Essential Properties Announces Fourth Quarter 2023 Results

Essential Properties Realty Trust, Inc. (NYSE: EPRT; “Essential Properties” or the “Company”) today announced operating results for the three months and year ended December 31, 2023.

Fourth Quarter 2023 Financial and Operating Highlights:

Operating Results (compared to Fourth Quarter 2022):
Investments (93 properties)	$ Invested	$314.9 million
	Weighted Avg Cash Cap Rate	7.9%
Dispositions (9 properties)	Net Proceeds	$30.6 million
	Weighted Avg Cash Cap Rate	6.6%
Net Income per Share	Increased by 24%	$0.31
Funds from Operations ("FFO") per Share	Increased by 18%	$0.46
Core Funds from Operations ("Core FFO") per Share	Increased by 18%	$0.46
Adjusted Funds from Operations ("AFFO") per Share	Increased by 8%	$0.42
Debt, Equity & Leverage Update:
Drew Remaining Principal on $450mm 2029 Term Loan	Additional Draws	$75.0 million
Equity Raised (Gross) - ATM Program (1)	$24.72/share	$47.9 million
Pro Form Net Debt to Annualized Adjusted EBITDAre (2)	As of Quarter End	4.0x

_________________
1.				All shares were sold on a forward basis and are currently unsettled.
2.				See page 12 for detailed calculation.

Full Year 2023 Financial and Operating Highlights:

Operating Results (compared to 2022):
Investments (293 properties)	$ Invested	$1.0 billion
	Weighted Avg Cash Cap Rate	7.6%
Dispositions (52 properties)	Net Proceeds	$138.0 million
	Weighted Avg Cash Cap Rate	6.3%
Net Income per share	Increased by 25%	$1.24
FFO per share	Increased by 13%	$1.77
Core FFO per share	Increased by 12%	$1.77
AFFO per share	Increased by 8%	$1.65
Debt & Equity Activity:
Equity Raised (Gross) - Follow-On Offerings	$23.68/share	$493.9 million
Equity Raised (Gross) - ATM Program	$24.48/share	$145.2 million

Activity Subsequent to Fourth Quarter 2023:

Investments (17 properties)	$ Invested	$40.9 million
Dispositions (4 properties)	$ Gross Proceeds	$9.1 million

CEO Comments

Commenting on the fourth quarter and full year 2023 results, the Company's President and Chief Executive Officer, Pete Mavoides, said, “We were pleased to close out the year with a great fourth quarter, highlighted by strong AFFO per share growth of 8%, reflecting a strong and consistent year of investment activity. With substantial liquidity of nearly $800 million, we remain well-positioned to capitalize on an increasingly attractive investment landscape as we continue to deploy sale-leaseback capital supporting the growth of our middle-market tenant relationships.”

Portfolio Highlights

The Company’s investment portfolio as of December 31, 2023 is summarized as follows:

Number of properties		1,873
Weighted average lease term (WALT)		14.0 years
Weighted average rent coverage ratio		3.8x
Number of tenants		374
Number of concepts (i.e., brands)		588
Number of industries		16
Number of states		48
Weighted average occupancy		99.8%
Total square feet of rentable space		18,661,836
Cash ABR - service-oriented or experience-based		92.9%
Cash ABR - properties subject to master lease		65.7%

Portfolio Update

Investments

The Company’s investment activity during the three months and year ended December 31, 2023 is summarized as follows:

		Quarter Ended December 31, 2023		Year Ended December 31, 2023
Investments:
Investment volume		$314.9 million		$1.0 billion
Number of transactions		43		126
Property count		93		293
Weighted average cash / GAAP cap rate		7.9%/9.1%		7.6%/8.9%
Weighted average lease escalation		1.9%		1.9%
% Subject to master lease		72%		68%
% Sale-leaseback transactions		97%		99%
% Existing relationship		96%		85%
% Required financial reporting (tenant/guarantor)		100%		100%
WALT		17.6 years		18.3 years

Dispositions

The Company’s disposition activity during the three months and year ended December 31, 2023 is summarized as follows:

		Quarter Ended December 31, 2023		Year Ended December 31, 2023
Dispositions:
Net proceeds		$30.6 million		$138.0 million
Number of properties sold		9		52
Net gain / (loss)		$4.8 million		$24.2 million
Weighted average cash cap rate (excluding vacant properties and sales subject to a tenant purchase option )		6.6%		6.3%

Loan Repayments

Loan repayments to the Company during the three months and year ended December 31, 2023 are summarized as follows:

		Quarter Ended December 31, 2023		Year Ended December 31, 2023
Loan Repayments:
Proceeds—Principal		$4.6 million		$26.9 million
Proceeds—Prepayment penalties		$0.1 million		$0.4 million
Number of properties		3		19
Weighted average cash cap rate		7.8%		7.4%

Leverage and Balance Sheet and Liquidity

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

		December 31, 2023		Pro Forma (1) December 31, 2023
Leverage:
Net debt to Annualized Adjusted EBITDAre		4.4x		4.0x
Balance Sheet and Liquidity:
Cash and cash equivalents and restricted cash		$49.0 million		$179.6 million
Unused revolving credit facility capacity		$600.0 million		$600.0 million
Forward equity sales - unsettled		$130.6 million		—
Total available liquidity		$779.6 million		$779.6 million
ATM Program:
2022 ATM Program initial availability		$500.0 million
Aggregate gross sales under the 2022 ATM Program		$220.6 million
Availability remaining under the 2022 ATM Program		$279.4 million
Average price per share of gross sales since inception in May 2022		$23.62

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1.				Pro forma adjustments have been made to reflect 5,778,363 shares sold on a forward basis in the Company's September 2023 follow-on offering or ATM Program as if they had been physically settled for cash on December 31, 2023.

Guidance

2024 Guidance

The Company reiterates its previously issued expectation that 2024 AFFO per share on a fully diluted basis will be within a range of $1.71 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 December 1, 2023, Essential Properties' board of directors declared a cash dividend of $0.285 per share of common stock for the quarter ended December 31, 2023. The dividend was paid on January 12, 2024 to stockholders of record as of the close of business on December 29, 2023.

Conference Call Information

In conjunction with the release of Essential Properties’ operating results, the Company will host a conference call on Thursday, February 15, 2024 at 10:00 a.m. EST to discuss the results. To access the conference, dial 877-407-9208 (International: 201-493-6784). A live webcast will also be available in listen-only mode by clicking on the webcast link in the Investor Relations section at www.essentialproperties.com.

A telephone replay of the conference call can also be accessed by calling 844-512-2921 (International: 412-317-6671) and entering the access code: 13743572. The telephone replay will be available through February 29, 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—Fourth Quarter Ended December 31, 2023 is available on Essential Properties’ website at investors.essentialproperties.com.

About Essential Properties Realty Trust, Inc.

Essential Properties Realty Trust, Inc. is an internally managed REIT that acquires, owns and manages primarily single- tenant properties that are net leased on a long-term basis to companies operating service-oriented or experience-based businesses. As of December 31, 2023, the Company’s portfolio consisted of 1,873 freestanding net lease properties with a weighted average lease term of 14.0 years and a weighted average rent coverage ratio of 3.8x. In addition, as of December 31, 2023, the Company’s portfolio was 99.8% leased to 374 tenants operating 588 different concepts in 16 industries across 48 states.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. When used in this press release, the words “estimate,” “anticipate,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “seek,” “approximately” or “plan,” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters are intended to identify forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans or intentions of management. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and the Company may not be able to realize them. The Company does not guarantee that the transactions and events described will happen as described (or that they will happen at all). You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this press release. While forward-looking statements reflect the Company’s good faith beliefs, they are not guarantees of future performance. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events, except as required by law. In light of these risks and uncertainties, the forward-looking events discussed in this press release might not occur as described, or at all.

Additional information concerning factors that could cause actual results to differ materially from these forward-looking statements is contained in the company’s Securities and Exchange Commission (the "Commission”) filings, including, but not limited to, the Company’s most recent Annual Report on Form 10-K. Copies of each filing may be obtained from the Company or the Commission. Such forward-looking statements should be regarded solely as reflections of the Company’s current operating plans and estimates. Actual operating results may differ materially from what is expressed or forecast in this press release.

The results reported in this press release are preliminary and not final. There can be no assurance that these results will not vary from the final results reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 that it will file with the Commission.

Non-GAAP Financial Measures and Certain Definitions

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

FFO, Core FFO and AFFO

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

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

Core FFO is used by management in evaluating the performance of our core business operations. Items included in calculating FFO that may be excluded in calculating Core FFO include certain transaction related gains, losses, income or 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 December 31,								Year ended December 31,
(in thousands, except share and per share data)			2023				2022				2023				2022
		(Unaudited)				(Unaudited)				(Unaudited)				(Audited)
Revenues:
Rental revenue1,2		$	92,937			$	70,101			$	339,897			$	269,827
Interest on loans and direct financing lease receivables			4,580				4,009				18,128				15,499
Other revenue			217				166				1,570				1,180
Total revenues			97,734				74,276				359,595				286,506
Expenses:
General and administrative			7,335				6,508				30,678				29,464
Property expenses3			1,317				784				4,663				3,452
Depreciation and amortization			27,440				24,121				102,219				88,562
Provision for impairment of real estate			1,903				9,623				3,548				20,164
Change in provision for credit losses			(14	)			(48	)			(99	)			88
Total expenses			37,981				40,988				141,009				141,730
Other operating income:
Gain on dispositions of real estate, net			4,847				12,565				24,167				30,647
Income from operations			64,600				45,853				242,753				175,423
Other (expense)/income:
Loss on debt extinguishment4			—				—				(116	)			(2,138	)
Interest expense			(15,760	)			(12,128	)			(52,597	)			(40,370	)
Interest income			595				2,025				2,011				2,825
Income before income tax expense			49,435				35,750				192,051				135,740
Income tax expense			164				229				636				998
Net income			49,271				35,521				191,415				134,742
Net income attributable to non-controlling interests			(176	)			(171	)			(708	)			(612	)
Net income attributable to stockholders		$	49,095			$	35,350			$	190,707			$	134,130
Basic weighted-average shares outstanding			157,561,157				142,378,451				152,140,735				134,941,188
Basic net income per share		$	0.31			$	0.25			$	1.25			$	0.99
Diluted weighted-average shares outstanding			159,196,777				143,375,819				153,521,854				135,855,916
Diluted net income per share		$	0.31			$	0.25			$	1.24			$	0.99

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1.				Includes contingent rent (based on a percentage of the tenant's gross sales at the leased property) of $225, $156 ,$743 and $682 for the three months and year ended December 31, 2023 and 2022, respectively.
2.				Includes reimbursable income from the Company’s tenants of $674, $497, $2,867 and $2,081 for the three months and year ended December 31, 2023 and 2022, respectively.
3.				Includes reimbursable expenses from the Company’s tenants $674, $497, $2,867 and $2,081 for the three months and year ended December 31, 2023 and 2022, respectively.
4.				During the year ended December 31, 2023, includes debt extinguishment costs associated with the full repayment of the Company’s 2024 Term Loan and during the year ended December 31, 2022, includes debt extinguishment costs associated with the Company's restructuring of its credit and term loan facilities.

Essential Properties Realty Trust, Inc.
Consolidated Balance Sheets
(in thousands, expect share and per share amounts)		December 31, 2023				December 31, 2022
		(Unaudited)				(Audited)
ASSETS
Investments:
Real estate investments, at cost:
Land and improvements		$	1,542,302			$	1,228,687
Building and improvements			2,938,012				2,440,630
Lease incentive			17,890				18,352
Construction in progress			96,524				34,537
Intangible lease assets			89,209				88,364
Total real estate investments, at cost			4,683,937				3,810,570
Less: accumulated depreciation and amortization			(367,133	)			(276,307	)
Total real estate investments, net			4,316,804				3,534,263
Loans and direct financing lease receivables, net			223,854				240,035
Real estate investments held for sale, net			7,455				4,780
Net investments			4,548,113				3,779,078
Cash and cash equivalents			39,807				62,345
Restricted cash			9,156				9,155
Straight-line rent receivable, net			107,545				78,587
Derivative assets			30,980				47,877
Rent receivables, prepaid expenses and other assets, net			32,660				22,991
Total assets		$	4,768,261			$	4,000,033
LIABILITIES AND EQUITY
Unsecured term loans, net of deferred financing costs		$	1,272,772			$	1,025,492
Senior unsecured notes, net			395,846				395,286
Revolving credit facility			—				—
Intangible lease liabilities, net			11,206				11,551
Dividend payable			47,182				39,398
Derivative liabilities			23,005				2,274
Accrued liabilities and other payables			31,248				29,261
Total liabilities			1,781,259				1,503,262
Commitments and contingencies			—				—
Stockholders' equity:
Preferred stock, $0.01 par value; 150,000,000 authorized; none issued and outstanding as of December 31, 2023 and 2022			—				—
Common stock, $0.01 par value; 500,000,000 authorized; 164,635,150 and 142,379,655 issued and outstanding as of December 31, 2023 and 2022, respectively			1,646				1,424
Additional paid-in capital			3,078,459				2,563,305
Distributions in excess of cumulative earnings			(105,545	)			(117,187	)
Accumulated other comprehensive loss			4,019				40,719
Total stockholders' equity			2,978,579				2,488,261
Non-controlling interests			8,423				8,510
Total equity			2,987,002				2,496,771
Total liabilities and equity		$	4,768,261			$	4,000,033

Essential Properties Realty Trust, Inc.
Reconciliation of Non-GAAP Financial Measures
		Three months ended December 31,								Year ended December 31,
(unaudited, in thousands except per share amounts)			2023				2022				2023				2022
Net income		$	49,271			$	35,521			$	191,415			$	134,742
Depreciation and amortization of real estate			27,402				24,096				102,103				88,459
Provision for impairment of real estate			1,903				9,623				3,548				20,164
Gain on dispositions of real estate, net			(4,847	)			(12,565	)			(24,167	)			(30,647	)
Funds from Operations			73,729				56,675				272,899				212,718
Non-core expenses1			78				—				(510	)			2,388
Core Funds from Operations			73,807				56,675				272,389				215,106
Adjustments:
Straight-line rental revenue, net			(9,636	)			(4,005	)			(30,375	)			(20,615	)
Non-cash interest			992				621				3,187				2,616
Non-cash compensation expense			2,170				2,232				9,192				9,489
Other amortization expense			263				735				1,507				2,912
Other non-cash charges			28				(52	)			(73	)			74
Capitalized interest expense			(665	)			(394	)			(2,430	)			(757	)
Adjusted Funds from Operations		$	66,959			$	55,812			$	253,397			$	208,825
Net income per share2:
Basic		$	0.31			$	0.25			$	1.25			$	0.99
Diluted		$	0.31			$	0.25			$	1.24			$	0.99
FFO per share2:
Basic		$	0.47			$	0.40			$	1.78			$	1.57
Diluted		$	0.46			$	0.39			$	1.77			$	1.56
Core FFO per share2:
Basic		$	0.47			$	0.40			$	1.78			$	1.58
Diluted		$	0.46			$	0.39			$	1.77			$	1.58
AFFO per share2:
Basic		$	0.42			$	0.39			$	1.66			$	1.54
Diluted		$	0.42			$	0.39			$	1.65			$	1.53

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1.				Includes the following during the: i) three months ended December 31, 2023 — $0.1 million of accelerated expense related to the departure of a board member; ii) year ended December 31, 2023 — $0.1 million loss on debt extinguishment, $0.9 million of insurance recovery income and $0.3 million of separation costs and non-cash compensation expense in connection with the departure of a junior executive and board member; iii) year ended December 31, 2022 — $0.2 million of fees incurred in conjunction with a term loan amendment and our $2.1 million loss on debt extinguishment.
2.				Calculations exclude $103, $94, $407 and $374 from the numerator for the three months and year ended December 31, 2023 and 2022, respectively, related to dividends paid on unvested restricted stock awards and restricted stock units.

Essential Properties Realty Trust, Inc.
Reconciliation of Non-GAAP Financial Measures
(in thousands)		Three months ended December 31, 2023
Net income		$	49,271
Depreciation and amortization			27,440
Interest expense			15,760
Interest income			(595	)
Income tax expense			164
EBITDA			92,040
Provision for impairment of real estate			1,903
Gain on dispositions of real estate, net			(4,847	)
EBITDAre			89,096
Adjustment for current quarter re-leasing, acquisition and disposition activity1			4,506
Adjustment to exclude other non-core or non-recurring activity2			185
Adjustment to exclude termination/prepayment fees and certain percentage rent3			(144	)
Adjusted EBITDAre - Current Estimated Run Rate			93,643
General and administrative expense			7,015
Adjusted net operating income ("NOI")			100,658
Straight-line rental revenue, net1			(10,278	)
Other amortization expense			263
Adjusted Cash NOI		$	90,643
Annualized EBITDAre		$	356,384
Annualized Adjusted EBITDAre		$	374,572
Annualized Adjusted NOI		$	402,632
Annualized Adjusted Cash NOI		$	362,572

_________________
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 December 31, 2023 had occurred on October 1, 2023.
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)		December 31, 2023				Rate		Wtd. Avg. Maturity
Unsecured debt:
February 2027 term loan1		$	430,000			2.4%		3.1 years
January 2028 term loan1			400,000			4.6%		4.1 years
February 2029 term loan1,2			450,000			4.3%		5.2 years
Senior unsecured notes due July 2031			400,000			3.1%		7.5 years
Revolving credit facility3			—			—%		2.1 years
Total unsecured debt			1,680,000			3.6%		4.9 years
Gross debt			1,680,000
Less: cash & cash equivalents			(39,807	)
Less: restricted cash available for future investment			(9,156	)
Net debt			1,631,037
Equity:
Preferred stock			—
Common stock & OP units (165,188,997 shares @ $25.56/share as of 12/31/23)4			4,208,074
Total equity			4,208,074
Total enterprise value ("TEV")		$	5,839,111
Pro forma adjustments to Net Debt and TEV:5
Net debt		$	1,631,037
Less: Unsettled forward equity (5,778,363 shares @ $22.60 /share as of 12/31/23)			(130,591	)
Pro forma net debt			1,500,446
Total equity			4,208,074
Common stock — unsettled forward equity (5,778,363 shares @ $25.56/share as of 12/31/23)			147,695
Pro forma TEV		$	5,856,215
Gross Debt / Undepreciated Gross Assets			32.7	%
Net Debt / TEV			27.9	%
Net Debt / Annualized Adjusted EBITDAre		4.4x
Pro Forma Gross Debt / Undepreciated Gross Assets			31.9	%
Pro Forma Net Debt / Pro Forma TEV			25.6	%
Pro Forma Net Debt / Annualized Adjusted EBITDAre		4.0x

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 December 31, 2023, based on 164,635,150 common shares outstanding and 553,847 OP units held by non-controlling interests.
5.				Pro forma adjustments have been made to reflect shares sold on a forward basis in the Company's September 2023 follow-on offering or ATM Program as if they had been physically settled on December 31, 2023.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240214102431/en/

The Essential Properties Realty Trust Stock at the time of publication of the news with a raise of +0,41 % to 24,30EUR on NYSE stock exchange (14. Februar 2024, 21:50 Uhr).