Attached files
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| 8-K - 8-K/A PRO FORMA FINANCIAL INFORMATION - Four Corners Property Trust, Inc. | brinkerproforma8-k.htm |
Exhibit 99.1
Four Corners Property Trust, Inc.
Pro Forma Consolidated Financial Statements
(Unaudited)
Four Corners Property Trust, Inc. (the “Company,” “we,” “our” or “us”) was incorporated in the state of Maryland on July 2, 2015.
On August 8, 2018, the Company completed the acquisition (the "Initial Property Acquisition") of 46 Chili's properties (the "Initial Properties") pursuant to a Purchase and Sale Agreement (the "PSA"), dated August 1, 2018, with Brinker Property Corporation ("Brinker Property") and Brinker Propco Florida, Inc. ("Brinker Florida"), both subsidiaries of Brinker International, Inc. ("Brinker"), for the purchase price of $149.8 million. On September 28, 2018, the Company completed the acquisition (together with the Initial Property Acquisition, the "Brinker Property Acquisition") of the remaining two Chili's properties (together with the Initial Properties, the "Properties") under the PSA for a total purchase price of $5.9 million. Including the 46 Initial Properties acquired on August 8, 2018, the aggregate sales price for all the Properties was $155.7 million with an aggregate initial annual cash rent of approximately $9.9 million. All of the Properties are currently operated by Brinker or its subsidiaries. The Company has entered into individual triple-net lease agreements with either Brinker Property or Brinker Florida for each of the Properties, all of which have initial lease terms of 15 years subject to between two and six consecutive five-year renewal options, depending on the Property, by Brinker Property and Brinker Florida, with all of the leases guaranteed by Brinker.
The accompanying Unaudited Pro Forma Consolidated Balance Sheet and Unaudited Pro Forma Consolidated Statements of Income are presented to reflect the historical consolidated balance sheet of the Company as of June 30, 2018, which includes the Brinker Property Acquisition (and related financing) as if it had been completed on June 30, 2018; the historical consolidated statements of income for the year ended December 31, 2017, which includes the Brinker Property Acquisition as if it had been completed on January 1, 2017; and the historical consolidated statements of income for the six months ended June 30, 2018, which includes the Brinker Property Acquisition as if it had been completed on January 1, 2017.
Pro forma information is intended to provide investors with information about the impact of transactions by showing how specific transactions might have affected historical financial statements, illustrating the scope of the change in the historical financial position and results of operations. The adjustments made to historical financial information give effect to events that are directly attributable to the Brinker Property Acquisition and related financing and are factually supportable. The Unaudited Pro Forma Consolidated Financial Statements are prepared in accordance with Article 11 of Regulation S-X.
The Unaudited Pro Forma Consolidated Financial Statements set forth below are not statements of historical fact and there can be no assurance that the Company’s financial position and results of operations would not have differed significantly from those set forth below if the Brinker Property Acquisition and related financing had occurred on June 30, 2018, in the case of the Unaudited Pro Forma Consolidated Balance Sheet, or January 1, 2017, in the case of the Unaudited Pro Forma Consolidated Statements of Income. Accordingly, the Unaudited Pro Forma Consolidated Financial Statements are presented for illustrative purposes only and do not purport to represent, and are not necessarily indicative of, what our actual financial position and results of operations would have been had the Brinker Property Acquisition occurred on the date indicated, nor are they indicative of our future financial position or results of operations. Readers are cautioned not to place undue reliance on such information, and the Company makes no representations regarding the information set forth below or its ultimate performance compared to it. The Unaudited Pro Forma Consolidated Financial Statements exclude any non-recurring charges or credits directly attributable to the Brinker Property Acquisition.
Four Corners Property Trust, Inc.
Pro Forma Consolidated Balance Sheet
As of June 30, 2018
(Unaudited)
(In thousands)
Four Corners Property Trust Historical Balance Sheet | Brinker Property Acquisition | Four Corners Property Trust Pro Forma for Brinker Property Acquisition | Financing | Four Corners Property Trust Pro Forma Balance Sheet | ||||||||||||||||
ASSETS | (A) | (B) | ||||||||||||||||||
Real estate investments: | ||||||||||||||||||||
Land | $ | 471,870 | $ | 67,019 | $ | 538,889 | $ | — | $ | 538,889 | ||||||||||
Buildings, equipment and improvements | 1,118,348 | 90,220 | 1,208,568 | — | 1,208,568 | |||||||||||||||
Total real estate investments | 1,590,218 | 157,239 | 1,747,457 | — | 1,747,457 | |||||||||||||||
Less: Accumulated depreciation | (605,407 | ) | — | (605,407 | ) | — | (605,407 | ) | ||||||||||||
Total real estate investments, net | 984,811 | 157,239 | 1,142,050 | — | 1,142,050 | |||||||||||||||
Cash and cash equivalents | 88,371 | (157,239 | ) | (68,868 | ) | 96,355 | 27,487 | |||||||||||||
Straight-line rent adjustment | 25,505 | — | 25,505 | — | 25,505 | |||||||||||||||
Derivative assets | 12,284 | — | 12,284 | — | 12,284 | |||||||||||||||
Other assets | 11,903 | — | 11,903 | — | 11,903 | |||||||||||||||
Total Assets | $ | 1,122,874 | $ | — | $ | 1,122,874 | $ | 96,355 | $ | 1,219,229 | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Long-term debt, net of deferred financing costs | $ | 516,449 | $ | — | $ | 516,449 | $ | — | $ | 516,449 | ||||||||||
Dividends payable | 17,278 | — | 17,278 | — | 17,278 | |||||||||||||||
Rent received in advance | 8,461 | — | 8,461 | — | 8,461 | |||||||||||||||
Other liabilities | 4,946 | — | 4,946 | — | 4,946 | |||||||||||||||
Total liabilities | 547,134 | — | 547,134 | — | 547,134 | |||||||||||||||
Equity: | ||||||||||||||||||||
Preferred stock | — | — | — | — | — | |||||||||||||||
Common stock | 6 | — | 6 | 1 | 7 | |||||||||||||||
Additional paid-in capital | 510,235 | — | 510,235 | 96,354 | 606,589 | |||||||||||||||
Retained earnings | 45,418 | — | 45,418 | — | 45,418 | |||||||||||||||
Accumulated other comprehensive income | 12,185 | — | 12,185 | — | 12,185 | |||||||||||||||
Noncontrolling interest | 7,896 | — | 7,896 | — | 7,896 | |||||||||||||||
Total equity | 575,740 | — | 575,740 | 96,355 | 672,095 | |||||||||||||||
Total Liabilities and Equity | $ | 1,122,874 | $ | — | $ | 1,122,874 | $ | 96,355 | $ | 1,219,229 | ||||||||||
Four Corners Property Trust, Inc.
Pro Forma Consolidated Statements of Income
For the Year Ended December 31, 2017
(Unaudited)
(In thousands, except share and per share data)
Four Corners Property Trust | Brinker Property Acquisition | Four Corners Property Trust Pro Forma | ||||||||||||
Revenues: | ||||||||||||||
Rental | $ | 113,937 | $ | 10,908 | (AA) | $ | 124,845 | |||||||
Restaurant | 19,272 | — | 19,272 | |||||||||||
Total revenues | 133,209 | 10,908 | 144,117 | |||||||||||
Operating expenses: | — | |||||||||||||
General and administrative | 12,259 | 62 | (BB) | 12,321 | ||||||||||
Depreciation and amortization | 21,811 | 2,690 | (CC) | 24,501 | ||||||||||
Restaurant expenses | 18,652 | — | 18,652 | |||||||||||
Interest expense | 19,469 | — | 19,469 | |||||||||||
Total operating expenses | 72,191 | 2,752 | 74,943 | |||||||||||
Other income | 324 | — | 324 | |||||||||||
Realized gain on sale, net | 10,532 | — | 10,532 | |||||||||||
Income before income tax | 71,874 | 8,156 | 80,030 | |||||||||||
Income tax benefit (expense) | 18 | (18 | ) | (DD) | — | |||||||||
Net income | 71,892 | 8,138 | 80,030 | |||||||||||
Net income attributable to noncontrolling interest | (498 | ) | (57 | ) | (EE) | (555 | ) | |||||||
Net Income Available to Common Shareholders | $ | 71,394 | $ | 8,081 | $ | 79,475 | ||||||||
Basic net income per share: | $ | 1.18 | $ | 1.23 | ||||||||||
Diluted net income per share: | $ | 1.18 | $ | 1.23 | ||||||||||
Weighted average number of common shares outstanding: | ||||||||||||||
Basic | 60,627,423 | 64,652,423 | (FF) | |||||||||||
Diluted | 60,695,834 | 64,720,834 | (FF) | |||||||||||
Four Corners Property Trust, Inc.
Pro Forma Consolidated Statements of Income
For the Six Months Ended June 30, 2018
(Unaudited)
(In thousands, except share and per share data)
Four Corners Property Trust | Brinker Property Acquisition | Four Corners Property Trust Pro Forma | ||||||||||||
Revenues: | ||||||||||||||
Rental | $ | 59,186 | $ | 5,454 | (AA) | $ | 64,640 | |||||||
Restaurant | 10,293 | — | 10,293 | |||||||||||
Total revenues | 69,479 | 5,454 | 74,933 | |||||||||||
Operating expenses: | — | |||||||||||||
General and administrative | 6,873 | 31 | (BB) | 6,904 | ||||||||||
Depreciation and amortization | 10,569 | 1,345 | (CC) | 11,914 | ||||||||||
Restaurant expenses | 9,656 | — | 9,656 | |||||||||||
Interest expense | 9,733 | — | 9,733 | |||||||||||
Total operating expenses | 36,831 | 1,376 | 38,207 | |||||||||||
Other income | 588 | — | 588 | |||||||||||
Realized gain on sale, net | 10,879 | — | 10,879 | |||||||||||
Income before income tax | 44,115 | 4,078 | 48,193 | |||||||||||
Income tax expense | (125 | ) | (9 | ) | (DD) | (134 | ) | |||||||
Net income | 43,990 | 4,069 | 48,059 | |||||||||||
Net income attributable to noncontrolling interest | (291 | ) | (27 | ) | (EE) | (318 | ) | |||||||
Net Income Available to Common Shareholders | $ | 43,699 | $ | 4,042 | $ | 47,741 | ||||||||
Basic net income per share: | $ | 0.71 | $ | 0.73 | ||||||||||
Diluted net income per share: | $ | 0.71 | $ | 0.73 | ||||||||||
Weighted average number of common shares outstanding: | ||||||||||||||
Basic | 61,511,183 | 65,536,183 | (GG) | |||||||||||
Diluted | 61,661,560 | 65,686,560 | (GG) | |||||||||||
Four Corners Property Trust, Inc.
Notes to Unaudited Pro Forma Consolidated Financial Statements
1.Notes to the Unaudited Pro Forma Consolidated Balance Sheet as of June 30, 2018
(A) The Brinker Property Acquisition was accounted for as an asset acquisition, allocating the purchase price (including acquisition and closing costs) to land, building, and improvements based on the fair value of tangible assets acquired. The adjustment assumes the acquisition was initially funded in cash.
(B) On August 7, 2018, the Company completed a stock offering pursuant to which we sold 4,025,000 shares of our common stock, par value $0.01 per share, at a price of $25.00 per share. We raised $100.6 million in gross proceeds, resulting in net proceeds of approximately $96.4 million after deducting $4.3 million in underwriting discounts and expenses related to the offering.
2.Notes to the Unaudited Pro Forma Consolidated Statements of Income for the Year Ended December 31, 2017 and the Six Months Ended June 30, 2018
(AA) Amount represents the rental revenue recognized on a straight-line basis over the initial lease term of the Properties.
(BB) Amount represents the franchise tax expense incurred as a result of the rental revenue received from the Properties.
(CC) Amount represents depreciation and amortization expense based on the allocation of the purchase price. Depreciation and amortization expense is recognized using the straight-line method over an estimated useful life of 30.0 to 55.0 years and 3.0 to 13.0 years, for buildings and improvements, respectively.
(DD) Amount represents the state income tax expense incurred as a result of the rental revenue received from the Properties.
(EE) Amount represents the allocation of earnings for the year ended December 31, 2017 and the six months ended June 30, 2018, to the noncontrolling interest, which relates to the approximate 0.70% and 0.66%, respectively, of redeemable noncontrolling interest held by our limited partner.
(FF) Amount represents the weighted average number of shares of our common stock at December 31, 2017, adjusted to include the stock offering noted in (B) above. The calculation assumes the shares of our common stock issued in the stock offering were outstanding for the entire period.
(GG ) Amount represents the weighted average number of shares of our common stock at June 30, 2018, adjusted to include the stock offering noted in (B) above. The calculation assumes the shares of our common stock issued in the stock offering were outstanding for the entire period.