- Second Quarter Net Income per Share of $0.35
and AFFO per Share of $0.41 -
- Closed Investments of $277.4 million at a
7.4% Weighted Average Cash Cap Rate -
- Increases 2023 AFFO Guidance to $1.62 to
$1.65 per Share -
Essential Properties Realty Trust, Inc. (NYSE: EPRT; “Essential
Properties” or the “Company”) today announced operating results for
the three and six months ended June 30, 2023.
Second Quarter 2023 Financial and Operating
Highlights:
Operating Results (compared to Second
Quarter 2022):
- Investments (78 properties)
$ Invested
$277.4 million
Weighted Avg Cash Cap Rate
7.4%
- Dispositions (16 properties)
Net Proceeds
$41.7 million
Weighted Avg Cash Cap Rate
6.2%
Increased by 30%
$0.35
- Funds from Operations ("FFO") per Share
Increased by 5%
$0.43
- Core Funds from Operations ("Core FFO") per Share
Increased by 7%
$0.44
- Adjusted Funds from Operations ("AFFO") per Share
Increased by 8%
$0.41
Equity Activity:
- Equity Raised (Gross) - ATM Program(1)
$24.48/share
$65.9 million
Year to Date 2023 Financial and Operating Highlights:
Operating Results (compared to YTD Second
Quarter 2022):
- Investments (135 properties)
$ Invested
$484.5 million
Weighted Avg Cash Cap Rate
7.5%
- Dispositions (33 properties)
Net Proceeds
$78.9 million
Weighted Avg Cash Cap Rate
6.1%
Increased by 33%
$0.64
Increased by 9%
$0.86
Increased by 6%
$0.86
Increased by 7%
$0.81
Equity Activity:
- Equity Raised (Gross) - Follow-On Offering (February 22,
2023)
$24.60/share
$217.8 million
- Equity Raised (Gross) - ATM Program(1)
$24.39/share
$86.6 million
Highlights Subsequent to Second Quarter 2023:
- Investments (2 properties)
$ Invested
$7.5 million
- Dispositions (1 property)
$ Gross Proceeds
$4.2 million
- Proceeds from Early Loan Repayment
($ Principal and Prepayment
Penalties)
$1.0 million
Equity Activity:
- Equity Raised (Gross) - ATM Program
$24.30/share
$3.9 million
- Includes 836,050 shares sold on a forward basis for gross
proceeds of $20.6 million that were physically settled in July
2023.
CEO Comments
Commenting on the second quarter 2023 results, the Company's
President and Chief Executive Officer, Pete Mavoides, said, “We are
pleased to report that our second quarter was another quarter of
strong results driven by a portfolio that continues to perform at a
very high level, and a differentiated investment model that
continues to generate attractive risk adjusted return
opportunities, supported by a well-capitalized balance sheet
providing us with great flexibility to continue to execute on our
strategy.”
Portfolio Highlights
The Company’s investment portfolio as of June 30, 2023 is
summarized as follows:
Number of properties
1,742
Weighted average lease term (WALT)
14.0 years
Weighted average rent coverage ratio
4.1x
Number of tenants
360
Number of concepts (i.e., brands)
560
Number of industries
16
Number of states
48
Weighted average occupancy
99.9%
Total square feet of rentable space
17,194,366
Cash ABR - service-oriented or
experience-based
92.5%
Cash ABR - properties subject to master
lease
65.8%
Portfolio Update
Investments
The Company’s investment activity during the three and six
months ended June 30, 2023 is summarized as follows:
Quarter Ended June 30,
2023
Year to Date June 30,
2023
Investments:
Investment volume
$277.4 million
$484.5 million
Number of transactions
29
53
Property count
78
135
Weighted average cash / GAAP cap rate
7.4%/8.7%
7.5%/8.8%
Weighted average lease escalation
1.9%
2.0%
% Subject to master lease
57%
69%
% Sale-leaseback transactions
99%
99%
% Existing relationship
66%
78%
% Required financial reporting
(tenant/guarantor)
100%
100%
WALT
19.3 years
19.2 years
Dispositions
The Company’s disposition activity during the three and six
months ended June 30, 2023 is summarized as follows:
Quarter Ended June 30,
2023
Year to Date June 30,
2023
Dispositions:
Net proceeds
$41.7 million
$78.9 million
Number of properties sold
16
33
Net gain / (loss)
$12.5 million
$17.5 million
Weighted average cash cap rate (excluding
vacant properties and sales subject to a tenant purchase option
)
6.2%
6.1%
Loan Repayments
Loan repayments to the Company during the three and six months
ended June 30, 2023 are summarized as follows:
Quarter Ended June 30,
2023
Year to Date June 30,
2023
Loan Repayments:
Proceeds—Principal
$7.6 million
$18.7 million
Proceeds—Prepayment penalties
$49 thousand
$0.2 million
Number of properties
8
12
Weighted average cash cap rate
7.5%
7.3%
Leverage and Balance Sheet and Liquidity
The Company's leverage, balance sheet and liquidity are
summarized in the following table.
June 30, 2023
Pro Forma June 30,
2023
Leverage:
Net debt to Annualized Adjusted
EBITDAre
4.3x
4.2x
Balance Sheet and Liquidity:
Cash and cash equivalents and restricted
cash
$14.1 million
$34.2 million
Unused revolving credit facility
capacity
$600.0 million
$600.0 million
Forward equity sales - unsettled
$20.1 million
$—
Total available liquidity
$634.2 million
$634.2 million
ATM Program:
2022 ATM Program initial availability
$500.0 million
Aggregate gross sales under the 2022 ATM
Program
$162.0 million
Availability remaining under the 2022 ATM
Program
$338.0 million
Average price per share of gross sales
since inception in May 2022
$23.27
Guidance
2023 Guidance
The Company is increasing its guidance for 2023 AFFO per share
on a fully diluted basis to a range of $1.62 to $1.65 from its
previously announced range of $1.60 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 June 9, 2023, Essential Properties'
board of directors declared a cash dividend of $0.28 per share of
common stock for the quarter ended June 30, 2023. The dividend was
paid on July 14, 2023 to stockholders of record as of the close of
business on June 30, 2023.
Conference Call Information
In conjunction with the release of Essential Properties’
operating results, the Company will host a conference call on
Thursday, July 27, 2023 at 10:00 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: 13739788. The telephone replay will be available
through August 10, 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—Second
Quarter Ended June 30, 2023 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
June 30, 2023, the Company’s portfolio consisted of 1,742
freestanding net lease properties with a weighted average lease
term of 14.0 years and a weighted average rent coverage ratio of
4.1x. In addition, as of June 30, 2023, the Company’s portfolio was
99.9% leased to 360 tenants operating 560 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 June 30, 2023 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 and capitalized
interest expense. 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 June
30,
Six months ended June
30,
(in thousands, except share and per
share data)
2023
2022
2023
2022
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Revenues:
Rental revenue1,2
$
81,819
$
67,089
$
159,991
$
133,201
Interest on loans and direct financing
lease receivables
4,534
3,949
8,981
7,771
Other revenue
163
408
1,232
595
Total revenues
86,516
71,446
170,204
141,567
Expenses:
General and administrative
7,585
7,026
16,169
15,089
Property expenses3
1,144
828
1,987
1,837
Depreciation and amortization
24,742
22,074
48,567
42,387
Provision for impairment of real
estate
802
6,258
1,479
10,193
Change in provision for credit losses
8
107
(22
)
167
Total expenses
34,281
36,293
68,180
69,673
Other operating income:
Gain on dispositions of real estate,
net
12,547
10,094
17,461
11,752
Income from operations
64,782
45,247
119,485
83,646
Other (expense)/income:
Loss on debt extinguishment4
—
—
—
(2,138
)
Interest expense
(12,071
)
(9,190
)
(24,204
)
(18,350
)
Interest income
448
30
1,086
48
Income before income tax
expense
53,159
36,087
96,367
63,206
Income tax expense
159
275
311
576
Net income
53,000
35,812
96,056
62,630
Net income attributable to non-controlling
interests
(198
)
(159
)
(358
)
(278
)
Net income attributable to
stockholders
$
52,802
$
35,653
$
95,698
$
62,352
Basic weighted-average shares
outstanding
150,492,454
131,271,882
147,466,087
129,068,197
Basic net income per share
$
0.35
$
0.27
$
0.65
$
0.48
Diluted weighted-average shares
outstanding
151,522,350
132,019,501
148,776,458
129,983,198
Diluted net income per share
$
0.35
$
0.27
$
0.64
$
0.48
- Includes contingent rent (based on a percentage of the tenant's
gross sales at the leased property) of $144, $159, $320 and $315
for the three and six months ended June 30, 2023 and 2022,
respectively.
- Includes reimbursable income from the Company’s tenants of
$750, $501, $1,341 and $1,054 for the three and six months ended
June 30, 2023 and 2022, respectively.
- Includes reimbursable expenses from the Company’s tenants of
$750, $500, $1,341 and $1,054 for the three and six months ended
June 30, 2023 and 2022, respectively.
- During the six months ended June 30, 2022, includes debt
extinguishment costs associated with the Company's restructuring of
its credit and term loan facilities.
Essential Properties Realty
Trust, Inc. Consolidated Balance Sheets
(in thousands, expect share and per
share amounts)
June 30, 2023
December 31, 2022
(Unaudited)
(Audited)
ASSETS
Investments:
Real estate investments, at cost:
Land and improvements
$
1,370,069
$
1,228,687
Building and improvements
2,684,807
2,440,630
Lease incentive
17,681
18,352
Construction in progress
59,570
34,537
Intangible lease assets
87,946
88,364
Total real estate investments, at cost
4,220,073
3,810,570
Less: accumulated depreciation and
amortization
(318,862
)
(276,307
)
Total real estate investments, net
3,901,211
3,534,263
Loans and direct financing lease
receivables, net
227,405
240,035
Real estate investments held for sale,
net
4,617
4,780
Net investments
4,133,233
3,779,078
Cash and cash equivalents
14,108
62,345
Restricted cash
—
9,155
Straight-line rent receivable, net
92,135
78,587
Derivative assets
47,865
47,877
Rent receivables, prepaid expenses and
other assets, net
25,481
22,991
Total assets
$
4,312,822
$
4,000,033
LIABILITIES AND EQUITY
Unsecured term loans, net of deferred
financing costs
$
1,026,053
$
1,025,492
Senior unsecured notes, net
395,566
395,286
Revolving credit facility
—
—
Intangible lease liabilities, net
11,399
11,551
Dividend payable
43,705
39,398
Derivative liabilities
657
2,274
Accrued liabilities and other payables
28,182
29,261
Total liabilities
1,505,562
1,503,262
Commitments and contingencies
—
—
Stockholders' equity:
Preferred stock, $0.01 par value;
150,000,000 authorized; none issued and outstanding as of June 30,
2023 and December 31, 2022
—
—
Common stock, $0.01 par value; 500,000,000
authorized; 155,172,501 and 142,379,655 issued and outstanding as
of June 30, 2023 and December 31, 2022, respectively
1,552
1,424
Additional paid-in capital
2,863,857
2,563,305
Distributions in excess of cumulative
earnings
(109,466
)
(117,187
)
Accumulated other comprehensive loss
42,785
40,719
Total stockholders' equity
2,798,728
2,488,261
Non-controlling interests
8,532
8,510
Total equity
2,807,260
2,496,771
Total liabilities and equity
$
4,312,822
$
4,000,033
Essential Properties Realty
Trust, Inc. Reconciliation of Non-GAAP Financial
Measures
Three months ended June
30,
Six months ended June
30,
(unaudited, in thousands except per
share amounts)
2023
2022
2023
2022
Net income
$
53,000
$
35,812
$
96,056
$
62,630
Depreciation and amortization of real
estate
24,717
22,048
48,515
42,335
Provision for impairment of real
estate
802
6,258
1,479
10,193
Gain on dispositions of real estate,
net
(12,547
)
(10,094
)
(17,461
)
(11,752
)
Funds from Operations
65,972
54,024
128,589
103,406
Non-core expense (income)1
172
—
(704
)
2,138
Core Funds from Operations
66,144
54,024
127,885
105,544
Adjustments:
Straight-line rental revenue, net
(6,710
)
(6,535
)
(13,548
)
(12,801
)
Non-cash interest expense
615
689
1,434
1,350
Non-cash compensation expense
2,157
2,188
4,878
5,024
Other amortization expense
254
208
535
402
Other non-cash charges
2
104
(33
)
160
Capitalized interest expense
(582
)
(61
)
(1,015
)
(127
)
Adjusted Funds from Operations
$
61,880
$
50,617
$
120,136
$
99,552
Net income per share2:
Basic
$
0.35
$
0.27
$
0.65
$
0.48
Diluted
$
0.35
$
0.27
$
0.64
$
0.48
FFO per share2:
Basic
$
0.44
$
0.41
$
0.87
$
0.80
Diluted
$
0.43
$
0.41
$
0.86
$
0.79
Core FFO per share2:
Basic
$
0.44
$
0.41
$
0.86
$
0.81
Diluted
$
0.44
$
0.41
$
0.86
$
0.81
AFFO per share2:
Basic
$
0.41
$
0.38
$
0.81
$
0.77
Diluted
$
0.41
$
0.38
$
0.81
$
0.76
- During the three and six months ended June 30, 2023, includes
$0.2 million of severance expense and non-cash compensation expense
in connection with the departure of one of our junior executives;
during the six months ended June 30, 2023, includes $0.9 million of
insurance recovery income related to two properties; and during the
six months ended June 30, 2022, includes our $2.1 million loss on
debt extinguishment.
- Calculations exclude $102, $97, $203 and $187 from the
numerator for the three and six months ended June 30, 2023 and
2022, respectively, related to dividends paid on unvested
restricted stock awards and restricted stock units.
Essential Properties Realty
Trust, Inc. Reconciliation of Non-GAAP Financial
Measures
(in thousands)
Three months ended June 30,
2023
Net income
$
53,000
Depreciation and amortization
24,742
Interest expense
12,071
Interest income
(448
)
Income tax expense
159
EBITDA
89,524
Provision for impairment of real
estate
802
Gain on dispositions of real estate,
net
(12,547
)
EBITDAre
77,779
Adjustment for current quarter re-leasing,
acquisition and disposition activity1
4,370
Adjustment to exclude other non-core or
non-recurring activity2
833
Adjustment to exclude
termination/prepayment fees and certain percentage rent3
(53
)
Adjusted EBITDAre - Current Estimated
Run Rate
82,929
General and administrative expense
7,230
Adjusted net operating income
("NOI")
90,159
Straight-line rental revenue, net1
(8,652
)
Other amortization expense
254
Adjusted Cash NOI
$
81,761
Annualized EBITDAre
$
311,116
Annualized Adjusted EBITDAre
$
331,716
Annualized Adjusted NOI
$
360,636
Annualized Adjusted Cash NOI
$
327,044
- 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
June 30, 2023 had occurred on April 1, 2023.
- Adjustment is made to i) exclude non-core income and expense
adjustments made in computing Core FFO, ii) exclude changes in our
provision for credit losses, iii) exclude the write-off of
receivables from prior periods and iv) 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)
June 30, 2023
Rate
Wtd. Avg. Maturity
Unsecured debt:
April 2024 term loan1
$
200,000
2.9
%
0.8 years
February 2027 term loan1
430,000
2.4
%
3.6 years
January 2028 term loan1,2
400,000
4.6
%
4.6 years
Senior unsecured notes due July 2031
400,000
3.1
%
8.0 years
Revolving credit facility2
—
—
%
2.6 years
Total unsecured debt
1,430,000
3.3
%
4.7 years
Gross debt
1,430,000
Less: cash & cash equivalents
(14,108
)
Less: restricted cash available for future
investment
—
Net debt
1,415,892
Equity:
Preferred stock
—
Common stock and OP units (155,726,348
shares @ $23.54/share as of 6/30/23)3
3,665,798
Total equity
3,665,798
Total enterprise value ("TEV")
$
5,081,690
Pro forma adjustments to Net Debt and
TEV:4
Net debt
$
1,415,892
Less: cash received — unsettled forward
equity
(20,122
)
Pro forma net debt
1,395,770
Total equity
3,665,798
Common stock — unsettled forward equity
(836,050 shares @ $23.54/share as of 6/30/23)
19,681
Pro forma TEV
$
5,081,249
Gross Debt / Undepreciated Gross
Assets
30.9
%
Net Debt / TEV
27.9
%
Net Debt / Annualized Adjusted
EBITDAre
4.3x
Pro Forma Gross Debt / Undepreciated
Gross Assets
30.7
%
Pro Forma Net Debt / Pro Forma
TEV
27.5
%
Pro Forma Net Debt / Annualized
Adjusted EBITDAre
4.2x
- 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 stock and OP units as of June 30, 2023, based on
155,172,501 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 836,050 shares
sold on a forward basis through the Company's ATM Program as if
they had been physically settled on June 30, 2023.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230726153931/en/
Investor/Media: Essential Properties Realty Trust, Inc.
Mark E. Patten, Chief Financial Officer 609-436-0619
investors@essentialproperties.com
Essential Properties Rea... (NYSE:EPRT)
Historical Stock Chart
From Apr 2024 to May 2024
Essential Properties Rea... (NYSE:EPRT)
Historical Stock Chart
From May 2023 to May 2024