Four Corners Property Trust, Inc. · NYSE:FCPT
Four Corners Property Trust — Q1 2024 Earnings Presentation
31 slides from Four Corners Property Trust's earnings presentation, May 2, 2024
Slide 1: Investor Presentation May 2024
Four Corners Property Trust NYSE: FCPT INVESTOR PRESENTATION MAY 2024
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: Contents
CONTENTS 1 COMPANY OVERVIEW PG 3 2 HIGH QUALITY PORTFOLIO PG 8 3 CONSERVATIVE FINANCIAL POSITION PG 21 4 APPENDIX PG 24 MAY 2024 3
Slide 4: FCPT Overview
HIGH-QUALITY PORTFOLIO • Recently assembled, e-commerce resistant portfolio • Strong Tenant EBITDAR / Rent Coverage, nationally established brands and low rents FCPT provide for high tenant retention and limited vacancies TRANSPARENT, ANALYTICAL, DISCIPLINED INVESTMENT PHILOSOPHY OVERVIEW • Focus on
Slide 5: 2024 YTD Portfolio and Investment Highlights
2024 YTD PORTFOLIO AND INVESTMENT HIGHLIGHTS PORTFOLIO1 99.6% occupied 1,137 leases 4.9x tenant EBITDAR coverage2 149 brands 1.4% average annual escalator 59% investment grade3 7.6-year average lease term remaining <6.0% expirations before 2027 INVESTMENTS4 2023 2024 YTD Capital deployed ($M) $332.6
Slide 6: 2024 YTD Financial Highlights
2024 YTD FINANCIAL HIGHLIGHTS $0.26 $0.43 $0.41 Q1 2024 Net income per share Q1 2024 AFFO per share1 Q1 2024 FFO per share $277 million 100% Liquidity with ample revolver Unencumbered ABR capacity and cash 5.6x 4.3x Net debt to adjusted EBITDAre2 Fixed charge coverage 95% 4.5 years Fixed rate debt W
Slide 7: Acquisition Volume by Year
ACQUISITION VOLUME BY YEAR FCPT has been built with a deliberate focus on consistency and efficient execution 1111 1115 1023 PROPERTY COUNT 919 799 699 610 515 475 418 +57 +40 +95 +89 +100 +120 +104 +88 YEAR 1 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 YTD VOLUME ($M) SPIN $94 $99 $263 $199 $
Slide 8: Contents
CONTENTS 1 COMPANY OVERVIEW PG 3 2 HIGH QUALITY PORTFOLIO PG 8 3 CONSERVATIVE FINANCIAL POSITION PG 21 4 APPENDIX PG 24 MAY 2024 8
Slide 9: FCPT's Strong Portfolio Performance
FCPT’S STRONG PORTFOLIO PERFORMANCE FCPT has one of the highest-quality portfolios in the net lease sector and has established a strong track record over time (even through the COVID-19 pandemic) RENT COLLECTIONS 99.5% 98.8% 99.6% 99.6% 99.7% 99.8% 99.8% 99.8% 99.7% 99.9% 99.8% 99.7% 99.9% 99.7% 99.
Slide 10: 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 11: Low Rent / High Coverage Portfolio
LOW RENT / HIGH COVERAGE PORTFOLIO TENANT RENTAL COVERAGE1 • FCPT’s high caliber portfolio benefits from strong 5.5x 4.9x rent coverage. Rents for the original Darden spin- off properties were purposely set at sustainable 2.8x 2.7x levels, and our current investment strategy and credit underwriting
Slide 12: Brand Exposure by Annualized Base Rent
1,137 Leases / 149 Brands BRAND EXPOSURE BY FCPT PORTFOLIO Annual Base Rent of $219.6 million1 51% Darden Exposure ANNUALIZED BASE RENT 20% Non-Restaurant Exposure 314 leases 37% Other 2 10% 318 leases 4% 21% Other restaurants 57 brands 115 leases 37% 10% 8% 139 leases 9% Auto service 29 brands 82 l
Slide 13: Brand Diversification
Rank Brand Name # Sq Ft (000s) % of ABR(1) BRAND 1 2 Olive Garden Longhorn Steakhouse 314 115 2673 645 36.8% 10.4% DIVERSIFICATION 3 Chili's 82 450 7.7% 4 Buffalo Wild Wings 28 171 2.5% 5 Cheddar's 13 112 2.2% 6 Red Lobster 18 130 1.7% 7 Caliber Collision 28 390 1.6% 01 02 8 Bahama Breeze 10 92 1.5%
Slide 14: Thoughtful Brand Selection
THOUGHTFUL BRAND SELECTION Brand Average Sales Volume ($000s)1 Casual $7,000 Dining Quick Service $6,000 FCPT focuses on national brands with strong sales volumes and Fast market appropriate rents Casual $5,000 $4,000 $3,000 $2,000 $1,000 $0 FCPT pursues properties within the median range of Casual
Slide 15: Lease Maturity Schedule
LEASE MATURITY SCHEDULE 7.6 years weighted average lease term 99.6% %ANNUALIZED BASE RENT1 occupied2 as of 3/31/2024 4.7% 3.6% 8.7% < 6.0% 4.1% of rental income matures prior to 2027 2.5% 2.9% FCPT has had very high 2.3% renewal rates on lease maturities to date 8.0% 8.3% 7.1% 7.4% 6.6% 4.7% 4.7% 3.
Slide 16: Strong Recent Restaurant Results
STRONG RECENT RESTAURANT RESULTS BAIRD RESTAURANTS SURVEYS: WEEKLY SAME-STORE SALES VS. YEAR PRIOR 35% 30% 25% 20% 15% “ 10% 5% 0% -5% -10% Overall -15% Casual Dining Quick Service -20% Q2 2022 11/27/2022 2/19/2023 5/14/2023 8/6/2023 10/29/2023 1/21/2024 4/14/2024 • Baird’s weekly restaurant survey
Slide 17: Darden Performance and Concentration
DARDEN PERFORMANCE AND CONCENTRATION Darden has improved its performance beyond pre-COVID levels and maintained its strong credit profile Inception Pre-COVID Current1 Darden Restaurants Darden Rating BBB / Baa3 / BBB BBB / Baa2 / BBB BBB / Baa2 / BBB (Fitch/Moody’s/S&P) Sales per Store - Olive Garde
Slide 18: Diversification: Auto Industry
DIVERSIFICATION: 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 19: Diversification: Medical Retail
DIVERSIFICATION: MEDICAL RETAIL • FCPT’s largest medical retail exposures are focused on outpatient services: urgent care, dental, primary care, veterinary care, and outpatient / ambulatory surgery centers • Medical retail is e-commerce and recession resistant given its service-based nature, large c
Slide 20: Healthcare Industry Targets
HEALTHCARE INDUSTRY TARGETS Healthcare delivery occurs across a spectrum of real estate and operator cost structures • FCPT target operators provide services FCPT FOCUS that require in-person interaction, while Hospital having lighter asset needs and smaller Ambulatory surgery / Outpatient treatment
Slide 21: Contents
CONTENTS 1 COMPANY OVERVIEW PG 3 2 HIGH QUALITY PORTFOLIO PG 8 3 CONSERVATIVE FINANCIAL POSITION PG 21 4 APPENDIX PG 24 MAY 2024 21
Slide 22: 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 4.5 years • No near-term debt maturities prior to November 2025 DEBT MATURITY SCHEDULE ($ MILLIONS) Conservative leverage • Net
Slide 23: Company Momentum Since Inception
COMPANY MOMENTUM SINCE INCEPTION AS OF 3/31/23 Team members 4 37 + 33 $94.4 million $219.6 million + $125.2 million (+133%) Annual base rent1 Properties 418 1,115 + 697 (+167%) 5 149 + 144 Brands 100% 51% - 49% % Darden2 15 years 7.6 years - 7.4 years Weighted avg lease term $848 million $2.3 billio
Slide 24: Contents
CONTENTS 1 COMPANY OVERVIEW PG 3 2 HIGH QUALITY PORTFOLIO PG 8 3 CONSERVATIVE FINANCIAL POSITION PG 21 4 APPENDIX PG 24 MAY 2024 24
Slide 25: 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 26: 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 27: 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 28: Reconciliation Schedules
RECONCILIATION SCHEDULES RECONCILIATION OF NET INCOME TO ADJUSTED EBITDARE RENTAL REVENUE AND PROPERTY EXPENSE DETAIL (In thousands) Three Months Ended March 31, Rental Revenue Unaudited 2024 2023 Three Months Ended March 31, Net Income $ 24,074 $ 23,155 (In thousands) 2024 2023 Adjustments: Rental
Slide 29: FFO & AFFO Reconciliation
FFO & AFFO RECONCILIATION ($000s, except shares and per share data) Three Months Ended March 31, Unaudited 2024 2023 Net income $ 24,074 $ 23,155 Depreciation and amortization 13,430 12,145 Realized gain on sales of real estate - (1,562) FFO (as defined by NAREIT) $ 37,504 $ 33,738 Straight-line ren
Slide 30: Footnotes
FOOTNOTES PAGE 5 PORTFOLIO AND INVESTMENT HIGHLIGHTS PAGE 11 LOW RENT/ HIGH COVERAGE PORTFOLIO PAGE 17 DARDEN PERFORMANCE AND Figures as of 3/31/2024, unless otherwise noted 1. See glossary on page 27 for tenant EBITDAR and tenant CONCENTRATION 1. Weighted averages based on contractual Annual Cash B
Slide 31: Thank You
Four Corners Property Trust NYSE: FCPT THANK YOU INVESTOR PRESENTATION MAY 2024
Four Corners Property Trust — Q1 2024 Earnings Presentation on 6ix