Nicholas S. Schorsch Chairman of the Board • Co - founder of ARCT • Former CEO of American Financial Realty Trust (NYSE: AFR) • Two - Time Ernst & Young Entrepreneur of the Year Brian D. Jones Chief Financial Officer • 22 years public REIT experience • 15 years rea
Slide 8: Alignment of Interests Between Shareholders and Sponsor
June 2012 8 Alignment of Interests Between Shareholders and Sponsor Industry “Best Practices” align sponsor and shareholder interests Low Fees - Fees at bottom quartile of industry - Fees subordinated to distribution coverage Alignment of Sponsor Compensation - No internalization fee - Institutional
Slide 9: Potential Conflict Resolution
June 2012 9 Potential Conflict Resolution External Responsibilities • Full - time dedicated management team • CEO with no competing responsibilities or conflicts Compensation • Incentive - based compensation, balancing earnings growth, long - term total shareholder return, and outperformance of peer
Slide 10: Accretive External Growth
June 2012 10 Accretive External Growth • Targeted $100 million in 12 months (beginning April 1, 2012) • Modeled 7.8% average (unlevered) capitalization rate • Assumes full - year impact of FFO (not timing - dependent) • Currently evaluating $300 - $400 million of acquisitions • Includes existing ten
Slide 11: High Quality Portfolio
June 2012 11 Proven, Focused Business Plan High Quality Portfolio Conservative Capital Structure Overview of Recent Events
Slide 12: Portfolio Highlights
June 2012 12 Portfolio Highlights Overview Portfolio Map Portfolio Overview • Primarily investment grade tenants • Broadly diversified portfolio by tenant, industry and geography • Very strong 100 % occupancy • Long remaining lease term of 13.3 years • New properties that average 5.3 years of age No
Slide 13: Investment Grade Rated Tenant Focus
June 2012 13 Investment Grade Rated Tenant Focus Top 10 Tenants % Annual Rent Credit Rating 16.7% S&P: BBB 10.0% S&P: A 6.6% S&P: BBB+ 4.6% S&P: AA+ 3.5% S&P: BBB - 3.1% S&P: BBB+ (1) 2.7% S&P: BBB + 2.4% S&P: B 2.1% S&P: BB+ 2.1% S&P: A+ 53.8% Top 10 Tenants • Rated 100% • Investment Grade 89% Tota
Slide 14: Diversified Portfolio: Industry Diversification
June 2012 14 Diversified Portfolio Note: Data as of March 31, 2012. “Other” category includes those industries representing less than 2.0% of the Company’s GAAP rent. Tenant % of GAAP Rent Pharmacy 17.5% Freight 16.7% Specialty Retail 9.5% Healthcare 7.9% Retail Banking 6.5% Discount Retail 5.7% Gov
Slide 15: Diversified Portfolio: Geographic and Property Type
June 2012 15 Property Type Geographic Diversification Diversified Portfolio Midwest 23.6% Southwest 13.1% Pacific Southwest 10.2% Pacific Northwest 0.8% Puerto Rico 0.5% Northeast 16.4% Mid-Atlantic 19.7% Southeast 15.7% Targeting 60% Retail Retail 54% Warehouse 37% Office 9%
Slide 16: High Portfolio Occupancy vs. Peer Group
June 2012 16 Historical Occupancy vs. Peer Group & US REITs High Portfolio Occupancy (1) Includes: Realty Income Corp., National Retail Properties, Inc., Entertainment Properties Trust, Lexington Realty Trust a nd CapLease, Inc. (2) Source: SNL Financial. (3) All data as of year - end except 2011 da
Slide 17: Negligible Near-Term Lease Expirations
June 2012 17 Minimal lease expirations in next 10 years with an average remaining lease term of 13.3 years % of GAAP Rent Expiring (Annual and Cumulative) Negligible Near - Term Lease Expirations Lease Expiration Schedule 0.0% 0.0% 0.1% 0.0% 0.3% 0.1% 6.5% 4.5% 5.1% 11.3% 27.8% 0.0% 10.0% 20.0% 30.0
Slide 18: Recently Assembled Portfolio
June 2012 18 5.6 4.3 6.8 5.3 20.2 0 5 10 15 20 25 Retail Distribution Office ARCT Total Comps Avg. Age (years) Recently Assembled Portfolio 5.3 year average age of ARCT portfolio vs. 20.2 years for peer group (1) (2) Portfolio Age vs. Peer Group Peer (1) Peer group includes: Realty Income Corp., Nat
Slide 19: Conservative Capital Structure
June 2012 19 Proven, Focused Business Plan High Quality Portfolio Conservative Capital Structure Overview of Recent Events
Slide 20: Capital Strategy
June 2012 20 Capital Strategy Highlights • Upgraded by major national rating agency from “Ba3” to “Ba2” with a stable outlook on April 5, 2012 • Adjusted rating of “Baa3 ” per credit opinion dated April 27, 2012 • Upgraded by major national rating agency from a “B+” with stable outlook to “BB” with
Slide 21: Conservative Capital Structure
June 2012 21 Conservative Capital Structure ($ and shares in 000,000's, except per share amounts) Shares outstanding 158.5 Price per share (as of April 30, 2012) $ 10.91 Equity Capitalization $ 1,729.0 Debt : Mortgage debt 511.9 Term loan 200.0 Revolving line of credit 195.1 Total Debt 907.0 Total M
Slide 22: Well Laddered Debt Maturity Schedule
June 2012 22 Well Laddered Debt Maturity Schedule $4 $32 $99 $185 $192 $174 0% 1% 5% 14% 27% 53% $ - $100 $200 $300 $400 $500 $600 2012 2013 2014 2015 2016 Thereafter Mortgages Term Loan $ in millions Limited near - term maturities and manageable laddering over time
Slide 23: Low Average Cost of Debt
June 2012 23 Low Average Cost of Debt 5.73% 4.05% 6.10% 5.92% 5.44% 5.35% 5.35% 5.27% 3.80% 4.30% 4.80% 5.30% 5.80% 6.30% Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Cost of debt driven down by market forces and prudent balance sheet management
Slide 24: Overview of Recent Events
June 2012 24 Proven, Focused Business Plan High Quality Portfolio Conservative Capital Structure Overview of Recent Events
Slide 25: Delivering On Our Promises - Recent Events
June 2012 25 ARCT listed on NASDAQ on March 1, 2012 Non - traded offering closed July 2011 Aggregated best - in - class net lease portfolio (2008 to 2011) Delivering On Our Promises - Recent Events Management team internalized at no cost to shareholders Reaffirmed FFO & AFFO guidance of $0.790 to $0
Slide 26: Operating Performance In Line with Projections
June 2012 26 Operating Performance In Line with Projections (Three months ended March 31, 2012) Metric Result Funds from Operations • $25.6 million, or $0.144 per share, compared to $5.2 million, or $0.029 per share, in 2011 • Annualized $123.6 million, or $0.780 per share, excluding $100 million pr
Slide 27: 2012 Earnings Guidance Summary
June 2012 27 2012 Earnings Guidance Summary (in 000’s except per share data) (1) Includes adjustments for costs of Listing, Internalization and debt prepayments in addition to adjustments to normalize perio dic expenses. (2) For the twelve - month period commencing April 1, 2012 as provided in the C
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