- Collected 91% of October Rent - - Third
Quarter Net Income per Share of $0.13 and AFFO per Share of $0.28 -
- Closed Quarterly Investments of $148.9 million at a 7.1% Weighted
Average Cash Cap Rate -
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, 2020.
Third Quarter 2020 Financial and Operating Highlights
- Net income per fully diluted share decreased 28% to $0.13
- Funds from Operations (“FFO”) per fully diluted share increased
11% to $0.30
- Core Funds from Operations (“Core FFO”) per fully diluted share
decreased by 3% to $0.30
- Adjusted Funds from Operations (“AFFO”) per fully diluted share
decreased by 3% to $0.28
- Net Debt to Annualized Adjusted EBITDAre was 4.0x at quarter
end
- Cash and cash equivalents and restricted cash plus available
capacity under revolving credit facility of $589.4 million at
quarter end
- Ended the quarter with a 99.4% leased portfolio with a weighted
average lease term (“WALT”) of 14.6 years and a weighted average
rent coverage ratio of 2.8x
- Raised $219.6 million in gross proceeds from the sale of shares
of common stock through a follow-on equity offering and the
Company’s at-the-market equity program (“ATM Program”)
Year-to-Date 2020 Financial and Operating Highlights
- Invested $358.7 million in 126 properties at a 7.2% weighted
average cash cap rate
- Net income per fully diluted share decreased by 13% to
$0.39
- FFO per fully diluted share increased by 8% to $0.84
- Core FFO per fully diluted share decreased by 2% to $0.86
- AFFO per fully diluted share remained unchanged at $0.84
CEO Comments
Commenting on the third quarter 2020 results, Essential
Properties’ President and Chief Executive Officer, Pete Mavoides,
said, “We were pleased that as we begin to recover from the
significant disruption caused by the pandemic the vast majority of
our tenants, representing approximately 99% of our cash ABR, were
able to re-open their businesses. Our rent collection experience
has improved markedly since the onset of the pandemic, reaching 90%
for the third quarter and, most recently, 91% for October 2020,
which reflects our tenants' ability to return to their operations
and, we believe, the quality and durability of our portfolio and
our middle market tenant base.” Mr. Mavoides added, “With the
improved visibility into the performance of our tenants' businesses
and the trajectory of rent collections, we are pleased to be able
to return to our growth strategy, completing nearly $150 million of
investments in the quarter, at a weighted-average cash cap rate of
7.1%.”
Net Investment Activity
Investments
The Company’s investments during the quarter ended September 30,
2020 are summarized as follows:
- Invested $148.9 million in 50 properties in 19 separate
transactions,
- Weighted average cash and GAAP cap rate of 7.1% and 7.9%,
respectively,
- The properties are 100% leased with a WALT of 17.6 years,
and
- As a percentage of cash ABR, 92.4% of the investments were
sale-leaseback transactions, 79.0% were subject to a master lease
and 100.0% require the tenant to provide the Company with financial
reporting.
The Company’s investments during the nine months ended September
30, 2020 are summarized as follows:
- Invested $358.7 million in 126 properties in 62 separate
transactions,
- Weighted average cash and GAAP cap rate of 7.2% and 8.0%,
respectively,
- The properties are 100% leased with a WALT of 16.8 years,
and
- As a percentage of cash ABR, 91.3% of the investments were
sale-leaseback transactions, 66.1% were subject to a master lease
and 100.0% require the tenant to provide the Company with financial
reporting.
Dispositions
The Company’s dispositions during the quarter ended September
30, 2020 are summarized as follows:
- Sold 14 properties for $19.6 million in net proceeds, recording
a net gain of $1.0 million, and
- Dispositions completed at a weighted average cash cap rate of
7.0%.
The Company’s dispositions during the nine months ended
September 30, 2020 are summarized as follows:
- Sold 27 properties for $42.6 million in net proceeds, recording
a net gain of $4.0 million, and
- Dispositions completed at a weighted average cash cap rate of
7.0%, excluding one property sold pursuant to an existing tenant
purchase option.
Portfolio Update
Portfolio Highlights
The Company’s investment portfolio as of September 30, 2020 is
summarized as follows:
Number of properties
1,096
Weighted average lease term
14.6 years
Weighted average rent coverage ratio
2.81
Number of tenants
214
Number of states
43
Number of industries
16
Weighted average occupancy
99.4%
Total square feet of rentable space
8,797,716
Cash ABR - service-oriented or
experience-based
95.8%
Cash ABR - properties subject to master
lease
60.4%
Leverage and Balance Sheet and Liquidity
Leverage
As of September 30, 2020, the Company’s ratio of net debt to
Annualized Adjusted EBITDAre was 4.0x.
Balance Sheet and Liquidity
Essential Properties had $189.4 million of cash and cash
equivalents and restricted cash as of September 30, 2020.
Additionally, Essential Properties had $400.0 million of unused
borrowing capacity under its $400 million unsecured revolving
credit facility as of the same date.
Follow-On Offering
In September 2020, the Company completed an underwritten public
follow-on offering of 10,120,000 shares its common stock, including
1,320,000 shares of common stock purchased by the underwriters
pursuant to an option to purchase additional shares, raising gross
proceeds of $192.3 million at a public offering price of $19.00 per
share.
ATM Program
Essential Properties has an ATM Program through which it may,
from time to time, sell shares of its common stock with an
aggregate gross sales price of up to $250.0 million. Essential
Properties uses the proceeds generated from its ATM Program for
general corporate purposes, including funding its investment
activity, the repayment of outstanding indebtedness, working
capital and other general purposes. During the quarter ended
September 30, 2020, Essential Properties sold 1,527,549 shares of
common stock through its ATM Program at an average price of $17.88
per share, raising gross proceeds of $27.3 million.
Dividend Information
As previously announced, on September 4, 2020 Essential
Properties' board of directors declared a cash dividend of $0.23
per share of common stock for the quarter ended September 30, 2020.
The dividend was paid on October 15, 2020 to stockholders of record
as of the close of business on September 30, 2020.
Conference Call Information
In conjunction with the release of Essential Properties’
operating results, the Company will host a conference call on
Thursday, November 5, 2020 at 10:00 a.m. EST to discuss the
results. To access the conference, dial (800) 895-3361. 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 (877) 481-4010 and entering the access code: 36027. The
telephone replay will be available through November 20, 2020.
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, 2020 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, 2020, the Company’s portfolio consisted of 1,096
freestanding net lease properties with a weighted average lease
term of 14.6 years and a weighted average rent coverage ratio of
2.81 . As of the same date, the Company’s portfolio was 99.4%
leased to 214 tenants operating 300 different concepts in 16
industries across 43 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, 2020 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
deposits held for the benefit of lenders. The Company believes
excluding cash and cash equivalents and restricted cash deposits
held for the benefit of lenders 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 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)
2020
2019
2020
2019
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Revenues:
Rental revenue1,2
$
40,799
$
34,958
$
116,806
$
97,842
Interest on loans and direct financing
leases
2,054
940
6,030
1,669
Other revenue
56
393
64
641
Total revenues
42,909
36,291
122,900
100,152
Expenses:
Interest
7,651
7,207
21,887
20,074
General and administrative3
5,917
7,530
19,706
16,455
Property expenses4
810
442
1,755
2,334
Depreciation and amortization
13,966
11,141
40,442
30,367
Provision for impairment of real
estate
3,221
—
5,080
1,921
Provision for loan losses
14
—
531
—
Total expenses
31,579
26,320
89,401
71,151
Other operating income:
Gain on dispositions of real estate,
net
1,003
4,087
3,971
8,237
Income from operations
12,333
14,058
37,470
37,238
Other (expense)/income:
Loss on repayment and repurchase of
secured borrowings5
—
—
(924)
(4,353)
Interest income
58
114
433
723
Income before income tax
expense
12,391
14,172
36,979
33,608
Income tax expense
55
66
156
209
Net income
12,336
14,106
36,823
33,399
Net income attributable to non-controlling
interests
(73)
(861)
(220)
(6,076)
Net income attributable to
stockholders
$
12,263
$
13,245
$
36,603
$
27,323
Basic weighted-average shares
outstanding
94,259,150
72,483,932
92,070,002
58,375,745
Basic net income per share
$
0.13
$
0.18
$
0.39
$
0.46
Diluted weighted-average shares
outstanding
95,039,832
77,612,949
92,959,708
73,021,273
Diluted net income per share
$
0.13
$
0.18
$
0.39
$
0.45
- Includes contingent rent (based on a percentage of the tenant's
gross sales at the leased property) of $99, $142 ,$356 and $717 for
the three and nine months ended September 30, 2020 and 2019,
respectively.
- Includes reimbursable income from the Company’s tenants of $71,
$238, $583 and $1,179 for the three and nine months ended September
30, 2020 and 2019, respectively.
- During the three and nine months ended September 30, 2020,
includes non-recurring expenses of $115 and $234, respectively, for
reimbursement of executive relocation costs and non-recurring
recruiting costs and, during the nine months ended September 30,
2020, includes $1,093 for costs and charges incurred in connection
with the termination of one of our executive officers.
- Includes reimbursable expenses from the Company’s tenants $175,
$238, $686 and $1,179 for the three and nine months ended September
30, 2020 and 2019, respectively.
- Includes the write-off of $924 of deferred financing costs
during the nine months ended September 30, 2020 and, during the
nine months ended September 30, 2019, includes premium paid on
repurchase of notes issued under our Master Trust Funding Program
of $1,400, the write-off of $2,853 of deferred financing costs
related to the repurchased notes and $100 of legal costs related to
the repurchase.
Essential Properties Realty Trust, Inc.
Consolidated Balance Sheets
(in thousands, expect share and per
share amounts)
September 30, 2020
December 31, 2019
(Unaudited)
(Audited)
ASSETS
Investments:
Real estate investments, at cost:
Land and improvements
$
686,908
$
588,279
Building and improvements
1,423,033
1,224,682
Lease incentive
14,246
4,908
Construction in progress
7,239
12,128
Intangible lease assets
78,482
78,922
Total real estate investments, at cost
2,209,908
1,908,919
Less: accumulated depreciation and
amortization
(124,489)
(90,071)
Total real estate investments, net
2,085,419
1,818,848
Loans and direct financing lease
receivables, net
100,915
92,184
Real estate investments held for sale,
net
9,582
1,211
Net investments
2,195,916
1,912,243
Cash and cash equivalents
183,765
8,304
Restricted cash
5,604
13,015
Straight-line rent receivable, net
35,247
25,926
Rent receivables, prepaid expenses and
other assets, net
31,207
15,959
Total assets
$
2,451,739
$
1,975,447
LIABILITIES AND EQUITY
Secured borrowings, net of deferred
financing costs
$
171,840
$
235,336
Unsecured term loans, net of deferred
financing costs
626,119
445,586
Revolving credit facility
—
46,000
Intangible lease liabilities, net
8,589
9,564
Dividend payable
24,242
19,395
Derivative liabilities
43,504
4,082
Accrued liabilities and other payables
15,717
13,371
Total liabilities
890,011
773,334
Commitments and contingencies
—
—
Stockholders' equity:
Preferred stock, $0.01 par value;
150,000,000 authorized; none issued and outstanding as of September
30, 2020 and December 31, 2019
—
—
Common stock, $0.01 par value; 500,000,000
authorized; 104,671,571 and 83,761,151 issued and outstanding as of
September 30, 2020 and December 31, 2019, respectively
1,047
838
Additional paid-in capital
1,652,956
1,223,043
Distributions in excess of cumulative
earnings
(57,767)
(27,482)
Accumulated other comprehensive loss
(41,768)
(1,949)
Total stockholders' equity
1,554,468
1,194,450
Non-controlling interests
7,260
7,663
Total equity
1,561,728
1,202,113
Total liabilities and equity
$
2,451,739
$
1,975,447
Essential Properties Realty Trust, Inc.
Reconciliation of Non-GAAP Financial Measures
Three months ended September
30,
Nine months ended September
30,
(unaudited, in thousands except per
share amounts)
2020
2019
2020
2019
Net income
$
12,336
$
14,106
$
36,823
$
33,399
Depreciation and amortization of real
estate
13,903
11,117
40,330
30,295
Provision for impairment of real
estate
3,221
—
5,080
1,921
Gain on dispositions of real estate,
net
(1,003)
(4,087)
(3,971)
(8,237)
Funds from Operations
28,457
21,136
78,262
57,378
Other non-recurring expenses1
116
2,748
2,252
7,101
Core Funds from Operations
28,573
23,884
80,514
64,479
Adjustments:
Straight-line rental revenue, net
(3,960)
(2,982)
(9,321)
(8,879)
Non-cash interest expense
764
610
1,535
2,135
Non-cash compensation expense
1,351
1,051
4,041
3,524
Other amortization expense
(335)
294
1,018
735
Other non-cash charges
14
2
530
8
Capitalized interest expense
(63)
(95)
(223)
(165)
Transaction costs
3
—
112
—
Adjusted Funds from Operations
$
26,347
$
22,764
$
78,206
$
61,837
Net income per share2:
Basic
$
0.13
$
0.18
$
0.39
$
0.46
Diluted
$
0.13
$
0.18
$
0.39
$
0.45
FFO per share2:
Basic
$
0.30
$
0.27
$
0.84
$
0.79
Diluted
$
0.30
$
0.27
$
0.84
$
0.78
Core FFO per share2:
Basic
$
0.30
$
0.31
$
0.87
$
0.89
Diluted
$
0.30
$
0.31
$
0.86
$
0.88
AFFO per share2:
Basic
$
0.28
$
0.29
$
0.84
$
0.85
Diluted
$
0.28
$
0.29
$
0.84
$
0.84
Additional supplemental
disclosure:
Scheduled principal repayments
$
977
$
1,159
$
2,895
$
4,549
Contractual deferred rents included in
total revenues
1,669
—
11,425
—
Reduction of revenue for non-accrual
tenants:
Cash
$
168
$
—
$
3,411
$
25
Straight-line
—
—
2,263
—
Total reduction of revenue for non-accrual
tenants
$
168
$
—
$
5,673
$
25
- Includes non-recurring expenses of $39 related to reimbursement
of executive relocation costs during the three and nine months
ended September 30, 2020, $1,093 for severance payments and
acceleration of non-cash compensation expense in connection with
the termination of one of our executive officers during the nine
months ended September 30, 2020, $77 and $196, respectively, of
non-recurring recruiting costs during the three and nine months
ended September 30, 2020, and our $924 loss on repayment of secured
borrowings during the nine months ended September 30, 2020.
- Calculations exclude $95, $110, $302 and $377 from the
numerator for the three and nine months ended September 30, 2020
and 2019, 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, 2020
Net income
$
12,336
Interest expense
7,651
Depreciation and amortization
13,966
Interest income
(58)
Income tax expense
55
EBITDA
33,950
Provision for impairment of real
estate
3,221
Gain on dispositions of real estate,
net
(1,003)
EBITDAre
36,168
Adjustment for current quarter investment
and disposition activity1
2,407
Adjustment to exclude other non-recurring
activity2
(47)
Adjusted EBITDAre - Current Estimated
Run Rate
38,528
General and administrative
5,801
Adjusted net operating income
("NOI")
44,329
Straight-line rental revenue, net1
(3,894)
Other amortization expense
(335)
Adjusted Cash NOI
$
40,100
Annualized EBITDAre
$
144,672
Annualized Adjusted EBITDAre
$
154,112
Annualized Adjusted NOI
$
177,316
Annualized Adjusted Cash NOI
$
160,400
- These adjustments are made to reflect EBITDAre, NOI and Cash
NOI as if all investments in and dispositions of real estate made
during the three months ended September 30, 2020 had occurred on
July 1, 2020.
- Adjustment excludes $116 of non-core expenses added back to
compute Core FFO and the $14 adjustment to our provision for loan
loss, offset by $177 of rent collected from tenants which had been
written off in prior periods.
Essential Properties Realty Trust, Inc.
Reconciliation of Non-GAAP Financial Measures
(dollars in thousands, except share and
per share amounts)
September 30, 2020
Secured debt:
Series 2017-1, Class A
$
158,513
Series 2017-1, Class B
15,669
Total secured debt
174,182
Unsecured debt:
$200mm term loan
200,000
$430mm term loan
430,000
Revolving credit facility1
—
Total unsecured debt
630,000
Gross debt
804,182
Less: cash & cash equivalents
(183,765)
Less: restricted cash deposits held for
the benefit of lenders
(3,906)
Net debt
616,511
Equity:
Preferred stock
—
Common stock & OP units (105,225,418
shares @ $18.32/share as of 9/30/20)2
1,927,730
Total equity
1,927,730
Total enterprise value ("TEV")
$
2,544,241
Net Debt / TEV
24.2%
Net Debt / Annualized Adjusted
EBITDAre
4.0x
- The Company’s revolving credit facility provides a maximum
aggregate initial original principal amount of up to $400 million
and includes an accordion feature to increase, subject to certain
conditions, the maximum availability of the facility by up to $200
million.
- Common equity & units as of September 30, 2020, based on
104,671,571 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/20201104005661/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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