Essential Properties Announces First Quarter 2022 Results

- First Quarter Net Income per Share of $0.21 and AFFO per Share of $0.38 -

- Closed Investments of $237.8 million at a 7.0% Weighted Average Cash Cap Rate -

- Increases 2022 AFFO Guidance to $1.50 to $1.53 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, 2022.

First Quarter 2022 Financial and Operating Highlights

Operating Results (compared to First Quarter 2021):

 

 

  • Investments (105 properties)

$ Invested

$237.8 million

 

Weighted Avg Cash Cap Rate

7.0%

  • Net Income per Share

Increased by 50%

$0.21

  • Funds from Operations ("FFO") per Share

Increased by 30%

$0.39

  • Core Funds from Operations ("Core FFO") per Share

Increased by 33%

$0.40

  • Adjusted Funds from Operations ("AFFO") per Share

Increased by 27%

$0.38

Equity Activity:

 

 

  • Equity Raised (Gross) - ATM Program

$25.01/share

$159.6 million

Debt Activity:

 

 

  • Amendment to Credit and Term Loan Facilities

Loss on debt extinguishment

$2.1 million

CEO Comments

Commenting on the first quarter 2022 results, the Company's President and Chief Executive Officer, Pete Mavoides, said, “Our strong first quarter results are reflective of our stable internal growth profile, the resilient nature of the sale-leaseback marketplace, and the strength of our growing industry relationships, which consistently drive repeat business.” Mr. Mavoides continued, “With a well-fortified balance sheet and a robust investment pipeline, we are increasing our 2022 AFFO per share guidance range to $1.50 to $1.53, which not only reflects our brisk start to the year but a growing desire among middle-market operators to monetize their real estate amidst the backdrop of rising interest rates.”

Portfolio Update

Investments

The Company’s investment activity during the three months ended March 31, 2022 is summarized as follows:

 

 

Quarter Ended

March 31, 2022

Investments:

 

 

$ Invested

 

$237.8 million

# of Properties

 

105

# of Separate Transactions

 

23

Weighted Average Cash / GAAP Cap Rate

 

7.0%/7.8%

Weighted Average Lease Term (WALT)

 

15.0 years

% Sale-Leaseback Transactions

 

100%

% Subject to Master Lease

 

83%

% Required Financial Reporting (tenant/guarantor)

 

100%

Dispositions

The Company’s disposition activity during the three months ended March 31, 2022 is summarized as follows:

 

 

Quarter Ended

March 31, 2022

Dispositions:

 

 

Net Proceeds

 

$18.4 million

# of Properties Sold

 

6

Net Gain / (Loss)

 

$1.7 million

Weighted Average Cash Cap Rate (excluding vacant properties and sales subject to a tenant purchase option )

 

7.1%

Portfolio Highlights

The Company’s investment portfolio as of March 31, 2022 is summarized as follows:

Number of properties

 

1,545

WALT

 

13.9 years

Weighted average rent coverage ratio

 

3.8x

Number of tenants

 

323

Number of states

 

46

Number of industries

 

16

Weighted average occupancy

 

100.0%

Total square feet of rentable space

 

14,260,788

Cash ABR - service-oriented or experience-based

 

92.8%

Cash ABR - properties subject to master lease

 

62.1%

Leverage and Balance Sheet and Liquidity

The Company's leverage, balance sheet and liquidity are summarized in the following table.

 

 

March 31, 2022

Leverage:

 

 

Net debt to Annualized Adjusted EBITDAre

 

4.6x

 

 

 

Balance Sheet and Liquidity:

 

 

Cash and cash equivalents and restricted cash

 

$14.3 million

Unused borrowing capacity

 

$453.0 million

Total available liquidity

 

$467.3 million

Debt Activity

In February 2022, the Company amended its existing credit facility and $430.0 million term loan. The below table provides a summary of certain of the changes resulting from these amendments.

 

 

As Amended

 

Original

Revolving Credit Facility:

 

 

 

 

Maturity Date

 

February 2026

 

April 2023

Maximum Availability

 

$600.0 million

 

$400.0 million

Accordion Feature

 

$600.0 million

 

$200.0 million

Leverage-based Spread

 

105bps - 150bps

 

125bps - 185bps

Reference Rate

 

Adjusted Term SOFR

 

LIBOR

 

 

 

 

 

2027 Term Loan:

 

 

 

 

Maturity Date

 

February 2027

 

November 2026

Leverage-based Spread

 

120bps - 170bps

 

150bps - 220bps

Reference Rate

 

Adjusted Term SOFR

 

LIBOR

Dividend Information

As previously announced, on March 14, 2022 Essential Properties' board of directors declared a cash dividend of $0.26 per share of common stock for the quarter ended March 31, 2022. The dividend was paid on April 13, 2022 to stockholders of record as of the close of business on March 31, 2022.

Guidance

2022 Guidance

The Company is increasing its guidance for AFFO per share on a fully diluted basis for 2022 to a range of $1.50 to $1.53 from its previously announced range of $1.47 to $1.51.

Note: The Company does not provide guidance for the most comparable GAAP financial measure, net income, or a reconciliation of the forward-looking non-GAAP financial measure of AFFO to net income computed in accordance with GAAP, because it is unable to reasonably predict, without unreasonable efforts, certain items that would be contained in the GAAP measure, including items that are not indicative of the Company's ongoing operations, such as, without limitation, potential impairments of real estate assets, net gain/loss on dispositions of real estate assets, changes in allowance for credit losses and stock-based compensation expense. These items are uncertain, depend on various factors, and could have a material impact on the Company's GAAP results for the guidance periods.

Conference Call Information

In conjunction with the release of Essential Properties’ operating results, the Company will host a conference call on Thursday, April 28, 2022 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: 13729385. The telephone replay will be available through May 12, 2022.

A replay of the conference call webcast will be available on our website approximately two hours after the conclusion of the live broadcast. The webcast replay will be available for 90 days. No access code is required for this replay.

Supplemental Materials

The Company’s Supplemental Operating & Financial Data—First Quarter Ended March 31, 2022 is available on Essential Properties’ website at investors.essentialproperties.com.

About Essential Properties Realty Trust, Inc.

Essential Properties Realty Trust, Inc. is an internally managed REIT that acquires, owns and manages primarily single- tenant properties that are net leased on a long-term basis to companies operating service-oriented or experience-based businesses. As of March 31, 2022, the Company’s portfolio consisted of 1,545 freestanding net lease properties with a weighted average lease term of 13.9 years and a weighted average rent coverage ratio of 3.8x. In addition, as of March 31, 2022, the Company’s portfolio was 100.0% leased to 323 tenants operating 461 different concepts in 16 industries across 46 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 March 31, 2022 that it will file with the Commission.

Non-GAAP Financial Measures and Certain Definitions

The Company’s reported results are presented in accordance with GAAP. The Company also discloses the following non-GAAP financial measures: FFO, Core FFO, AFFO, earnings before interest, taxes, depreciation and amortization (“EBITDA”), EBITDA further adjusted to exclude gains (or losses) on sales of depreciable property and real estate impairment losses (“EBITDAre”), adjusted EBITDAre, annualized adjusted EBITDAre, net debt, net operating income (“NOI”) and cash NOI (“Cash NOI”). The Company believes these non-GAAP financial measures are industry measures used by analysts and investors to compare the operating performance of REITs.

FFO, Core FFO and AFFO

The Company computes FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT"). NAREIT defines FFO as GAAP net income or loss adjusted to exclude extraordinary items (as defined by GAAP), net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and real estate-related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets), including the pro rata share of such adjustments of unconsolidated subsidiaries. FFO is used by management, and may be useful to investors and analysts, to facilitate meaningful comparisons of operating performance between periods and among the Company’s peers primarily because it excludes the effect of real estate depreciation and amortization and net gains and losses on sales (which are dependent on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions).

The Company computes Core FFO by adjusting FFO, as defined by NAREIT, to exclude certain GAAP income and expense amounts that it believes are infrequent and unusual in nature and/or not related to its core real estate operations. Exclusion of these items from similar FFO-type metrics is common within the equity REIT industry, and management believes that presentation of Core FFO provides investors with a metric to assist in their evaluation of our operating performance across multiple periods and in comparison to the operating performance of our peers, because it removes the effect of unusual items that are not expected to impact our operating performance on an ongoing basis.

Core FFO is used by management in evaluating the performance of our core business operations. Items included in calculating FFO that may be excluded in calculating Core FFO include certain transaction related gains, losses, income or expense or other non-core amounts as they occur.

To derive AFFO, the Company modifies its computation of Core FFO to include other adjustments to GAAP net income related to certain items that it believes are not indicative of the Company’s operating performance, including straight-line rental revenue, non-cash interest expense, non-cash compensation expense, other amortization expense, other non-cash charges (including changes to our provision for loan losses following the adoption of ASC 326), capitalized interest expense and transaction costs. Such items may cause short-term fluctuations in net income but have no impact on operating cash flows or long-term operating performance. The Company believes that AFFO is an additional useful supplemental measure for investors to consider when assessing the Company’s operating performance without the distortions created by non-cash items and certain other revenues and expenses.

FFO, Core FFO and AFFO do not include all items of revenue and expense included in net income, they do not represent cash generated from operating activities and they are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operations as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures. Additionally, our computation of FFO, Core FFO and AFFO may differ from the methodology for calculating these metrics used by other equity REITs and, therefore, may not be comparable to similarly titled measures reported by other equity REITs.

EBITDA and EBITDAre

The Company computes EBITDA as earnings before interest, income taxes and depreciation and amortization. In 2017, NAREIT issued a white paper recommending that companies that report EBITDA also report EBITDAre. The Company computes EBITDAre in accordance with the definition adopted by NAREIT. NAREIT defines EBITDAre as EBITDA (as defined above) excluding gains (or losses) from the sales of depreciable property and real estate impairment losses. The Company presents EBITDA and EBITDAre as they are measures commonly used in its industry and the Company believes that these measures are useful to investors and analysts because they provide supplemental information concerning its operating performance, exclusive of certain non-cash items and other costs. The Company uses EBITDA and EBITDAre as measures of its operating performance and not as measures of liquidity.

EBITDA and EBITDAre do not include all items of revenue and expense included in net income, they do not represent cash generated from operating activities and they are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operations as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures. Additionally, the Company’s computation of EBITDA and EBITDAre may differ from the methodology for calculating these metrics used by other equity REITs and, therefore, may not be comparable to similarly titled measures reported by other equity REITs.

Net Debt

The Company calculates its net debt as its gross debt (defined as total debt plus net deferred financing costs on its secured borrowings) less cash and cash equivalents and restricted cash available for future investment. The Company believes excluding cash and cash equivalents and restricted cash available for future investment from gross debt, all of which could be used to repay debt, provides an estimate of the net contractual amount of borrowed capital to be repaid, which it believes is a beneficial disclosure to investors and analysts.

NOI and Cash NOI

The Company computes NOI as total revenues less property expenses. NOI excludes all other items of expense and income included in the financial statements in calculating net income or loss. Cash NOI further excludes non-cash items included in total revenues and property expenses, such as straight-line rental revenue and other amortization and non-cash charges. The Company believes NOI and Cash NOI provide useful information because they reflect only those revenue and expense items that are incurred at the property level and present such items on an unlevered basis.

NOI and Cash NOI are not measures of financial performance under GAAP. You should not consider the Company’s NOI and Cash NOI as alternatives to net income or cash flows from operating activities determined in accordance with GAAP. Additionally, the Company’s computation of NOI and Cash NOI may differ from the methodology for calculating these metrics used by other equity REITs and, therefore, may not be comparable to similarly titled measures reported by other equity REITs.

Adjusted EBITDAre / Adjusted NOI / Adjusted Cash NOI

The Company further adjusts EBITDAre, NOI and Cash NOI i) based on an estimate calculated as if all investment and disposition activity that took place during the quarter had occurred on the first day of the quarter, ii) to exclude certain GAAP income and expense amounts that the Company believes are infrequent and unusual in nature and iii) to eliminate the impact of lease termination or loan prepayment fees and contingent rental revenue from its tenants which is subject to sales thresholds specified in the lease. The Company then annualizes these estimates for the current quarter by multiplying them by four, which it believes provides a meaningful estimate of the Company’s current run rate for all investments as of the end of the current quarter. You should not unduly rely on these measures, as they are based on assumptions and estimates that may prove to be inaccurate. The Company’s actual reported EBITDAre, NOI and Cash NOI for future periods may be significantly less than these estimates of current run rates.

Cash ABR

Cash ABR means annualized contractually specified cash base rent in effect as of the end of the current quarter for all of the Company’s leases (including those accounted for as direct financing leases) commenced as of that date and annualized cash interest on its mortgage loans receivable as of that date.

Cash Cap Rate

Cash Cap Rate means annualized contractually specified cash base rent for the first full month after investment or disposition divided by the purchase or sale price, as applicable, for the property.

GAAP Cap Rate

GAAP Cap Rate means annualized rental income computed in accordance with GAAP for the first full month after investment divided by the purchase price, as applicable, for the property.

Rent Coverage Ratio

Rent coverage ratio means the ratio of tenant-reported or, when unavailable, management’s estimate based on tenant-reported financial information, annual EBITDA and cash rent attributable to the leased property (or properties, in the case of a master lease) to the annualized base rental obligation as of a specified date.

Disclaimer

Essential Properties Realty Trust, Inc. and the Essential Properties Realty Trust REIT are not affiliated with or sponsored by Griffin Capital Essential Asset Operating Partnership, L.P. or the Griffin Capital Essential Asset REIT, information about which can be obtained at (https://www.gcear.com).

Essential Properties Realty Trust, Inc.

Consolidated Statements of Operations

 

 

 

Three months ended March 31,

(in thousands, except share and per share data)

 

2022

 

2021

 

 

(unaudited)

 

(unaudited)

Revenues:

 

 

 

 

Rental revenue1,2

 

$

66,112

 

 

$

45,432

 

Interest on loans and direct financing lease receivables

 

 

3,822

 

 

 

3,105

 

Other revenue

 

 

187

 

 

 

15

 

Total revenues

 

 

70,121

 

 

 

48,552

 

 

 

 

 

 

Expenses:

 

 

 

 

General and administrative

 

 

8,063

 

 

 

6,431

 

Property expenses3

 

 

1,009

 

 

 

1,414

 

Depreciation and amortization

 

 

20,313

 

 

 

15,646

 

Provision for impairment of real estate

 

 

3,935

 

 

 

5,722

 

Change in provision for loan losses

 

 

60

 

 

 

38

 

Total expenses

 

 

33,380

 

 

 

29,251

 

Other operating income:

 

 

 

 

Gain on dispositions of real estate, net

 

 

1,658

 

 

 

3,788

 

Income from operations

 

 

38,399

 

 

 

23,089

 

Other (expense)/income:

 

 

 

 

Loss on debt extinguishment4

 

 

(2,138

)

 

 

 

Interest expense

 

 

(9,160

)

 

 

(7,678

)

Interest income

 

 

18

 

 

 

20

 

Income before income tax expense

 

 

27,119

 

 

 

15,431

 

Income tax expense

 

 

301

 

 

 

56

 

Net income

 

 

26,818

 

 

 

15,375

 

Net income attributable to non-controlling interests

 

 

(119

)

 

 

(80

)

Net income attributable to stockholders

 

$

26,699

 

 

$

15,295

 

 

 

 

 

 

Basic weighted-average shares outstanding

 

 

126,839,258

 

 

 

106,986,308

 

Basic net income per share

 

$

0.21

 

 

$

0.14

 

 

 

 

 

 

Diluted weighted-average shares outstanding

 

 

127,923,499

 

 

 

108,055,741

 

Diluted net income per share

 

$

0.21

 

 

$

0.14

 

  1. Includes contingent rent (based on a percentage of the tenant's gross sales at the leased property) of $156 and $169 for the three months ended March 31, 2022 and 2021, respectively.
  2. Includes reimbursable income from the Company’s tenants of $553 and $453 for the three months ended March 31, 2022 and 2021, respectively.
  3. Includes reimbursable expenses from the Company’s tenants of $554 and $452 for the three months ended March 31, 2022 and 2021, respectively.
  4. Represents fees and the write-off of deferred financing costs during the three months ended March 31, 2022 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)

 

March 31, 2022

 

December 31, 2021

 

 

(Unaudited)

 

(Audited)

ASSETS

 

 

 

 

Investments:

 

 

 

 

Real estate investments, at cost:

 

 

 

 

Land and improvements

 

$

1,083,007

 

 

$

1,004,154

 

Building and improvements

 

 

2,130,595

 

 

 

2,035,919

 

Lease incentive

 

 

14,049

 

 

 

13,950

 

Construction in progress

 

 

9,318

 

 

 

8,858

 

Intangible lease assets

 

 

88,137

 

 

 

87,959

 

Total real estate investments, at cost

 

 

3,325,106

 

 

 

3,150,840

 

Less: accumulated depreciation and amortization

 

 

(220,711

)

 

 

(200,152

)

Total real estate investments, net

 

 

3,104,395

 

 

 

2,950,688

 

Loans and direct financing lease receivables, net

 

 

223,168

 

 

 

189,287

 

Real estate investments held for sale, net

 

 

14,488

 

 

 

15,434

 

Net investments

 

 

3,342,051

 

 

 

3,155,409

 

Cash and cash equivalents

 

 

14,255

 

 

 

59,758

 

Straight-line rent receivable, net

 

 

64,720

 

 

 

57,990

 

Derivative assets

 

 

17,582

 

 

 

 

Rent receivables, prepaid expenses and other assets, net

 

 

27,271

 

 

 

25,638

 

Total assets

 

$

3,465,879

 

 

$

3,298,795

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

Unsecured term loans, net of deferred financing costs

 

$

628,055

 

 

$

626,983

 

Senior unsecured notes, net

 

 

394,864

 

 

 

394,723

 

Revolving credit facility

 

 

147,000

 

 

 

144,000

 

Intangible lease liabilities, net

 

 

12,507

 

 

 

12,693

 

Dividend payable

 

 

34,333

 

 

 

32,610

 

Derivative liabilities

 

 

495

 

 

 

11,838

 

Accrued liabilities and other payables

 

 

24,715

 

 

 

32,145

 

Total liabilities

 

 

1,241,969

 

 

 

1,254,992

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

Preferred stock, $0.01 par value; 150,000,000 authorized; none issued and outstanding as of March 31, 2022 and December 31, 2021

 

 

 

 

 

 

Common stock, $0.01 par value; 500,000,000 authorized; 131,151,693 and 124,649,053 issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

 

 

1,312

 

 

 

1,246

 

Additional paid-in capital

 

 

2,311,918

 

 

 

2,151,088

 

Distributions in excess of cumulative earnings

 

 

(110,706

)

 

 

(100,982

)

Accumulated other comprehensive loss

 

 

13,994

 

 

 

(14,786

)

Total stockholders' equity

 

 

2,216,518

 

 

 

2,036,566

 

Non-controlling interests

 

 

7,392

 

 

 

7,237

 

Total equity

 

 

2,223,910

 

 

 

2,043,803

 

Total liabilities and equity

 

$

3,465,879

 

 

$

3,298,795

 

Essential Properties Realty Trust, Inc.

Reconciliation of Non-GAAP Financial Measures

 

 

 

Three months ended March 31,

(unaudited, in thousands except per share amounts)

 

2022

 

2021

Net income

 

$

26,818

 

 

$

15,375

 

Depreciation and amortization of real estate

 

 

20,287

 

 

 

15,621

 

Provision for impairment of real estate

 

 

3,935

 

 

 

5,722

 

Gain on dispositions of real estate, net

 

 

(1,658

)

 

 

(3,788

)

Funds from Operations

 

 

49,382

 

 

 

32,930

 

Other non-recurring expenses1

 

 

2,138

 

 

 

 

Core Funds from Operations

 

 

51,520

 

 

 

32,930

 

Adjustments:

 

 

 

 

Straight-line rental revenue, net

 

 

(6,265

)

 

 

(3,644

)

Non-cash interest expense

 

 

661

 

 

 

479

 

Non-cash compensation expense

 

 

2,836

 

 

 

1,595

 

Other amortization expense

 

 

194

 

 

 

1,105

 

Other non-cash charges

 

 

56

 

 

 

36

 

Capitalized interest expense

 

 

(66

)

 

 

(20

)

Adjusted Funds from Operations

 

$

48,936

 

 

$

32,481

 

 

 

 

 

 

Net income per share2:

 

 

 

 

Basic

 

$

0.21

 

 

$

0.14

 

Diluted

 

$

0.21

 

 

$

0.14

 

FFO per share2:

 

 

 

 

Basic

 

$

0.39

 

 

$

0.31

 

Diluted

 

$

0.39

 

 

$

0.30

 

Core FFO per share2:

 

 

 

 

Basic

 

$

0.40

 

 

$

0.31

 

Diluted

 

$

0.40

 

 

$

0.30

 

AFFO per share2:

 

 

 

 

Basic

 

$

0.38

 

 

$

0.30

 

Diluted

 

$

0.38

 

 

$

0.30

 

  1. During the three months ended March 31, 2022, includes fees and the write-off of deferred financing costs associated with the Company's restructuring of its credit and term loan facilities.
  2. Calculations exclude $90 and $119 from the numerator for the three months ended March 31, 2022 and 2021, respectively, related to dividends paid on unvested restricted share awards and restricted share units.

Essential Properties Realty Trust, Inc.

Reconciliation of Non-GAAP Financial Measures

 

 

(in thousands)

 

Three months ended

March 31, 2022

Net income

 

$26,818

Depreciation and amortization

 

20,313

Interest expense

 

9,160

Interest income

 

(18)

Income tax expense

 

301

EBITDA

 

56,574

Provision for impairment of real estate

 

3,935

Gain on dispositions of real estate, net

 

(1,658)

EBITDAre

 

58,851

Adjustment for current quarter re-leasing, acquisition and disposition activity1

 

1,781

Adjustment to exclude other non-core or non-recurring activity2

 

3,003

Adjustment to exclude termination/prepayment fees and certain percentage rent3

 

Adjusted EBITDAre - Current Estimated Run Rate

 

63,635

General and administrative

 

8,063

Adjusted net operating income ("NOI")

 

71,698

Straight-line rental revenue, net1

 

(5,882)

Other amortization expense

 

316

Adjusted Cash NOI

 

$66,132

 

 

 

Annualized EBITDAre

 

$235,404

Annualized Adjusted EBITDAre

 

$254,540

Annualized Adjusted NOI

 

$286,792

Annualized Adjusted Cash NOI

 

$264,528

  1. These adjustments are made to reflect EBITDAre, NOI and Cash NOI as if all investments, dispositions and re-leasing activity of real estate made during the three months ended March 31, 2022 had occurred on January 1, 2022.
  2. Adjustment is made to exclude non-core expenses added back to compute Core FFO, our provision for loan losses and to eliminate the impact of seasonal fluctuation in certain non-cash compensation expense recorded in the period.
  3. Adjustment to exclude contingent rent (based on a percentage of the tenant's gross sales at the leased property), if any, where payment is subject to exceeding a sales threshold specified in the lease and lease termination or loan prepayment fees.

Essential Properties Realty Trust, Inc.

Reconciliation of Non-GAAP Financial Measures

 

(dollars in thousands, except share and per share amounts)

 

March 31, 2022

 

 

 

Unsecured debt:

 

 

2024 term loan

 

$

200,000

 

2027 term loan

 

 

430,000

 

Senior unsecured notes

 

 

400,000

 

Revolving credit facility1

 

 

147,000

 

Total unsecured debt

 

 

1,177,000

 

Gross debt

 

 

1,177,000

 

Less: cash & cash equivalents

 

 

(14,255

)

Less: restricted cash available for future investment

 

 

 

Net debt

 

 

1,162,745

 

 

 

 

Equity:

 

 

Preferred stock

 

 

 

Common stock & OP units (131,705,540 shares @ $25.30/share as of 3/31/22)2

 

 

3,332,150

 

Total equity

 

 

3,332,150

 

Total enterprise value ("TEV")

 

$

4,494,895

 

 

 

 

Net Debt / TEV

 

 

25.9

%

Net Debt / Annualized Adjusted EBITDAre

 

4.6x

  1. 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 an additional $600 million.
  2. Common equity & units as of March 31, 2022, based on 131,151,693 common shares outstanding (including unvested restricted share awards) and 553,847 OP units held by non-controlling interests.

 

Contacts

Investor/Media:

Essential Properties Realty Trust, Inc.

Daniel Donlan, Senior Vice President, Capital Markets

609-436-0619

info@essentialproperties.com

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