- Third Quarter Net Income per Share of $0.26
and AFFO per Share of $0.38 - - Closed Investments of $195.5
million at a 7.1% Weighted Average Cash Cap Rate - - Issues 2023
AFFO Guidance of $1.58 to $1.64 per Share -
Essential Properties Realty Trust, Inc. (NYSE: EPRT; “Essential
Properties” or the “Company”) today announced operating results for
the three and nine months ended September 30, 2022.
Third Quarter 2022 Financial and Operating
Highlights:
Operating Results (compared to Third
Quarter 2021):
- Investments (40 properties)
$ Invested
$195.5 million
Weighted Avg Cash Cap Rate
7.1%
- Dispositions (12 properties)
Net Proceeds
$35.5 million
Weighted Avg Cash Cap Rate
6.2%
Increased by 13%
$0.26
- Funds from Operations ("FFO") per Share
Increased by 6%
$0.38
- Core Funds from Operations ("Core FFO") per Share
Increased by 6%
$0.38
- Adjusted Funds from Operations ("AFFO") per Share
Increased by 15%
$0.38
Equity Activity:
- Equity Raised (Gross) - ATM Program
$21.57/share
$20.5 million
- Equity Raised (Gross) - Follow-On Offering (August 4,
2022)
$23.00/share
$201.0 million
Year to Date 2022 Financial and Operating Highlights:
Operating Results (compared to YTD Third
Quarter 2021):
- Investments (184 properties)
$ Invested
$609.0 million
Weighted Avg Cash Cap Rate
7.0%
- Dispositions (26 properties)
Net Proceeds
$80.0 million
Weighted Avg Cash Cap Rate
6.4%
Increased by 30%
$0.74
Increased by 19%
$1.17
Increased by 17%
$1.19
Increased by 19%
$1.15
Equity Activity:
- Equity Raised (Gross) - ATM Program
$24.08/share
$212.8 million
- Equity Raised (Gross) - Follow-On Offering (August 4,
2022)
$23.00/share
$201.0 million
Highlights Subsequent to Third Quarter 2022:
- Investments (14 properties)
$ Invested
$59.6 million
- Dispositions (2 properties)
$ Gross Proceeds
$7.5 million
Debt Activity:
Drew Remaining Available
Principal
$150.0 million
CEO Comments
Commenting on the third quarter 2022 results, the Company's
President and Chief Executive Officer, Pete Mavoides, said, "We
were pleased to see strong AFFO per share growth in our third
quarter results, which were defined by continued improvement in
unit-level coverages, solid investment activity, and proactive
capital market executions. With quarter-end leverage of 4.4x and
nearly $900 million of available liquidity, our balance sheet is
well positioned to capitalize on accretive investment opportunities
in today’s dynamic marketplace. Looking ahead to 2023, our newly
issued guidance assumes continued balance sheet discipline and a
moderated level of investment activity, which we see as prudent
given the uncertain economic outlook and challenged capital markets
environment."
Portfolio Highlights
The Company’s investment portfolio as of September 30, 2022 is
summarized as follows:
Number of properties
1,572
Weighted average lease term (WALT)
14.0 years
Weighted average rent coverage ratio
4.2x
Number of tenants
329
Number of states
48
Number of industries
16
Weighted average occupancy
99.8%
Total square feet of rentable space
14,821,496
Cash ABR - service-oriented or
experience-based
93.1%
Cash ABR - properties subject to master
lease
64.2%
Portfolio Update
Investments
The Company’s investment activity during the three and nine
months ended September 30, 2022 is summarized as follows:
Quarter Ended
September 30, 2022
Year to Date
September 30, 2022
Investments:
Investment volume
$195.5 million
$609.0 million
Number of transactions
27
73
Property count
40
184
Weighted average cash / GAAP cap rate
7.1%/8.2%
7.0%/8.0%
Weighted average lease escalation
1.6%
1.5%
% Subject to master lease
68%
79%
% Sale-leaseback transactions
89%
96%
% Existing relationship
94%
86%
% Required financial reporting
(tenant/guarantor)
100%
100%
WALT
16.5 years
16.1 years
Dispositions
The Company’s disposition activity during the three and nine
months ended September 30, 2022 is summarized as follows:
Quarter Ended
September 30, 2022
Year to Date
September 30, 2022
Dispositions:
Net proceeds
$35.5 million
$80.0 million
Number of properties sold
12
26
Net gain / (loss)
$6.3 million
$18.1 million
Weighted average cash cap rate (excluding
vacant properties and sales subject to a tenant purchase option
)
6.2%
6.4%
Loan Repayments
Loan repayments to the Company during the three and nine months
ended September 30, 2022 are summarized as follows:
Quarter Ended
September 30, 2022
Year to Date
September 30, 2022
Proceeds—Principal
$23.1 million
$71.5 million
Proceeds—Prepayment penalties
$0.4 million
$0.8 million
Number of properties
17
37
Leverage and Balance Sheet and Liquidity
The Company's leverage, balance sheet and liquidity are
summarized in the following table.
September 30, 2022
Leverage:
Net debt to Annualized Adjusted
EBITDAre
4.4x
Balance Sheet and Liquidity:
Cash and cash equivalents and restricted
cash
$144.2 million
Unused revolving credit facility
capacity
$600.0 million
2028 Term Loan - remaining
availability
$150.0 million
Total available liquidity
$894.2 million
ATM Program:
2022 ATM Program initial availability
$500.0 million
Aggregate gross sales under the 2022 ATM
Program
$53.2 million
Availability remaining under the 2022 ATM
Program
$446.8 million
Average price per share of gross sales
since inception in May 2022
$21.57
Subsequent Debt Activity
In October 2022, the Company drew the remaining $150.0 million
available under its $400.0 million 2028 term loan.
Guidance
2023 Guidance
The Company currently expects 2023 AFFO per share on a fully
diluted basis to be within a range of $1.58 to $1.64.
2022 Guidance
The Company reiterates its previously issued expectation that
2022 AFFO per share on a fully diluted basis will be within a range
of $1.52 to $1.54.
Note: The Company does not provide guidance for the most
comparable GAAP financial measure, net income, or a reconciliation
of the forward-looking non-GAAP financial measure of AFFO to net
income computed in accordance with GAAP, because it is unable to
reasonably predict, without unreasonable efforts, certain items
that would be contained in the GAAP measure, including items that
are not indicative of the Company's ongoing operations, such as,
without limitation, potential impairments of real estate assets,
net gain/loss on dispositions of real estate assets, changes in
allowance for credit losses and stock-based compensation expense.
These items are uncertain, depend on various factors, and could
have a material impact on the Company's GAAP results for the
guidance periods.
Dividend Information
As previously announced, on September 2, 2022, Essential
Properties' board of directors declared a cash dividend of $0.27
per share of common stock for the quarter ended September 30, 2022.
The dividend was paid on October 14, 2022 to stockholders of record
as of the close of business on September 30, 2022.
Conference Call Information
In conjunction with the release of Essential Properties’
operating results, the Company will host a conference call on
Friday, October 28, 2022 at 11:00 a.m. EDT to discuss the results.
To access the conference, dial 877-407-9208 (International:
201-493-6784). A live webcast will also be available in listen-only
mode by clicking on the webcast link in the Investor Relations
section at www.essentialproperties.com.
A telephone replay of the conference call can also be accessed
by calling 844-512-2921 (International: 412-317-6671) and entering
the access code: 13733465. The telephone replay will be available
through November 11, 2022.
A replay of the conference call webcast will be available on our
website approximately two hours after the conclusion of the live
broadcast. The webcast replay will be available for 90 days. No
access code is required for this replay.
Supplemental Materials
The Company’s Supplemental Operating & Financial Data—Third
Quarter Ended September 30, 2022 is available on Essential
Properties’ website at investors.essentialproperties.com.
About Essential Properties Realty Trust, Inc.
Essential Properties Realty Trust, Inc. is an internally managed
REIT that acquires, owns and manages primarily single- tenant
properties that are net leased on a long-term basis to companies
operating service-oriented or experience-based businesses. As of
September 30, 2022, the Company’s portfolio consisted of 1,572
freestanding net lease properties with a weighted average lease
term of 14.0 years and a weighted average rent coverage ratio of
4.2x. In addition, as of September 30, 2022, the Company’s
portfolio was 99.8% leased to 329 tenants operating 486 different
concepts in 16 industries across 48 states.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the federal securities laws. When used in this press
release, the words “estimate,” “anticipate,” “expect,” “believe,”
“intend,” “may,” “will,” “should,” “seek,” “approximately” or
“plan,” or the negative of these words and phrases or similar words
or phrases that are predictions of or indicate future events or
trends and that do not relate solely to historical matters are
intended to identify forward-looking statements. You can also
identify forward-looking statements by discussions of strategy,
plans or intentions of management. Forward-looking statements
involve numerous risks and uncertainties and you should not rely on
them as predictions of future events. Forward-looking statements
depend on assumptions, data or methods that may be incorrect or
imprecise and the Company may not be able to realize them. The
Company does not guarantee that the transactions and events
described will happen as described (or that they will happen at
all). You are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date of this
press release. While forward-looking statements reflect the
Company’s good faith beliefs, they are not guarantees of future
performance. The Company undertakes no obligation to publicly
release the results of any revisions to these forward-looking
statements that may be made to reflect events or circumstances
after the date of this press release or to reflect the occurrence
of unanticipated events, except as required by law. In light of
these risks and uncertainties, the forward-looking events discussed
in this press release might not occur as described, or at all.
Additional information concerning factors that could cause
actual results to differ materially from these forward-looking
statements is contained in the company’s Securities and Exchange
Commission (the "Commission”) filings, including, but not limited
to, the Company’s most recent Annual Report on Form 10-K and
subsequent Quarterly Reports on Form 10-Q. Copies of each filing
may be obtained from the Company or the Commission. Such
forward-looking statements should be regarded solely as reflections
of the Company’s current operating plans and estimates. Actual
operating results may differ materially from what is expressed or
forecast in this press release.
The results reported in this press release are preliminary and
not final. There can be no assurance that these results will not
vary from the final results reported in the Company’s Quarterly
Report on Form 10-Q for the quarter ended September 30, 2022 that
it will file with the Commission.
Non-GAAP Financial Measures and Certain Definitions
The Company’s reported results are presented in accordance with
GAAP. The Company also discloses the following non-GAAP financial
measures: FFO, Core FFO, AFFO, earnings before interest, taxes,
depreciation and amortization (“EBITDA”), EBITDA further adjusted
to exclude gains (or losses) on sales of depreciable property and
real estate impairment losses (“EBITDAre”), adjusted EBITDAre,
annualized adjusted EBITDAre, net debt, net operating income
(“NOI”) and cash NOI (“Cash NOI”). The Company believes these
non-GAAP financial measures are industry measures used by analysts
and investors to compare the operating performance of REITs.
FFO, Core FFO and AFFO
The Company computes FFO in accordance with the definition
adopted by the Board of Governors of the National Association of
Real Estate Investment Trusts ("NAREIT"). NAREIT defines FFO as
GAAP net income or loss adjusted to exclude extraordinary items (as
defined by GAAP), net gain or loss from sales of depreciable real
estate assets, impairment write-downs associated with depreciable
real estate assets and real estate-related depreciation and
amortization (excluding amortization of deferred financing costs
and depreciation of non-real estate assets), including the pro rata
share of such adjustments of unconsolidated subsidiaries. FFO is
used by management, and may be useful to investors and analysts, to
facilitate meaningful comparisons of operating performance between
periods and among the Company’s peers primarily because it excludes
the effect of real estate depreciation and amortization and net
gains and losses on sales (which are dependent on historical costs
and implicitly assume that the value of real estate diminishes
predictably over time, rather than fluctuating based on existing
market conditions).
The Company computes Core FFO by adjusting FFO, as defined by
NAREIT, to exclude certain GAAP income and expense amounts that it
believes are infrequent and unusual in nature and/or not related to
its core real estate operations. Exclusion of these items from
similar FFO-type metrics is common within the equity REIT industry,
and management believes that presentation of Core FFO provides
investors with a metric to assist in their evaluation of our
operating performance across multiple periods and in comparison to
the operating performance of our peers, because it removes the
effect of unusual items that are not expected to impact our
operating performance on an ongoing basis.
Core FFO is used by management in evaluating the performance of
our core business operations. Items included in calculating FFO
that may be excluded in calculating Core FFO include certain
transaction related gains, losses, income or expense or other
non-core amounts as they occur.
To derive AFFO, the Company modifies its computation of Core FFO
to include other adjustments to GAAP net income related to certain
items that it believes are not indicative of the Company’s
operating performance, including straight-line rental revenue,
non-cash interest expense, non-cash compensation expense, other
amortization expense, other non-cash charges (including changes to
our provision for loan losses following the adoption of ASC 326),
capitalized interest expense and transaction costs. Such items may
cause short-term fluctuations in net income but have no impact on
operating cash flows or long-term operating performance. The
Company believes that AFFO is an additional useful supplemental
measure for investors to consider when assessing the Company’s
operating performance without the distortions created by non-cash
items and certain other revenues and expenses.
FFO, Core FFO and AFFO do not include all items of revenue and
expense included in net income, they do not represent cash
generated from operating activities and they are not necessarily
indicative of cash available to fund cash requirements;
accordingly, they should not be considered alternatives to net
income as a performance measure or cash flows from operations as a
liquidity measure and should be considered in addition to, and not
in lieu of, GAAP financial measures. Additionally, our computation
of FFO, Core FFO and AFFO may differ from the methodology for
calculating these metrics used by other equity REITs and,
therefore, may not be comparable to similarly titled measures
reported by other equity REITs.
EBITDA and EBITDAre
The Company computes EBITDA as earnings before interest, income
taxes and depreciation and amortization. In 2017, NAREIT issued a
white paper recommending that companies that report EBITDA also
report EBITDAre. The Company computes EBITDAre in accordance with
the definition adopted by NAREIT. NAREIT defines EBITDAre as EBITDA
(as defined above) excluding gains (or losses) from the sales of
depreciable property and real estate impairment losses. The Company
presents EBITDA and EBITDAre as they are measures commonly used in
its industry and the Company believes that these measures are
useful to investors and analysts because they provide supplemental
information concerning its operating performance, exclusive of
certain non-cash items and other costs. The Company uses EBITDA and
EBITDAre as measures of its operating performance and not as
measures of liquidity.
EBITDA and EBITDAre do not include all items of revenue and
expense included in net income, they do not represent cash
generated from operating activities and they are not necessarily
indicative of cash available to fund cash requirements;
accordingly, they should not be considered alternatives to net
income as a performance measure or cash flows from operations as a
liquidity measure and should be considered in addition to, and not
in lieu of, GAAP financial measures. Additionally, the Company’s
computation of EBITDA and EBITDAre may differ from the methodology
for calculating these metrics used by other equity REITs and,
therefore, may not be comparable to similarly titled measures
reported by other equity REITs.
Net Debt
The Company calculates its net debt as its gross debt (defined
as total debt plus net deferred financing costs on its secured
borrowings) less cash and cash equivalents and restricted cash
available for future investment. The Company believes excluding
cash and cash equivalents and restricted cash available for future
investment from gross debt, all of which could be used to repay
debt, provides an estimate of the net contractual amount of
borrowed capital to be repaid, which it believes is a beneficial
disclosure to investors and analysts.
NOI and Cash NOI
The Company computes NOI as total revenues less property
expenses. NOI excludes all other items of expense and income
included in the financial statements in calculating net income or
loss. Cash NOI further excludes non-cash items included in total
revenues and property expenses, such as straight-line rental
revenue and other amortization and non-cash charges. The Company
believes NOI and Cash NOI provide useful information because they
reflect only those revenue and expense items that are incurred at
the property level and present such items on an unlevered
basis.
NOI and Cash NOI are not measures of financial performance under
GAAP. You should not consider the Company’s NOI and Cash NOI as
alternatives to net income or cash flows from operating activities
determined in accordance with GAAP. Additionally, the Company’s
computation of NOI and Cash NOI may differ from the methodology for
calculating these metrics used by other equity REITs and,
therefore, may not be comparable to similarly titled measures
reported by other equity REITs.
Adjusted EBITDAre / Adjusted NOI / Adjusted Cash NOI
The Company further adjusts EBITDAre, NOI and Cash NOI i) based
on an estimate calculated as if all investment and disposition
activity that took place during the quarter had occurred on the
first day of the quarter, ii) to exclude certain GAAP income and
expense amounts that the Company believes are infrequent and
unusual in nature and iii) to eliminate the impact of lease
termination or loan prepayment fees and contingent rental revenue
from its tenants which is subject to sales thresholds specified in
the lease. The Company then annualizes these estimates for the
current quarter by multiplying them by four, which it believes
provides a meaningful estimate of the Company’s current run rate
for all investments as of the end of the current quarter. You
should not unduly rely on these measures, as they are based on
assumptions and estimates that may prove to be inaccurate. The
Company’s actual reported EBITDAre, NOI and Cash NOI for future
periods may be significantly less than these estimates of current
run rates.
Cash ABR
Cash ABR means annualized contractually specified cash base rent
in effect as of the end of the current quarter for all of the
Company’s leases (including those accounted for as direct financing
leases) commenced as of that date and annualized cash interest on
its mortgage loans receivable as of that date.
Cash Cap Rate
Cash Cap Rate means annualized contractually specified cash base
rent for the first full month after investment or disposition
divided by the purchase or sale price, as applicable, for the
property.
GAAP Cap Rate
GAAP Cap Rate means annualized rental income computed in
accordance with GAAP for the first full month after investment
divided by the purchase price, as applicable, for the property.
Rent Coverage Ratio
Rent coverage ratio means the ratio of tenant-reported or, when
unavailable, management’s estimate based on tenant-reported
financial information, annual EBITDA and cash rent attributable to
the leased property (or properties, in the case of a master lease)
to the annualized base rental obligation as of a specified
date.
Disclaimer
Essential Properties Realty Trust, Inc. and the Essential
Properties Realty Trust REIT are not affiliated with or sponsored
by Griffin Capital Essential Asset Operating Partnership, L.P. or
the Griffin Capital Essential Asset REIT, information about which
can be obtained at (https://www.gcear.com).
Essential Properties Realty
Trust, Inc.
Consolidated Statements of
Operations
Three months ended September
30,
Nine months ended September
30,
(in thousands, except share and per
share data)
2022
2021
2022
2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Revenues:
Rental revenue1,2
$
66,525
$
54,929
$
199,726
$
153,511
Interest on loans and direct financing
lease receivables
3,719
4,574
11,490
11,558
Other revenue
419
98
1,014
150
Total revenues
70,663
59,601
212,230
165,219
Expenses:
General and administrative
7,868
5,596
22,956
18,497
Property expenses3
830
1,358
2,668
3,946
Depreciation and amortization
22,054
17,355
64,441
50,185
Provision for impairment of real
estate
349
—
10,541
6,120
Change in provision for loan losses
(30
)
16
136
(112
)
Total expenses
31,071
24,325
100,742
78,636
Other operating income:
Gain on dispositions of real estate,
net
6,329
1,343
18,082
8,841
Income from operations
45,921
36,619
129,570
95,424
Other (expense)/income:
Loss on debt extinguishment4
—
—
(2,138
)
(4,461
)
Interest expense
(9,892
)
(8,955
)
(28,242
)
(24,444
)
Interest income
752
37
800
74
Income before income tax
expense
36,781
27,701
99,990
66,593
Income tax expense
190
55
769
172
Net income
36,591
27,646
99,221
66,421
Net income attributable to non-controlling
interests
(163
)
(139
)
(441
)
(335
)
Net income attributable to
stockholders
$
36,428
$
27,507
$
98,780
$
66,086
Basic weighted-average shares
outstanding
139,068,188
119,230,645
132,438,157
114,223,586
Basic net income per share
$
0.26
$
0.23
$
0.74
$
0.58
Diluted weighted-average shares
outstanding
139,890,693
120,298,680
133,321,987
115,339,656
Diluted net income per share
$
0.26
$
0.23
$
0.74
$
0.57
_______________________
- Includes contingent rent (based on a percentage of the tenant's
gross sales at the leased property) of $210, $233 ,$526 and $464
for the three and nine months ended September 30, 2022 and 2021,
respectively.
- Includes reimbursable income from the Company’s tenants of
$530, $399, $1,584 and $852 for the three and nine months ended
September 30, 2022 and 2021, respectively.
- Includes reimbursable expenses from the Company’s tenants $530,
$399, $1,584 and $852 for the three and nine months ended September
30, 2022 and 2021, respectively.
- During the nine months ended September 30, 2022, includes debt
extinguishment costs associated with the Company's restructuring of
its credit and term loan facilities and, during the nine months
ended September 30, 2021, includes debt extinguishment costs
associated with the full repayment of the Company's remaining
secured debt.
Essential Properties Realty
Trust, Inc.
Consolidated Balance
Sheets
(in thousands, expect share and per
share amounts)
September 30, 2022
December 31, 2021
(Unaudited)
(Audited)
ASSETS
Investments:
Real estate investments, at cost:
Land and improvements
$
1,163,660
$
1,004,154
Building and improvements
2,305,254
2,035,919
Lease incentive
12,496
13,950
Construction in progress
29,973
8,858
Intangible lease assets
89,393
87,959
Total real estate investments, at cost
3,600,776
3,150,840
Less: accumulated depreciation and
amortization
(259,092
)
(200,152
)
Total real estate investments, net
3,341,684
2,950,688
Loans and direct financing lease
receivables, net
204,742
189,287
Real estate investments held for sale,
net
11,907
15,434
Net investments
3,558,333
3,155,409
Cash and cash equivalents
136,303
59,758
Restricted cash
7,925
—
Straight-line rent receivable, net
74,583
57,990
Derivative assets
50,670
—
Rent receivables, prepaid expenses and
other assets, net
25,731
25,638
Total assets
$
3,853,545
$
3,298,795
LIABILITIES AND EQUITY
Unsecured term loans, net of deferred
financing costs
$
875,239
$
626,983
Senior unsecured notes, net
395,145
394,723
Revolving credit facility
—
144,000
Intangible lease liabilities, net
11,909
12,693
Dividend payable
38,682
32,610
Derivative liabilities
13
11,838
Accrued liabilities and other payables
28,855
32,145
Total liabilities
1,349,843
1,254,992
Commitments and contingencies
—
—
Stockholders' equity:
Preferred stock, $0.01 par value;
150,000,000 authorized; none issued and outstanding as of September
30, 2022 and December 31, 2021
—
—
Common stock, $0.01 par value; 500,000,000
authorized; 142,377,215 and 124,649,053 issued and outstanding as
of September 30, 2022 and December 31, 2021, respectively
1,424
1,246
Additional paid-in capital
2,561,124
2,151,088
Distributions in excess of cumulative
earnings
(113,275
)
(100,982
)
Accumulated other comprehensive loss
46,870
(14,786
)
Total stockholders' equity
2,496,143
2,036,566
Non-controlling interests
7,559
7,237
Total equity
2,503,702
2,043,803
Total liabilities and equity
$
3,853,545
$
3,298,795
Essential Properties Realty
Trust, Inc.
Reconciliation of Non-GAAP
Financial Measures
Three months ended
Nine months ended
(unaudited, in thousands except per
share amounts)
2022
2021
2022
2021
Net income
$
36,591
$
27,646
$
99,221
$
66,421
Depreciation and amortization of real
estate
22,028
17,329
64,363
50,108
Provision for impairment of real
estate
349
—
10,541
6,120
Gain on dispositions of real estate,
net
(6,329
)
(1,343
)
(18,082
)
(8,841
)
Funds from Operations
52,639
43,632
156,043
113,808
Other non-recurring expenses1
250
—
2,388
4,461
Core Funds from Operations
52,889
43,632
158,431
118,269
Adjustments:
Straight-line rental revenue, net
(3,810
)
(5,086
)
(16,610
)
(13,950
)
Non-cash interest expense
645
488
1,995
1,407
Non-cash compensation expense
2,233
1,103
7,257
4,554
Other amortization expense
1,775
68
2,177
2,487
Other non-cash charges
(34
)
15
126
(118
)
Capitalized interest expense
(236
)
(19
)
(363
)
(55
)
Adjusted Funds from Operations
$
53,462
$
40,201
$
153,013
$
112,594
Net income per share2:
Basic
$
0.26
$
0.23
$
0.74
$
0.58
Diluted
$
0.26
$
0.23
$
0.74
$
0.57
FFO per share2:
Basic
$
0.38
$
0.36
$
1.17
$
0.99
Diluted
$
0.38
$
0.36
$
1.17
$
0.98
Core FFO per share2:
Basic
$
0.38
$
0.36
$
1.19
$
1.03
Diluted
$
0.38
$
0.36
$
1.19
$
1.02
AFFO per share2:
Basic
$
0.38
$
0.33
$
1.15
$
0.98
Diluted
$
0.38
$
0.33
$
1.15
$
0.97
___________________________
- Includes $0.2 million of fees incurred in conjunction with the
August 2022 amendment to our 2027 Term Loan during the three and
nine months ended September 30, 2022, our $2.1 million loss on debt
extinguishment during the nine months ended September 30, 2022 and
our $4.5 million of loss on debt extinguishment during the nine
months ended September 30, 2021.
- Calculations exclude $93, $61, $280 and $249 from the numerator
for the three and nine months ended September 30, 2022 and 2021,
respectively, related to dividends paid on unvested restricted
share awards and restricted share units.
Essential Properties Realty
Trust, Inc.
Reconciliation of Non-GAAP
Financial Measures
(in thousands)
Three months ended September
30, 2022
Net income
$
36,591
Depreciation and amortization
22,054
Interest expense
9,892
Interest income
(752
)
Income tax expense
190
EBITDA
67,975
Provision for impairment of real
estate
349
Gain on dispositions of real estate,
net
(6,329
)
EBITDAre
61,995
Adjustment for current quarter re-leasing,
acquisition and disposition activity1
2,844
Adjustment to exclude other non-core or
non-recurring activity2
134
Adjustment to exclude
termination/prepayment fees and certain percentage rent3
(429
)
Adjusted EBITDAre - Current Estimated
Run Rate
64,544
General and administrative expense
7,618
Adjusted net operating income
("NOI")
72,162
Straight-line rental revenue, net1
(3,055
)
Other amortization expense
193
Adjusted Cash NOI
$
69,300
Annualized EBITDAre
$
247,980
Annualized Adjusted EBITDAre
$
258,176
Annualized Adjusted NOI
$
288,648
Annualized Adjusted Cash NOI
$
277,200
______________________
- These adjustments are made to reflect EBITDAre, NOI and Cash
NOI as if all investments, dispositions and re-leasing activity
completed during the three months ended September 30, 2022 had
occurred on July 1, 2022.
- Adjustment is made to exclude non-core expenses added back to
compute Core FFO, our provision for loan losses and to eliminate
the impact of seasonal fluctuation in certain non-cash compensation
expense recorded in the period.
- Adjustment excludes lease termination or loan prepayment fees
and contingent rent (based on a percentage of the tenant's gross
sales at the leased property) where payment is subject to exceeding
a sales threshold specified in the lease, if any.
Essential Properties Realty
Trust, Inc.
Reconciliation of Non-GAAP
Financial Measures
(dollars in thousands, except share and
per share amounts)
September 30, 2022
Rate
Wtd. Avg. Maturity
Unsecured debt:
2024 term loan1
$
200,000
2.9%
1.5 years
2027 term loan1
430,000
2.4%
4.4 years
2028 term loan1,2
250,000
4.4%
5.3 years
Senior unsecured notes
400,000
3.1%
8.8 years
Revolving credit facility3
—
—%
3.4 years
Total unsecured debt
1,280,000
3.1%
5.5 years
Gross debt
1,280,000
Less: cash & cash equivalents
(136,303)
Less: restricted cash available for future
investment
(7,925)
Net debt
1,135,772
Equity:
Preferred stock
—
Common stock & OP units (142,931,062
shares @ $19.45/share as of 9/30/22)4
2,780,009
Total equity
2,780,009
Total enterprise value ("TEV")
$
3,915,781
Net Debt / TEV
29.0%
Gross Debt / Undepreciated Gross
Assets
31.1%
Net Debt / Annualized Adjusted
EBITDAre
4.4x
___________________________
- Rates presented for the Company's term loans are fixed at the
stated rates after giving effect to its interest rate swaps,
applicable margin of 85bps and SOFR premium of 10bps.
- The Company's 2028 term loan provides for $400 million in
available principal and the Company drew $250 million of this
principal in July 2022. Subsequent to quarter end, the Company drew
the remaining $150 million in October 2022, $100 million of which
bears interest at Term SOFR plus applicable margin of 85bps and
SOFR premium of 10bps.
- The Company's revolving credit facility provides a maximum
aggregate initial original principal amount of up to $600 million
and includes an accordion feature to increase, subject to certain
conditions, the maximum availability of the facility by up to $600
million. Borrowings bear interest at Term SOFR plus applicable
margin of 77.5bps and SOFR premium of 10bps.
- Common equity & units as of September 30, 2022, based on
142,377,215 common shares outstanding (including unvested
restricted share awards) and 553,847 OP units held by
non-controlling interests.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221027006088/en/
Investor/Media: Essential Properties Realty Trust, Inc.
Daniel Donlan, Senior Vice President, Capital Markets 609-436-0619
info@essentialproperties.com
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