Four Corners Property Trust, Inc. · NYSE:FCPT
Four Corners Property Trust — Investor Presentation (June 2018)
29 slides from Four Corners Property Trust's investor presentation, Jun 1, 2018
Slide 1: Four Corners Property Trust Investor Presentation | June 2018
FOUR CORNERS PROPERTY TRUST N Y S E : F C P T INVESTOR PRESENTATION | JUNE 2018 w w w .fcpt.com 1 | FCPT | JUNE 2018
Slide 2: Forward Looking Statements and Disclaimers
FORW ARD 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: Agenda
AGEND A Company Overview and Update Page 3 Key Investment Highlights Page 11 Diversification and Acquisition Strategy Page 16 Financial Update & Key Credit Strengths Page 25 3 | FCPT | JUNE 2018
Slide 4: Senior Management Team
SENIOR MAN AGEMENT 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 t
Slide 5: Overview of FCPT
OVERVIEW OF FCPT Four Corners Property Trust (“FCPT”) is an investment grade rated REIT primarily engaged in the ownership, acquisition, and leasing of restaurant properties 528 properties, diversified by geography and brand, 414 of which are leased to Darden under long- term triple-net leases ▪
Slide 6: FCPT Recent Updates
F C P T R E C E N T U P D ATE S • Announced an increase in the annual dividend to $1.10 per share (over 13% increase from prior dividend) in December 2017 • Active acquisitions & portfolio management program focused on high credit quality operators: Property Volume Initial Cash Term Count ($mm) Yiel
Slide 7: Case Study: FCPT and Washington Prime
CASE STUDY: FCPT AND W ASHINGTON PRIME • On September 20, 2017, FCPT announced the acquisition of 41 restaurant properties from Washington Prime Group (“WPG”) for a purchase price of approximately $67 million (6.7% initial cash yield) with a weighted average remaining 8 year lease term - Attractive
Slide 8: FCPT Closed Acquisitions
FCPT CLOSED ACQUISITIONS # of Purchase Initial Cash Term Annualized Rent Tenant Location Properties Operator / Guarantor Information Price ($mm) Yield (yrs) Bumps Announced Pizza Hut IL, IN 6 40-unit sub. of 150-unit operator $5.7 7.2% 20 1.5% 7/18/2016 Wendy's TX 1 2-unit operator $2.1 6.5% 10 1.2%
Slide 9: FCPT Closed Dispositions
FCPT CLOSED DISPOSITIONS # of Sale Initial Cash Term Annualized Rent Tenant Location Properties Operator / Guarantor Information Price ($mm) Yield (yrs) Bumps Announced Bahama Breeze Tampa, FL 1 Bahama Breeze Holdings, LLC $18.5 4.8% 12 1.5% 10/24/2016 Olive Garden Pembroke Pines, FL 1 Darden Restau
Slide 10: National Footprint with Increasing Brand Diversification
NATION AL FOOTPRINT W ITH INCREASING BRAND DIVERSIFICATION ND WA MT MN 528 Properties ME SD WI ID MI VT NH OR WY NY IA MA NE CT RI PA OH 44 States NV IL IN NJ UT CO MD DE KS MO WV KY VA CA TN OK NC AR 29 Brands AZ NM SC MS AL GA LA TX 3.7 million sq ft FL Portfolio at Inception Acquired Properties _
Slide 11: Agenda
AGEND A Company Overview and Update Page 3 Key Investment Highlights Page 11 Diversification and Acquisition Strategy Page 16 Financial Update & Key Credit Strengths Page 25 11 | FCPT | JUNE 2018
Slide 12: High Quality Portfolio
HIGH QUALITY PORTFOLIO FCPT Portfolio Summary • 528 Properties1 Properties: • 87% Investment grade tenancy • 29 brands – 17 Quick Service & Fast Casual / 12 Casual, Family & Fine Dining1 Casual, • 44 states Geography: Family • Only Texas (10.7%) and Florida (10.1%) are above 10% of NOI1 & Fine Dinin
Slide 13: Portfolio Diversification
PORTFOLIO DIVERSIFICATION Brand Breakdown by Annual Base Rent (ABR) 20% 18% 104 units 105 units 4% 6% 13 units 74% 14 units 65% 300 units 297 units 13% 112 units Initial Portfolio: Today: Rental Revenue of $94.4 million Rental Revenue of $109.4 million1 (ABR at spin) (ABR at 3/31/2018) _____________
Slide 14: Lease Maturity Schedule
LEASE MATURITY SCHEDULE Lease Maturity Schedule by % Annual Base Rent1 (ABR) 99.9% occupied as of 3/31/20182 15.8% 15.2% 14.1% 13.7% 12.8% Weighted average lease term of 12.7 years 9.6% 8.6% Less than 1.5% of rental income matures prior to 2027 3.6% 3.7% 0.7% 0.9% 0.0% 0.0% 0.2% 0.2% 0.3% 0.3% 0.1%
Slide 15: FCPT's Portfolio Compares Favorably Across Major Metrics
FCPT’S PORTFOLIO COMPARES FAVOR ABLY ACROSS MAJOR METRICS EBITDAR Coverage1 % Investment Grade Tenants2 % Tenants 100% 100% 81% 39% 96% included: 87% 4.7x 3.2x 2.8x 51% Peer Average: 2.8x 2.6x 2.6x 43% 46% Peer Average: 37% 37% 24% 20% N/A N/A ADC VEREIT Spirit STORE Realty National Retail FCPT STOR
Slide 16: Agenda
AGEND A Company Overview and Update Page 3 Key Investment Highlights Page 11 Diversification and Acquisition Strategy Page 16 Financial Update & Key Credit Strengths Page 25 16 | FCPT | JUNE 2018
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 UNDERW RITING 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 Strike Zone
CONCEPTUAL UNDERW RITING STRIKE ZONE Valuation to Score Matrix FCPT is disciplined in its underwriting, passing on properties with weak real estate, weak credit or aggressive pricing Dilutive Expensive FCPT Long Term WACC Strike Zone Valuation (Going in Asking Valuation(Going Cap Asking in Rate) Che
Slide 20: Vast Addressable Market Within Restaurant Industry Subsectors
VAST ADDRESSABLE MARKET W ITHIN RESTAURANT INDUSTRY SUBSECTORS US GDP – $18.6 Trillion Consumption Investment Government $12.8T $3.0T $3.3T Net Exports Retail Sales -$0.5T $4.85T Restaurants (~11% of Retail Sales, $523bn) Family Fine Quick Service & Fast Casual Casual Dining / Buffet Dining $268bn $
Slide 21: Industry Benchmarking
INDUSTRY BENCHMARKING FCPT is focused on acquiring restaurants operated by top brands within each cuisine type % of % of Predominately Top 5 Revenue Dining Restaurant Free-Standing Top 5 Brands by Market Share (% of cuisine type)1 % of ($bn) Sector Industry Buildings #1 #2 #3 #4 #5 Cuisine Type Quic
Slide 22: Food & Beverage Seems to Be Most Resilient to E-Commerce
FOOD & BEVERAGE SEEMS TO BE MOST RESILIENT TO E -COMMERCE US eCommerce Penetration by Retail Category (2016) 50% 46.7% 45% 40% 35% 31.8% 30% 25% 20% 16.4% 14.8% 15% 11.1% 11.0% 10.5% 10% 7.3% 5% 2.8% 0.9% 0% Consumer Books & Toys & Hobbies Apparel & Health & Jewelry & Sports & Fitness Furniture & To
Slide 23: Rapid Franchisee Consolidation Within Restaurant Industry
RAPID FRANCHISEE CONSOLIDATION W ITHIN RESTAURANT INDUSTRY Units Owned by the Top 200 Franchisees Average units per Top 200 Franchisees 28,000 26,997 150 25,176 135 130 24,000 23,177 126 21,831 120 116 20,331 109 20,000 102 18,408 105 17,887 92 16,715 89 90 84 16,000 75 12,000 60 8,000 45 30 4,000 1
Slide 24: Thoughtful Brand Selection Aimed at Protecting Cash Flow
THOUGHTFUL BRAND SELECTION AIMED AT PROTECTING CASH FLOW Brand Average Sales Volume ($000s) Casual $6,000 Dining $10,909 $5,000 Fast Brands with mid-range sales have more Casual options for re-tenanting in case of vacancy $4,000 Quick Service $3,000 $2,000 $1,000 $0 ___________________________ Sourc
Slide 25: Agenda
AGEND A Company Overview and Update Page 3 Key Investment Highlights Page 11 Diversification and Acquisition Strategy Page 16 Financial Update & Key Credit Strengths Page 25 25 | FCPT | JUNE 2018
Slide 26: Summary Capitalization and Financials
SUMMARY CAPIT ALIZ ATI ON AND FINANCI ALS Current Capitalization Current Trading Metrics ($ million, except per share) Cash NOI ($ million) $109.4 Share price (5/31/2018) $22.89 Implied Cap Rate 5.8% Shares and OP units outstanding (millions) 61.8 Consensus AFFO per share (12 month forward) $1.37 Eq
Slide 27: FCPT Debt Maturity Schedule
FCPT DEBT MATURITY SCHEDULE Current Debt Maturity Schedule1 Weighted average 1 maturity of 5.4 years Unsecured Notes $400 Undrawn Revolver Capacity Drawn Revolver Unsecured Term Loan $250 $75 $50 $0 $0 $0 $0 $0 $0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 ___________________________ Figures
Slide 28: 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 Sales of Darden branded assets demonstrate strong underlying value and liquidity Geograp
Slide 29: Four Corners Property Trust
FOUR CORNERS PROPERTY TRUST N Y S E : F C P T 29 | FCPT | JUNE 2018
Four Corners Property Trust — Investor Presentation (June 2018) on 6ix