Four Corners Property Trust, Inc. · NYSE:FCPT
Four Corners Property Trust — Q3 2023 Earnings Presentation
30 slides from Four Corners Property Trust's earnings presentation, Nov 2, 2023
Slide 1: Investor Presentation November 2023
Four Corners Property Trust NYSE: FCPT INVESTOR PRESENTATION NOVEMBER 2023
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
Slide 3: FCPT Overview
HIGH-QUALITY PORTFOLIO • Recently assembled, e-commerce resistant portfolio • Strong tenant EBITDAR rent coverage, nationally established brands and FCPT low rents provide for high tenant retention and limited vacancies ANALYTICAL, DISCIPLINED INVESTMENT PHILOSOPHY OVERVIEW • Focus on cost of capita
Slide 4: Contents
CONTENTS 1 COMPANY OVERVIEW PG 4 2 HIGH QUALITY PORTFOLIO PG 8 3 CONSERVATIVE FINANCIAL POSITION PG 19 4 APPENDIX PG 22 NOVEMBER 2023 4
Slide 5: Q3 2023 Portfolio Highlights
Q3 2023 PORTFOLIO HIGHLIGHTS PORTFOLIO1 99.8% occupied 1,130 leases 4.8x tenant EBITDAR coverage2 148 brands 1.4% average annual escalator 59% investment grade3 8.0-year average lease term remaining 6.9% expirations before 2027 INVESTMENTS4 Q3 2023 Year to Date Capital deployed $130.2 $319.8 Average
Slide 6: Q3 2023 Financial Highlights
Q3 2023 FINANCIAL HIGHLIGHTS $0.27 $0.42 $0.41 Net income AFFO FFO per share per share1 per share1 $237 million 100% Corporate liquidity Unencumbered ABR 5.6x 4.2x Net debt to adjusted EBITDAre2 Fixed charge coverage 90% 4.9 years Fixed rate debt Weighted average debt maturity BBB / Baa3 Stable Outl
Slide 7: Sustainability Framework
SUSTAINABILITY FRAMEWORK Our commitment to sustainability and Environmental, Social and Governance (ESG) principles creates value our shareholders. We continuously review our internal policies to advance in the areas of environmental sustainability, social responsibility, employee well-being, and go
Slide 8: High Quality Portfolio
CONTENTS 1 COMPANY OVERVIEW PG 4 2 HIGH QUALITY PORTFOLIO PG 8 3 CONSERVATIVE FINANCIAL POSITION PG 19 4 APPENDIX PG 22 NOVEMBER 2023 8
Slide 9: Geographically Diverse Portfolio
WA GEOGRAPHICALLY MT ND ME DIVERSE PORTFOLIO OR ID MN VT NH SD WI NY MA WY MI RI • Lower taxes and a shift toward work-from- IA PA CT home has accelerated a demographic shift NV NE IN OH NJ UT IL DE toward low-cost of living and high-quality CA CO WV MD of life states KS MO KY VA NC TN • FCPT’s port
Slide 10: Low Rent / High Coverage Portfolio
LOW RENT / HIGH COVERAGE PORTFOLIO TENANT RENTAL COVERAGE1 • FCPT’s high caliber portfolio benefits from strong 5.4x rent coverage from the original Darden spin-off 4.8x properties where the rents were purposely set low, 2.8x conservative credit underwriting and a specialized strategy for acquiring
Slide 11: Brand Exposure by Annualized Base Rent
1,130 Leases / 148 Brands BRAND EXPOSURE BY FCPT PORTFOLIO Annual Base Rent of $215.3 million1 52% Darden Exposure ANNUALIZED BASE RENT 314 leases 37% Other 2 10% 317 leases 4% 21% Other restaurants 58 brands 115 leases 10% 37% 8% 138 leases 9% Auto service 29 brands 83 leases 8% 84 leases 7% Medica
Slide 12: Lease Maturity Schedule
LEASE MATURITY SCHEDULE 8.0 years weighted average lease term 99.8% %ANNUALIZED BASE RENT1 occupied2 as of 9/30/2023 13.5% < 6.9% 12.8% 11.9% 10.4% of rental income 10.0% 9.6% matures prior to 2027 7.0% FCPT has had very high renewal rates on lease maturities to date 3.4% 2.9% 2.3% 2.3% 2.3% 2.3% 1.
Slide 13: Diversification: Auto Industry
DIVERSIFCATION: AUTO INDUSTRY • Principally targeting auto service centers, including collision repair and tire service leased to credit worthy operators. We have made select investments in gas stations with large format convenience stores, car wash and auto part retailers at attractive, low bases •
Slide 14: Diversification: Medical Retail
DIVERSIFCATION: MEDICAL RETAIL • FCPT’s largest medical retail exposures are focused on outpatient services: urgent care, dental, primary care clinics, veterinary care, and outpatient / ambulatory surgery centers • Medical retail is e-commerce and recession resistant given its service-based nature,
Slide 15: Outpatient Trends
OUTPATIENT TRENDS U.S. OUTPATIENT vs. HOSPITAL (INPATIENT) ADMISSIONS1 Outpatient Inpatient Visits Admissions Outpatient visits per 1,000 populations Inpatient admissions per 1,000 populations , , , , “ , , , , Over the past two decades, the availability and access An increasing menu of health servi
Slide 16: Healthcare Industry Targets
HEALTHCARE INDUSTRY TARGETS Healthcare delivery occurs across a spectrum of real estate and operator cost structures FCPT FOCUS • Target operators provide services that Hospital require in-person interaction, while Ambulatory surgery / Outpatient treatment having lighter asset needs and smaller Inpa
Slide 17: Medical Retail Investment History
MEDICAL RETAIL INVESTMENT HISTORY Since 2021, FCPT has made $231 million of investments within medical retail across 84 leases. In 2023, FCPT meaningly outpaced medical retail investments in prior years FCPT MEDICAL RETAIL INVESTMENTS TO DATE (‘21- Q3 ’23) FCPT FOCUS Investments ($ Million) % of FCP
Slide 18: Medical Retail Case Study
MEDICAL RETAIL CASE STUDY 620 W. NORTH AVE MELROSE PARK, IL Melrose Park Multi-Tenant • Two buildings leased to three tenants: urgent care (WellNow), dental care (Aspen Dental) and quick service with drive-thru (Starbucks) • Adjacent to Gottlieb Memorial Hospital, two colleges and several nationally
Slide 19: Conservative Financial Position
CONTENTS 1 COMPANY OVERVIEW PG 4 2 HIGH QUALITY PORTFOLIO PG 8 3 CONSERVATIVE FINANCIAL POSITION PG 19 4 APPENDIX PG 22 NOVEMBER 2023 19
Slide 20: Conservative Financial Policies
CONSERVATIVE FCPT maintains a well-laddered debt maturity and 100% FINANCIAL POLICIES unencumbered assets to provide financial flexibility • Weighted average debt maturity 4.9 years • Minimal near-term debt maturities prior to November 2025 DEBT MATURITY SCHEDULE ($ MILLIONS) Conservative leverage $
Slide 21: Company Momentum Since Inception
COMPANY MOMENTUM SINCE INCEPTION AS OF 9/30/23 Team members 4 39 + 35 $94.4 million $215.3 million + $120.9 million (+128%) Annual base rent1 Properties 418 1,106 + 688 (+165%) 5 148 + 143 Brands 100% 52% - 48% % Darden2 15 years 8.0 years - 7.0 years Weighted avg lease terms $848 million $2.0 billi
Slide 22: Appendix
CONTENTS 1 COMPANY OVERVIEW PG 4 2 HIGH QUALITY PORTFOLIO PG 8 3 CONSERVATIVE FINANCIAL POSITION PG 19 4 APPENDIX PG 22 NOVEMBER 2023 22
Slide 23: Acquisition and Underwriting Framework
ACQUISITION AND UNDERWRITING FRAMEWORK CREDIT CRITERIA REAL ESTATE CRITERIA 50% 50% • Guarantor credit and health • Location • Brand durability • Retail corridor strength & demographics • Store performance • Access / visibility • Lease term and structure • Absolute and relative rent • Pad site and b
Slide 24: Acquisition Volume by Year
ACQUISITION VOLUME BY YEAR FCPT has been built with a deliberate focus on consistency and efficient execution PROPERTY COUNT 1106 1023 919 799 699 610 475 515 418 +57 +40 +95 +89 +100 +120 +104 +83 1 YEAR 2015 2016 2017 2018 2019 2020 2021 2022 2023 YTD VOLUME ($M) SPIN +$94 +$99 +$263 +$199 +$223 +
Slide 25: Brand Diversification
Rank Brand Name # Sq Ft (000s) % of ABR(1) BRAND 1 2 Olive Garden Longhorn Steakhouse 314 115 2,673 645 37.0% 10.4% DIVERSIFICATION 3 Chili's 83 455 7.9% 4 Buffalo Wild Wings 28 171 2.5% 5 Cheddar's 13 112 2.2% 6 Red Lobster 19 138 1.8% 7 Caliber Collision 28 390 1.6% 01 02 8 Bahama Breeze 10 92 1.5
Slide 26: Glossary and Non-GAAP Definitions
GLOSSARY AND NON-GAAP DEFINITIONS NON-GAAP DEFINITIONS AND CAUTIONARY NOTE REGARDING Tenant EBITDAR is calculated as EBITDA plus rental expense. EBITDAR is Adjusted Funds From Operations “AFFO” is a non-GAAP FORWARD-LOOKING STATEMENTS: derived from the most recent data provided by tenants that discl
Slide 27: Reconciliation Schedules
RECONCILIATION SCHEDULES RECONCILIATION OF NET INCOME TO ADJUSTED EBITDARE RENTAL REVENUE 3 Months End 9/30 9 Months End 9/30 3 Months End 9/30 9 Months End 9/30 (In thousands) Unaudited 2023 2022 2023 2022 (In thousands) 2023 2022 2023 2022 Net Income $24,192 $24,552 $71,003 $75,008 Rental revenue
Slide 28: FFO & AFFO Reconciliation
FFO & AFFO RECONCILIATION Three Months Ended September 30, Nine Months Ended September 30, (In thousands) Unaudited 2023 2022 2023 2022 Net income $24,192 24,552 71,003 75,008 Depreciation and amortization 13,382 10,558 37,308 30,322 Realized gain on sales of real estate (318) (1,828) (2,053) (7,584
Slide 29: Footnotes
FOOTNOTES PAGE 5 PORTFOLIO HIGHLIGHTS PAGE 11 BRAND EXPOSURE BY ANNUALIZED BASE PAGE 24 ACQUISITION VOLUME BY YEAR Figures as of 9/30/2023, unless otherwise noted RENT 1. Figures as of 9/30/2023 1. Weighted averages based on contractual Annual Cash Base Rent 1. Represents current Annual Cash Base Re
Slide 30: Thank You
Four Corners Property Trust NYSE: FCPT THANK YOU INVESTOR PRESENTATION NOVEMBER 2023
Four Corners Property Trust — Q3 2023 Earnings Presentation on 6ix