Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Essential Properties Announces First Quarter 2024 Results By: Essential Properties Realty Trust, Inc. via Business Wire April 24, 2024 at 16:05 PM EDT - First Quarter Net Income per Share of $0.28 and AFFO per Share of $0.42 - - Closed Investments of $248.8 million at an 8.1% Weighted Average Cash Cap Rate - - Updates 2024 AFFO Guidance to $1.72 to $1.75 per Share - Essential Properties Realty Trust, Inc. (NYSE: EPRT; “Essential Properties” or the “Company”) today announced operating results for the three months ended March 31, 2024. First Quarter 2024 Financial and Operating Highlights: Operating Results (compared to First Quarter 2023): • Investments (79 properties) $ Invested $248.8 million Weighted Avg Cash Cap Rate 8.1% • Dispositions (7 properties) Net Proceeds $11.9 million Weighted Avg Cash Cap Rate 6.5% • Net Income per Share Decreased by 5% $0.28 • Funds from Operations ("FFO") per Share Increased by 7% $0.46 • Core Funds from Operations ("Core FFO") per Share Increased by 9% $0.46 • Adjusted Funds from Operations ("AFFO") per Share Increased by 5% $0.42 Debt, Equity & Leverage Update: • Equity Raised (Gross) - Follow-On Offering (March 14, 2024) (1) $24.75/share $256.2 million • Equity Raised (Gross) - ATM Program $24.17/share $53.4 million • Pro Forma Net Debt to Annualized Adjusted EBITDAre (2) As of Quarter End 3.6x _______________ 1. All shares were sold on a forward basis and 7,828,852 shares remain unsettled for estimated net proceeds of $184.2 million. 2. See page 12 for detailed calculation. Activity Subsequent to First Quarter 2024: • Investments (20 properties) $ Invested $61.0 million • Dispositions (2 properties) $ Gross Proceeds $1.3 million CEO Comments Commenting on the first quarter 2024 results, the Company's President and Chief Executive Officer, Pete Mavoides, said, “The year has started off on a positive note, with our highest first quarter amount of investments since inception, reflecting favorable competitive dynamics and the benefits of our differentiated relationship-driven sale-leaseback platform. With a healthy portfolio and strong tenant credit trends, coupled with our conservative leverage position and strong liquidity, we are well-positioned to continue to invest accretively. Our favorable performance in the first quarter and a strong second quarter investment pipeline provide us with the support to increase the bottom end of our 2024 AFFO per share guidance range to $1.72 to $1.75.” Portfolio Highlights The Company’s investment portfolio as of March 31, 2024 is summarized as follows: Number of properties 1,937 Weighted average lease term (WALT) 14.1 years Weighted average rent coverage ratio 3.9x Number of tenants 383 Number of concepts (i.e., brands) 548 Number of industries 16 Number of states 48 Weighted average occupancy 99.9% Total square feet of rentable space 19,254,998 Cash ABR - service-oriented or experience-based 93.2% Cash ABR - properties subject to master lease 67.0% Portfolio Update Investments The Company’s investment activity during the three months ended March 31, 2024 is summarized as follows: Quarter Ended March 31, 2024 Investments: Investment volume $248.8 million Number of transactions 36 Property count 79 Weighted average cash / GAAP cap rate 8.1%/9.3% Weighted average lease escalation 1.9% % Subject to master lease 82% % Sale-leaseback transactions 100% % Existing relationship 87% % Required financial reporting (tenant/guarantor) 100% WALT 17.2 years Dispositions The Company’s disposition activity during the three months ended March 31, 2024 is summarized as follows: Quarter Ended March 31, 2024 Dispositions: Net proceeds $11.9 million Number of properties sold 7 Net gain / (loss) $1.5 million Weighted average cash cap rate (excluding vacant properties and sales subject to a tenant purchase option ) 6.5% Loan Repayments Loan repayments to the Company during the three months ended March 31, 2024 are summarized as follows: Quarter Ended March 31, 2024 Loan Repayments: Proceeds—Principal $2.8 million Number of properties 6 Weighted average interest rate 7.0% Leverage and Balance Sheet and Liquidity The Company's leverage, balance sheet and liquidity as of March 31, 2024 are summarized in the following table. March 31, 2024 Pro Forma (1) March 31, 2024 Leverage: Net debt to Annualized Adjusted EBITDAre 4.1x 3.6x Balance Sheet and Liquidity: Cash and cash equivalents and restricted cash $79.2 million $263.3 million Unused revolving credit facility capacity $600.0 million $600.0 million Forward equity sales - unsettled $184.2 million — Total available liquidity $863.3 million $863.3 million ATM Program: 2022 ATM Program initial availability $500.0 million Aggregate gross sales under the 2022 ATM Program $274.0 million Availability remaining under the 2022 ATM Program $226.0 million Average price per share of gross sales since inception in May 2022 $23.72 _______________ 1. Pro forma adjustments have been made to reflect the 7,828,852 unsettled shares sold on a forward basis in the Company's March 2024 follow-on offering as if they had been physically settled for cash on March 31, 2024. Guidance 2024 Guidance The Company has increased the low end of its previously issued fully diluted 2024 AFFO per share estimate and now expects that 2024 AFFO per share on a fully diluted basis will be within a range of $1.72 to $1.75. 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 March 7, 2024, Essential Properties' board of directors declared a cash dividend of $0.285 per share of common stock for the quarter ended March 31, 2024. The first quarter 2024 dividend represents an annualized dividend of $1.14 per share of common stock. The dividend was paid on April 12, 2024 to stockholders of record as of the close of business on March 29, 2024. Conference Call Information In conjunction with the release of Essential Properties’ operating results, the Company will host a conference call on Thursday, April 25, 2024 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: 13745503. The telephone replay will be available through May 9, 2024. 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—First Quarter Ended March 31, 2024 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 March 31, 2024, the Company’s portfolio consisted of 1,937 freestanding net lease properties with a weighted average lease term of 14.1 years and a weighted average rent coverage ratio of 3.9x. In addition, as of March 31, 2024, the Company’s portfolio was 99.9% leased to 383 tenants operating 548 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 Quarterly Report on Form 10-Q for the year ended March 31, 2024 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 expenses 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 March 31, (in thousands, except share and per share data) 2024 2023 (Unaudited) (Unaudited) Revenues: Rental revenue1,2 $ 98,510 $ 78,172 Interest on loans and direct financing lease receivables 4,740 4,446 Other revenue 251 1,069 Total revenues 103,501 83,687 Expenses: General and administrative 9,358 8,583 Property expenses2 993 843 Depreciation and amortization 28,525 23,824 Provision for impairment of real estate 3,752 677 Change in provision for credit losses 2 (30 ) Total expenses 42,630 33,897 Other operating income: Gain on dispositions of real estate, net 1,512 4,914 Income from operations 62,383 54,704 Other (expense)/income: Interest expense (15,597 ) (12,133 ) Interest income 493 638 Income before income tax expense 47,279 43,209 Income tax expense 156 153 Net income 47,123 43,056 Net income attributable to non-controlling interests (148 ) (160 ) Net income attributable to stockholders $ 46,975 $ 42,896 Basic weighted-average shares outstanding 167,290,702 144,406,044 Basic net income per share $ 0.28 $ 0.30 Diluted weighted-average shares outstanding 168,854,601 146,000,007 Diluted net income per share $ 0.28 $ 0.29 ______________ 1. Includes contingent rent (based on a percentage of the tenant's gross sales at the leased property) of, $238 and $176 for the three months ended March 31, 2024 and 2023, respectively. 2. Includes reimbursable income or reimbursable expenses from the Company’s tenants of $548 and $591 for the three months ended March 31, 2024 and 2023, respectively. Essential Properties Realty Trust, Inc. Consolidated Balance Sheets (in thousands, expect share and per share amounts) March 31, 2024 December 31, 2023 (Unaudited) (Audited) ASSETS Investments: Real estate investments, at cost: Land and improvements $ 1,635,673 $ 1,542,302 Building and improvements 3,045,579 2,938,012 Lease incentive 17,892 17,890 Construction in progress 121,633 96,524 Intangible lease assets 88,320 89,209 Total real estate investments, at cost 4,909,097 4,683,937 Less: accumulated depreciation and amortization (393,784 ) (367,133 ) Total real estate investments, net 4,515,313 4,316,804 Loans and direct financing lease receivables, net 235,905 223,854 Real estate investments held for sale, net 1,235 7,455 Net investments 4,752,453 4,548,113 Cash and cash equivalents 79,161 39,807 Restricted cash 3 9,156 Straight-line rent receivable, net 117,130 107,545 Derivative assets 37,207 30,980 Rent receivables, prepaid expenses and other assets, net 27,491 32,660 Total assets $ 5,013,445 $ 4,768,261 LIABILITIES AND EQUITY Unsecured term loans, net of deferred financing costs $ 1,273,365 $ 1,272,772 Senior unsecured notes, net 395,985 395,846 Revolving credit facility — — Intangible lease liabilities, net 10,936 11,206 Intangible lease liabilities held for sale, net 76 — Dividend payable 50,236 47,182 Derivative liabilities 9,490 23,005 Accrued liabilities and other payables 25,798 31,248 Total liabilities 1,765,886 1,781,259 Commitments and contingencies — — Stockholders' equity: Preferred stock, $0.01 par value; 150,000,000 authorized; none issued and outstanding as of March 31, 2024 and December 31, 2023 — — Common stock, $0.01 par value; 500,000,000 authorized; 175,306,386 and 164,635,150 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively 1,753 1,646 Additional paid-in capital 3,325,668 3,078,459 Distributions in excess of cumulative earnings (111,926 ) (105,545 ) Accumulated other comprehensive loss 23,594 4,019 Total stockholders' equity 3,239,089 2,978,579 Non-controlling interests 8,470 8,423 Total equity 3,247,559 2,987,002 Total liabilities and equity $ 5,013,445 $ 4,768,261 Essential Properties Realty Trust, Inc. Reconciliation of Non-GAAP Financial Measures Three months ended March 31, (unaudited, in thousands except per share amounts) 2024 2023 Net income $ 47,123 $ 43,056 Depreciation and amortization of real estate 28,485 23,799 Provision for impairment of real estate 3,752 677 Gain on dispositions of real estate, net (1,512 ) (4,914 ) Funds from Operations 77,848 62,618 Non-core expense (income)1 — (876 ) Core Funds from Operations 77,848 61,742 Adjustments: Straight-line rental revenue, net (9,980 ) (6,838 ) Non-cash interest 949 819 Non-cash compensation expense 2,945 2,721 Other amortization expense 219 281 Other non-cash adjustments (7 ) (35 ) Capitalized interest expense (859 ) (432 ) Adjusted Funds from Operations $ 71,115 $ 58,258 Net income per share2: Basic $ 0.28 $ 0.30 Diluted $ 0.28 $ 0.29 FFO per share2: Basic $ 0.46 $ 0.43 Diluted $ 0.46 $ 0.43 Core FFO per share2: Basic $ 0.46 $ 0.43 Diluted $ 0.46 $ 0.42 AFFO per share2: Basic $ 0.42 $ 0.40 Diluted $ 0.42 $ 0.40 ______________ 1. During the three months ended March 31, 2023, includes $0.9 million of insurance recovery income related to two properties. 2. Calculations exclude $116 and $101 from the numerator for the three months ended March 31, 2024 and 2023, respectively, related to dividends paid on unvested restricted stock units. Essential Properties Realty Trust, Inc. Reconciliation of Non-GAAP Financial Measures (in thousands) Three months ended March 31, 2024 Net income $ 47,123 Depreciation and amortization 28,525 Interest expense 15,597 Interest income (493 ) Income tax expense 156 EBITDA 90,908 Provision for impairment of real estate 3,752 Gain on dispositions of real estate, net (1,512 ) EBITDAre 93,148 Adjustment for current quarter re-leasing, acquisition and disposition activity1 4,122 Adjustment to exclude other non-core or non-recurring activity2 392 Adjustment to exclude termination/prepayment fees and certain percentage rent3 (183 ) Adjusted EBITDAre - Current Estimated Run Rate 97,479 General and administrative expense 8,784 Adjusted net operating income ("NOI") 106,263 Straight-line rental revenue, net1 (10,544 ) Other amortization expense 219 Adjusted Cash NOI $ 95,938 Annualized EBITDAre $ 372,592 Annualized Adjusted EBITDAre $ 389,916 Annualized Adjusted NOI $ 425,052 Annualized Adjusted Cash NOI $ 383,752 ______________ 1. 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 March 31, 2024 had occurred on January 1, 2024. 2. Adjustment is made to i) exclude non-core expenses added back to compute Core FFO, ii) exclude changes in the Company's provision for credit losses and iii) eliminate the impact of seasonal fluctuation in certain non-cash compensation expense recorded in the period. 3. 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) March 31, 2024 Rate Wtd. Avg. Maturity Unsecured debt: February 2027 term loan1 $ 430,000 2.4% 2.9 years January 2028 term loan1 400,000 4.6% 3.8 years February 2029 term loan1,2 450,000 4.3% 4.9 years Senior unsecured notes due July 2031 400,000 3.1% 7.3 years Revolving credit facility3 — —% 1.9 years Total unsecured debt 1,680,000 3.6% 4.7 years Gross debt 1,680,000 Less: cash & cash equivalents (79,161 ) Less: restricted cash available for future investment (3 ) Net debt 1,600,836 Equity: Preferred stock — Common stock & OP units (175,860,233 shares @ $26.66/share as of 3/31/24)4 4,688,434 Total equity 4,688,434 Total enterprise value ("TEV") $ 6,289,270 Pro forma adjustments to Net debt and TEV:5 Net debt $ 1,600,836 Less: Unsettled forward equity (7,828,852 shares @ $23.53/share as of 3/31/24) (184,178 ) Pro forma net debt 1,416,658 Total equity 4,688,434 Common stock — unsettled forward equity (7,828,852 shares @ $26.66/share as of 3/31/24) 208,717 Pro forma TEV $ 6,313,809 Gross Debt / Undepreciated Gross Assets 31.1 % Net Debt / TEV 25.5 % Net Debt / Annualized Adjusted EBITDAre 4.1x Pro Forma Gross Debt / Undepreciated Gross Assets 30.0 % Pro Forma Net Debt / Pro Forma TEV 22.4 % Pro Forma Net Debt / Annualized Adjusted EBITDAre 3.6x ______________ 1. 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 (for 2027 and 2028 Term Loans) or 95bps (for 2029 Term Loan) and SOFR premium of 10bps. 2. Weighted average maturity calculation is made after giving effect to extension options exercisable at the Company's election. 3. 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. 4. Common stock & OP units as of March 31, 2024, based on 175,306,386 common shares outstanding and 553,847 OP units held by non-controlling interests. 5. Pro forma adjustments have been made to reflect the unsettled portion of shares sold on a forward basis in the Company's March 2024 follow-on offering as if they had been physically settled on March 31, 2024. View source version on businesswire.com: https://www.businesswire.com/news/home/20240424956793/en/Contacts Investor/Media: Essential Properties Realty Trust, Inc. Robert W. Salisbury, CFA Senior Vice President, Head of Capital Markets 609-436-0619 investors@essentialproperties.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Essential Properties Announces First Quarter 2024 Results By: Essential Properties Realty Trust, Inc. via Business Wire April 24, 2024 at 16:05 PM EDT - First Quarter Net Income per Share of $0.28 and AFFO per Share of $0.42 - - Closed Investments of $248.8 million at an 8.1% Weighted Average Cash Cap Rate - - Updates 2024 AFFO Guidance to $1.72 to $1.75 per Share - Essential Properties Realty Trust, Inc. (NYSE: EPRT; “Essential Properties” or the “Company”) today announced operating results for the three months ended March 31, 2024. First Quarter 2024 Financial and Operating Highlights: Operating Results (compared to First Quarter 2023): • Investments (79 properties) $ Invested $248.8 million Weighted Avg Cash Cap Rate 8.1% • Dispositions (7 properties) Net Proceeds $11.9 million Weighted Avg Cash Cap Rate 6.5% • Net Income per Share Decreased by 5% $0.28 • Funds from Operations ("FFO") per Share Increased by 7% $0.46 • Core Funds from Operations ("Core FFO") per Share Increased by 9% $0.46 • Adjusted Funds from Operations ("AFFO") per Share Increased by 5% $0.42 Debt, Equity & Leverage Update: • Equity Raised (Gross) - Follow-On Offering (March 14, 2024) (1) $24.75/share $256.2 million • Equity Raised (Gross) - ATM Program $24.17/share $53.4 million • Pro Forma Net Debt to Annualized Adjusted EBITDAre (2) As of Quarter End 3.6x _______________ 1. All shares were sold on a forward basis and 7,828,852 shares remain unsettled for estimated net proceeds of $184.2 million. 2. See page 12 for detailed calculation. Activity Subsequent to First Quarter 2024: • Investments (20 properties) $ Invested $61.0 million • Dispositions (2 properties) $ Gross Proceeds $1.3 million CEO Comments Commenting on the first quarter 2024 results, the Company's President and Chief Executive Officer, Pete Mavoides, said, “The year has started off on a positive note, with our highest first quarter amount of investments since inception, reflecting favorable competitive dynamics and the benefits of our differentiated relationship-driven sale-leaseback platform. With a healthy portfolio and strong tenant credit trends, coupled with our conservative leverage position and strong liquidity, we are well-positioned to continue to invest accretively. Our favorable performance in the first quarter and a strong second quarter investment pipeline provide us with the support to increase the bottom end of our 2024 AFFO per share guidance range to $1.72 to $1.75.” Portfolio Highlights The Company’s investment portfolio as of March 31, 2024 is summarized as follows: Number of properties 1,937 Weighted average lease term (WALT) 14.1 years Weighted average rent coverage ratio 3.9x Number of tenants 383 Number of concepts (i.e., brands) 548 Number of industries 16 Number of states 48 Weighted average occupancy 99.9% Total square feet of rentable space 19,254,998 Cash ABR - service-oriented or experience-based 93.2% Cash ABR - properties subject to master lease 67.0% Portfolio Update Investments The Company’s investment activity during the three months ended March 31, 2024 is summarized as follows: Quarter Ended March 31, 2024 Investments: Investment volume $248.8 million Number of transactions 36 Property count 79 Weighted average cash / GAAP cap rate 8.1%/9.3% Weighted average lease escalation 1.9% % Subject to master lease 82% % Sale-leaseback transactions 100% % Existing relationship 87% % Required financial reporting (tenant/guarantor) 100% WALT 17.2 years Dispositions The Company’s disposition activity during the three months ended March 31, 2024 is summarized as follows: Quarter Ended March 31, 2024 Dispositions: Net proceeds $11.9 million Number of properties sold 7 Net gain / (loss) $1.5 million Weighted average cash cap rate (excluding vacant properties and sales subject to a tenant purchase option ) 6.5% Loan Repayments Loan repayments to the Company during the three months ended March 31, 2024 are summarized as follows: Quarter Ended March 31, 2024 Loan Repayments: Proceeds—Principal $2.8 million Number of properties 6 Weighted average interest rate 7.0% Leverage and Balance Sheet and Liquidity The Company's leverage, balance sheet and liquidity as of March 31, 2024 are summarized in the following table. March 31, 2024 Pro Forma (1) March 31, 2024 Leverage: Net debt to Annualized Adjusted EBITDAre 4.1x 3.6x Balance Sheet and Liquidity: Cash and cash equivalents and restricted cash $79.2 million $263.3 million Unused revolving credit facility capacity $600.0 million $600.0 million Forward equity sales - unsettled $184.2 million — Total available liquidity $863.3 million $863.3 million ATM Program: 2022 ATM Program initial availability $500.0 million Aggregate gross sales under the 2022 ATM Program $274.0 million Availability remaining under the 2022 ATM Program $226.0 million Average price per share of gross sales since inception in May 2022 $23.72 _______________ 1. Pro forma adjustments have been made to reflect the 7,828,852 unsettled shares sold on a forward basis in the Company's March 2024 follow-on offering as if they had been physically settled for cash on March 31, 2024. Guidance 2024 Guidance The Company has increased the low end of its previously issued fully diluted 2024 AFFO per share estimate and now expects that 2024 AFFO per share on a fully diluted basis will be within a range of $1.72 to $1.75. 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 March 7, 2024, Essential Properties' board of directors declared a cash dividend of $0.285 per share of common stock for the quarter ended March 31, 2024. The first quarter 2024 dividend represents an annualized dividend of $1.14 per share of common stock. The dividend was paid on April 12, 2024 to stockholders of record as of the close of business on March 29, 2024. Conference Call Information In conjunction with the release of Essential Properties’ operating results, the Company will host a conference call on Thursday, April 25, 2024 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: 13745503. The telephone replay will be available through May 9, 2024. 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—First Quarter Ended March 31, 2024 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 March 31, 2024, the Company’s portfolio consisted of 1,937 freestanding net lease properties with a weighted average lease term of 14.1 years and a weighted average rent coverage ratio of 3.9x. In addition, as of March 31, 2024, the Company’s portfolio was 99.9% leased to 383 tenants operating 548 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 Quarterly Report on Form 10-Q for the year ended March 31, 2024 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 expenses 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 March 31, (in thousands, except share and per share data) 2024 2023 (Unaudited) (Unaudited) Revenues: Rental revenue1,2 $ 98,510 $ 78,172 Interest on loans and direct financing lease receivables 4,740 4,446 Other revenue 251 1,069 Total revenues 103,501 83,687 Expenses: General and administrative 9,358 8,583 Property expenses2 993 843 Depreciation and amortization 28,525 23,824 Provision for impairment of real estate 3,752 677 Change in provision for credit losses 2 (30 ) Total expenses 42,630 33,897 Other operating income: Gain on dispositions of real estate, net 1,512 4,914 Income from operations 62,383 54,704 Other (expense)/income: Interest expense (15,597 ) (12,133 ) Interest income 493 638 Income before income tax expense 47,279 43,209 Income tax expense 156 153 Net income 47,123 43,056 Net income attributable to non-controlling interests (148 ) (160 ) Net income attributable to stockholders $ 46,975 $ 42,896 Basic weighted-average shares outstanding 167,290,702 144,406,044 Basic net income per share $ 0.28 $ 0.30 Diluted weighted-average shares outstanding 168,854,601 146,000,007 Diluted net income per share $ 0.28 $ 0.29 ______________ 1. Includes contingent rent (based on a percentage of the tenant's gross sales at the leased property) of, $238 and $176 for the three months ended March 31, 2024 and 2023, respectively. 2. Includes reimbursable income or reimbursable expenses from the Company’s tenants of $548 and $591 for the three months ended March 31, 2024 and 2023, respectively. Essential Properties Realty Trust, Inc. Consolidated Balance Sheets (in thousands, expect share and per share amounts) March 31, 2024 December 31, 2023 (Unaudited) (Audited) ASSETS Investments: Real estate investments, at cost: Land and improvements $ 1,635,673 $ 1,542,302 Building and improvements 3,045,579 2,938,012 Lease incentive 17,892 17,890 Construction in progress 121,633 96,524 Intangible lease assets 88,320 89,209 Total real estate investments, at cost 4,909,097 4,683,937 Less: accumulated depreciation and amortization (393,784 ) (367,133 ) Total real estate investments, net 4,515,313 4,316,804 Loans and direct financing lease receivables, net 235,905 223,854 Real estate investments held for sale, net 1,235 7,455 Net investments 4,752,453 4,548,113 Cash and cash equivalents 79,161 39,807 Restricted cash 3 9,156 Straight-line rent receivable, net 117,130 107,545 Derivative assets 37,207 30,980 Rent receivables, prepaid expenses and other assets, net 27,491 32,660 Total assets $ 5,013,445 $ 4,768,261 LIABILITIES AND EQUITY Unsecured term loans, net of deferred financing costs $ 1,273,365 $ 1,272,772 Senior unsecured notes, net 395,985 395,846 Revolving credit facility — — Intangible lease liabilities, net 10,936 11,206 Intangible lease liabilities held for sale, net 76 — Dividend payable 50,236 47,182 Derivative liabilities 9,490 23,005 Accrued liabilities and other payables 25,798 31,248 Total liabilities 1,765,886 1,781,259 Commitments and contingencies — — Stockholders' equity: Preferred stock, $0.01 par value; 150,000,000 authorized; none issued and outstanding as of March 31, 2024 and December 31, 2023 — — Common stock, $0.01 par value; 500,000,000 authorized; 175,306,386 and 164,635,150 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively 1,753 1,646 Additional paid-in capital 3,325,668 3,078,459 Distributions in excess of cumulative earnings (111,926 ) (105,545 ) Accumulated other comprehensive loss 23,594 4,019 Total stockholders' equity 3,239,089 2,978,579 Non-controlling interests 8,470 8,423 Total equity 3,247,559 2,987,002 Total liabilities and equity $ 5,013,445 $ 4,768,261 Essential Properties Realty Trust, Inc. Reconciliation of Non-GAAP Financial Measures Three months ended March 31, (unaudited, in thousands except per share amounts) 2024 2023 Net income $ 47,123 $ 43,056 Depreciation and amortization of real estate 28,485 23,799 Provision for impairment of real estate 3,752 677 Gain on dispositions of real estate, net (1,512 ) (4,914 ) Funds from Operations 77,848 62,618 Non-core expense (income)1 — (876 ) Core Funds from Operations 77,848 61,742 Adjustments: Straight-line rental revenue, net (9,980 ) (6,838 ) Non-cash interest 949 819 Non-cash compensation expense 2,945 2,721 Other amortization expense 219 281 Other non-cash adjustments (7 ) (35 ) Capitalized interest expense (859 ) (432 ) Adjusted Funds from Operations $ 71,115 $ 58,258 Net income per share2: Basic $ 0.28 $ 0.30 Diluted $ 0.28 $ 0.29 FFO per share2: Basic $ 0.46 $ 0.43 Diluted $ 0.46 $ 0.43 Core FFO per share2: Basic $ 0.46 $ 0.43 Diluted $ 0.46 $ 0.42 AFFO per share2: Basic $ 0.42 $ 0.40 Diluted $ 0.42 $ 0.40 ______________ 1. During the three months ended March 31, 2023, includes $0.9 million of insurance recovery income related to two properties. 2. Calculations exclude $116 and $101 from the numerator for the three months ended March 31, 2024 and 2023, respectively, related to dividends paid on unvested restricted stock units. Essential Properties Realty Trust, Inc. Reconciliation of Non-GAAP Financial Measures (in thousands) Three months ended March 31, 2024 Net income $ 47,123 Depreciation and amortization 28,525 Interest expense 15,597 Interest income (493 ) Income tax expense 156 EBITDA 90,908 Provision for impairment of real estate 3,752 Gain on dispositions of real estate, net (1,512 ) EBITDAre 93,148 Adjustment for current quarter re-leasing, acquisition and disposition activity1 4,122 Adjustment to exclude other non-core or non-recurring activity2 392 Adjustment to exclude termination/prepayment fees and certain percentage rent3 (183 ) Adjusted EBITDAre - Current Estimated Run Rate 97,479 General and administrative expense 8,784 Adjusted net operating income ("NOI") 106,263 Straight-line rental revenue, net1 (10,544 ) Other amortization expense 219 Adjusted Cash NOI $ 95,938 Annualized EBITDAre $ 372,592 Annualized Adjusted EBITDAre $ 389,916 Annualized Adjusted NOI $ 425,052 Annualized Adjusted Cash NOI $ 383,752 ______________ 1. 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 March 31, 2024 had occurred on January 1, 2024. 2. Adjustment is made to i) exclude non-core expenses added back to compute Core FFO, ii) exclude changes in the Company's provision for credit losses and iii) eliminate the impact of seasonal fluctuation in certain non-cash compensation expense recorded in the period. 3. 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) March 31, 2024 Rate Wtd. Avg. Maturity Unsecured debt: February 2027 term loan1 $ 430,000 2.4% 2.9 years January 2028 term loan1 400,000 4.6% 3.8 years February 2029 term loan1,2 450,000 4.3% 4.9 years Senior unsecured notes due July 2031 400,000 3.1% 7.3 years Revolving credit facility3 — —% 1.9 years Total unsecured debt 1,680,000 3.6% 4.7 years Gross debt 1,680,000 Less: cash & cash equivalents (79,161 ) Less: restricted cash available for future investment (3 ) Net debt 1,600,836 Equity: Preferred stock — Common stock & OP units (175,860,233 shares @ $26.66/share as of 3/31/24)4 4,688,434 Total equity 4,688,434 Total enterprise value ("TEV") $ 6,289,270 Pro forma adjustments to Net debt and TEV:5 Net debt $ 1,600,836 Less: Unsettled forward equity (7,828,852 shares @ $23.53/share as of 3/31/24) (184,178 ) Pro forma net debt 1,416,658 Total equity 4,688,434 Common stock — unsettled forward equity (7,828,852 shares @ $26.66/share as of 3/31/24) 208,717 Pro forma TEV $ 6,313,809 Gross Debt / Undepreciated Gross Assets 31.1 % Net Debt / TEV 25.5 % Net Debt / Annualized Adjusted EBITDAre 4.1x Pro Forma Gross Debt / Undepreciated Gross Assets 30.0 % Pro Forma Net Debt / Pro Forma TEV 22.4 % Pro Forma Net Debt / Annualized Adjusted EBITDAre 3.6x ______________ 1. 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 (for 2027 and 2028 Term Loans) or 95bps (for 2029 Term Loan) and SOFR premium of 10bps. 2. Weighted average maturity calculation is made after giving effect to extension options exercisable at the Company's election. 3. 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. 4. Common stock & OP units as of March 31, 2024, based on 175,306,386 common shares outstanding and 553,847 OP units held by non-controlling interests. 5. Pro forma adjustments have been made to reflect the unsettled portion of shares sold on a forward basis in the Company's March 2024 follow-on offering as if they had been physically settled on March 31, 2024. View source version on businesswire.com: https://www.businesswire.com/news/home/20240424956793/en/Contacts Investor/Media: Essential Properties Realty Trust, Inc. Robert W. Salisbury, CFA Senior Vice President, Head of Capital Markets 609-436-0619 investors@essentialproperties.com
- First Quarter Net Income per Share of $0.28 and AFFO per Share of $0.42 - - Closed Investments of $248.8 million at an 8.1% Weighted Average Cash Cap Rate - - Updates 2024 AFFO Guidance to $1.72 to $1.75 per Share -
Essential Properties Realty Trust, Inc. (NYSE: EPRT; “Essential Properties” or the “Company”) today announced operating results for the three months ended March 31, 2024. First Quarter 2024 Financial and Operating Highlights: Operating Results (compared to First Quarter 2023): • Investments (79 properties) $ Invested $248.8 million Weighted Avg Cash Cap Rate 8.1% • Dispositions (7 properties) Net Proceeds $11.9 million Weighted Avg Cash Cap Rate 6.5% • Net Income per Share Decreased by 5% $0.28 • Funds from Operations ("FFO") per Share Increased by 7% $0.46 • Core Funds from Operations ("Core FFO") per Share Increased by 9% $0.46 • Adjusted Funds from Operations ("AFFO") per Share Increased by 5% $0.42 Debt, Equity & Leverage Update: • Equity Raised (Gross) - Follow-On Offering (March 14, 2024) (1) $24.75/share $256.2 million • Equity Raised (Gross) - ATM Program $24.17/share $53.4 million • Pro Forma Net Debt to Annualized Adjusted EBITDAre (2) As of Quarter End 3.6x _______________ 1. All shares were sold on a forward basis and 7,828,852 shares remain unsettled for estimated net proceeds of $184.2 million. 2. See page 12 for detailed calculation. Activity Subsequent to First Quarter 2024: • Investments (20 properties) $ Invested $61.0 million • Dispositions (2 properties) $ Gross Proceeds $1.3 million CEO Comments Commenting on the first quarter 2024 results, the Company's President and Chief Executive Officer, Pete Mavoides, said, “The year has started off on a positive note, with our highest first quarter amount of investments since inception, reflecting favorable competitive dynamics and the benefits of our differentiated relationship-driven sale-leaseback platform. With a healthy portfolio and strong tenant credit trends, coupled with our conservative leverage position and strong liquidity, we are well-positioned to continue to invest accretively. Our favorable performance in the first quarter and a strong second quarter investment pipeline provide us with the support to increase the bottom end of our 2024 AFFO per share guidance range to $1.72 to $1.75.” Portfolio Highlights The Company’s investment portfolio as of March 31, 2024 is summarized as follows: Number of properties 1,937 Weighted average lease term (WALT) 14.1 years Weighted average rent coverage ratio 3.9x Number of tenants 383 Number of concepts (i.e., brands) 548 Number of industries 16 Number of states 48 Weighted average occupancy 99.9% Total square feet of rentable space 19,254,998 Cash ABR - service-oriented or experience-based 93.2% Cash ABR - properties subject to master lease 67.0% Portfolio Update Investments The Company’s investment activity during the three months ended March 31, 2024 is summarized as follows: Quarter Ended March 31, 2024 Investments: Investment volume $248.8 million Number of transactions 36 Property count 79 Weighted average cash / GAAP cap rate 8.1%/9.3% Weighted average lease escalation 1.9% % Subject to master lease 82% % Sale-leaseback transactions 100% % Existing relationship 87% % Required financial reporting (tenant/guarantor) 100% WALT 17.2 years Dispositions The Company’s disposition activity during the three months ended March 31, 2024 is summarized as follows: Quarter Ended March 31, 2024 Dispositions: Net proceeds $11.9 million Number of properties sold 7 Net gain / (loss) $1.5 million Weighted average cash cap rate (excluding vacant properties and sales subject to a tenant purchase option ) 6.5% Loan Repayments Loan repayments to the Company during the three months ended March 31, 2024 are summarized as follows: Quarter Ended March 31, 2024 Loan Repayments: Proceeds—Principal $2.8 million Number of properties 6 Weighted average interest rate 7.0% Leverage and Balance Sheet and Liquidity The Company's leverage, balance sheet and liquidity as of March 31, 2024 are summarized in the following table. March 31, 2024 Pro Forma (1) March 31, 2024 Leverage: Net debt to Annualized Adjusted EBITDAre 4.1x 3.6x Balance Sheet and Liquidity: Cash and cash equivalents and restricted cash $79.2 million $263.3 million Unused revolving credit facility capacity $600.0 million $600.0 million Forward equity sales - unsettled $184.2 million — Total available liquidity $863.3 million $863.3 million ATM Program: 2022 ATM Program initial availability $500.0 million Aggregate gross sales under the 2022 ATM Program $274.0 million Availability remaining under the 2022 ATM Program $226.0 million Average price per share of gross sales since inception in May 2022 $23.72 _______________ 1. Pro forma adjustments have been made to reflect the 7,828,852 unsettled shares sold on a forward basis in the Company's March 2024 follow-on offering as if they had been physically settled for cash on March 31, 2024. Guidance 2024 Guidance The Company has increased the low end of its previously issued fully diluted 2024 AFFO per share estimate and now expects that 2024 AFFO per share on a fully diluted basis will be within a range of $1.72 to $1.75. 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 March 7, 2024, Essential Properties' board of directors declared a cash dividend of $0.285 per share of common stock for the quarter ended March 31, 2024. The first quarter 2024 dividend represents an annualized dividend of $1.14 per share of common stock. The dividend was paid on April 12, 2024 to stockholders of record as of the close of business on March 29, 2024. Conference Call Information In conjunction with the release of Essential Properties’ operating results, the Company will host a conference call on Thursday, April 25, 2024 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: 13745503. The telephone replay will be available through May 9, 2024. 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—First Quarter Ended March 31, 2024 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 March 31, 2024, the Company’s portfolio consisted of 1,937 freestanding net lease properties with a weighted average lease term of 14.1 years and a weighted average rent coverage ratio of 3.9x. In addition, as of March 31, 2024, the Company’s portfolio was 99.9% leased to 383 tenants operating 548 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 Quarterly Report on Form 10-Q for the year ended March 31, 2024 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 expenses 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 March 31, (in thousands, except share and per share data) 2024 2023 (Unaudited) (Unaudited) Revenues: Rental revenue1,2 $ 98,510 $ 78,172 Interest on loans and direct financing lease receivables 4,740 4,446 Other revenue 251 1,069 Total revenues 103,501 83,687 Expenses: General and administrative 9,358 8,583 Property expenses2 993 843 Depreciation and amortization 28,525 23,824 Provision for impairment of real estate 3,752 677 Change in provision for credit losses 2 (30 ) Total expenses 42,630 33,897 Other operating income: Gain on dispositions of real estate, net 1,512 4,914 Income from operations 62,383 54,704 Other (expense)/income: Interest expense (15,597 ) (12,133 ) Interest income 493 638 Income before income tax expense 47,279 43,209 Income tax expense 156 153 Net income 47,123 43,056 Net income attributable to non-controlling interests (148 ) (160 ) Net income attributable to stockholders $ 46,975 $ 42,896 Basic weighted-average shares outstanding 167,290,702 144,406,044 Basic net income per share $ 0.28 $ 0.30 Diluted weighted-average shares outstanding 168,854,601 146,000,007 Diluted net income per share $ 0.28 $ 0.29 ______________ 1. Includes contingent rent (based on a percentage of the tenant's gross sales at the leased property) of, $238 and $176 for the three months ended March 31, 2024 and 2023, respectively. 2. Includes reimbursable income or reimbursable expenses from the Company’s tenants of $548 and $591 for the three months ended March 31, 2024 and 2023, respectively. Essential Properties Realty Trust, Inc. Consolidated Balance Sheets (in thousands, expect share and per share amounts) March 31, 2024 December 31, 2023 (Unaudited) (Audited) ASSETS Investments: Real estate investments, at cost: Land and improvements $ 1,635,673 $ 1,542,302 Building and improvements 3,045,579 2,938,012 Lease incentive 17,892 17,890 Construction in progress 121,633 96,524 Intangible lease assets 88,320 89,209 Total real estate investments, at cost 4,909,097 4,683,937 Less: accumulated depreciation and amortization (393,784 ) (367,133 ) Total real estate investments, net 4,515,313 4,316,804 Loans and direct financing lease receivables, net 235,905 223,854 Real estate investments held for sale, net 1,235 7,455 Net investments 4,752,453 4,548,113 Cash and cash equivalents 79,161 39,807 Restricted cash 3 9,156 Straight-line rent receivable, net 117,130 107,545 Derivative assets 37,207 30,980 Rent receivables, prepaid expenses and other assets, net 27,491 32,660 Total assets $ 5,013,445 $ 4,768,261 LIABILITIES AND EQUITY Unsecured term loans, net of deferred financing costs $ 1,273,365 $ 1,272,772 Senior unsecured notes, net 395,985 395,846 Revolving credit facility — — Intangible lease liabilities, net 10,936 11,206 Intangible lease liabilities held for sale, net 76 — Dividend payable 50,236 47,182 Derivative liabilities 9,490 23,005 Accrued liabilities and other payables 25,798 31,248 Total liabilities 1,765,886 1,781,259 Commitments and contingencies — — Stockholders' equity: Preferred stock, $0.01 par value; 150,000,000 authorized; none issued and outstanding as of March 31, 2024 and December 31, 2023 — — Common stock, $0.01 par value; 500,000,000 authorized; 175,306,386 and 164,635,150 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively 1,753 1,646 Additional paid-in capital 3,325,668 3,078,459 Distributions in excess of cumulative earnings (111,926 ) (105,545 ) Accumulated other comprehensive loss 23,594 4,019 Total stockholders' equity 3,239,089 2,978,579 Non-controlling interests 8,470 8,423 Total equity 3,247,559 2,987,002 Total liabilities and equity $ 5,013,445 $ 4,768,261 Essential Properties Realty Trust, Inc. Reconciliation of Non-GAAP Financial Measures Three months ended March 31, (unaudited, in thousands except per share amounts) 2024 2023 Net income $ 47,123 $ 43,056 Depreciation and amortization of real estate 28,485 23,799 Provision for impairment of real estate 3,752 677 Gain on dispositions of real estate, net (1,512 ) (4,914 ) Funds from Operations 77,848 62,618 Non-core expense (income)1 — (876 ) Core Funds from Operations 77,848 61,742 Adjustments: Straight-line rental revenue, net (9,980 ) (6,838 ) Non-cash interest 949 819 Non-cash compensation expense 2,945 2,721 Other amortization expense 219 281 Other non-cash adjustments (7 ) (35 ) Capitalized interest expense (859 ) (432 ) Adjusted Funds from Operations $ 71,115 $ 58,258 Net income per share2: Basic $ 0.28 $ 0.30 Diluted $ 0.28 $ 0.29 FFO per share2: Basic $ 0.46 $ 0.43 Diluted $ 0.46 $ 0.43 Core FFO per share2: Basic $ 0.46 $ 0.43 Diluted $ 0.46 $ 0.42 AFFO per share2: Basic $ 0.42 $ 0.40 Diluted $ 0.42 $ 0.40 ______________ 1. During the three months ended March 31, 2023, includes $0.9 million of insurance recovery income related to two properties. 2. Calculations exclude $116 and $101 from the numerator for the three months ended March 31, 2024 and 2023, respectively, related to dividends paid on unvested restricted stock units. Essential Properties Realty Trust, Inc. Reconciliation of Non-GAAP Financial Measures (in thousands) Three months ended March 31, 2024 Net income $ 47,123 Depreciation and amortization 28,525 Interest expense 15,597 Interest income (493 ) Income tax expense 156 EBITDA 90,908 Provision for impairment of real estate 3,752 Gain on dispositions of real estate, net (1,512 ) EBITDAre 93,148 Adjustment for current quarter re-leasing, acquisition and disposition activity1 4,122 Adjustment to exclude other non-core or non-recurring activity2 392 Adjustment to exclude termination/prepayment fees and certain percentage rent3 (183 ) Adjusted EBITDAre - Current Estimated Run Rate 97,479 General and administrative expense 8,784 Adjusted net operating income ("NOI") 106,263 Straight-line rental revenue, net1 (10,544 ) Other amortization expense 219 Adjusted Cash NOI $ 95,938 Annualized EBITDAre $ 372,592 Annualized Adjusted EBITDAre $ 389,916 Annualized Adjusted NOI $ 425,052 Annualized Adjusted Cash NOI $ 383,752 ______________ 1. 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 March 31, 2024 had occurred on January 1, 2024. 2. Adjustment is made to i) exclude non-core expenses added back to compute Core FFO, ii) exclude changes in the Company's provision for credit losses and iii) eliminate the impact of seasonal fluctuation in certain non-cash compensation expense recorded in the period. 3. 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) March 31, 2024 Rate Wtd. Avg. Maturity Unsecured debt: February 2027 term loan1 $ 430,000 2.4% 2.9 years January 2028 term loan1 400,000 4.6% 3.8 years February 2029 term loan1,2 450,000 4.3% 4.9 years Senior unsecured notes due July 2031 400,000 3.1% 7.3 years Revolving credit facility3 — —% 1.9 years Total unsecured debt 1,680,000 3.6% 4.7 years Gross debt 1,680,000 Less: cash & cash equivalents (79,161 ) Less: restricted cash available for future investment (3 ) Net debt 1,600,836 Equity: Preferred stock — Common stock & OP units (175,860,233 shares @ $26.66/share as of 3/31/24)4 4,688,434 Total equity 4,688,434 Total enterprise value ("TEV") $ 6,289,270 Pro forma adjustments to Net debt and TEV:5 Net debt $ 1,600,836 Less: Unsettled forward equity (7,828,852 shares @ $23.53/share as of 3/31/24) (184,178 ) Pro forma net debt 1,416,658 Total equity 4,688,434 Common stock — unsettled forward equity (7,828,852 shares @ $26.66/share as of 3/31/24) 208,717 Pro forma TEV $ 6,313,809 Gross Debt / Undepreciated Gross Assets 31.1 % Net Debt / TEV 25.5 % Net Debt / Annualized Adjusted EBITDAre 4.1x Pro Forma Gross Debt / Undepreciated Gross Assets 30.0 % Pro Forma Net Debt / Pro Forma TEV 22.4 % Pro Forma Net Debt / Annualized Adjusted EBITDAre 3.6x ______________ 1. 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 (for 2027 and 2028 Term Loans) or 95bps (for 2029 Term Loan) and SOFR premium of 10bps. 2. Weighted average maturity calculation is made after giving effect to extension options exercisable at the Company's election. 3. 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. 4. Common stock & OP units as of March 31, 2024, based on 175,306,386 common shares outstanding and 553,847 OP units held by non-controlling interests. 5. Pro forma adjustments have been made to reflect the unsettled portion of shares sold on a forward basis in the Company's March 2024 follow-on offering as if they had been physically settled on March 31, 2024. View source version on businesswire.com: https://www.businesswire.com/news/home/20240424956793/en/
Investor/Media: Essential Properties Realty Trust, Inc. Robert W. Salisbury, CFA Senior Vice President, Head of Capital Markets 609-436-0619 investors@essentialproperties.com