- Fourth Quarter Net Income per Share of $0.25
and AFFO per Share of $0.39 -
- Closed Investments of $328.4 million at a
7.5% Weighted Average Cash Cap Rate -
- Reiterates 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 months and year ended December 31, 2022.
Fourth Quarter 2022 Financial and Operating
Highlights:
Operating Results (compared to Fourth
Quarter 2021):
- Investments (115 properties)
$ Invested
$328.4 million
Weighted Avg Cash Cap Rate
7.5%
- Dispositions (26 properties)
Net Proceeds
$75.5 million
Weighted Avg Cash Cap Rate
6.9%
Increased by 4%
$0.25
- Funds from Operations ("FFO") per Share
Unchanged
$0.39
- Core Funds from Operations ("Core FFO") per Share
Unchanged
$0.39
- Adjusted Funds from Operations ("AFFO") per Share
Increased by 5%
$0.39
Debt & Equity Activity:
Drew Remaining Available
Principal
$150.0 million
- Equity Raised (Gross) - ATM Program (1)
$23.22/share
$22.2 million
Full Year 2022 Financial and Operating Highlights:
Operating Results (compared to 2021):
- Investments (299 properties)
$ Invested
$937.4 million
Weighted Avg Cash Cap Rate
7.2%
- Dispositions (52 properties)
Net Proceeds
$155.6 million
Weighted Avg Cash Cap Rate
6.6%
Increased by 21%
$0.99
Increased by 13%
$1.56
Increased by 12%
$1.58
Increased by 14%
$1.53
Equity Activity:
- Equity Raised (Gross) - ATM Program (1)
$24.00/share
$235.1 million
- Equity Raised (Gross) - Follow-On Offering (August 4,
2022)
$23.00/share
$201.0 million
Highlights Subsequent to Fourth Quarter 2022:
- Investments (14 properties)
$ Invested
$65.7 million
- Dispositions (8 properties)
$ Gross Proceeds
$19.7 million
Equity Activity:
- Equity Raised (Gross) - ATM Program
$24.12/share
$20.7 million
_______________
- Includes 957,453 shares sold on a forward basis for gross
proceeds of $22.2 million that were physically settled for cash in
January 2023.
CEO Comments
Commenting on the fourth quarter and full year 2022 results, the
Company's President and Chief Executive Officer, Pete Mavoides,
said, "Despite a volatile year for the capital markets, we grew
AFFO per share by more than 14% in 2022, thanks to the stable
internal rent growth of our high quality net lease portfolio,
strong external growth that benefited from our reliable and
relationship-driven investment platform, and ready access to
attractively priced capital. With nearly $700 million of available
liquidity at quarter-end, we are well positioned to capitalize on a
robust opportunity set of accretive sale-leaseback transactions,
which was evidenced by our record investment activity in the fourth
quarter. While we believe economic uncertainty remains elevated,
the durability of our service-oriented and experience-based tenancy
and our low leverage position provide us with the confidence to
affirm our 2023 AFFO per share guidance."
Portfolio Highlights
The Company’s investment portfolio as of December 31, 2022 is
summarized as follows:
Number of properties
1,653
Weighted average lease term
(WALT)
13.9
Weighted average rent coverage
ratio
4.0x
Number of tenants
350
Number of concepts (i.e.,
brands)
538
Number of industries
16
Number of states
48
Weighted average occupancy
99.9%
Total square feet of rentable
space
16,059,492
Cash ABR - service-oriented or
experience-based
93.0%
Cash ABR - properties subject to
master lease
65.0%
Portfolio Update
Investments
The Company’s investment activity during the three months and
year ended December 31, 2022 is summarized as follows:
Quarter Ended
December 31,
2022
Year Ended
December 31,
2022
Investments:
Investment volume
$328.4 million
$937.4 million
Number of transactions
39
112
Property count
115
299
Weighted average cash / GAAP cap rate
7.5%/8.8%
7.2%/8.3%
Weighted average lease escalation
1.8%
1.6%
% Subject to master lease
90%
83%
% Sale-leaseback transactions
99%
97%
% Existing relationship
95%
89%
% Required financial reporting
(tenant/guarantor)
100%
100%
WALT
18.7 years
17.0 years
Dispositions
The Company’s disposition activity during the three months and
year ended December 31, 2022 is summarized as follows:
Quarter Ended
December 31,
2022
Year Ended
December 31,
2022
Dispositions:
Net proceeds
$75.5 million
$155.6 million
Number of properties sold
26
52
Net gain / (loss)
$12.6 million
$30.6 million
Weighted average cash cap rate (excluding
vacant properties and sales subject to a tenant purchase option
)
6.9%
6.6%
Loan Repayments
Loan repayments to the Company during the three months and year
ended December 31, 2022 are summarized as follows:
Quarter Ended
December 31,
2022
Year Ended
December 31,
2022
Proceeds—Principal
$11.8 million
$83.3 million
Proceeds—Prepayment penalties
$0.1 million
$0.9 million
Number of properties
7
44
Leverage and Balance Sheet and Liquidity
The Company's leverage, balance sheet and liquidity are
summarized in the following table.
December 31, 2022
Pro Forma (1)
December 31, 2022
Leverage:
Net debt to Annualized Adjusted
EBITDAre
4.6x
4.5x
Balance Sheet and Liquidity:
Cash and cash equivalents and restricted
cash
$71.5 million
$93.7 million
Unused revolving credit facility
capacity
$600.0 million
$600.0 million
Forward equity sales - unsettled
$22.2 million
—
Total available liquidity
$693.7 million
$693.7 million
ATM Program:
2022 ATM Program initial availability
$500.0 million
Aggregate gross sales under the 2022 ATM
Program
$75.4 million
Availability remaining under the 2022 ATM
Program
$424.6 million
Average price per share of gross sales
since inception in May 2022
$22.11
_______________
- Pro forma adjustments have been made to reflect 957,453 shares
sold on a forward basis through the Company's ATM program as if
they had been physically settled for cash as of December 31,
2022.
Guidance
2023 Guidance
The Company reiterates its previously issued expectation that
2023 AFFO per share on a fully diluted basis will be within a range
of $1.58 to $1.64.
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 period.
Dividend Information
As previously announced, on November 30, 2022, Essential
Properties' board of directors declared a cash dividend of $0.275
per share of common stock for the quarter ended December 31, 2022.
The dividend was paid on January 13, 2023 to stockholders of record
as of the close of business on December 30, 2022.
Conference Call Information
In conjunction with the release of Essential Properties’
operating results, the Company will host a conference call on
Thursday, February 16, 2023 at 10:00 a.m. EST 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: 13735903. The telephone replay will be available
through March 2, 2023.
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—Fourth
Quarter Ended December 31, 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
December 31, 2022, the Company’s portfolio consisted of 1,653
freestanding net lease properties with a weighted average lease
term of 13.9 years and a weighted average rent coverage ratio of
4.0x. In addition, as of December 31, 2022, the Company’s portfolio
was 99.9% leased to 350 tenants operating 538 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. 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 Annual Report
on Form 10-K for the year ended December 31, 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.
Essential Properties Realty
Trust, Inc.
Consolidated Statements of
Operations
Three months ended
December 31,
Year ended December
31,
(in thousands, except share and per
share data)
2022
2021
2022
2021
(Unaudited)
(Unaudited)
(Unaudited)
(Audited)
Revenues:
Rental revenue1,2
$
70,101
$
59,816
$
269,827
$
213,327
Interest on loans and direct financing
lease receivables
4,009
4,152
15,499
15,710
Other revenue
166
1,047
1,180
1,197
Total revenues
74,276
65,015
286,506
230,234
Expenses:
General and administrative
6,508
5,832
29,464
24,329
Property expenses3
784
1,816
3,452
5,762
Depreciation and amortization
24,121
18,961
88,562
69,146
Provision for impairment of real
estate
9,623
—
20,164
6,120
Change in provision for credit losses
(48
)
(92
)
88
(204
)
Total expenses
40,988
26,517
141,730
105,153
Other operating income:
Gain on dispositions of real estate,
net
12,565
497
30,647
9,338
Income from operations
45,853
38,995
175,423
134,419
Other (expense)/income:
Loss on debt extinguishment4
—
—
(2,138
)
(4,461
)
Interest expense
(12,128
)
(9,170
)
(40,370
)
(33,614
)
Interest income
2,025
20
2,825
94
Income before income tax
expense
35,750
29,845
135,740
96,438
Income tax expense
229
55
998
227
Net income
35,521
29,790
134,742
96,211
Net income attributable to non-controlling
interests
(171
)
(151
)
(612
)
(486
)
Net income attributable to
stockholders
$
35,350
$
29,639
$
134,130
$
95,725
Basic weighted-average shares
outstanding
142,378,451
122,691,874
134,941,188
116,358,059
Basic net income per share
$
0.25
$
0.24
$
0.99
$
0.82
Diluted weighted-average shares
outstanding
143,375,819
123,777,032
135,855,916
117,466,338
Diluted net income per share
$
0.25
$
0.24
$
0.99
$
0.82
_______________
- Includes contingent rent (based on a percentage of the tenant's
gross sales at the leased property) of $156, $257 ,$682 and $721
for the three months and year ended December 31, 2022 and 2021,
respectively.
- Includes reimbursable income from the Company’s tenants of
$497, $1,058, $2,081 and $2,293 for the three months and year ended
December 31, 2022 and 2021, respectively.
- Includes reimbursable expenses from the Company’s tenants $497,
$1,058, $2,081 and $2,293 for the three months and year ended
December 31, 2022 and 2021, respectively.
- During the year ended December 31, 2022, includes debt
extinguishment costs associated with the Company's restructuring of
its credit and term loan facilities and, during the year ended
December 31, 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)
December 31, 2022
December 31, 2021
(Unaudited)
(Audited)
ASSETS
Investments:
Real estate investments, at cost:
Land and improvements
$
1,228,687
$
1,004,154
Building and improvements
2,440,630
2,035,919
Lease incentive
18,352
13,950
Construction in progress
34,537
8,858
Intangible lease assets
88,364
87,959
Total real estate investments, at cost
3,810,570
3,150,840
Less: accumulated depreciation and
amortization
(276,307
)
(200,152
)
Total real estate investments, net
3,534,263
2,950,688
Loans and direct financing lease
receivables, net
240,035
189,287
Real estate investments held for sale,
net
4,780
15,434
Net investments
3,779,078
3,155,409
Cash and cash equivalents
62,345
59,758
Restricted cash
9,155
—
Straight-line rent receivable, net
78,587
57,990
Derivative assets
47,877
—
Rent receivables, prepaid expenses and
other assets, net
22,991
25,638
Total assets
$
4,000,033
$
3,298,795
LIABILITIES AND EQUITY
Unsecured term loans, net of deferred
financing costs
$
1,025,492
$
626,983
Senior unsecured notes, net
395,286
394,723
Revolving credit facility
—
144,000
Intangible lease liabilities, net
11,551
12,693
Dividend payable
39,398
32,610
Derivative liabilities
2,274
11,838
Accrued liabilities and other payables
29,261
32,145
Total liabilities
1,503,262
1,254,992
Commitments and contingencies
—
—
Stockholders' equity:
Preferred stock, $0.01 par value;
150,000,000 authorized; none issued and outstanding as of December
31, 2022 and December 31, 2021
—
—
Common stock, $0.01 par value; 500,000,000
authorized; 142,379,655 and 124,649,053 issued and outstanding as
of December 31, 2022 and December 31, 2021, respectively
1,424
1,246
Additional paid-in capital
2,563,305
2,151,088
Distributions in excess of cumulative
earnings
(117,187
)
(100,982
)
Accumulated other comprehensive loss
40,719
(14,786
)
Total stockholders' equity
2,488,261
2,036,566
Non-controlling interests
8,510
7,237
Total equity
2,496,771
2,043,803
Total liabilities and equity
$
4,000,033
$
3,298,795
Essential Properties Realty
Trust, Inc.
Reconciliation of Non-GAAP
Financial Measures
Three months ended
December 31,
Year ended December
31,
(unaudited, in thousands except per
share amounts)
2022
2021
2022
2021
Net income
$
35,521
$
29,790
$
134,742
$
96,211
Depreciation and amortization of real
estate
24,096
18,935
88,459
69,043
Provision for impairment of real
estate
9,623
—
20,164
6,120
Gain on dispositions of real estate,
net
(12,565
)
(497
)
(30,647
)
(9,338
)
Funds from Operations
56,675
48,228
212,718
162,036
Non-core expenses1
—
—
2,388
4,461
Core Funds from Operations
56,675
48,228
215,106
166,497
Adjustments:
Straight-line rental revenue, net
(4,005
)
(5,166
)
(20,615
)
(19,116
)
Non-cash interest expense
621
1,147
2,616
2,554
Non-cash compensation expense
2,232
1,129
9,489
5,683
Other amortization expense
735
188
2,912
2,675
Other non-cash charges
(52
)
(94
)
74
(212
)
Capitalized interest expense
(394
)
(26
)
(757
)
(81
)
Adjusted Funds from Operations
$
55,812
$
45,406
$
208,825
$
158,000
Net income per share2:
Basic
$
0.25
$
0.24
$
0.99
$
0.82
Diluted
$
0.25
$
0.24
$
0.99
$
0.82
FFO per share2:
Basic
$
0.40
$
0.39
$
1.57
$
1.38
Diluted
$
0.39
$
0.39
$
1.56
$
1.38
Core FFO per share2:
Basic
$
0.40
$
0.39
$
1.58
$
1.42
Diluted
$
0.39
$
0.39
$
1.58
$
1.41
AFFO per share2:
Basic
$
0.39
$
0.37
$
1.54
$
1.35
Diluted
$
0.39
$
0.37
$
1.53
$
1.34
_______________
- Includes $0.2 million of fees incurred in conjunction with the
August 2022 amendment to the Company's 2027 Term Loan and its $2.1
million loss on debt extinguishment during the year ended December
31, 2022 and the Company's $4.5 million of loss on debt
extinguishment during the year ended December 31, 2021.
- Calculations exclude $94, $63, $374 and $311 from the numerator
for the three months and year ended December 31, 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
December 31, 2022
Net income
$
35,521
Depreciation and amortization
24,121
Interest expense
12,128
Interest income
(2,025
)
Income tax expense
229
EBITDA
69,974
Provision for impairment of real
estate
9,623
Gain on dispositions of real estate,
net
(12,565
)
EBITDAre
67,032
Adjustment for current quarter re-leasing,
acquisition and disposition activity1
2,865
Adjustment to exclude other non-core or
non-recurring activity2
(92
)
Adjustment to exclude
termination/prepayment fees and certain percentage rent3
(1,028
)
Adjusted EBITDAre - Current Estimated
Run Rate
73,709
General and administrative expense
6,316
Adjusted net operating income
("NOI")
80,025
Straight-line rental revenue, net1
(7,382
)
Other amortization expense
1,187
Adjusted Cash NOI
$
73,830
Annualized EBITDAre
$
268,128
Annualized Adjusted EBITDAre
$
294,836
Annualized Adjusted NOI
$
320,100
Annualized Adjusted Cash NOI
$
295,320
_______________
- Adjustment is made to reflect EBITDAre, NOI and Cash NOI as if
all re-leasing activity, investments in and dispositions of real
estate and loan repayments completed during the three months ended
December 31, 2022 had occurred on October 1, 2022.
- Adjustment is made to exclude non-core expenses added back to
compute Core FFO, to exclude changes in the Company's provision for
credit 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)
December 31, 2022
Rate
Wtd. Avg.
Maturity
Unsecured debt:
April 2024 term loan1
$
200,000
2.9
%
1.3 years
February 2027 term loan1
430,000
2.4
%
4.1 years
January 2028 term loan1
400,000
4.6
%
5.1 years
Senior unsecured notes due July 2031
400,000
3.1
%
8.5 years
Revolving credit facility2
—
—
%
3.1 years
Total unsecured debt
1,430,000
3.3
%
5.2 years
Gross debt
1,430,000
Less: cash & cash equivalents
(62,345
)
Less: restricted cash available for future
investment
(9,155
)
Net debt
1,358,500
Equity:
Preferred stock
—
Common stock & OP units (142,933,502
shares @ $23.47/share as of 12/31/22)3
3,341,651
Total equity
3,341,651
Total enterprise value ("TEV")
$
4,700,151
Pro forma adjustments to Net Debt and
TEV:4
Net debt
$
1,358,500
Less: cash received — Forward ATM
settlement
(22,217
)
Pro forma net debt
1,336,283
Total equity
3,341,651
Common stock — Forward ATM settlement
(957,453 shares @ $23.47/share as of 12/31/22)
22,471
Pro forma TEV
$
4,700,405
Gross Debt / Undepreciated Gross
Assets
33.4
%
Net Debt / TEV
28.9
%
Net Debt / Annualized Adjusted
EBITDAre
4.6x
Pro Forma Gross Debt / Undepreciated
Gross Assets
33.3
%
Pro Forma Net Debt / Pro Forma
TEV
28.4
%
Pro Forma Net Debt / Annualized
Adjusted EBITDAre
4.5x
_______________
- 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 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 December 31, 2022, based on
142,379,655 common shares outstanding (including unvested
restricted share awards) and 553,847 OP units held by
non-controlling interests.
- Pro forma adjustments have been made to reflect 957,453 shares
sold on a forward basis through the Company's ATM program as if
they had been physically settled for cash as of December 31,
2022.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230215005848/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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