Affirms 2017 Guidance
SCOTTSDALE, Ariz.--(BUSINESS WIRE)--
STORE
Capital Corporation (NYSE: STOR), an internally managed net-lease
real estate investment trust (REIT) that invests in Single Tenant
Operational Real Estate, today announced operating
results for the fourth quarter and full year ended December 31, 2016.
Highlights
For the quarter ended December 31, 2016:
-
Total revenues of $102.1 million
-
Net income of $31.9 million
-
Net income per share of $0.20 (basic and diluted)
-
AFFO of $67.1 million
-
AFFO per share of $0.43 (basic and diluted)
-
Declared a regular quarterly cash dividend per common share of $0.29
-
Invested $325.0 million in 94 properties at an initial weighted
average cap rate of 7.9%
-
Issued $200 million of A+ rated net-lease mortgage notes under the
STORE Master Funding debt program in October 2016
-
Raised aggregate net equity proceeds of $87.7 million from the sale of
approximately 3.6 million common shares under the at-the-market equity
program
For the year ended December 31, 2016:
-
Total revenues of $376.3 million
-
Net income of $123.3 million
-
Net income per share of $0.82 (basic and diluted)
-
AFFO of $245.8 million
-
AFFO of $1.65 per basic share and $1.64 per diluted share
-
Declared regular cash dividends per common share aggregating $1.12
which includes a 7.4% increase in the third quarter
-
Invested $1.2 billion in 367 properties at an initial weighted average
cap rate of 7.9%
-
Issued an aggregate of $565 million of long-term debt at a weighted
average interest rate of 4.1% with a weighted average maturity of nine
years and expanded the unsecured credit facility to $500 million
-
Raised net equity proceeds of $463.9 million representing 18.4 million
common shares through a follow-on offering in May 2016 and the
at-the-market equity program commenced in September 2016
Management Commentary
“2016 was another year of outperformance and growth for STORE Capital,
clearly depicting the foundational distinction that makes STORE the best
platform our team has ever created,” said Christopher H. Volk, President
and Chief Executive Officer of STORE Capital. “In 2016, we grew
comparable AFFO per share by over 10% and raised our dividend by more
than 7%. During the year, we acquired 367 properties through 145
separate transactions, grew our customer count by 19% and added over 20
industry groups to our customer base as we continued to expand our
diversified capital markets strategy, locking in historically attractive
long-term spreads. Stability and quality continued to define our
portfolio, as we concluded 2016 with approximately 99.5% of our
portfolio occupied and 75% of our lease contracts of investment-grade
quality as measured by our STORE Score model. The combination of our
portfolio quality and strong financial position, together with our
modest corporate leverage targets, significant investment diversity,
increasing stockholder dividend protection and impressive internal
growth potential, convey the powerful margins of safety for our
stockholders we have built into everything we do. Our strong investment
activity in 2016, coupled with continued investment in our distinctive
origination platform, gives us good reason to be optimistic about our
future prospects and growth.”
Financial Results
Total Revenues
Total revenues were $102.1 million for the fourth quarter of 2016, an
increase of 28.3% from $79.6 million for the fourth quarter of 2015.
Total revenues for 2016 were $376.3 million, an increase of 32.2% from
$284.8 million for 2015. The increase was driven primarily by the growth
in the size of STORE Capital’s real estate investment portfolio, which
grew from $4.0 billion in gross investment amount representing 1,325
property locations at December 31, 2015 to $5.1 billion in gross
investment amount representing 1,660 property locations at December 31,
2016.
Net Income
Net income was $31.9 million, or $0.20 per basic and diluted share, for
the fourth quarter of 2016, an increase of 32.7% from $24.1 million, or
$0.18 per basic and diluted share, for the fourth quarter of 2015. Net
income for the fourth quarter of 2016 included $3.7 million of net gains
on the sale of properties. In comparison, net income for the fourth
quarter of 2015 included $0.6 million of net losses on the sale of
properties.
Net income for 2016 was $123.3 million, or $0.82 per basic and diluted
share, an increase of 47.2% from $83.8 million, or $0.68 per basic and
diluted share, for 2015. The Company reported gains of $13.2 million on
the sale of 31 properties during 2016. During 2015, the Company
recognized gains of $1.3 million on the sale of 13 properties.
Adjusted Funds from Operations (AFFO)
AFFO was $67.1 million, or $0.43 per basic and diluted share, for the
fourth quarter of 2016, an increase of 27.8% from $52.6 million, or
$0.40 per basic and diluted share, for the fourth quarter of 2015.
AFFO for 2016 was $245.8 million, or $1.65 per basic share and $1.64 per
diluted share, an increase of 34.0% from $183.5 million, or $1.49 per
basic and diluted share, for 2015. The increase in AFFO between years
was primarily driven by additional rental revenues and interest income
generated by the growth in the Company’s real estate investment
portfolio.
Dividend Information
As previously announced, STORE Capital declared a regular quarterly cash
dividend per common share of $0.29 for the fourth quarter ended December
31, 2016. This dividend, totaling $46.2 million, was paid on January 17,
2017 to stockholders of record on December 30, 2016.
Real Estate Portfolio Highlights
Investment Activity
The Company originated $325.0 million of gross investments representing
94 property locations during the fourth quarter of 2016, adding 17 new
customers. These investments had an initial weighted average cap rate of
7.9%. Total investment activity for the year was $1.2 billion
representing 367 property locations with an initial weighted average cap
rate of 7.9%. The Company defines “initial cap rate” for property
acquisitions as the initial annual cash rent divided by the purchase
price of the property.
Disposition Activity
During the year ended December 31, 2016, the Company sold 31 properties
and recognized an aggregate gain, net of tax, of $13.2 million; 10 of
these 31 properties were sold in the fourth quarter at an aggregate
gain, net of tax, of $3.7 million. The aggregate investment amount of
the 31 properties sold represented approximately 1.8% of the total
investment portfolio at the beginning of 2016.
Portfolio
At December 31, 2016, STORE Capital’s real estate portfolio totaled
$5.1 billion representing 1,660 property locations. Approximately 95% of
the portfolio represents commercial real estate properties subject to
long-term leases, 5% represents mortgage loans and direct financing
receivables primarily on commercial real estate buildings (located on
land the Company owns and leases to its customers) and a nominal amount
represents loans receivable secured by the tenants’ other assets. As of
December 31, 2016, the portfolio’s annualized base rent and interest
(based on rates in effect on December 31, 2016 for all lease and loan
contracts) totaled $418.5 million. The weighted average non-cancelable
remaining term of the leases at December 31, 2016 was approximately
14 years.
The Company's customers operate their businesses across a diverse range
of more than 420 brand names, or concepts, and the largest single
concept represented 3.1% of the Company's annualized base rent and
interest as of December 31, 2016.
| Portfolio At A Glance-- As of December 31, 2016 |
|
|
|
|
Investment property locations
|
|
|
1,660
|
|
States
| | |
48
|
|
Customers
| | |
360
|
|
Industries in which customers operate
| | |
106
|
|
Proportion of portfolio from direct origination
| | |
~80%
|
|
Contracts with STORE preferred terms* | | |
91%
|
|
Weighted average annual lease escalation(1) | | |
1.8%
|
|
Weighted average remaining lease contract term
| | |
~14 years
|
|
Occupancy(2) | | |
99.5%
|
|
Properties not operating but subject to a lease(3) | | |
9
|
|
Investment locations subject to a ground lease
| | |
17
|
|
Investment portfolio subject to NNN leases* | | |
97%
|
|
Investment portfolio subject to Master Leases*(4) | | |
82%
|
|
Average investment amount/replacement cost (new)(5) | | |
82%
|
|
Locations subject to unit-level financial reporting
| | |
97%
|
|
Median unit fixed charge coverage ratio (FCCR)/4-Wall coverage ratio(6) | | |
2.09x/2.59x
|
|
Contracts rated investment grade(7) |
|
|
~75%
|
* Based on annualized base rent and interest.
|
(1) |
| Represents the weighted average annual escalation rate of the
entire portfolio as if all escalations occurred annually. For
escalations based on a formula including CPI, assumes the stated
fixed percentage in the contract or assumes 1.5% if no fixed
percentage is in the contract. For contracts with no escalations
remaining in the current lease term, assumes the escalation in the
extension term. Calculation excludes contracts representing less
than 0.3% of annualized base rent and interest where there are no
further escalations remaining in the current lease term and there
are no extension options. |
(2) | | The Company defines occupancy as a property being subject to a
lease or loan contract. As of December 31, 2016, eight of the
Company’s properties were vacant and not subject to a contract. |
(3) | | Represents the number of the Company’s investment locations
that have been closed by the tenant but remain subject to a lease. |
(4) | | Percentage of investment portfolio in multiple properties with
a single customer subject to master leases. Approximately 81% of
the investment portfolio involves multiple properties with a
single customer, whether or not subject to a master lease. |
(5) | | Represents the ratio of purchase price to replacement cost
(new) at acquisition. |
(6) | | STORE Capital calculates a unit’s FCCR generally as the ratio
of (i) the unit’s EBITDAR, less a standardized corporate overhead
expense based on estimated industry standards, to (ii) the unit’s
total fixed charges, which are its lease expense, interest expense
and scheduled principal payments on indebtedness. The 4-Wall
coverage ratio refers to a unit’s FCCR before taking into account
standardized corporate overhead expense. |
(7) | | Represents the percentage of the Company’s contracts that have
a STORE Score that is investment grade. The Company measures the
credit quality of its portfolio on a contract-by-contract basis
using the STORE Score, which is a proprietary risk measure
reflective of both the credit risk of the Company’s tenants and
the profitability of the operations at the properties. As of
December 31, 2016, STORE Capital’s tenants had a median tenant
credit profile of approximately ‘Ba2’ as measured by Moody's
Analytics RiskCalc rating scale. Considering the profitability of
the operations at each of its properties and STORE’s assessment of
the likelihood that each of the tenants will choose to continue to
operate at the properties in the event of their insolvency, the
credit quality of its contracts, or STORE Score, is enhanced to a
median of ‘Baa2’. |
| |
|
Capital Transactions
In September 2016, the Company established an “at the market” equity
distribution program, or ATM program, pursuant to which, from time to
time, it offers and sells registered shares of common stock up to a
maximum amount of $400 million through a group of banks acting as its
sales agents. During the fourth quarter of 2016, the Company sold
approximately 3.6 million shares and raised approximately $87.7 million
in net proceeds under the ATM program. Since the start of the program,
the Company has sold approximately 6.1 million shares at a weighted
average share price of $26.66, raising $159.3 million in aggregate net
proceeds after the payment of sales agents’ commissions and offering
expenses.
On October 18, 2016, certain of the Company’s consolidated special
purpose entities issued an additional series of STORE Master Funding
net-lease mortgage notes consisting of $200.0 million of Class A-1
notes, $135.0 million of Class A-2 notes and $20.0 million of Class B
notes. The Class A-1 notes are 10-year notes with an interest rate of
3.96%. The Class A-2 notes are 10.5-year notes and were retained by the
Company for sale at a future date. The Class B notes were also retained
by the Company.
2017 Guidance
Affirming its 2017 guidance presented in November 2016, the Company
currently expects 2017 AFFO per share to be within a range of $1.74 to
$1.76, based on projected 2017 annual real estate acquisition volume,
net of projected property sales, of approximately $900 million. This
AFFO per share guidance equates to anticipated net income, excluding
gains or losses on sales of property, of $0.78 to $0.79 per share, plus
$0.87 to $0.88 per share of expected real estate depreciation and
amortization, plus approximately $0.09 per share related to such items
as straight-line rent and the amortization of stock-based compensation
and deferred financing costs. AFFO per share is sensitive to the timing
and amount of real estate acquisitions and capital markets activities
during the year, as well as to the spread achieved between the lease
rates on new acquisitions and the interest rates on borrowings used to
finance those acquisitions.
Conference Call and Webcast
A conference call and audio webcast with analysts and investors will be
held later today at 12:00 p.m. Eastern Time / 10:00 a.m.Scottsdale,
Arizona Time, to discuss fourth quarter and full year ended December 31,
2016 operating results and answer questions.
-
Live conference call: 855-656-0920 (domestic) or 412-542-4168
(international)
-
Conference call replay available through March 9, 2017: 877-344-7529
(domestic) or 412-317-0088 (international)
-
Replay access code: 10100252
-
Live and archived webcast: http://ir.storecapital.com/webcasts
About STORE Capital
STORE Capital Corporation is an internally managed net-lease real estate
investment trust, or REIT, that is the leader in the acquisition,
investment and management of Single Tenant Operational Real Estate,
which is its target market and the inspiration for its name. STORE
Capital is one of the largest and fastest growing net-lease REITs and
owns a large, well-diversified portfolio that consists of investments in
1,660 property locations, substantially all of which are profit centers,
in 48 states. Additional information about STORE Capital can be found on
its website at www.storecapital.com.
Forward-Looking Statements
Certain statements contained in this press release that are not
historical facts contain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, that are subject to the “safe harbor” created by those
sections. Forward-looking statements can be identified by the use of
words such as “estimate,” “anticipate,” “expect,” “believe,” “intend,”
“may,” “will,” “should,” “seek,” “approximate” or “plan,” or the
negative of these words and phrases or similar words or phrases.
Forward-looking statements, by their nature, involve estimates,
projections, goals, forecasts and assumptions and are subject to risks
and uncertainties that could cause actual results or outcomes to differ
materially from those expressed in the forward-looking statements. For
more information on risk factors for STORE Capital’s business, please
refer to the periodic reports the Company files with the Securities and
Exchange Commission from time to time. These forward-looking statements
herein speak only as of the date of this press release and should not be
relied upon as predictions of future events. STORE Capital expressly
disclaims any obligation or undertaking to update or revise any
forward-looking statements contained herein, to reflect any change in
STORE Capital’s expectations with regard thereto, or any other change in
events, conditions or circumstances on which any such statement is
based, except as required by law.
Non-GAAP Financial Measures
FFO and AFFO
STORE Capital’s reported results are presented in accordance with U.S.
generally accepted accounting principles, or GAAP. The Company also
discloses Funds from Operations, or FFO, and Adjusted Funds from
Operations, or AFFO, both of which are non-GAAP measures. Management
believes these two non-GAAP financial measures are useful to investors
because they are widely accepted industry measures used by analysts and
investors to compare the operating performance of REITs. FFO and AFFO do
not represent cash generated from operating activities and 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 to cash flows from operations as reported on a
statement of cash flows as a liquidity measure and should be considered
in addition to, and not in lieu of, GAAP financial measures.
The Company computes FFO in accordance with the definition adopted by
the Board of Governors of the National Association of Real Estate
Investment Trusts, or NAREIT. NAREIT defines FFO as GAAP net income,
excluding gains (or losses) from extraordinary items and sales of
depreciable property, real estate impairment losses, and depreciation
and amortization expense from real estate assets, including the pro rata
share of such adjustments of unconsolidated subsidiaries.
To derive AFFO, the Company modifies the NAREIT computation of FFO to
include other adjustments to GAAP net income related to certain non-cash
revenues and expenses that have no impact on the Company’s long-term
operating performance, such as straight-line rents, amortization of
deferred financing costs and stock-based compensation. In addition, in
deriving AFFO, the Company excludes transaction costs associated with
acquiring real estate subject to existing leases and certain other
expenses not related to its ongoing operations.
FFO is used by management, 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 on sales, which
are based on historical costs and implicitly assume that the value of
real estate diminishes predictably over time, rather than fluctuating
based on existing market conditions. Management believes that AFFO
provides more useful information to investors and analysts because it
modifies FFO to exclude certain additional non-cash revenues and
expenses such as straight-line rents, amortization of deferred financing
costs and stock-based compensation as such items may cause short-term
fluctuations in net income but have no impact on long-term operating
performance. Additionally, in deriving AFFO, the Company excludes
transaction costs associated with acquiring real estate subject to
existing leases. The Company views transaction costs to be a part of the
investment in the real estate it acquires, similar to the treatment of
acquisition and closing costs on sale-leaseback transactions, which are
capitalized as a part of the investment in the asset. The Company
believes that transaction costs are not an ongoing cost of the portfolio
in place at the end of each reporting period and, for these reasons, the
portion expensed is added back when computing AFFO. Similarly, in 2016
the Company excluded the offering expenses incurred on behalf of its
selling stockholder, STORE Holding, when it exited all of its holdings
in STORE Capital common stock, as those costs are not related to the
Company’s ongoing operations. As a result, the Company believes AFFO to
be a more meaningful measurement of ongoing performance that allows for
greater performance comparability. Therefore, the Company discloses both
FFO and AFFO and reconciles them to the most appropriate GAAP
performance metric, which is net income. STORE Capital’s FFO and AFFO
may not be comparable to similarly titled measures employed by other
companies.
|
|
| STORE Capital Corporation |
| Condensed Consolidated Statements of Income |
| (In thousands, except share and per share data) |
| |
|
| |
|
|
|
| |
| | | | Three months ended
December 31, | | | Year ended
December 31, |
| | | | 2016 |
|
| 2015 | | | 2016 | | | 2015 |
| | | |
(unaudited)
| | |
(unaudited)
|
| |
(audited)
|
|
Revenues:
| | | | | | | | | | | | |
|
Rental revenues
| | |
$
|
96,415
| | |
$
|
75,467
| | | |
$
|
356,081
| | |
$
|
270,780
|
|
Interest income on loans and direct financing receivables
| | | |
5,576
| | | |
4,108
| | | | |
19,677
| | | |
13,861
|
|
Other income
| | |
|
150
| | |
|
37
|
| | |
|
585
| | |
|
121
|
|
Total revenues
| | |
|
102,141
| | |
|
79,612
|
| | |
|
376,343
| | |
|
284,762
|
| | | | | | | | | | | | |
|
|
Expenses:
| | | | | | | | | | | | |
|
Interest
| | | |
28,753
| | | |
22,525
| | | | |
105,180
| | | |
81,782
|
|
Transaction costs
| | | |
33
| | | |
153
| | | | |
523
| | | |
1,156
|
|
Property costs
| | | |
1,548
| | | |
393
| | | | |
4,067
| | | |
1,515
|
|
General and administrative
| | | |
8,732
| | | |
6,989
| | | | |
33,972
| | | |
27,972
|
|
Selling stockholder costs
| | | |
–
| | | |
–
| | | | |
800
| | | |
–
|
|
Depreciation and amortization
| | | |
32,992
| | | |
24,884
| | | | |
119,618
| | | |
88,615
|
|
Provision for impairment of real estate
| | |
|
1,720
| | |
|
–
|
| | |
|
1,720
| | |
|
1,000
|
|
Total expenses
| | |
|
73,778
| | |
|
54,944
|
| | |
|
265,880
| | |
|
202,040
|
| | | | | | | | | | | | |
|
|
Income from operations before income taxes
| | | |
28,363
| | | |
24,668
| | | | |
110,463
| | | |
82,722
|
|
Income tax expense
| | |
|
110
| | |
|
36
|
| | |
|
358
| | |
|
274
|
|
Income before gain on dispositions of real estate
| | | |
28,253
| | | |
24,632
| | | | |
110,105
| | | |
82,448
|
|
Gain (loss) on dispositions of real estate, net of tax
| | |
|
3,687
| | |
|
(560
|
)
| | |
|
13,220
| | |
|
1,322
|
|
Net income
| | |
$
|
31,940
| | |
$
|
24,072
|
| | |
$
|
123,325
| | |
$
|
83,770
|
| | | | | | | | | | | | |
|
|
Net income per share of common stock - basic and diluted:
| | |
$
|
0.20
| | |
$
|
0.18
|
| | |
$
|
0.82
| | |
$
|
0.68
|
| | | | | | | | | | | | |
|
| | | | | | | | | | | | |
|
Weighted average common shares outstanding:
|
Basic
| | |
|
155,987,275
| | |
|
130,085,462
|
| | |
|
148,878,504
| | |
|
122,180,650
|
|
Diluted
| | |
|
156,199,297
| | |
|
130,275,296
|
| | |
|
149,124,010
| | |
|
122,207,505
|
| | | | | | | | | | | | |
|
|
Dividends declared per common share
| | |
$
|
0.29
| | |
$
|
0.27
|
| | |
$
|
1.12
| | |
$
|
1.04
|
| | | | | | | | | | | | | | | | | |
|
|
|
| STORE Capital Corporation |
| Condensed Consolidated Balance Sheets |
| (In thousands, except share and per share data) |
|
|
| |
|
| |
| | | December 31,
2016 | | | December 31,
2015 |
| | |
(unaudited)
| | |
(audited)
|
| Assets | | | | | | |
|
Investments:
| | | | | | |
|
Real estate investments:
| | | | | | |
|
Land and improvements
| | |
$
|
1,536,178
| | | |
$
|
1,187,482
| |
|
Buildings and improvements
| | | |
3,226,791
| | | | |
2,490,394
| |
|
Intangible lease assets
| | |
|
92,337
|
| | |
|
88,724
|
|
|
Total real estate investments
| | | |
4,855,306
| | | | |
3,766,600
| |
|
Less accumulated depreciation and amortization
| | |
|
(298,984
|
)
| | |
|
(184,182
|
)
|
| | | |
4,556,322
| | | | |
3,582,418
| |
|
Loans and direct financing receivables
| | |
|
269,210
|
| | |
|
213,342
|
|
|
Net investments
| | | |
4,825,532
| | | | |
3,795,760
| |
|
Cash and cash equivalents
| | | |
54,200
| | | | |
67,115
| |
|
Other assets
| | |
|
61,936
|
| | |
|
48,513
|
|
|
Total assets
| | |
$
|
4,941,668
|
| | |
$
|
3,911,388
|
|
| | | | | |
|
| Liabilities and stockholders' equity | | | | | | |
|
Liabilities:
| | | | | | |
|
Credit facility
| | |
$
|
48,000
| | | |
$
|
–
| |
|
Unsecured notes and term loan payable, net
| | | |
470,190
| | | | |
172,442
| |
|
Non-recourse debt obligations of consolidated special purpose
entities, net
| | | |
1,833,481
| | | | |
1,597,505
| |
|
Dividends payable
| | | |
46,209
| | | | |
38,032
| |
|
Accounts payable, accrued expenses and other liabilities
| | |
|
60,533
|
| | |
|
43,616
|
|
|
Total liabilities
| | |
|
2,458,413
|
| | |
|
1,851,595
|
|
| | | | | |
|
|
Stockholders' equity:
| | | | | | |
Common stock, $0.01 par value per share, 375,000,000 shares
authorized, 159,341,955 and 140,858,765 shares issued and
outstanding, respectively
| | | |
1,593
| | | | |
1,409
| |
|
Capital in excess of par value
| | | |
2,631,845
| | | | |
2,162,130
| |
|
Distributions in excess of retained earnings
| | | |
(151,592
|
)
| | | |
(103,453
|
)
|
|
Accumulated other comprehensive income (loss)
| | |
|
1,409
|
| | |
|
(293
|
)
|
|
Total stockholders' equity
| | |
|
2,483,255
|
| | |
|
2,059,793
|
|
|
Total liabilities and stockholders' equity
| | |
$
|
4,941,668
|
| | |
$
|
3,911,388
|
|
| | | | | |
|
|
|
| STORE Capital Corporation |
| Reconciliations of Non-GAAP Financial Measures |
| (In thousands, except per share data) |
|
|
| Funds from Operations and Adjusted Funds from Operations |
|
|
| |
|
| |
| | | Three months ended
December 31, | | | Year ended
December 31, |
| | | 2016 |
|
| 2015 | | | 2016 |
|
| 2015 |
| | |
(unaudited)
| | |
(unaudited)
|
| | | | | | | | | | | |
|
| Net income | | | $ | 31,940 | | | | $ | 24,072 | | | | $ | 123,325 | | | | $ | 83,770 | |
|
Depreciation and amortization of real estate assets
| | | |
32,843
| | | | |
24,783
| | | | |
119,079
| | | | |
88,257
| |
|
Provision for impairment of real estate
| | | |
1,720
| | | | |
–
| | | | |
1,720
| | | | |
1,000
| |
|
(Gain) loss on dispositions of real estate, net of tax
| | |
|
(3,687
|
)
| | |
|
560
|
| | |
|
(13,220
|
)
| | |
|
(1,322
|
)
|
| Funds from Operations | | |
|
62,816
|
| | |
|
49,415
|
| | |
|
230,904
|
| | |
|
171,705
|
|
| | | | | | | | | | | |
|
|
Adjustments:
| | | | | | | | | | | | |
|
Straight-line rental revenue, net
| | | |
204
| | | | |
(505
|
)
| | | |
(2,344
|
)
| | | |
(2,018
|
)
|
|
Transaction costs
| | | |
33
| | | | |
153
| | | | |
523
| | | | |
1,156
| |
|
Amortization of:
| | | | | | | | | | | | |
|
Equity-based compensation
| | | |
1,803
| | | | |
1,285
| | | | |
7,022
| | | | |
4,735
| |
Deferred financing costs and other noncash interest expense
| | | |
1,949
| | | | |
1,664
| | | | |
7,267
| | | | |
6,507
| |
|
Lease-related intangibles and costs
| | | |
336
| | | | |
543
| | | | |
1,657
| | | | |
1,390
| |
|
Selling stockholder costs
| | |
|
–
|
| | |
|
–
|
| | |
|
800
|
| | |
|
–
|
|
| Adjusted Funds from Operations | | |
$
|
67,141
|
| | |
$
|
52,555
|
| | |
$
|
245,829
|
| | |
$
|
183,475
|
|
| | | | | | | | | | | |
|
|
Dividends declared to common stockholders
| | |
$
|
46,209
|
| | |
$
|
38,032
|
| | |
$
|
170,795
|
| | |
$
|
132,821
|
|
| | | | | | | | | | | |
|
| Net income per share of common stock: | | | | | | | | | | | | |
|
Basic and Diluted (1) | | |
$
|
0.20
|
| | |
$
|
0.18
|
| | |
$
|
0.82
|
| | |
$
|
0.68
|
|
| FFO per share of common stock: | | | | | | | | | | | | |
|
Basic (1) | | |
$
|
0.40
|
| | |
$
|
0.38
|
| | |
$
|
1.55
|
| | |
$
|
1.40
|
|
|
Diluted (1) | | |
$
|
0.40
|
| | |
$
|
0.38
|
| | |
$
|
1.54
|
| | |
$
|
1.40
|
|
| AFFO per share of common stock: | | | | | | | | | | | | |
|
Basic (1) | | |
$
|
0.43
|
| | |
$
|
0.40
|
| | |
$
|
1.65
|
| | |
$
|
1.49
|
|
|
Diluted (1) | | |
$
|
0.43
|
| | |
$
|
0.40
|
| | |
$
|
1.64
|
| | |
$
|
1.49
|
|
(1) |
|
Under the two-class method, earnings attributable to unvested
restricted stock are deducted from earnings in the computation of
per share amounts where applicable.
|
| |
|
STORE Capital Corporation
Investment Portfolio
December
31, 2016
Real Estate Portfolio Information
As of December 31, 2016, STORE Capital’s total investment in real estate
and loans approximated $5.1 billion, representing investments in 1,660
property locations, substantially all of which are profit centers for
its customers. The Company’s real estate portfolio is highly
diversified. The following tables summarize the diversification of the
real estate portfolio based on the percentage of base rent and interest,
annualized based on rates in effect on December 31, 2016, for all
leases, loans and direct financing receivables in place as of that date.
Diversification by Customer
STORE Capital has a diverse customer base. At December 31, 2016, the
Company’s 1,660 property locations were operated by 360 customers. No
single customer represented more than 2.8% of annualized base rent and
interest and the top ten customers totaled 16.7% of annualized base rent
and interest. The following table identifies STORE Capital’s ten largest
customers as of December 31, 2016:
| Customer |
|
| % of
Annualized
Base Rent and
Interest |
|
| Number of
Properties |
| American Multi-Cinema, Inc. (Starplex/Carmike/Showplex/AMC)
| | |
2.8
|
%
| | |
16
|
| Cadence Education, Inc. (Early childhood/elementary education)
| | |
2.2
| | | |
32
|
| Gander Mountain Company | | |
2.2
| | | |
13
|
| Mills Fleet Farm Group, LLC | | |
2.0
| | | |
6
|
| RMH Franchise Holdings, Inc. (Applebee’s)
| | |
1.6
| | | |
33
|
|
O'Charley's LLC
| | |
1.4
| | | |
30
|
| Dufresne Spencer Group Holdings, LLC (Ashley Furniture HomeStore)
| | |
1.2
| | | |
11
|
| FreedomRoads, LLC (Camping World)
| | |
1.1
| | | |
8
|
| Sailormen, Inc. (Popeyes Louisiana Kitchen)
| | |
1.1
| | | |
41
|
| At Home Stores LLC | | |
1.1
| | | |
5
|
|
All other (350 customers)
| | |
83.3
|
| | |
1,465
|
|
Total
| | |
100.0
|
%
| | |
1,660
|
| | | | | | |
|
STORE Capital Corporation
Investment Portfolio
December
31, 2016
Diversification by Concept
STORE Capital’s customers operate their businesses under a wide range of
brand names or business concepts. Of the more than 420 concepts
represented in the Company’s investment portfolio as of December 31,
2016, the largest single concept represented 3.1% of annualized base
rent and interest and the top ten concepts totaled 17.5% of annualized
base rent and interest. The following table identifies the top ten
customer business concepts as of December 31, 2016:
| Customer Business Concept |
|
| % of
Annualized
Base Rent and
Interest |
|
| Number of
Properties |
|
Ashley Furniture HomeStore
| | |
3.1
|
%
| | |
25
|
|
Applebee’s
| | |
2.2
| | | |
48
|
|
Gander Mountain
| | |
2.2
| | | |
13
|
| Mills Fleet Farm | | |
2.1
| | | |
6
|
|
Popeyes Louisiana Kitchen
| | |
1.6
| | | |
63
|
|
Starplex Cinemas
| | |
1.5
| | | |
8
|
|
O'Charley's
| | |
1.4
| | | |
30
|
|
Captain D’s
| | |
1.2
| | | |
73
|
|
Sonic Drive-In
| | |
1.1
| | | |
56
|
|
Camping World
| | |
1.1
| | | |
8
|
|
All other (414 concepts)
| | |
82.5
|
| | |
1,330
|
|
Total
| | |
100.0
|
%
| | |
1,660
|
| | | | | |
|
STORE Capital Corporation
Investment Portfolio
December
31, 2016
Diversification by Industry
The business concepts of STORE Capital’s customers are diversified
across more than 100 industries within the service, retail and
manufacturing sectors of the U.S. economy. The following table
summarizes those industries as of December 31, 2016:
| Customer Industry |
|
| % of
Annualized
Base Rent and
Interest |
|
| Number of
Properties |
|
| Building
Square
Footage
(in
thousands) |
|
Service:
| | | | | | | | | |
|
Restaurants – full service
| | |
13.8
|
%
| | |
322
| | |
2,240
|
|
Restaurants – limited service
| | |
8.4
| | | |
393
| | |
1,038
|
|
Early childhood education centers
| | |
7.4
| | | |
167
| | |
1,803
|
|
Movie theaters
| | |
6.9
| | | |
38
| | |
1,769
|
|
Health clubs
| | |
6.2
| | | |
60
| | |
1,743
|
|
Automotive repair and maintenance facilities
| | |
2.9
| | | |
84
| | |
402
|
|
Colleges and professional schools
| | |
1.9
| | | |
6
| | |
488
|
|
All other service (44 industries)
| | |
22.0
|
| | |
299
| | |
8,539
|
|
Total service
| | |
69.5
|
| | |
1,369
| | |
18,022
|
|
Retail:
| | | | | | | | | |
|
Furniture stores
| | |
3.8
| | | |
31
| | |
1,889
|
|
Lawn and garden equipment and supply stores
| | |
3.2
| | | |
21
| | |
1,799
|
|
Sporting goods and hobby stores
| | |
2.5
| | | |
16
| | |
1,050
|
|
All other retail (12 industries)
| | |
5.9
|
| | |
76
| | |
3,016
|
|
Total retail
| | |
15.4
|
| | |
144
| | |
7,754
|
|
Manufacturing:
| | | | | | | | | |
|
Total manufacturing (40 industries)
| | |
15.1
|
| | |
147
| | |
15,181
|
|
Total
| | |
100.0
|
%
| | |
1,660
| | |
40,957
|
| | | | | | | | |
|
STORE Capital Corporation
Investment Portfolio
December
31, 2016
Diversification by Geography
STORE Capital’s portfolio is also highly diversified by geography, as
the Company’s property locations can be found in 48 of the 50 states
(excluding Delaware and Rhode Island). The following table details the
top ten geographical locations of the properties as of December 31, 2016:
| State |
|
| % of
Annualized
Base Rent and
Interest |
|
| Number of
Properties |
| Texas | | |
12.9
|
%
| | |
176
|
| Illinois | | |
7.5
| | | |
121
|
| Georgia | | |
5.9
| | | |
112
|
| Ohio | | |
5.9
| | | |
99
|
| Florida | | |
5.6
| | | |
86
|
| Tennessee | | |
4.9
| | | |
84
|
| California | | |
4.3
| | | |
24
|
| Arizona | | |
3.7
| | | |
63
|
| Wisconsin | | |
3.3
| | | |
35
|
| Minnesota | | |
3.2
| | | |
50
|
|
All other (38 states) (1) | | |
42.8
|
| | |
810
|
|
Total
| | |
100.0
|
%
| | |
1,660
|
(1) |
|
Includes two properties in Ontario, Canada which represent 0.2% of
annualized base rent and interest.
|
| |
|
STORE Capital Corporation
Investment Portfolio
December
31, 2016
Contracts and Expirations
The Company focuses on long-term, triple-net leases with built-in lease
escalators and uses master leases, where appropriate. As of December 31,
2016, 97% of the Company’s investment portfolio was subject to a
triple-net lease. Where the Company owns multiple properties leased to a
single customer, 82% of this portion of the investment portfolio was
subject to a master lease. Leases and loans representing less than 12%
of the annualized base rent and interest will expire in the next ten
years (before 2027). The following table sets forth the schedule of
lease, loan and direct financing receivable expirations as of December
31, 2016:
| Year of Lease Expiration or Loan Maturity (1) |
|
| % of
Annualized
Base Rent and
Interest |
|
| Number of
Properties (2) |
|
2017
| | |
0.6
|
%
| | |
13
|
|
2018
| | |
0.3
| | | |
2
|
|
2019
| | |
0.8
| | | |
8
|
|
2020
| | |
0.8
| | | |
7
|
|
2021
| | |
1.0
| | | |
8
|
|
2022
| | |
0.3
| | | |
5
|
|
2023
| | |
1.7
| | | |
34
|
|
2024
| | |
1.2
| | | |
18
|
|
2025
| | |
2.0
| | | |
20
|
|
2026
| | |
3.1
| | | |
59
|
|
Thereafter
| | |
88.2
|
| | |
1,478
|
|
Total
| | |
100.0
|
%
| | |
1,652
|
| (1) |
|
Expiration year of contracts in place as of December 31, 2016,
excluding any tenant renewal option periods.
|
(2) | |
Excludes eight properties which were vacant and not subject to a
lease as of December 31, 2016.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170223005500/en/
Investors and Media:
Financial Profiles, Inc.
Moira
Conlon, 310-622-8220
Tricia Ross, 310-622-8226
STORECapital@finprofiles.com
Source: STORE Capital Corporation