Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 29, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Four Corners Property Trust, Inc. | |
Entity Central Index Key | 1,650,132 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, shares outstanding | 67,755,399 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Real estate investments: | ||
Land | $ 549,070 | $ 449,331 |
Buildings, equipment and improvements | 1,214,792 | 1,115,624 |
Total real estate investments | 1,763,862 | 1,564,955 |
Less: Accumulated depreciation | (610,835) | (598,846) |
Total real estate investments, net | 1,153,027 | 966,109 |
Intangible lease assets, net | 12,549 | 3,835 |
Total real estate investments and intangible lease assets, net | 1,165,576 | 969,944 |
Cash and cash equivalents | 26,890 | 64,466 |
Straight-line rent adjustment | 27,799 | 21,130 |
Derivative assets | 12,634 | 4,997 |
Other assets | 3,279 | 8,122 |
Total Assets | 1,236,178 | 1,068,659 |
Liabilities: | ||
Long-term debt, net of deferred financing costs | 516,904 | 515,539 |
Dividends payable | 18,519 | 16,843 |
Rent received in advance | 8,300 | 8,295 |
Derivative liabilities | 0 | 8 |
Other liabilities | 7,377 | 5,706 |
Total liabilities | 551,100 | 546,391 |
Equity: | ||
Preferred stock, par value $0.0001 per share; 25,000,000 authorized, zero shares issued and outstanding | 0 | |
Common stock, par value $0.0001 per share; 500,000,000 shares authorized, 67,441,692 and 61,329,489 shares issued and outstanding, respectively | 7 | 6 |
Additional paid-in capital | 620,216 | 473,685 |
Retained earnings | 44,393 | 36,318 |
Accumulated other comprehensive income | 12,566 | 4,478 |
Noncontrolling interest | 7,896 | 7,781 |
Total equity | 685,078 | 522,268 |
Total Liabilities and Equity | $ 1,236,178 | $ 1,068,659 |
CONSOLIDATED BALANCE SHEETS (PA
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 67,441,692 | 61,329,489 |
Common stock, shares outstanding | 67,441,692 | 61,329,489 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues: | ||||
Rental revenue | $ 36,122 | $ 33,511 | $ 105,600 | $ 99,371 |
Total revenues | 36,122 | 33,511 | 105,600 | 99,371 |
Expenses: | ||||
General and administrative | 3,225 | 2,899 | 10,098 | 9,215 |
Depreciation and amortization | 5,743 | 5,425 | 16,312 | 16,254 |
Restaurant expenses | 4,713 | 4,571 | 14,370 | 13,823 |
Interest expense | 4,934 | 5,463 | 14,667 | 14,066 |
Total expenses | 18,615 | 18,358 | 55,447 | 53,358 |
Other income | 164 | 172 | 752 | 211 |
Realized gain on sale, net | 0 | 4,042 | 10,879 | 7,333 |
Income before income taxes | 17,671 | 19,367 | 61,784 | 53,557 |
Income tax expense | (64) | (33) | (189) | (139) |
Net income | 17,607 | 19,334 | 61,595 | 53,418 |
Net income attributable to noncontrolling interest | (111) | (129) | (402) | (374) |
Net Income Available to Common Shareholders | $ 17,496 | $ 19,205 | $ 61,193 | $ 53,044 |
Basic net income per share (in USD per share) | $ 0.27 | $ 0.31 | $ 0.97 | $ 0.88 |
Diluted net income per share (in USD per share) | $ 0.27 | $ 0.31 | $ 0.97 | $ 0.88 |
Weighted average number of common shares outstanding: | ||||
Weighted average common shares outstanding – basic | 65,347,842 | 61,112,051 | 62,804,123 | 60,457,949 |
Weighted average common shares outstanding – diluted | 65,577,975 | 61,256,145 | 62,987,282 | 60,567,152 |
Dividends declared per common share (in USD per share) | $ 0.2750 | $ 0.2425 | $ 0.8250 | $ 0.7275 |
Rental Revenue [Member] | ||||
Revenues: | ||||
Rental revenue | $ 31,324 | $ 28,835 | $ 90,509 | $ 84,926 |
Restaurant Revenue [Member] | ||||
Revenues: | ||||
Rental revenue | $ 4,798 | $ 4,676 | $ 15,091 | $ 14,445 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 17,607 | $ 19,334 | $ 61,595 | $ 53,418 |
Other comprehensive income: | ||||
Effective portion of change in fair value of derivative instruments | 1,132 | 293 | 9,234 | 115 |
Reclassification adjustment of derivative instruments included in net income | (748) | 196 | (1,562) | 1,230 |
Other comprehensive income (loss) | 384 | 489 | 7,672 | 1,345 |
Comprehensive income | 17,991 | 19,823 | 69,267 | 54,763 |
Less: comprehensive income attributable to noncontrolling interest | ||||
Net income attributable to noncontrolling interest | 111 | 129 | 402 | 374 |
Other comprehensive income attributable to noncontrolling interest | 2 | 4 | 51 | 7 |
Comprehensive income attributable to noncontrolling interest | 113 | 133 | 453 | 381 |
Comprehensive Income Attributable to Common Shareholders | $ 17,878 | $ 19,690 | $ 68,814 | $ 54,382 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | At-The-Market Offering [Member] | Equity Offering [Member] | Common Stock [Member] | Common Stock [Member]At-The-Market Offering [Member] | Common Stock [Member]Equity Offering [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member]At-The-Market Offering [Member] | Additional Paid-in Capital [Member]Equity Offering [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income [Member] | Noncontrolling Interest [Member] |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
ASU 2017-12 cumulative effect adjustment | $ 0 | $ (467) | $ 467 | |||||||||
Beginning Balance, shares outstanding at Dec. 31, 2017 | 61,329,489 | 61,329,489 | ||||||||||
Stockholders equity, start of period at Dec. 31, 2017 | $ 522,268 | $ 6 | $ 473,685 | 36,318 | 4,478 | $ 7,781 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income | 61,595 | 61,193 | 402 | |||||||||
Other comprehensive income | 7,672 | 7,621 | 51 | |||||||||
Shares, new issues | 2,022,106 | 2,022,106 | 4,025,000 | |||||||||
ATM proceeds, net of issuance costs | $ 47,305 | $ 96,356 | $ 1 | $ 47,305 | $ 96,355 | |||||||
Dividends and distributions to equity holders | (52,989) | (52,651) | (338) | |||||||||
Stock-based compensation, net, shares | 65,097 | |||||||||||
Stock-based compensation, net | $ 2,871 | 2,871 | ||||||||||
Ending Balance, shares outstanding at Sep. 30, 2018 | 67,441,692 | |||||||||||
Stockholders equity, end of period at Sep. 30, 2018 | $ 685,078 | $ 7 | $ 620,216 | $ 44,393 | $ 12,566 | $ 7,896 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows - operating activities | ||
Net income | $ 61,595 | $ 53,418 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 16,312 | 16,254 |
Gain on disposal of land, building, and equipment | (10,879) | (7,333) |
Gain on exchange of non-financial assets | 228 | 0 |
Amortization of financing costs | 1,368 | 1,265 |
Stock-based compensation expense | 2,871 | 1,920 |
Deferred income taxes | 0 | (32) |
Changes in assets and liabilities: | ||
Derivative assets and liabilities | 27 | 105 |
Straight-line rent adjustment | (6,857) | (7,283) |
Rent received in advance | 5 | (10) |
Other assets and liabilities | 1,601 | 1,875 |
Net cash provided by operating activities | 65,815 | 60,179 |
Cash flows - investing activities | ||
Purchases of real estate investments | (216,272) | (70,366) |
Proceeds from sale of real estate investments | 15,714 | 10,734 |
Advance deposits on acquisition of operating real estate | (86) | (757) |
Cash used in investing activities | (200,644) | (60,389) |
Cash flows - financing activities | ||
Proceeds from issuance of senior notes | 0 | 125,000 |
Payment of deferred financing costs | 0 | 1,809 |
Proceeds from revolving credit facility | 0 | 36,000 |
Repayment of revolving credit facility | 0 | (81,000) |
Payment of dividends to shareholders | (50,975) | (43,875) |
Distributions to non-controlling interests | (338) | (348) |
Redemption of non-controlling interests | 0 | 988 |
Repayment of debt assumed in purchase of real estate investments | 0 | (2,305) |
Net cash provided by financing activities | 92,348 | 59,462 |
Net (decrease) increase in cash and cash equivalents, including restricted cash | (42,481) | 59,252 |
Cash and cash equivalents, including restricted cash, at beginning of period | 69,371 | 26,643 |
Cash and cash equivalents, including restricted cash, at end of period | 26,890 | 85,895 |
Supplemental disclosures: | ||
Interest paid | 13,199 | 10,945 |
Income taxes paid | 615 | 522 |
Non-cash investing and financing activities: | ||
Dividends declared but not paid | 18,519 | 14,820 |
Debt assumed in acquisition of real estate investments | 0 | 2,305 |
Change in fair value of derivative instruments | 7,637 | 1,240 |
Operating partnership units issued in exchange for real estate investments | 0 | 3,609 |
At-The-Market Offering [Member] | ||
Cash flows - financing activities | ||
Net proceeds from issuance of stock | 47,305 | 28,787 |
Equity Offering [Member] | ||
Cash flows - financing activities | ||
Net proceeds from issuance of stock | $ 96,356 | $ 0 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | ORGANIZATION Four Corners Property Trust, Inc. (together with its consolidated subsidiaries, “FCPT”) is an independent, publicly traded, self-administered company, primarily engaged in the ownership, acquisition and leasing of restaurant properties. Substantially all of our business is conducted through Four Corners Operating Partnership, LP (“FCPT OP”), a Delaware limited partnership of which we are the initial and substantial limited partner. Our wholly owned subsidiary, Four Corners GP, LLC (“FCPT GP”), is its sole general partner. FCPT was incorporated as a Maryland corporation on July 2, 2015 as a wholly owned indirect subsidiary of Darden Restaurants, Inc., (together with its consolidated subsidiaries, “Darden”), for the purpose of owning, acquiring and leasing properties on a triple-net basis, for use in the restaurant and related food service industries. On November 9, 2015, Darden completed a spin-off of FCPT whereby Darden contributed to us 100% of the equity interest in entities that owned 418 properties in which Darden operates restaurants, representing five of their brands, and six LongHorn Steakhouse® restaurants located in the San Antonio, Texas area (the “Kerrow Restaurant Operating Business”) along with the underlying properties or interests therein associated with the Kerrow Restaurant Operating Business. In exchange, we issued to Darden all of our common stock and paid to Darden $315.0 million in cash. Subsequently, Darden distributed all of our outstanding shares of common stock pro rata to holders of Darden common stock whereby each Darden shareholder received one share of our common stock for every three shares of Darden common stock held at the close of business on the record date as well as cash in lieu of any fractional shares of our common stock which they would have otherwise received (the “Spin-Off”). The Spin-Off is intended to qualify as tax-free to Darden shareholders for U.S. federal income tax purposes, except for cash paid in lieu of fractional shares. We believe that we have been organized and have operated in conformity with the requirements for qualification and taxation as a real estate investment trust (a “REIT”) for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2016, and we intend to continue to operate in a manner that will enable us to maintain our qualification as a REIT. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute at least 90% of our adjusted taxable income to our shareholders, subject to certain adjustments and excluding any net capital gain. As a REIT, we will not be subject to U.S. federal corporate income tax on that portion of net income that is distributed to our shareholders. However, FCPT’s taxable REIT subsidiaries (“TRS”) will generally be subject to U.S. federal, state, and local income taxes. We made our REIT election upon the filing of our 2016 tax return. Any references to “the Company,” “we,” “us,” or “our” refer to FCPT as an independent, publicly traded, self-administered company. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation Th e accompanying consolidated financial statements include the accounts of Four Corners Property Trust, Inc. and its consolidated subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair presentation of the results for the interim periods presented. These adjustments are considered to be of a normal, recurring nature. Reclassifications Certain amounts previously reported under specific financial statement captions have been reclassified to be consistent with the current period presentation. The Company reclassified intangible lease assets, net of $3.8 million at December 31, 2017, from Other assets to Intangible lease assets, net on the Consolidated Balance Sheet. Use of Estimates The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of sales and expenses during the reporting period. The estimates and assumptions used in the accompanying consolidated financial statements are based on management’s evaluation of the relevant facts and circumstances as of the date of the combination. Actual results may differ from the estimates and assumptions used in preparing the accompanying consolidated financial statements, and such differences could be material. Real Estate Investments, Net Real estate investments, net are recorded at cost less accumulated depreciation. Building components are depreciated over estimated useful lives ranging from seven to fifty-five years using the straight-line method. Leasehold improvements, which are reflected on our balance sheets as a component of buildings, equipment and improvements are amortized over the lesser of the non-cancelable lease term or the estimated useful lives of the related assets using the straight-line method. Other equipment is generally depreciated over estimated useful lives ranging from two to fifteen years also using the straight-line method. Real estate development and construction costs for newly constructed restaurants are capitalized in the period in which they are incurred. Gains and losses on the disposal of land, buildings and equipment are included in our accompanying Consolidated Statements of Income and Comprehensive Income. Our accounting policies regarding land, buildings and equipment, including leasehold improvements, include our judgments regarding the estimated useful lives of these assets, the residual values to which the assets are depreciated or amortized, the determination of what constitutes a reasonably assured lease term, and the determination as to what constitutes enhancing the value of or increasing the life of existing assets. These judgments and estimates may produce materially different amounts of reported depreciation and amortization expense if different assumptions were used. As discussed further below, these judgments may also impact our need to recognize an impairment charge on the carrying amount of these assets as the cash flows associated with the assets are realized, or as our expectations of estimated future cash flows change. Acquisition of Real Estate The Company evaluates acquisitions to determine whether transactions should be accounted for as asset acquisitions or business combinations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2017-01. Since adoption in the fourth quarter of 2016, the Company has determined the land, building, site improvements, and in-places leases (if any) of assets acquired were a single asset as the building and property improvements are attached to the land and cannot be physically removed and used separately from the land without incurring significant costs or reducing their fair value. Additionally, the Company has not acquired a substantive process used to generate outputs. As substantially all of the fair value of the gross assets acquired are concentrated in a single identifiable asset and there were no processes acquired, the acquisitions do not qualify as a business and are accounted for as asset acquisitions. Related transaction costs are generally capitalized and amortized over the useful life of the acquired assets. The Company allocates the purchase price (including acquisition and closing costs) of real estate acquisitions to land, building, and improvements based on their relative fair values, as-if-vacant, and lease intangibles (if any). In making estimates of fair values for this purpose, the Company uses a third-party specialist that obtains various information about each property, as well as the pre-acquisition due diligence of the Company and prior leasing activities at the site. Lease Intangibles Lease intangibles, if any, acquired in conjunction with the purchase of real estate represent the value of in-place leases and above- or below-market leases. For real estate acquired subject to existing lease agreements, acquired lease intangibles are valued based on the Company’s estimates of costs related to tenant acquisition and the asset carrying costs that would be incurred during the time it would take to locate a tenant if the property were vacant, considering current market conditions and costs to execute similar leases at the time of the acquisition. Above-market and below-market lease intangibles are recorded based on the present value of the difference between the contractual amounts to be paid pursuant to the leases at the time of acquisition of the real estate and the Company’s estimate of current market lease rates for the property, measured over a period equal to the remaining initial term of the lease. The aggregate value of other acquired intangible assets, consisting of in-place leases, is measured by the excess of the purchase price paid for a property after adjusting existing in-place leases to current market lease rates over the estimated fair value of the property as-if-vacant. In-place lease intangibles are amortized on a straight-line basis over the remaining initial term of the related lease and included in depreciation and amortization expense. Above-market lease intangibles are amortized over the remaining initial terms of the respective leases as a decrease in rental revenue. Below market lease intangibles are generally amortized as an increase to rental revenue over the remaining initial term of the respective leases, but may be amortized over the renewal periods if the Company believes it is likely the tenant will exercise the renewal option. Should a lease terminate early, the unamortized portion of any related lease intangible is immediately recognized as an impairment loss in depreciation and amortization expense. Impairment of Long-Lived Assets Land, buildings and equipment and certain other assets, including definite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted net cash flows expected to be generated by the assets. Identifiable cash flows are measured at the lowest level for which they are largely independent of the cash flows of other groups of assets and liabilities, generally at the restaurant level. If these assets are determined to be impaired, the amount of impairment recognized is measured by the amount by which the carrying amount of the assets exceeds their fair value. Fair value is generally determined by appraisals or sales prices of comparable assets. The judgments we make related to the expected useful lives of long-lived assets and our ability to realize undiscounted cash flows in excess of the carrying amounts of these assets are affected by factors such as the ongoing maintenance and improvements of the assets, changes in economic conditions, changes in usage or operating performance, desirability of the restaurant sites and other factors, such as our ability to sell or lease our assets. As we assess the ongoing expected cash flows and carrying amounts of our long-lived assets, significant adverse changes in these factors could cause us to realize a material impairment loss. Exit or disposal activities include the cost of disposing of the assets and are generally expensed as incurred. Upon disposal of the assets, any gain or loss is recorded in the same caption within our Consolidated Statements of Income and Comprehensive Income as the original impairment, if any. Real Estate Held for Sale Real estate is classified as held for sale when the sale is probable, will be completed within one year, purchase agreements are executed, the buyer has a significant deposit at risk, and no financing contingencies exist which could prevent the transaction from being completed in a timely manner. Assets whose disposal is not probable within one year remain in land, buildings, equipment and improvements until their disposal within one year is probable. Disposals of assets that have a major effect on our operations and financial results or that represent a strategic shift in our operating businesses meet the requirements to be reported as discontinued operations. Real estate held for sale is reported at the lower of carrying amount or fair value, less estimated costs to sell. There was no real estate held for sale at September 30, 2018 or December 31, 2017. Cash, Cash Equivalents, and Restricted Cash We consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents can consist of cash and money market accounts. Restricted cash includes escrow deposits and is included in Other Assets on our Consolidated Balance Sheets. The following table provides a reconciliation of cash, cash equivalents, and restricted cash in our Consolidated Balance Sheets to the total amount shown in our Consolidated Statements of Cash Flows: September 30, December 31, (In thousands) 2018 2017 Cash and cash equivalents $ 26,890 $ 64,466 Restricted cash (included in Other assets) — 4,905 Total Cash, Cash Equivalents, and Restricted Cash $ 26,890 $ 69,371 Long-term Debt Long-term debt is carried at unpaid principal balance, net of deferred financing costs. All of our long-term debt is currently unsecured and interest is paid monthly on our non-amortizing term loan and revolving credit facility and semi-annually on our senior fixed rate notes. See Note 6 - Long-term Debt, Net of Deferred Financing Costs for additional information. Deferred Financing Costs Financing costs related to long-term debt are deferred and amortized over the remaining life of the debt using the effective interest method. These costs are presented as a direct deduction from their related liabilities on the Consolidated Balance Sheets. See Note 6 - Long-term Debt, Net of Deferred Financing Costs for additional information. Derivative Instruments and Hedging Activities We enter into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments as required by FASB ASC Topic 815, Derivatives and Hedging, and those utilized as economic hedges. Our use of derivative instruments is currently limited to interest rate hedges. These instruments are generally structured as hedges of the variability of cash flows related to forecasted transactions (cash flow hedges). We do not enter into derivative instruments for trading or speculative purposes, where changes in the cash flows of the derivative are not expected to offset changes in cash flows of the hedged item. All derivatives are recognized on the balance sheet at fair value. For those derivative instruments for which we intend to elect hedge accounting, at the time the derivative contract is entered into, we document all relationships between hedging instruments and hedged items, as well as our risk-management objective and strategy for undertaking the various hedge transactions. This process includes linking all derivatives designated as cash flow hedges to specific assets and liabilities on the consolidated balance sheet or to specific forecasted transactions. We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the derivatives used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. To the extent our derivatives are effective in offsetting the variability of the hedged cash flows, and otherwise meet the cash flow hedge accounting criteria in accordance with United States generally accepted accounting principles (“U.S. GAAP”), changes in the derivatives’ fair value are not included in current earnings but are included in accumulated other comprehensive income (loss), net of tax. These changes in fair value will be reclassified into earnings at the time of the forecasted transaction. Ineffectiveness measured in the hedging relationship is recorded in earnings in the period in which it occurs. In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities.” ASU 2017-12 is intended to simplify hedge accounting by better aligning an entity’s financial reporting for hedging relationships with its risk management activities. We adopted ASU 2017-12 in January 2018, and as a result recorded a cumulative effect adjustment of $467 thousand to retained earnings and other comprehensive income. See Note 7 - Derivative Financial Instruments for additional information. Other Assets and Liabilities Other assets primarily consist of pre-acquisition costs, prepaid assets, food and beverage inventories, restricted cash (escrow deposits), lease origination fees, and accounts receivable. Other liabilities primarily consist of accrued compensation, accrued interest, accrued operating expenses, intangible lease liabilities, and deferred rent obligations on certain operating leases. Revenue Recognition Effective January 1, 2018, the Company adopted FASB ASU No. 2014-09, “Revenue from Contracts with Customers” using the modified retrospective method. The standard outlines a single comprehensive revenue recognition model for entities to follow in accounting for revenue from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity should recognize revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to receive for those goods or services. Effective January 1, 2018, the Company also adopted FASB ASU No. 2017-15, “Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” Through the evaluation and implementation process, we have determined FCPT’s key revenue stream that could be impacted by FASB ASU No. 2014-09, as amended by FASB ASU No. 2017-05, is the gain on disposition of real estate reported on the Consolidated Statements of Income and Comprehensive Income. We previously recognized revenue from asset sales at the time of closing (i.e., transfer of asset). After adoption of FASB No. ASU 2014-09, as amended by FASB ASU No. 2017-05, we will evaluate the transaction to determine if control has been transferred to the buyer to determine proper timing of revenue recognition, as well as transaction price allocation. Adoption of this guidance did not have a material impact on our consolidated financial statements or related disclosures. Rental Revenue For those net leases that provide for periodic and determinable increases in base rent, base rental revenue is recognized on a straight-line basis over the applicable lease term when collectability is reasonably assured. Recognizing rental income on a straight-line basis generally results in recognized revenues during the first half of a lease term exceeding the cash amounts contractually due from our tenants, creating a deferred rent receivable. Lease origination fees are deferred and amortized over the related lease term as an adjustment to rental revenue. Taxes collected from lessees and remitted to governmental authorities are presented on a net basis within rental revenue in our Consolidated Statements of Income and Comprehensive Income. For those leases that provide for periodic increases in base rent only if certain revenue parameters or other substantive contingencies are met, the increased rental revenue is recognized as the related parameters or contingencies are met, rather than on a straight-line basis over the applicable lease term. We assess the collectability of our lease receivables, including deferred rent receivables. We base our assessment of the collectability of rent receivables (other than deferred rent receivables) on several factors, including payment history, the financial strength of the tenant and any guarantors, the value of the underlying collateral, if any, and current economic conditions. If our evaluation of these factors indicates it is probable that we will be unable to recover the full value of the receivable, we provide a reserve against the portion of the receivable that we estimate may not be recovered. We also base our assessment of the collectability of deferred rent receivables on several factors, including among other things, the financial strength of the tenant and any guarantors, the historical operations and operating trends of the property, the historical payment pattern of the tenant and the type of property. If our evaluation of these factors indicates it is probable that we will be unable to receive the rent payments due in the future, we provide a reserve against the recognized deferred rent receivable asset for the portion, up to its full value, that we estimate may not be recovered. If we change our assumptions or estimates regarding the collectability of future rent payments required by a lease, we may adjust our reserve or reduce the rental revenue recognized in the period we make such change in our assumptions or estimates. Refer to the Application of New Accounting Standards section below for discussion of FASB ASU 2016-02, “Leases (Topic 842)”. Restaurant Revenue Restaurant revenue represents food, beverage, and other products sold and is presented net of the following discounts: coupons, employee meals, complimentary meals and gift cards. Revenue from restaurant sales, whether received in cash or by credit card, is recognized when food and beverage products are sold. At September 30, 2018, and December 31, 2017, credit card receivables totaled $ 68 thousand and $ 90 thousand , respectively. We recognize sales from our gift cards when the gift card is redeemed by the customer. Sales taxes collected from customers and remitted to governmental authorities are presented on a net basis within restaurant revenue on our consolidated statements of income. Restaurant Expenses Restaurant expenses include restaurant labor, general and administrative expenses, and food and beverage costs. Food and beverage costs include inventory, warehousing, related purchasing and distribution costs. Vendor allowances received in connection with the purchase of a vendor’s products are recognized as a reduction of the related food and beverage costs as earned. Income Taxes We believe that we have been organized and have operated in conformity with the requirements for qualification and taxation as a REIT commencing with our taxable year ended December 31, 2016, and we intend to continue to operate in a manner that will enable us to maintain our qualification as a REIT. So long as we qualify as a REIT, we generally will not be subject to U.S. federal income tax on our net income that we distribute currently to our shareholders. To maintain our qualification as a REIT, we are required under the Code to distribute at least 90% of our REIT taxable income (without regard to the deduction for dividends paid and excluding net capital gains) to our shareholders and meet certain other requirements. If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income tax on our taxable income at regular corporate rates. Even if we qualify as a REIT, we may also be subject to certain state, local and franchise taxes. Under certain circumstances, U.S. federal income and excise taxes may be due on our undistributed taxable income. The Kerrow Restaurant Operating Business is a TRS and is taxed as a C corporation. We provide for U.S. federal and state income taxes currently payable as well as for those deferred because of temporary differences between reporting income and expenses for financial statement purposes versus tax purposes. U.S. federal income tax credits are recorded as a reduction of income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. Interest recognized on reserves for uncertain tax positions is included in interest, net in our Consolidated Statements of Comprehensive Income. A corresponding liability for accrued interest is included as a component of other liabilities on our Consolidated Balance Sheets. Penalties, when incurred, are recognized in general and administrative expenses. We estimate certain components of our provision for income taxes. These estimates include, among other items, depreciation and amortization expense allowable for tax purposes, allowable tax credits for items such as taxes paid on reported employee tip income, effective rates for state and local income taxes and the valuation and tax deductibility of certain other items. We adjust our annual effective income tax rate as additional information on outcomes or events becomes available. We base our estimates on the best available information at the time that we prepare the provision. We will generally file our annual income tax returns several months after our year end. Income tax returns are subject to audit by state and local governments, generally years after the returns are filed. These returns could be subject to material adjustments or differing interpretations of the tax laws. The major jurisdictions in which we will file income tax returns are the U.S. federal jurisdiction and all states in the U.S. in which we own properties that have an income tax. U.S. GAAP requires that a position taken or expected to be taken in a tax return be recognized (or derecognized) in the financial statements when it is more likely than not (i.e., a likelihood of more than 50 percent) that the position would be sustained upon examination by tax authorities. A recognized tax position is then measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. We include within our current tax provision the balance of unrecognized tax benefits related to tax positions for which it is reasonably possible that the total amounts could change during the next 12 months based on the outcome of examinations. See Note 8 - Income Taxes for additional information. Earnings Per Share Basic earnings per share (“EPS”) are computed by dividing net income allocated to common shareholders by the weighted-average number of common shares outstanding for the reporting period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. No effect is shown for any securities that are anti-dilutive. Net income allocated to common shareholders represents net income less income allocated to participating securities and non-controlling interests. None of the Company’s equity awards are participating securities. See Note 9 - Equity for additional information. Stock-Based Compensation The Company’s stock-based compensation plan provides for the grant of restricted stock awards (“RSAs”), deferred stock units (“DSUs”), performance-based awards (including performance stock units, “PSUs”), forfeitable dividend equivalent units (“DEUs”), restricted stock units (“RSUs”), and other types of awards to eligible participants. DEUs are earned during the vesting period and received upon vesting of award. Upon forfeiture of an award, DEUs earned during the vesting period are also forfeited. We classify stock-based payment awards either as equity awards or liability awards based upon cash settlement options. Equity classified awards are measured based on the fair value on the date of grant. Liability classified awards are remeasured to fair value each reporting period. We recognize costs resulting from the Company’s stock-based compensation awards on a straight-line basis over their vesting periods, which range between one and three years, less estimated forfeitures. No compensation cost is recognized for awards for which employees do not render the requisite services. Effective January 1, 2018, the Company adopted FASB ASU No. 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.” The amendments in this ASU provide guidance about which changes to the terms or conditions of a share-based payment award require the application of modification accounting in Topic 718. The Company’s adoption of this guidance did not have a material impact on our consolidated financial statements or related disclosures. See Note 10 - Stock-Based Compensation for additional information. Fair Value of Financial Instruments We use a fair value approach to value certain assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. We use a fair value hierarchy, which distinguishes between assumptions based on market data (observable inputs) and an entity's own assumptions (unobservable inputs). The hierarchy consists of three levels: • Level 1 - Quoted market prices in active markets for identical assets or liabilities; • Level 2 - Inputs other than level one inputs that are either directly or indirectly observable; and • Level 3 - Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. Application of New Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”, which supersedes the existing guidance for lease accounting, Leases (Topic 840). FASB ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. We have completed our initial inventory and evaluation, and upon adoption, we will recognize lease obligations for the three ground leases at our Kerrow Restaurant Operating Business and our corporate office lease, with corresponding right of use assets. We estimate that the right of use assets and lease liabilities to be recognized upon adoption will represent less than 2% of total assets. We will continue to recognize lease expense for these leases, expected to be included in Restaurant expenses and General and administrative expenses, respectively, in our Consolidated Statements of Income. FASB ASU 2016-02 requires lessors to record certain lessor costs paid directly by lessees to third parties as revenue and expense on a gross basis. We may be required to show certain of these expenses on our Consolidated Statements of Income, but this will not result in an impact to net income or cash flows. We are continuing to evaluate the impact of adoption of this accounting standard and changes in presentation and disclosure requirements. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. FASB ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement”, which eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. FASB ASU 2018-13 requires additional disclosures for recurring and nonrecurring Level 3 fair value measurements. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early application is permitted for all entities. We do not expect adoption of this ASU to have a material impact on our disclosures. Effective January 1, 2018, the Company adopted FASB ASU No. 2016-15, “Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments.” FASB ASU 2016-15 provides guidance on certain specific cash flow issues, including, but not limited to, debt prepayment or extinguishment costs, contingent consideration payments made after a business combination and distributions received from equity method investees. The Company’s adoption of this guidance did not have a material impact on our consolidated financial statements or related disclosures. Effective January 1, 2018, the Company adopted FASB ASU No. 2016-18, “Statement of Cash Flows - Restricted Cash.” FASB No. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash. This adoption did not have a material impact on our financial statements and as a result of adoption, restricted cash is included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the Consolidated Statement of Cash Flows. |
Concentration of Credit Risk
Concentration of Credit Risk | 9 Months Ended |
Sep. 30, 2018 | |
Concentration of Credit Risk [Abstract] | |
Concentration of Credit Risk | CONCENTRATION OF CREDIT RISK Our tenant base and the restaurant brands operating our properties are highly concentrated. With respect to our tenant base, Darden leases represent approximately 79% of the scheduled base rents from the properties we own. As our revenues predominately consist of rental payments, we are dependent on Darden for a significant portion of our leasing revenues. The audited financial statements for Darden can be found in the Investor Relations section at www.darden.com. We are providing this website address solely for the information of our stockholders. We do not intend this website to be an active link or to otherwise incorporate the information contained on such website into this report or our other filings with the SEC. We also are subject to concentration risk in terms of the restaurant brands that operate our properties. With 299 locations in our portfolio, Olive Garden branded restaurants comprise approximately 51% of our leased properties and approximately 59% of the revenues received under leases. Our properties, including the Kerrow Restaurant Operating Business, are located in 45 states, with concentrations of 10% or greater of total rental revenue in two states: Texas ( 12.5% ) and Florida ( 11.7% ). We are exposed to credit risk with respect to cash held at various financial institutions, access to our credit facility, and amounts due or payable under our derivative contracts. At September 30, 2018, our exposure to risk related to our derivative instruments totaled $12.6 million and the counterparty to such instruments are investment grade financial institutions. Our credit risk exposure with regard to our cash and the $250.0 million available capacity under the revolver portion of our credit facility is spread among a diversified group of investment grade financial institutions. |
Real Estate Investments, Net
Real Estate Investments, Net | 9 Months Ended |
Sep. 30, 2018 | |
Real Estate [Abstract] | |
Real Estate Investments, Net | REAL ESTATE INVESMENTS, NET AND INTANGIBLE ASSETS AND LIABILITIES, NET Real Estate Investments, Net Real estate investments, net, which consist of land, buildings and improvements leased to others subject to net operating leases and those utilized in the operations of Kerrow Restaurant Operating Business are summarized as follows: September 30, December 31, (In thousands) 2018 2017 Land $ 549,070 $ 449,331 Buildings and improvements 1,077,703 977,783 Equipment 137,089 137,841 Total gross real estate investments 1,763,862 1,564,955 Less: accumulated depreciation (610,835 ) (598,846 ) Total real estate investments, net 1,153,027 966,109 Intangible lease assets, net 12,549 3,835 Total Real Estate Investments and Intangible Lease Assets, Net $ 1,165,576 $ 969,944 During the nine months ended September 30, 2018, the Company invested $216.1 million , including transaction costs, in 77 restaurant properties located in twenty-nine states, and allocated the investment as follows: $101.9 million to land, $105.0 million to buildings and improvements, and $9.2 million to intangible assets principally related to the value of the in-place leases acquired. There was no contingent consideration associated with these acquisitions. These properties are 100% occupied under net leases, with a weighted average remaining lease term of 13.6 years as of September 30, 2018. During the nine months ended September 30, 2018, the Company sold one property with a net book value of $4.6 million for a realized gain on sale of $10.9 million . During the nine months ended September 30, 2017, the Company invested $76.1 million , including transaction costs, in 35 restaurant properties located in 14 states, and allocated the investment as follows: $22.2 million to land, $52.9 million to buildings and improvements, and $1.0 million to intangible assets related to leases. These properties were 100% occupied under triple-net leases, with a weighted average remaining lease term of 17.8 years at September 30, 2017. Operating Leases as Lessor The following table presents the scheduled minimum future contractual rent to be received under the remaining non-cancelable term of the operating leases, and b ecause lease renewal periods are exercisable at the option of the lessee, the table presents future minimum lease payments due during the initial lease term only. September 30, (In thousands) 2018 2018 (three months) $ 30,474 2019 122,746 2020 124,210 2021 125,643 2022 127,267 2023 128,974 Thereafter 1,009,650 Total Future Minimum Lease Payments $ 1,668,964 Intangible Lease Assets and Liabilities, Net The following tables detail intangible lease assets and liabilities. Intangible lease liabilities are included in Other Liabilities on our Consolidated Balance Sheets. Acquired in-place lease intangibles are amortized over the remaining lease term as depreciation and amortization expense. Above-market and below-market leases are amortized over the initial term of the respective leases as an adjustment to rental revenue. September 30, December 31, (In thousands) 2018 2017 Acquired in-place lease intangibles $ 12,686 $ 4,169 Above-market leases 804 — Total 13,490 4,169 Less: Accumulated amortization (941 ) (334 ) Intangible Lease Assets, Net $ 12,549 $ 3,835 September 30, December 31, (In thousands) 2018 2017 Below-market leases $ 115 $ — Less: Accumulated amortization (21 ) — Intangible Lease Liabilities, Net $ 94 $ — The value of acquired in-place leases amortized and included in depreciation and amortization expense was $297 thousand and $77 thousand for the three months ended September 30, 2018 and 2017, and $542 thousand and $237 thousand for the nine months ended September 30, 2018 and 2017, respectively. The value of above-market and below-market leases amortized as an adjustment to revenue was $15 thousand and $46 thousand for the three and nine months ended September 30, 2018, respectively. There was no amortization for adjustments to revenue for the nine months ended September 30, 2017. At September 30, 2018 , the total weighted average amortization period remaining for our intangible lease assets and liabilities was 12.0 years , and the individual weighted average amortization period remaining for acquired in-place lease intangibles, above-market leases, and below-market leases was 12.8 years , 12.3 years , and 4.1 years , respectively. The following table presents the estimated impact during the next five years and thereafter related to the amortization of in-place lease intangibles, and above-market and below-market lease intangibles for properties held for investment at September 30, 2018 . (In thousands) September 30, 2018 2018 (three months) $ 376 2019 1,503 2020 1,309 2021 1,260 2022 1,182 2023 1,110 Thereafter 5,715 Total Future Amortization $ 12,455 |
Supplemental Detail for Certain
Supplemental Detail for Certain Components of Consolidated Balance Sheets | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Detail for Certain Components of Consolidated Balance Sheets | SUPPLEMENTAL DETAIL FOR CERTAIN COMPONENTS OF CONSOLIDATED BALANCE SHEETS Other Assets The components of other assets were as follows: September 30, December 31, (In thousands) 2018 2017 Prepaid acquisition costs and deposits $ 1,795 $ 1,385 Accounts receivable 411 383 Restricted cash — 4,905 Prepaid assets 361 616 Food and beverage inventories 147 186 Other 565 647 Total Other Assets $ 3,279 $ 8,122 Other Liabilities The components of other liabilities were as follows: September 30, December 31, (In thousands) 2018 2017 Accrued interest expense $ 2,937 $ 1,290 Accounts payable 802 1,055 Deferred lease liability 702 663 Accrued compensation 1,486 1,543 Accrued operating expenses 486 488 Intangible lease liabilities, net 94 — Other 870 667 Total Other Liabilities $ 7,377 $ 5,706 |
Long-Term Debt, Net of Deferred
Long-Term Debt, Net of Deferred Financing Costs | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt, Net of Deferred Financing Costs | LONG-TERM DEBT, NET OF DEFERRED FINANCING COSTS At September 30, 2018 , and December 31, 2017, our long-term debt consisted of (1) a $400 million , non-amortizing term loan and (2) $125 million of senior, unsecured, fixed rate notes. At September 30, 2018 and December 31, 2017, net unamortized deferred financing costs were approximately $8.1 million and $9.5 million , respectively. During the three months ended September 30, 2018 and 2017, amortization of deferred financing costs was $458 thousand and $452 thousand , respectively. During the nine months ended September 30, 2018 and September 30, 2017, amortization of deferred financing costs was $1.4 million and $1.3 million , respectively. The weighted average interest rate on the term loan before consideration of the interest rate hedge described below was 3.43% and 2.79% at September 30, 2018 and December 31, 2017, respectively. At both September 30, 2018 , and December 31, 2017, there was no balance outstanding under the $250 million revolving credit facility no r any outstanding letters of credit. The Company was in compliance with all debt covenants at September 30, 2018 . On September 18, 2018, FCPT OP entered into agreements to issue $100 million of senior, unsecured, fixed rate notes (the “Notes”) in a private placement pursuant to a Note Purchase Agreement (the “Note Purchase Agreement”) with the various purchasers named therein (the “Purchasers”). The Notes consist of $50.0 million with an eight -year term maturing on December 20, 2026 and priced at a fixed interest rate of 4.63% , and $50.0 million of notes with a ten -year term maturing on December 20, 2028 and priced at a fixed interest rate of 4.76% . The funding of the Notes is expected to occur on December 20, 2018. Under the terms of the Note Purchase Agreement, the Notes have the same guarantors as the $400 million term loan agreement (“Loan Agreement”). The Note Purchase Agreement contains customary financial covenants, including a total leverage ratio, a mortgage-secured leverage ratio, a secured recourse leverage ratio, a fixed charge coverage ratio, a minimum net worth requirement, an unencumbered leverage ratio and an unencumbered interest coverage ratio. The Note Purchase Agreement also contains restrictive covenants that, among other things, restrict the ability of FCPT OP, the Company and their subsidiaries to enter into transactions with affiliates, merge, consolidate, create liens or make certain restricted payments. Such financial and restrictive covenants are substantially similar to the corresponding covenants contained in the Loan Agreement. In addition, the Note Purchase Agreement includes provisions providing that certain of such covenants will be automatically amended in the Note Purchase Agreement to conform to certain amendments that may from time to time be implemented to corresponding covenants under the loan agreement. The Note Purchase Agreement contains customary events of default, including payment defaults, cross defaults with certain other indebtedness, breaches of covenants and bankruptcy events. In the case of an event of default, the Purchasers may, among other remedies, accelerate the payment of all obligations. The Company used a portion of the net proceeds from the offering to reduce amounts outstanding under its unsecured credit facility, and intends to use the remaining proceeds to fund future acquisitions and for general corporate purposes. The Notes have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States or any other jurisdiction absent registration or an applicable exemption from the registration requirements of the Securities Act and the applicable securities laws of any state or other jurisdiction. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | DERIVATIVE FINANCIAL INSTRUMENTS Risk Management Objective of Using Derivatives We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposures to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of our debt funding and the use of derivative financial instruments. Specifically, we enter into derivative financial instruments to manage exposures that arise from business activities that result in our receipt or payment of future cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash payments principally related to our borrowings. Cash Flow Hedges of Interest Rate Risk Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish these objectives, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The change in the fair value of derivatives designated and that qualify as cash flow hedges is recorded on our consolidated balance sheet in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the nine months ended September 30, 2018, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. As of September 30, 2018 , our variable-rate debt of $400 million is hedged by swaps with notional values totaling $400 million through November 9, 2018. From November 9, 2018, through the loan maturity date of the variable-rate debt, November 9, 2022, there are swaps in place with notional amounts totaling $300 million . After the Company’s adoption of ASU 2017-12 in January 2018, it no longer separately measures and reports hedge ineffectiveness prospectively. For the three months and nine months ended September 30, 2017, we recorded approximately $9 thousand and $ 46 thousand of income, respectively, related to hedge ineffectiveness in earnings. The hedge ineffectiveness was attributable to zero-percent floor and rounding mismatches in the hedging relationships. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. We estimate that over the next twelve months an additional $3.0 million will be reclassified to earnings as a decrease to interest expense. Non-designated Hedges We do not use derivatives for trading or speculative purposes. During the nine months ended September 30, 2018 and 2017, we did not have any derivatives that were not designated as cash flow hedges for accounting purposes. Tabular Disclosure of Fair Values of Derivative Instruments on the Consolidated Balance Sheets The table below presents the fair value of our derivative financial instruments as well as their classification on the consolidated balance sheet as of September 30, 2018 and December 31, 2017. Derivative Assets Derivative Liabilities Balance Sheet Location Fair Value at Balance Sheet Location Fair Value at (Dollars in thousands) September 30, 2018 December 31, 2017 September 30, 2018 December 31, 2017 Derivatives designated as hedging instruments: Interest rate swaps Derivative assets $ 12,634 $ 4,997 Derivative liabilities $ — $ 8 Total $ 12,634 $ 4,997 $ — $ 8 Tabular Disclosure of the Effect of Derivative Instruments on the Statements of Comprehensive Income The table below presents the effect of our interest rate swaps on the statements of comprehensive income for the three and nine months ended September 30, 2018 and 2017. (Dollars in thousands) Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Total Amount of Interest expense Presented in the Consolidated Statements of Income Three months ended September 30, 2018 $ 1,132 Interest expense $ 748 $ 4,934 Three months ended September 30, 2017 $ 293 Interest expense $ (196 ) $ 5,463 Nine months ended September 30, 2018 $ 9,234 Interest expense $ 1,562 $ 14,667 Nine months ended September 30, 2017 $ 115 Interest expense $ (1,230 ) $ 14,066 Tabular Disclosure Offsetting Derivatives The table below presents a gross presentation, the effects of offsetting, and a net presentation of our derivatives at September 30, 2018 and December 31, 2017. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the consolidated balance sheets. Offsetting of Derivative Assets Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Assets Presented in the Consolidated Balance Sheet Gross Amounts Not Offset in the Consolidated Balance Sheet (In thousands) Financial Instruments Cash Collateral Received Net Amount September 30, 2018 $ 12,634 $ — $ 12,634 $ — $ — $ 12,634 December 31, 2017 4,997 — 4,997 (8 ) — 4,989 Offsetting of Derivative Liabilities Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Liabilities Presented in the Consolidated Balance Sheet Gross Amounts Not Offset in the Consolidated Balance Sheet (In thousands) Financial Instruments Cash Collateral Posted Net Amount September 30, 2018 $ — $ — $ — $ — $ — $ — December 31, 2017 8 — 8 (8 ) — — Credit-risk-related Contingent Features The agreement with our derivative counterparty provides that if we default on any of our indebtedness, including default for which repayment of the indebtedness has not been accelerated by the lender, then we could also be declared in default on our derivative obligations. At September 30, 2018 and December 31, 2017, the fair value of derivatives in a net asset position related to these agreements was approximately $12.6 million and $5.0 million , respectively. As of September 30, 2018 , we have not posted any collateral related to these agreements. If we or our counterparty had breached any of these provisions at September 30, 2018 , we would have been entitled to the termination value of $12.6 million . |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES We believe that we have been organized and have operated in conformity with the requirements for qualification and taxation as a REIT commencing with our taxable year ended December 31, 2016, and we intend to continue to operate in a manner that will enable us to maintain our qualification as a REIT. So long as we qualify as a REIT, we generally will not be subject to U.S. federal income tax on our net income that we distribute currently to our stockholders. Accordingly, no provision for U.S. federal income taxes has been included in the accompanying consolidated financial statements for the nine months ended September 30, 2018 related to the REIT. The income tax provision consists of U.S. federal, state, and local income taxes incurred by FCPT’s TRSs, and state and local income taxes incurred by FCPT on its lease portfolio. During the three months ended September 30, 2018 and 2017, our income tax provision was $64 thousand and $33 thousand , respectively . During the nine months ended September 30, 2018 and 2017, our income tax provision was $189 thousand and $139 thousand , respectively. In December 2017, the Tax Cuts and Jobs Act lowered the U.S. federal income tax rate on corporations to 21% effective for taxable years after December 31, 2017. Due to FCPT’s REIT status and the nominal taxable income at our Kerrow Restaurant Operating Business, there was not a significant impact to our reported results resulting from this change. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts for income tax purposes, as well as operating loss and tax credit carryforwards. The Company evaluates the realizability of its deferred tax assets and recognizes a valuation allowance if, based on the available evidence, both positive and negative, it is more likely than not that some portion or all of its deferred tax assets will not be realized. When evaluating the realizability of its deferred tax assets, the Company considers, among other matters, estimates of expected future taxable income, nature of current and cumulative losses, existing and projected book/tax differences, tax planning strategies available, and the general and industry specific economic outlook. This realizability analysis is inherently subjective, as it requires the Company to forecast its business and general economic environment in future periods. Based on an assessment of all factors, including historical losses of the Kerrow Restaurants Operating Business, it was determined that full valuation allowances were required on the net deferred tax assets as of September 30, 2018 . Changes in estimates of deferred tax asset realizability are included in "Income tax expense" in the Consolidated Statements of Income. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Equity | EQUITY Preferred Stock At September 30, 2018 and December 31, 2017, the Company was authorized to issue 25,000,000 shares, $0.0001 par value per share of preferred stock. There were no shares issued and outstanding at September 30, 2018 or December 31, 2017. Common Stock At September 30, 2018 and December 31, 2017, the Company was authorized to issue 500,000,000 shares, $0.0001 par value per share, of common stock. 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 . On September 30, 2018 , we declared a dividend of $0.275 per share, which was paid in October 2018 to common stockholders of record as of September 28, 2018. At September 30, 2018, there were 67,441,692 shares of the Company's common stock issued and outstanding. Common Stock Issuance Under the At-The-Market Program In December 2016, the Company established an “At-the-Market” (“ATM”) equity issuance program under which the Company may, at its discretion, issue and sell its common stock with a sales value of up to a maximum of $150.0 million through ATM offerings on the New York Stock Exchange through broker-dealers. During the three and nine months ended September 30, 2018, we sold 488,174 and 2,022,106 shares under the ATM program at a weighted-average selling price of $26.70 and $23.87 per share, for net proceeds of approximately $12.7 million and $ 47.3 million , respectively. At September 30, 2018, there was $68.3 million available for issuance under the ATM program. Noncontrolling Interest At September 30, 2018, there were 409,320 FCPT Operating Partnership Units (“OP units”) outstanding held by third parties. During the nine months ended September 30, 2018, FCPT OP did not issue any OP units for consideration in real estate transactions. Generally, OP units participate in net income allocations and distributions and entitle their holder the right, subject to the terms set forth in the partnership agreement, to require FCPT OP to redeem all or a portion of the OP units held by such limited partner. At FCPT OP’s option, it may satisfy this redemption with cash or by exchanging non-registered shares of FCPT common stock on a one-for-one basis. Prior to the redemption of OP units, the limited partners participate in net income allocations and distributions in a manner equivalent to the common stock holders. The redemption value of outstanding non-controlling interest OP units was $10.5 million and $10.6 million as of September 30, 2018 and December 31, 2017, respectively. At September 30, 2018, FCPT is the owner of approximately 99.40% of FCPT’s OP units. The remaining 0.60% , or 409,320 of FCPT’s OP units are held by unaffiliated limited partners. During the nine months ended September 30, 2018, FCPT OP distributed $338 thousand to its limited partners. Earnings Per Share The following table presents the computation of basic and diluted net earnings per common share for the three and nine months ended September 30, 2018 and 2017. Three Months Ended September 30, Nine Months Ended September 30, (In thousands except for shares and per share data) 2018 2017 2018 2017 Average common shares outstanding – basic 65,347,842 61,112,051 62,804,123 60,457,949 Net effect of dilutive equity awards 230,133 144,094 183,159 109,203 Average common shares outstanding – diluted 65,577,975 61,256,145 62,987,282 60,567,152 Net income available to common shareholders $ 17,496 $ 19,205 $ 61,193 $ 53,044 Basic net earnings per share $ 0.27 $ 0.31 $ 0.97 $ 0.88 Diluted net earnings per share $ 0.27 $ 0.31 $ 0.97 $ 0.88 For the three months ended September 30, 2018 and 2017, the number of outstanding equity awards that were anti-dilutive totaled 278,071 and 271,443 , respectively. For the nine months ended September 30, 2018 and 2017, the number of outstanding equity awards that were anti-dilutive totaled 311,881 and 270,749 , respectively. Exchangeable OP units have been omitted from the denominator for the purpose of computing diluted earnings per share since FCPT OP, at its option, may satisfy a redemption with cash or by exchanging non-registered shares of FCPT common stock . The weighted average exchangeable OP units outstanding for the nine months ended September 30, 2018 and 2017 was 409,320 and 425,729 , respectively. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION On October 20, 2015, the Board of Directors of FCPT adopted, and FCPT’s sole stockholder at such time, Rare Hospitality International, Inc., approved, the Four Corners Property Trust, Inc. 2015 Omnibus Incentive Plan (the “Plan”). The Plan provides for the grant of awards of nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, deferred stock units, unrestricted stock, dividend equivalent rights, performance shares and other performance-based awards, other equity-based awards, and cash bonus awards to eligible participants. Subject to adjustment, the maximum number of shares of stock reserved for issuance under the Plan is equal to 2,100,000 shares. At September 30, 2018, 1,633,801 shares of common stock were available for award under the Plan. The unamortized compensation cost of awards issued under the Incentive Plan totaled approximately $4.0 million at September 30, 2018 as shown in the following table. (In thousands) Restricted Stock Units Restricted Stock Awards Performance Stock Awards Total Unrecognized compensation cost at January 1, 2018 $ 524 $ 1,052 $ 2,302 $ 3,878 Equity grants 414 1,612 1,180 3,206 Equity grant forfeitures — (56 ) — (56 ) Equity compensation expense (564 ) (1,082 ) (1,391 ) (3,037 ) Unrecognized Compensation Cost at September 30, 2018 $ 374 $ 1,526 $ 2,091 $ 3,991 At September 30, 2018, the weighted average amortization period remaining for all of our equity awards was 1.4 years. Restricted Stock Units RSUs have been granted at a value equal to the five -day average or day of closing market price of our common stock on the date of grant, and will be settled in stock at the end of their vesting periods, which range between one and three years. At September 30, 2018 and December 31, 2017, there were 78,791 and 64,983 RSUs outstanding, respectively. During the nine months ended September 30, 2018, there were 17,896 shares of restricted stock granted, 4,088 restrictions on RSUs lapsed and those shares distributed, and no RSUs were forfeited. Restrictions on these shares lapse throu gh 2019. Restricted Stock Awards RSAs have been granted at a value equal to the five -day average closing market price of our common stock on the date of grant and will be settled in stock at the end of their vesting periods, which range between one and three years. At September 30, 2018 and December 31, 2017, there were 100,402 and 81,909 RSAs outstanding, respectively. During the nine months ended September 30, 2018 there were 67,845 shares of restricted stock granted, restrictions on 47,292 RSAs lapsed and those shares were distributed, 7,126 RSAs were designated for tax withholdings, and 2,060 RSAs were forfeited and returned to the Plan. Restrictions on these shares lapse through 2021. Performance-Based Restricted Stock Awards During the nine months ended September 30, 2018, PSUs with a target number of 68,490 shares were granted. At September 30, 2018 and December 31, 2017, the target number of PSUs that were unvested was 204,068 and 135,578 , respectively. The performance period of the grants run from January 1, 2018 through December 31, 2020, from January 1, 2017 through December 31, 2019, and from January 1, 2016 through December 31, 2018. Pursuant to the PSU award agreement, each participant is eligible to vest in and receive shares of the Company's common stock based on the initial target number of shares granted multiplied by a percentage range between 0% and 200% . The percentage range is based on the attainment of a total shareholder return of the Company compared to certain specified peer groups of companies during the performance period. The fair value of the performance shares was estimated on the date of grant using a Monte Carlo Simulation model. Based on the grant date fair value, the Company expects to recognize $2.1 million in compensation expense on a straight-line basis over the remaining requisite service period associated with these awards. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The carrying amounts of certain of the Company’s financial instruments including cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair value due either to length of maturity or interest rates that approximate prevailing market rates. The carrying value of derivative financial instruments equal fair value in accordance with U.S. GAAP. Determining which category an asset or liability falls within the hierarchy requires significant judgment. We evaluate hierarchy disclosures each reporting period. The following table presents the assets and liabilities recorded that are reported at fair value on our Consolidated Balance Sheets on a recurring basis. Assets and Liabilities Measured at Fair Value on a Recurring Basis September 30, 2018 (In thousands) Level 1 Level 2 Level 3 Total Assets Derivative assets $ — $ 12,634 $ — $ 12,634 December 31, 2017 (In thousands) Level 1 Level 2 Level 3 Total Assets Derivative assets $ — $ 4,997 $ — $ 4,997 Liabilities Derivative liabilities $ — $ 8 $ — $ 8 Derivative Financial Instruments Currently, we use interest rate swaps to manage our interest rate risk associated with our notes payable. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The fair values of interest rate options are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rate of the caps. The variable interest rates used in the calculation of projected receipts on the cap are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities. To comply with the provisions of ASC 820, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees. Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by ourselves and our counterparties. We have determined that the significance of the impact of the credit valuation adjustments made to our derivative contracts, which determination was based on the fair value of each individual contract, was not significant to the overall valuation. As a result, all of our derivatives held at September 30, 2018 , and December 31, 2017 were classified as Level 2 of the fair value hierarchy. The following table presents the carrying value and fair value of certain financial liabilities that are recorded on our consolidated balance sheets. Fair Value of Certain Financial Liabilities September 30, 2018 (In thousands) Carrying Value Fair Value Term loan, excluding deferred financing costs $ 400,000 $ 392,386 Senior fixed note - due December 2024, excluding deferred financing costs $ 50,000 $ 49,622 Senior fixed note - due December 2027, excluding deferred financing costs $ 75,000 $ 75,153 December 31, 2017 (In thousands) Carrying Value Fair Value Term loan, excluding deferred financing costs $ 400,000 $ 406,637 Senior fixed note - due December 2024, excluding deferred financing costs $ 50,000 $ 50,043 Senior fixed note - due December 2027, excluding deferred financing costs $ 75,000 $ 75,184 The fair value of the long-term debt (Level 2) is determined using the present value of the contractual cash flows, discounted at the current market cost of debt. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Operating Leases as Lessee The annual future lease commitments under non-cancelable operating leases for the four years subsequent to September 30, 2018 and thereafter is as follows: (In thousands) September 30, 2018 2018 (three months) $ 148 2019 550 2020 400 2021 103 Thereafter — Total Future Lease Commitments $ 1,201 Rental expense was $183 thousand and $155 thousand for the three months ended September 30, 2018 and 2017, and $536 thousand and $468 thousand for the nine months ended September 30, 2018 and 2017, respectively. Litigation We are subject to private lawsuits, administrative proceedings and claims that arise in the ordinary course of our business from time to time. A number of these lawsuits, proceedings and claims may exist at any given time. These matters typically involve claims from guests, employee wage and hour claims and others related to operational issues common to the restaurant industry. We record our best estimate of a loss when the loss is considered probable. When a liability is probable and there is a range of estimated loss with no best estimate in the range, we record the minimum estimated liability related to the lawsuits, proceedings or claims. While the resolution of a lawsuit, proceeding or claim may have an impact on our financial results for the period in which it is resolved, we believe that the maximum liability related to probable lawsuits, proceedings and claims in which we are currently involved, individually and in the aggregate, will not have a material adverse effect on our financial position, results of operations or liquidity. |
Segments
Segments | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segments | SEGMENTS During the three and nine months ended September 30, 2018 and 2017, we operated in two segments: real estate operations and restaurant operations. Our segments are based on our organizational and management structure, which aligns with how our results are monitored and performance is assessed. Expenses incurred at our corporate office are allocated to real estate operations. The accounting policies of the reportable segments are the same as those described in Note 2 - Summary of Significant Accounting Policies . The following tables present financial information by segment for the three and nine months ended September 30, 2018 and 2017. Three Months Ended September 30, 2018 (In thousands) Real Estate Operations Restaurant Operations Intercompany Total Revenues: Rental revenue $ 31,324 $ — $ — $ 31,324 Intercompany rental revenue 100 — (100 ) — Restaurant revenue — 4,798 — 4,798 Total revenues 31,424 4,798 (100 ) 36,122 Expenses: General and administrative 3,225 — — 3,225 Depreciation and amortization 5,614 129 — 5,743 Restaurant expenses — 4,813 (100 ) 4,713 Interest expense 4,934 — — 4,934 Total expenses 13,773 4,942 (100 ) 18,615 Other income 164 — — 164 Realized gain on sale, net — — — — Income before income taxes 17,815 (144 ) — 17,671 Income tax expense (38 ) (26 ) — (64 ) Net Income (Loss) $ 17,777 $ (170 ) $ — $ 17,607 Three Months Ended September 30, 2017 (In thousands) Real Estate Operations Restaurant Operations Intercompany Total Revenues: Rental revenue $ 28,835 $ — $ — $ 28,835 Intercompany rental revenue 99 — (99 ) — Restaurant revenue — 4,676 — 4,676 Total revenues 28,934 4,676 (99 ) 33,511 Expenses: General and administrative 2,899 — — 2,899 Depreciation and amortization 5,286 139 — 5,425 Restaurant expenses — 4,670 (99 ) 4,571 Interest expense 5,463 — — 5,463 Total expenses 13,648 4,809 (99 ) 18,358 Other income 172 — — 172 Realized gain on sale, net 4,042 — — 4,042 Income before income taxes 19,500 (133 ) — 19,367 Income tax expense — (33 ) — (33 ) Net Income (Loss) $ 19,500 $ (166 ) $ — $ 19,334 Nine Months Ended September 30, 2018 (In thousands) Real Estate Operations Restaurant Operations Intercompany Total Revenues: Rental revenue $ 90,509 $ — $ — $ 90,509 Intercompany rental revenue 300 — (300 ) — Restaurant revenue — 15,091 — 15,091 Total revenues 90,809 15,091 (300 ) 105,600 Expenses: General and administrative 10,098 — — 10,098 Depreciation and amortization 15,931 381 — 16,312 Restaurant expenses — 14,670 (300 ) 14,370 Interest expense 14,667 — — 14,667 Total expenses 40,696 15,051 (300 ) 55,447 Other income 752 — — 752 Realized gain on sale, net 10,879 — — 10,879 Income before income taxes 61,744 40 — 61,784 Income tax expense (100 ) (89 ) — (189 ) Net Income (Loss) $ 61,644 $ (49 ) $ — $ 61,595 Nine Months Ended September 30, 2017 (In thousands) Real Estate Operations Restaurant Operations Intercompany Total Revenues: Rental revenue $ 84,926 $ — $ — $ 84,926 Intercompany rental revenue 296 — (296 ) — Restaurant revenue — 14,445 — 14,445 Total revenues 85,222 14,445 (296 ) 99,371 Expenses: General and administrative 9,215 — — 9,215 Depreciation and amortization 15,812 442 — 16,254 Restaurant expenses — 14,119 (296 ) 13,823 Interest expense 14,066 — — 14,066 Total expenses 39,093 14,561 (296 ) 53,358 Other income 211 — — 211 Realized gain on sale, net 7,333 — — 7,333 Income before income taxes 53,673 (116 ) — 53,557 Income tax expense (56 ) (83 ) — (139 ) Net Income (Loss) $ 53,617 $ (199 ) $ — $ 53,418 The following tables present supplemental information by segment at September 30, 2018 and December 31, 2017. Supplemental Segment Information at September 30, 2018 (In thousands) Real Estate Operations Restaurant Operations Total Gross real estate investments $ 1,747,094 $ 16,768 $ 1,763,862 Accumulated depreciation (604,064 ) (6,771 ) (610,835 ) Total real estate investments, net $ 1,143,030 $ 9,997 $ 1,153,027 Cash and cash equivalents $ 26,028 $ 862 $ 26,890 Total assets $ 1,224,865 $ 11,313 $ 1,236,178 Long-term debt, net of deferred financing costs $ 516,904 $ — $ 516,904 Supplemental Segment Information at December 31, 2017 (In thousands) Real Estate Operations Restaurant Operations Total Gross real estate investments $ 1,548,259 $ 16,696 $ 1,564,955 Accumulated depreciation (592,293 ) (6,553 ) (598,846 ) Total real estate investments, net $ 955,966 $ 10,143 $ 966,109 Cash and cash equivalents $ 63,229 $ 1,237 $ 64,466 Total assets $ 1,056,500 $ 12,159 $ 1,068,659 Long-term debt, net of deferred financing costs $ 515,539 $ — $ 515,539 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS The Company reviewed its subsequent events and transactions that have occurred after September 30, 2018, the date of the consolidated balance sheet, through October 30, 2018 and noted the following: On October 10, 2018, one leased property in Florida sustained damage due to Hurricane Michael. The tenant is working to reopen the restaurant and we are entitled to receive rent on this property during any period of repair by the tenant. The temporary closure and repair work performed by the tenant is not expected to have a material impact on the Company. During October 2018, the Company invested $5.7 million in the acquisition of three properties located in three states, with an investment yield of 6.8% . The properties are 100% occupied under net leases with a weighted average lease terms of 10 years remaining. The Company funded the acquisitions with cash on hand. The Company anticipates accounting for these transactions as asset acquisitions in accordance with U.S. GAAP. There were no contingent liabilities associated with these transactions at September 30, 2018. There were no other material subsequent events or transactions. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation Th e accompanying consolidated financial statements include the accounts of Four Corners Property Trust, Inc. and its consolidated subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair presentation of the results for the interim periods presented. These adjustments are considered to be of a normal, recurring nature. |
Reclassification | Reclassifications Certain amounts previously reported under specific financial statement captions have been reclassified to be consistent with the current period presentation. |
Use of Estimates | Use of Estimates The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of sales and expenses during the reporting period. The estimates and assumptions used in the accompanying consolidated financial statements are based on management’s evaluation of the relevant facts and circumstances as of the date of the combination. Actual results may differ from the estimates and assumptions used in preparing the accompanying consolidated financial statements, and such differences could be material. |
Real Estate Investments, Net | Real Estate Investments, Net Real estate investments, net are recorded at cost less accumulated depreciation. Building components are depreciated over estimated useful lives ranging from seven to fifty-five years using the straight-line method. Leasehold improvements, which are reflected on our balance sheets as a component of buildings, equipment and improvements are amortized over the lesser of the non-cancelable lease term or the estimated useful lives of the related assets using the straight-line method. Other equipment is generally depreciated over estimated useful lives ranging from two to fifteen years also using the straight-line method. Real estate development and construction costs for newly constructed restaurants are capitalized in the period in which they are incurred. Gains and losses on the disposal of land, buildings and equipment are included in our accompanying Consolidated Statements of Income and Comprehensive Income. Our accounting policies regarding land, buildings and equipment, including leasehold improvements, include our judgments regarding the estimated useful lives of these assets, the residual values to which the assets are depreciated or amortized, the determination of what constitutes a reasonably assured lease term, and the determination as to what constitutes enhancing the value of or increasing the life of existing assets. These judgments and estimates may produce materially different amounts of reported depreciation and amortization expense if different assumptions were used. As discussed further below, these judgments may also impact our need to recognize an impairment charge on the carrying amount of these assets as the cash flows associated with the assets are realized, or as our expectations of estimated future cash flows change. Acquisition of Real Estate The Company evaluates acquisitions to determine whether transactions should be accounted for as asset acquisitions or business combinations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2017-01. Since adoption in the fourth quarter of 2016, the Company has determined the land, building, site improvements, and in-places leases (if any) of assets acquired were a single asset as the building and property improvements are attached to the land and cannot be physically removed and used separately from the land without incurring significant costs or reducing their fair value. Additionally, the Company has not acquired a substantive process used to generate outputs. As substantially all of the fair value of the gross assets acquired are concentrated in a single identifiable asset and there were no processes acquired, the acquisitions do not qualify as a business and are accounted for as asset acquisitions. Related transaction costs are generally capitalized and amortized over the useful life of the acquired assets. The Company allocates the purchase price (including acquisition and closing costs) of real estate acquisitions to land, building, and improvements based on their relative fair values, as-if-vacant, and lease intangibles (if any). In making estimates of fair values for this purpose, the Company uses a third-party specialist that obtains various information about each property, as well as the pre-acquisition due diligence of the Company and prior leasing activities at the site. Lease Intangibles Lease intangibles, if any, acquired in conjunction with the purchase of real estate represent the value of in-place leases and above- or below-market leases. For real estate acquired subject to existing lease agreements, acquired lease intangibles are valued based on the Company’s estimates of costs related to tenant acquisition and the asset carrying costs that would be incurred during the time it would take to locate a tenant if the property were vacant, considering current market conditions and costs to execute similar leases at the time of the acquisition. Above-market and below-market lease intangibles are recorded based on the present value of the difference between the contractual amounts to be paid pursuant to the leases at the time of acquisition of the real estate and the Company’s estimate of current market lease rates for the property, measured over a period equal to the remaining initial term of the lease. The aggregate value of other acquired intangible assets, consisting of in-place leases, is measured by the excess of the purchase price paid for a property after adjusting existing in-place leases to current market lease rates over the estimated fair value of the property as-if-vacant. In-place lease intangibles are amortized on a straight-line basis over the remaining initial term of the related lease and included in depreciation and amortization expense. Above-market lease intangibles are amortized over the remaining initial terms of the respective leases as a decrease in rental revenue. Below market lease intangibles are generally amortized as an increase to rental revenue over the remaining initial term of the respective leases, but may be amortized over the renewal periods if the Company believes it is likely the tenant will exercise the renewal option. Should a lease terminate early, the unamortized portion of any related lease intangible is immediately recognized as an impairment loss in depreciation and amortization expense. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Land, buildings and equipment and certain other assets, including definite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted net cash flows expected to be generated by the assets. Identifiable cash flows are measured at the lowest level for which they are largely independent of the cash flows of other groups of assets and liabilities, generally at the restaurant level. If these assets are determined to be impaired, the amount of impairment recognized is measured by the amount by which the carrying amount of the assets exceeds their fair value. Fair value is generally determined by appraisals or sales prices of comparable assets. The judgments we make related to the expected useful lives of long-lived assets and our ability to realize undiscounted cash flows in excess of the carrying amounts of these assets are affected by factors such as the ongoing maintenance and improvements of the assets, changes in economic conditions, changes in usage or operating performance, desirability of the restaurant sites and other factors, such as our ability to sell or lease our assets. As we assess the ongoing expected cash flows and carrying amounts of our long-lived assets, significant adverse changes in these factors could cause us to realize a material impairment loss. Exit or disposal activities include the cost of disposing of the assets and are generally expensed as incurred. Upon disposal of the assets, any gain or loss is recorded in the same caption within our Consolidated Statements of Income and Comprehensive Income as the original impairment, if any. |
Real Estate Held for Sale | Real Estate Held for Sale Real estate is classified as held for sale when the sale is probable, will be completed within one year, purchase agreements are executed, the buyer has a significant deposit at risk, and no financing contingencies exist which could prevent the transaction from being completed in a timely manner. Assets whose disposal is not probable within one year remain in land, buildings, equipment and improvements until their disposal within one year is probable. Disposals of assets that have a major effect on our operations and financial results or that represent a strategic shift in our operating businesses meet the requirements to be reported as discontinued operations. Real estate held for sale is reported at the lower of carrying amount or fair value, less estimated costs to sell. There was no real estate held for sale at September 30, 2018 or December 31, 2017. |
Cash, Cash Equivalents, and Restricted Cash | Cash, Cash Equivalents, and Restricted Cash We consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents can consist of cash and money market accounts. Restricted cash includes escrow deposits and is included in Other Assets on our Consolidated Balance Sheets. |
Long-term Debt and Deferred Financing Costs | Long-term Debt Long-term debt is carried at unpaid principal balance, net of deferred financing costs. All of our long-term debt is currently unsecured and interest is paid monthly on our non-amortizing term loan and revolving credit facility and semi-annually on our senior fixed rate notes. See Note 6 - Long-term Debt, Net of Deferred Financing Costs for additional information. Deferred Financing Costs Financing costs related to long-term debt are deferred and amortized over the remaining life of the debt using the effective interest method. These costs are presented as a direct deduction from their related liabilities on the Consolidated Balance Sheets. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities We enter into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments as required by FASB ASC Topic 815, Derivatives and Hedging, and those utilized as economic hedges. Our use of derivative instruments is currently limited to interest rate hedges. These instruments are generally structured as hedges of the variability of cash flows related to forecasted transactions (cash flow hedges). We do not enter into derivative instruments for trading or speculative purposes, where changes in the cash flows of the derivative are not expected to offset changes in cash flows of the hedged item. All derivatives are recognized on the balance sheet at fair value. For those derivative instruments for which we intend to elect hedge accounting, at the time the derivative contract is entered into, we document all relationships between hedging instruments and hedged items, as well as our risk-management objective and strategy for undertaking the various hedge transactions. This process includes linking all derivatives designated as cash flow hedges to specific assets and liabilities on the consolidated balance sheet or to specific forecasted transactions. We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the derivatives used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. To the extent our derivatives are effective in offsetting the variability of the hedged cash flows, and otherwise meet the cash flow hedge accounting criteria in accordance with United States generally accepted accounting principles (“U.S. GAAP”), changes in the derivatives’ fair value are not included in current earnings but are included in accumulated other comprehensive income (loss), net of tax. These changes in fair value will be reclassified into earnings at the time of the forecasted transaction. Ineffectiveness measured in the hedging relationship is recorded in earnings in the period in which it occurs. In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities.” ASU 2017-12 is intended to simplify hedge accounting by better aligning an entity’s financial reporting for hedging relationships with its risk management activities. |
Other Assets and Liabilities | Other Assets and Liabilities Other assets primarily consist of pre-acquisition costs, prepaid assets, food and beverage inventories, restricted cash (escrow deposits), lease origination fees, and accounts receivable. Other liabilities primarily consist of accrued compensation, accrued interest, accrued operating expenses, intangible lease liabilities, and deferred rent obligations on certain operating leases. |
Revenue Recognition | Revenue Recognition Effective January 1, 2018, the Company adopted FASB ASU No. 2014-09, “Revenue from Contracts with Customers” using the modified retrospective method. The standard outlines a single comprehensive revenue recognition model for entities to follow in accounting for revenue from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity should recognize revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to receive for those goods or services. Effective January 1, 2018, the Company also adopted FASB ASU No. 2017-15, “Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” Through the evaluation and implementation process, we have determined FCPT’s key revenue stream that could be impacted by FASB ASU No. 2014-09, as amended by FASB ASU No. 2017-05, is the gain on disposition of real estate reported on the Consolidated Statements of Income and Comprehensive Income. We previously recognized revenue from asset sales at the time of closing (i.e., transfer of asset). After adoption of FASB No. ASU 2014-09, as amended by FASB ASU No. 2017-05, we will evaluate the transaction to determine if control has been transferred to the buyer to determine proper timing of revenue recognition, as well as transaction price allocation. Adoption of this guidance did not have a material impact on our consolidated financial statements or related disclosures. Rental Revenue For those net leases that provide for periodic and determinable increases in base rent, base rental revenue is recognized on a straight-line basis over the applicable lease term when collectability is reasonably assured. Recognizing rental income on a straight-line basis generally results in recognized revenues during the first half of a lease term exceeding the cash amounts contractually due from our tenants, creating a deferred rent receivable. Lease origination fees are deferred and amortized over the related lease term as an adjustment to rental revenue. Taxes collected from lessees and remitted to governmental authorities are presented on a net basis within rental revenue in our Consolidated Statements of Income and Comprehensive Income. For those leases that provide for periodic increases in base rent only if certain revenue parameters or other substantive contingencies are met, the increased rental revenue is recognized as the related parameters or contingencies are met, rather than on a straight-line basis over the applicable lease term. We assess the collectability of our lease receivables, including deferred rent receivables. We base our assessment of the collectability of rent receivables (other than deferred rent receivables) on several factors, including payment history, the financial strength of the tenant and any guarantors, the value of the underlying collateral, if any, and current economic conditions. If our evaluation of these factors indicates it is probable that we will be unable to recover the full value of the receivable, we provide a reserve against the portion of the receivable that we estimate may not be recovered. We also base our assessment of the collectability of deferred rent receivables on several factors, including among other things, the financial strength of the tenant and any guarantors, the historical operations and operating trends of the property, the historical payment pattern of the tenant and the type of property. If our evaluation of these factors indicates it is probable that we will be unable to receive the rent payments due in the future, we provide a reserve against the recognized deferred rent receivable asset for the portion, up to its full value, that we estimate may not be recovered. If we change our assumptions or estimates regarding the collectability of future rent payments required by a lease, we may adjust our reserve or reduce the rental revenue recognized in the period we make such change in our assumptions or estimates. Refer to the Application of New Accounting Standards section below for discussion of FASB ASU 2016-02, “Leases (Topic 842)”. Restaurant Revenue Restaurant revenue represents food, beverage, and other products sold and is presented net of the following discounts: coupons, employee meals, complimentary meals and gift cards. Revenue from restaurant sales, whether received in cash or by credit card, is recognized when food and beverage products are sold. At September 30, 2018, and December 31, 2017, credit card receivables totaled $ 68 thousand and $ 90 thousand , respectively. We recognize sales from our gift cards when the gift card is redeemed by the customer. Sales taxes collected from customers and remitted to governmental authorities are presented on a net basis within restaurant revenue on our consolidated statements of income. |
Restaurant Expenses | Restaurant Expenses Restaurant expenses include restaurant labor, general and administrative expenses, and food and beverage costs. Food and beverage costs include inventory, warehousing, related purchasing and distribution costs. Vendor allowances received in connection with the purchase of a vendor’s products are recognized as a reduction of the related food and beverage costs as earned. |
Income Taxes | Income Taxes We believe that we have been organized and have operated in conformity with the requirements for qualification and taxation as a REIT commencing with our taxable year ended December 31, 2016, and we intend to continue to operate in a manner that will enable us to maintain our qualification as a REIT. So long as we qualify as a REIT, we generally will not be subject to U.S. federal income tax on our net income that we distribute currently to our shareholders. To maintain our qualification as a REIT, we are required under the Code to distribute at least 90% of our REIT taxable income (without regard to the deduction for dividends paid and excluding net capital gains) to our shareholders and meet certain other requirements. If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income tax on our taxable income at regular corporate rates. Even if we qualify as a REIT, we may also be subject to certain state, local and franchise taxes. Under certain circumstances, U.S. federal income and excise taxes may be due on our undistributed taxable income. The Kerrow Restaurant Operating Business is a TRS and is taxed as a C corporation. We provide for U.S. federal and state income taxes currently payable as well as for those deferred because of temporary differences between reporting income and expenses for financial statement purposes versus tax purposes. U.S. federal income tax credits are recorded as a reduction of income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. Interest recognized on reserves for uncertain tax positions is included in interest, net in our Consolidated Statements of Comprehensive Income. A corresponding liability for accrued interest is included as a component of other liabilities on our Consolidated Balance Sheets. Penalties, when incurred, are recognized in general and administrative expenses. We estimate certain components of our provision for income taxes. These estimates include, among other items, depreciation and amortization expense allowable for tax purposes, allowable tax credits for items such as taxes paid on reported employee tip income, effective rates for state and local income taxes and the valuation and tax deductibility of certain other items. We adjust our annual effective income tax rate as additional information on outcomes or events becomes available. We base our estimates on the best available information at the time that we prepare the provision. We will generally file our annual income tax returns several months after our year end. Income tax returns are subject to audit by state and local governments, generally years after the returns are filed. These returns could be subject to material adjustments or differing interpretations of the tax laws. The major jurisdictions in which we will file income tax returns are the U.S. federal jurisdiction and all states in the U.S. in which we own properties that have an income tax. U.S. GAAP requires that a position taken or expected to be taken in a tax return be recognized (or derecognized) in the financial statements when it is more likely than not (i.e., a likelihood of more than 50 percent) that the position would be sustained upon examination by tax authorities. A recognized tax position is then measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. We include within our current tax provision the balance of unrecognized tax benefits related to tax positions for which it is reasonably possible that the total amounts could change during the next 12 months based on the outcome of examinations. |
Earnings Per Share | Earnings Per Share Basic earnings per share (“EPS”) are computed by dividing net income allocated to common shareholders by the weighted-average number of common shares outstanding for the reporting period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. No effect is shown for any securities that are anti-dilutive. Net income allocated to common shareholders represents net income less income allocated to participating securities and non-controlling interests. None of the Company’s equity awards are participating securities. |
Stock-Based Compensation | Stock-Based Compensation The Company’s stock-based compensation plan provides for the grant of restricted stock awards (“RSAs”), deferred stock units (“DSUs”), performance-based awards (including performance stock units, “PSUs”), forfeitable dividend equivalent units (“DEUs”), restricted stock units (“RSUs”), and other types of awards to eligible participants. DEUs are earned during the vesting period and received upon vesting of award. Upon forfeiture of an award, DEUs earned during the vesting period are also forfeited. We classify stock-based payment awards either as equity awards or liability awards based upon cash settlement options. Equity classified awards are measured based on the fair value on the date of grant. Liability classified awards are remeasured to fair value each reporting period. We recognize costs resulting from the Company’s stock-based compensation awards on a straight-line basis over their vesting periods, which range between one and three years, less estimated forfeitures. No compensation cost is recognized for awards for which employees do not render the requisite services. Effective January 1, 2018, the Company adopted FASB ASU No. 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.” The amendments in this ASU provide guidance about which changes to the terms or conditions of a share-based payment award require the application of modification accounting in Topic 718. The Company’s adoption of this guidance did not have a material impact on our consolidated financial statements or related disclosures. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We use a fair value approach to value certain assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. We use a fair value hierarchy, which distinguishes between assumptions based on market data (observable inputs) and an entity's own assumptions (unobservable inputs). The hierarchy consists of three levels: • Level 1 - Quoted market prices in active markets for identical assets or liabilities; • Level 2 - Inputs other than level one inputs that are either directly or indirectly observable; and • Level 3 - Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. |
Application of New Accounting Standards | Application of New Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”, which supersedes the existing guidance for lease accounting, Leases (Topic 840). FASB ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. We have completed our initial inventory and evaluation, and upon adoption, we will recognize lease obligations for the three ground leases at our Kerrow Restaurant Operating Business and our corporate office lease, with corresponding right of use assets. We estimate that the right of use assets and lease liabilities to be recognized upon adoption will represent less than 2% of total assets. We will continue to recognize lease expense for these leases, expected to be included in Restaurant expenses and General and administrative expenses, respectively, in our Consolidated Statements of Income. FASB ASU 2016-02 requires lessors to record certain lessor costs paid directly by lessees to third parties as revenue and expense on a gross basis. We may be required to show certain of these expenses on our Consolidated Statements of Income, but this will not result in an impact to net income or cash flows. We are continuing to evaluate the impact of adoption of this accounting standard and changes in presentation and disclosure requirements. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. FASB ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement”, which eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. FASB ASU 2018-13 requires additional disclosures for recurring and nonrecurring Level 3 fair value measurements. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early application is permitted for all entities. We do not expect adoption of this ASU to have a material impact on our disclosures. Effective January 1, 2018, the Company adopted FASB ASU No. 2016-15, “Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments.” FASB ASU 2016-15 provides guidance on certain specific cash flow issues, including, but not limited to, debt prepayment or extinguishment costs, contingent consideration payments made after a business combination and distributions received from equity method investees. The Company’s adoption of this guidance did not have a material impact on our consolidated financial statements or related disclosures. Effective January 1, 2018, the Company adopted FASB ASU No. 2016-18, “Statement of Cash Flows - Restricted Cash.” FASB No. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash. This adoption did not have a material impact on our financial statements and as a result of adoption, restricted cash is included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the Consolidated Statement of Cash Flows. |
Fair Value Measurement | Determining which category an asset or liability falls within the hierarchy requires significant judgment. We evaluate hierarchy disclosures each reporting period. The following table presents the assets and liabilities recorded that are reported at fair value on our Consolidated Balance Sheets on a recurring basis. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash in our Consolidated Balance Sheets to the total amount shown in our Consolidated Statements of Cash Flows: September 30, December 31, (In thousands) 2018 2017 Cash and cash equivalents $ 26,890 $ 64,466 Restricted cash (included in Other assets) — 4,905 Total Cash, Cash Equivalents, and Restricted Cash $ 26,890 $ 69,371 |
Real Estate Investments, Net (T
Real Estate Investments, Net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Real Estate [Abstract] | |
Schedule of Property Subject to or Available for Operating Lease | Real estate investments, net, which consist of land, buildings and improvements leased to others subject to net operating leases and those utilized in the operations of Kerrow Restaurant Operating Business are summarized as follows: September 30, December 31, (In thousands) 2018 2017 Land $ 549,070 $ 449,331 Buildings and improvements 1,077,703 977,783 Equipment 137,089 137,841 Total gross real estate investments 1,763,862 1,564,955 Less: accumulated depreciation (610,835 ) (598,846 ) Total real estate investments, net 1,153,027 966,109 Intangible lease assets, net 12,549 3,835 Total Real Estate Investments and Intangible Lease Assets, Net $ 1,165,576 $ 969,944 |
Schedule of Future Minimum Rental Payments for Operating Leases | The following table presents the scheduled minimum future contractual rent to be received under the remaining non-cancelable term of the operating leases, and b ecause lease renewal periods are exercisable at the option of the lessee, the table presents future minimum lease payments due during the initial lease term only. September 30, (In thousands) 2018 2018 (three months) $ 30,474 2019 122,746 2020 124,210 2021 125,643 2022 127,267 2023 128,974 Thereafter 1,009,650 Total Future Minimum Lease Payments $ 1,668,964 The annual future lease commitments under non-cancelable operating leases for the four years subsequent to September 30, 2018 and thereafter is as follows: (In thousands) September 30, 2018 2018 (three months) $ 148 2019 550 2020 400 2021 103 Thereafter — Total Future Lease Commitments $ 1,201 |
Schedule of Intangible Assets | September 30, December 31, (In thousands) 2018 2017 Acquired in-place lease intangibles $ 12,686 $ 4,169 Above-market leases 804 — Total 13,490 4,169 Less: Accumulated amortization (941 ) (334 ) Intangible Lease Assets, Net $ 12,549 $ 3,835 |
Schedule of Intangible Liabilities | September 30, December 31, (In thousands) 2018 2017 Below-market leases $ 115 $ — Less: Accumulated amortization (21 ) — Intangible Lease Liabilities, Net $ 94 $ — |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The following table presents the estimated impact during the next five years and thereafter related to the amortization of in-place lease intangibles, and above-market and below-market lease intangibles for properties held for investment at September 30, 2018 . (In thousands) September 30, 2018 2018 (three months) $ 376 2019 1,503 2020 1,309 2021 1,260 2022 1,182 2023 1,110 Thereafter 5,715 Total Future Amortization $ 12,455 |
Supplemental Detail for Certa_2
Supplemental Detail for Certain Components of Consolidated Balance Sheets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Components of Other Assets | The components of other assets were as follows: September 30, December 31, (In thousands) 2018 2017 Prepaid acquisition costs and deposits $ 1,795 $ 1,385 Accounts receivable 411 383 Restricted cash — 4,905 Prepaid assets 361 616 Food and beverage inventories 147 186 Other 565 647 Total Other Assets $ 3,279 $ 8,122 |
Other Liabilities | The components of other liabilities were as follows: September 30, December 31, (In thousands) 2018 2017 Accrued interest expense $ 2,937 $ 1,290 Accounts payable 802 1,055 Deferred lease liability 702 663 Accrued compensation 1,486 1,543 Accrued operating expenses 486 488 Intangible lease liabilities, net 94 — Other 870 667 Total Other Liabilities $ 7,377 $ 5,706 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The table below presents the fair value of our derivative financial instruments as well as their classification on the consolidated balance sheet as of September 30, 2018 and December 31, 2017. Derivative Assets Derivative Liabilities Balance Sheet Location Fair Value at Balance Sheet Location Fair Value at (Dollars in thousands) September 30, 2018 December 31, 2017 September 30, 2018 December 31, 2017 Derivatives designated as hedging instruments: Interest rate swaps Derivative assets $ 12,634 $ 4,997 Derivative liabilities $ — $ 8 Total $ 12,634 $ 4,997 $ — $ 8 The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the consolidated balance sheets. Offsetting of Derivative Assets Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Assets Presented in the Consolidated Balance Sheet Gross Amounts Not Offset in the Consolidated Balance Sheet (In thousands) Financial Instruments Cash Collateral Received Net Amount September 30, 2018 $ 12,634 $ — $ 12,634 $ — $ — $ 12,634 December 31, 2017 4,997 — 4,997 (8 ) — 4,989 Offsetting of Derivative Liabilities Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Liabilities Presented in the Consolidated Balance Sheet Gross Amounts Not Offset in the Consolidated Balance Sheet (In thousands) Financial Instruments Cash Collateral Posted Net Amount September 30, 2018 $ — $ — $ — $ — $ — $ — December 31, 2017 8 — 8 (8 ) — — |
Derivative Instruments, Gain (Loss) | The table below presents the effect of our interest rate swaps on the statements of comprehensive income for the three and nine months ended September 30, 2018 and 2017. (Dollars in thousands) Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Total Amount of Interest expense Presented in the Consolidated Statements of Income Three months ended September 30, 2018 $ 1,132 Interest expense $ 748 $ 4,934 Three months ended September 30, 2017 $ 293 Interest expense $ (196 ) $ 5,463 Nine months ended September 30, 2018 $ 9,234 Interest expense $ 1,562 $ 14,667 Nine months ended September 30, 2017 $ 115 Interest expense $ (1,230 ) $ 14,066 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the computation of basic and diluted net earnings per common share for the three and nine months ended September 30, 2018 and 2017. Three Months Ended September 30, Nine Months Ended September 30, (In thousands except for shares and per share data) 2018 2017 2018 2017 Average common shares outstanding – basic 65,347,842 61,112,051 62,804,123 60,457,949 Net effect of dilutive equity awards 230,133 144,094 183,159 109,203 Average common shares outstanding – diluted 65,577,975 61,256,145 62,987,282 60,567,152 Net income available to common shareholders $ 17,496 $ 19,205 $ 61,193 $ 53,044 Basic net earnings per share $ 0.27 $ 0.31 $ 0.97 $ 0.88 Diluted net earnings per share $ 0.27 $ 0.31 $ 0.97 $ 0.88 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The unamortized compensation cost of awards issued under the Incentive Plan totaled approximately $4.0 million at September 30, 2018 as shown in the following table. (In thousands) Restricted Stock Units Restricted Stock Awards Performance Stock Awards Total Unrecognized compensation cost at January 1, 2018 $ 524 $ 1,052 $ 2,302 $ 3,878 Equity grants 414 1,612 1,180 3,206 Equity grant forfeitures — (56 ) — (56 ) Equity compensation expense (564 ) (1,082 ) (1,391 ) (3,037 ) Unrecognized Compensation Cost at September 30, 2018 $ 374 $ 1,526 $ 2,091 $ 3,991 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | Assets and Liabilities Measured at Fair Value on a Recurring Basis September 30, 2018 (In thousands) Level 1 Level 2 Level 3 Total Assets Derivative assets $ — $ 12,634 $ — $ 12,634 December 31, 2017 (In thousands) Level 1 Level 2 Level 3 Total Assets Derivative assets $ — $ 4,997 $ — $ 4,997 Liabilities Derivative liabilities $ — $ 8 $ — $ 8 |
Fair Value Measurements, Nonrecurring | Fair Value of Certain Financial Liabilities September 30, 2018 (In thousands) Carrying Value Fair Value Term loan, excluding deferred financing costs $ 400,000 $ 392,386 Senior fixed note - due December 2024, excluding deferred financing costs $ 50,000 $ 49,622 Senior fixed note - due December 2027, excluding deferred financing costs $ 75,000 $ 75,153 December 31, 2017 (In thousands) Carrying Value Fair Value Term loan, excluding deferred financing costs $ 400,000 $ 406,637 Senior fixed note - due December 2024, excluding deferred financing costs $ 50,000 $ 50,043 Senior fixed note - due December 2027, excluding deferred financing costs $ 75,000 $ 75,184 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | The following table presents the scheduled minimum future contractual rent to be received under the remaining non-cancelable term of the operating leases, and b ecause lease renewal periods are exercisable at the option of the lessee, the table presents future minimum lease payments due during the initial lease term only. September 30, (In thousands) 2018 2018 (three months) $ 30,474 2019 122,746 2020 124,210 2021 125,643 2022 127,267 2023 128,974 Thereafter 1,009,650 Total Future Minimum Lease Payments $ 1,668,964 The annual future lease commitments under non-cancelable operating leases for the four years subsequent to September 30, 2018 and thereafter is as follows: (In thousands) September 30, 2018 2018 (three months) $ 148 2019 550 2020 400 2021 103 Thereafter — Total Future Lease Commitments $ 1,201 |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables present financial information by segment for the three and nine months ended September 30, 2018 and 2017. Three Months Ended September 30, 2018 (In thousands) Real Estate Operations Restaurant Operations Intercompany Total Revenues: Rental revenue $ 31,324 $ — $ — $ 31,324 Intercompany rental revenue 100 — (100 ) — Restaurant revenue — 4,798 — 4,798 Total revenues 31,424 4,798 (100 ) 36,122 Expenses: General and administrative 3,225 — — 3,225 Depreciation and amortization 5,614 129 — 5,743 Restaurant expenses — 4,813 (100 ) 4,713 Interest expense 4,934 — — 4,934 Total expenses 13,773 4,942 (100 ) 18,615 Other income 164 — — 164 Realized gain on sale, net — — — — Income before income taxes 17,815 (144 ) — 17,671 Income tax expense (38 ) (26 ) — (64 ) Net Income (Loss) $ 17,777 $ (170 ) $ — $ 17,607 Three Months Ended September 30, 2017 (In thousands) Real Estate Operations Restaurant Operations Intercompany Total Revenues: Rental revenue $ 28,835 $ — $ — $ 28,835 Intercompany rental revenue 99 — (99 ) — Restaurant revenue — 4,676 — 4,676 Total revenues 28,934 4,676 (99 ) 33,511 Expenses: General and administrative 2,899 — — 2,899 Depreciation and amortization 5,286 139 — 5,425 Restaurant expenses — 4,670 (99 ) 4,571 Interest expense 5,463 — — 5,463 Total expenses 13,648 4,809 (99 ) 18,358 Other income 172 — — 172 Realized gain on sale, net 4,042 — — 4,042 Income before income taxes 19,500 (133 ) — 19,367 Income tax expense — (33 ) — (33 ) Net Income (Loss) $ 19,500 $ (166 ) $ — $ 19,334 Nine Months Ended September 30, 2018 (In thousands) Real Estate Operations Restaurant Operations Intercompany Total Revenues: Rental revenue $ 90,509 $ — $ — $ 90,509 Intercompany rental revenue 300 — (300 ) — Restaurant revenue — 15,091 — 15,091 Total revenues 90,809 15,091 (300 ) 105,600 Expenses: General and administrative 10,098 — — 10,098 Depreciation and amortization 15,931 381 — 16,312 Restaurant expenses — 14,670 (300 ) 14,370 Interest expense 14,667 — — 14,667 Total expenses 40,696 15,051 (300 ) 55,447 Other income 752 — — 752 Realized gain on sale, net 10,879 — — 10,879 Income before income taxes 61,744 40 — 61,784 Income tax expense (100 ) (89 ) — (189 ) Net Income (Loss) $ 61,644 $ (49 ) $ — $ 61,595 Nine Months Ended September 30, 2017 (In thousands) Real Estate Operations Restaurant Operations Intercompany Total Revenues: Rental revenue $ 84,926 $ — $ — $ 84,926 Intercompany rental revenue 296 — (296 ) — Restaurant revenue — 14,445 — 14,445 Total revenues 85,222 14,445 (296 ) 99,371 Expenses: General and administrative 9,215 — — 9,215 Depreciation and amortization 15,812 442 — 16,254 Restaurant expenses — 14,119 (296 ) 13,823 Interest expense 14,066 — — 14,066 Total expenses 39,093 14,561 (296 ) 53,358 Other income 211 — — 211 Realized gain on sale, net 7,333 — — 7,333 Income before income taxes 53,673 (116 ) — 53,557 Income tax expense (56 ) (83 ) — (139 ) Net Income (Loss) $ 53,617 $ (199 ) $ — $ 53,418 The following tables present supplemental information by segment at September 30, 2018 and December 31, 2017. Supplemental Segment Information at September 30, 2018 (In thousands) Real Estate Operations Restaurant Operations Total Gross real estate investments $ 1,747,094 $ 16,768 $ 1,763,862 Accumulated depreciation (604,064 ) (6,771 ) (610,835 ) Total real estate investments, net $ 1,143,030 $ 9,997 $ 1,153,027 Cash and cash equivalents $ 26,028 $ 862 $ 26,890 Total assets $ 1,224,865 $ 11,313 $ 1,236,178 Long-term debt, net of deferred financing costs $ 516,904 $ — $ 516,904 Supplemental Segment Information at December 31, 2017 (In thousands) Real Estate Operations Restaurant Operations Total Gross real estate investments $ 1,548,259 $ 16,696 $ 1,564,955 Accumulated depreciation (592,293 ) (6,553 ) (598,846 ) Total real estate investments, net $ 955,966 $ 10,143 $ 966,109 Cash and cash equivalents $ 63,229 $ 1,237 $ 64,466 Total assets $ 1,056,500 $ 12,159 $ 1,068,659 Long-term debt, net of deferred financing costs $ 515,539 $ — $ 515,539 |
Organization (Details)
Organization (Details) - Darden [Member] $ in Millions | Nov. 09, 2015USD ($)propertybrand |
Separation And Spin-Off [Line Items] | |
Equity interest contributed, percentage | 1 |
Number of real estate properties | property | 418 |
Number of brands | 5 |
Stockholder's equity, conversion ratio | 3 |
Revolving Credit and Term Loan [Member] | Secured Debt [Member] | |
Separation And Spin-Off [Line Items] | |
Payment from issuance of long-term debt | $ | $ 315 |
Longhorn San Antonio Business [Member] | |
Separation And Spin-Off [Line Items] | |
Number of brands | 6 |
Operations (Details)
Operations (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | ||
Intangible lease assets, net | $ 12,455,000 | $ 3,800,000 |
Assets held for sale disposal period | 1 year | |
Real estate held for sale | $ 0 | |
Building and Building Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life (in years) | 7 years | |
Building and Building Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life (in years) | 55 years | |
Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life (in years) | 2 years | |
Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life (in years) | 15 years |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 26,890 | $ 64,466 | ||
Restricted cash (included in Other assets) | 0 | 4,905 | ||
Total Cash, Cash Equivalents, and Restricted Cash | $ 26,890 | $ 69,371 | $ 85,895 | $ 26,643 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies Derivative Instruments and Hedging Activities (Details) $ in Thousands | Dec. 31, 2017USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
ASU 2017-12 cumulative effect adjustment | $ 0 |
AOCI Attributable to Parent [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
ASU 2017-12 cumulative effect adjustment | 467 |
AOCI Attributable to Parent [Member] | Accounting Standards Update 2017-12 [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
ASU 2017-12 cumulative effect adjustment | 467 |
Retained Earnings [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
ASU 2017-12 cumulative effect adjustment | (467) |
Retained Earnings [Member] | Accounting Standards Update 2017-12 [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
ASU 2017-12 cumulative effect adjustment | $ (467) |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies Revenue (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Credit card receivables | $ 68 | $ 90 |
Restricted Stock (Details)
Restricted Stock (Details) - Restricted Stock Units (RSUs) [Member] | 9 Months Ended |
Sep. 30, 2018 | |
Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
RSU vesting period (in years) | 1 year |
Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
RSU vesting period (in years) | 3 years |
Predecessor [Member] | Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
RSU vesting period (in years) | 3 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies Application of New Accounting Standards (Details) | Jan. 01, 2019 |
Accounting Standards Update 2016-02 [Member] | Scenario, Forecast [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Right-of-use assets, percentage of total assets | 2.00% |
Concentration of Credit Risk (D
Concentration of Credit Risk (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($)staterestaurant | |
Concentration Risk [Line Items] | |
Number of states in which entity operates | state | 45 |
Net Assets, Geographic Area [Member] | Geographic Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 10.00% |
Number of states in which entity operates | state | 2 |
Net Assets, Geographic Area [Member] | Geographic Concentration Risk [Member] | Texas [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 12.50% |
Net Assets, Geographic Area [Member] | Geographic Concentration Risk [Member] | Florida [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 11.70% |
Olive Garden [Member] | |
Concentration Risk [Line Items] | |
Number of restaurants | restaurant | 299 |
Olive Garden [Member] | Customer Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 51.00% |
Olive Garden [Member] | Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 59.00% |
Darden [Member] | Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 79.00% |
Secured Debt [Member] | Revolving Credit and Term Loan [Member] | |
Concentration Risk [Line Items] | |
Line of credit facility, current borrowing capacity | $ | $ 250 |
Credit Risk Contract [Member] | |
Concentration Risk [Line Items] | |
Derivative, net liability position, aggregate fair value | $ | $ 12.6 |
Real Estate Investments, Net (D
Real Estate Investments, Net (Details) | 9 Months Ended | ||
Sep. 30, 2018USD ($)stateproperty | Sep. 30, 2017USD ($)stateproperty | Dec. 31, 2017USD ($) | |
Property Subject to or Available for Operating Lease [Line Items] | |||
Total real estate investments | $ 1,763,862,000 | $ 1,564,955,000 | |
Less: Accumulated depreciation | (610,835,000) | (598,846,000) | |
Total real estate investments, net | 1,153,027,000 | 966,109,000 | |
Intangible lease assets, net | 12,455,000 | 3,800,000 | |
Total real estate investments and intangible lease assets, net | $ 1,165,576,000 | 969,944,000 | |
Number of states in which entity operates | state | 45 | ||
Contingent consideration | $ 0 | ||
Discontinued Operations, Disposed of by Sale [Member] | |||
Property Subject to or Available for Operating Lease [Line Items] | |||
Total real estate investments, net | $ 4,600,000 | ||
Number of real estate properties | property | 1 | ||
Gain on sale of property | $ 10,900,000 | ||
Property Subject to Operating Lease [Member] | |||
Property Subject to or Available for Operating Lease [Line Items] | |||
Land | 549,070,000 | 449,331,000 | |
Buildings and improvements | 1,077,703,000 | 977,783,000 | |
Equipment | 137,089,000 | 137,841,000 | |
Total real estate investments | 1,763,862,000 | 1,564,955,000 | |
Less: Accumulated depreciation | (610,835,000) | (598,846,000) | |
Total real estate investments, net | 1,153,027,000 | 966,109,000 | |
Intangible lease assets, net | 12,549,000 | 3,835,000 | |
Total real estate investments and intangible lease assets, net | 1,165,576,000 | $ 969,944,000 | |
Payments to acquire business | $ 216,100,000 | $ 76,100,000 | |
Number of restaurants | property | 77 | 35 | |
Number of states in which entity operates | state | 29 | 14 | |
Payments to acquire land | $ 101,900,000 | $ 22,200,000 | |
Payments to acquire buildings and improvements | 105,000,000 | 52,900,000 | |
Payments to acquire intangible assets | $ 9,200,000 | $ 1,000,000 | |
Operating leases, term of contract (in years) | 13 years 7 months | 17 years 9 months 18 days |
Real Estate Investments, Net Op
Real Estate Investments, Net Operating Leases (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Operating Leases, Future Minimum Payments Receivable [Abstract] | |
2018 (three months) | $ 30,474 |
2,019 | 122,746 |
2,020 | 124,210 |
2,021 | 125,643 |
2,022 | 127,267 |
2,023 | 128,974 |
Thereafter | 1,009,650 |
Total Future Minimum Lease Payments | $ 1,668,964 |
Real Estate Investments, Net In
Real Estate Investments, Net Intangible Lease Assets, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible lease assets, gross | $ 13,490 | $ 4,169 |
Less: Accumulated amortization | (941) | (334) |
Intangible Lease Assets, Net | 12,549 | 3,835 |
Leases, Acquired-in-Place [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible lease assets, gross | 12,686 | 4,169 |
Above-Market Leases [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible lease assets, gross | $ 804 | $ 0 |
Real Estate Investments, Net _2
Real Estate Investments, Net Intagngible Lease Liabilities, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Schedule Of Finite-Lived Intangible Liabilities [Line Items] | ||
Less: Accumulated amortization | $ (21) | $ 0 |
Intangible lease liabilities, net | 94 | 0 |
Below-Market Leases [Member] | ||
Schedule Of Finite-Lived Intangible Liabilities [Line Items] | ||
Intangible lease liabilities, gross | $ 115 | $ 0 |
Real Estate Investments, Net _3
Real Estate Investments, Net Intangible Lease Assets and Liabilities, Net - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible lease assets and liabilities, weighted average amortization period | 12 years | |||
Acquired lease intangible weighted average amortization period | 12 years 9 months 18 days | |||
Leases, Acquired-in-Place [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 297,000 | $ 77,000 | $ 542,000 | $ 237,000 |
Above-Market And Below-Market Leases [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 15,000 | $ 46,000 | $ 0 | |
Above-Market Leases [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Acquired lease intangible weighted average amortization period | 12 years 3 months 18 days | |||
Below-Market Leases [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Acquired lease intangible weighted average amortization period | 4 years 1 month 6 days |
Real Estate Investments, Net Am
Real Estate Investments, Net Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
2018 (three months) | $ 376 | |
2,019 | 1,503 | |
2,020 | 1,309 | |
2,021 | 1,260 | |
2,022 | 1,182 | |
2,023 | 1,110 | |
Thereafter | 5,715 | |
Total Future Amortization | $ 12,455 | $ 3,800 |
Supplemental Detail for Certa_3
Supplemental Detail for Certain Components of Consolidated Balance Sheets Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid acquisition costs and deposits | $ 1,795 | $ 1,385 |
Accounts receivable | 411 | 383 |
Restricted cash (included in Other assets) | 0 | 4,905 |
Prepaid assets | 361 | 616 |
Food and beverage inventories | 147 | 186 |
Other | 565 | 647 |
Total Other Assets | $ 3,279 | $ 8,122 |
Supplemental Detail for Certa_4
Supplemental Detail for Certain Components of Consolidated Balance Sheets Other Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued interest expense | $ 2,937 | $ 1,290 |
Accounts payable | 802 | 1,055 |
Deferred lease liability | 702 | 663 |
Accrued compensation | 1,486 | 1,543 |
Accrued operating expenses | 486 | 488 |
Intangible lease liabilities, net | 94 | 0 |
Other | 870 | 667 |
Total Other Liabilities | $ 7,377 | $ 5,706 |
Long-Term Debt, Net of Deferr_2
Long-Term Debt, Net of Deferred Financing Costs - Narrative (Details) - USD ($) | Sep. 18, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Oct. 02, 2017 |
Debt Instrument [Line Items] | |||||||
Unamortized deferred financing costs | $ 8,100,000 | $ 8,100,000 | $ 9,500,000 | ||||
Amortization of financing costs | $ 1,368,000 | $ 1,265,000 | |||||
Weighted average interest rate | 3.43% | 3.43% | 2.79% | ||||
Loan Agreement Amendment [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Amortization of financing costs | $ 458,000 | $ 452,000 | $ 1,400,000 | $ 1,300,000 | |||
Unsecured Debt [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 100,000,000 | ||||||
Unsecured Debt [Member] | The Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Notes payable, net of deferred financing costs | 125,000,000 | 125,000,000 | $ 125,000,000 | ||||
Unsecured Debt [Member] | Notes Maturing On December 2026 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 50,000,000 | ||||||
Contractual term | 8 years | ||||||
Fixed interest rate | 4.63% | ||||||
Unsecured Debt [Member] | Notes Maturing On December 2028 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 50,000,000 | ||||||
Contractual term | 10 years | ||||||
Fixed interest rate | 4.76% | ||||||
Term Loan [Member] | Loan Agreement Amendment [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Notes payable, net of deferred financing costs | 400,000,000 | 400,000,000 | 400,000,000 | ||||
Revolving Credit Facility [Member] | Loan Agreement Amendment [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Notes payable, net of deferred financing costs | $ 250,000,000 | ||||||
Revolving Credit Facility [Member] | Secured Debt [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Fair value of amount outstanding | 0 | 0 | 0 | ||||
Letter of Credit [Member] | Secured Debt [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Fair value of amount outstanding | $ 0 | $ 0 | $ 0 |
Derivative Financial Instrume_3
Derivative Financial Instruments Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Derivative [Line Items] | |||
Estimated reclass to earnings from AOCI | $ 3,000,000 | ||
Derivative fair value | $ 12,600,000 | 12,600,000 | $ 5,000,000 |
Interest Rate Swap [Member] | |||
Derivative [Line Items] | |||
Notional amount | 300,000,000 | 300,000,000 | |
Credit Risk Contract [Member] | |||
Derivative [Line Items] | |||
Derivative, net liability position, aggregate fair value | 12,600,000 | 12,600,000 | |
Designated as Hedging Instrument [Member] | |||
Derivative [Line Items] | |||
Variable-rate debt | 400,000,000 | 400,000,000 | |
Notional amount | 400,000,000 | 400,000,000 | |
Accounting Standards Update 2017-12 [Member] | |||
Derivative [Line Items] | |||
Gain on cash flow hedge ineffectiveness | $ 9,000 | $ 46,000 |
Derivatives Balance Sheet (Deta
Derivatives Balance Sheet (Details) - Designated as Hedging Instrument [Member] - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Other Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | $ 12,634 | $ 4,997 |
Other Assets [Member] | Interest Rate Swap [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 12,634 | 4,997 |
Other Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value, gross liability | 0 | 8 |
Other Liabilities [Member] | Interest Rate Swap [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value, gross liability | $ 0 | $ 8 |
Derivatives Income Statement (D
Derivatives Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total Amount of Interest expense Presented in the Consolidated Statements of Income | $ 4,934 | $ 5,463 | $ 14,667 | $ 14,066 |
Interest Rate Contract [Member] | Designated as Hedging Instrument [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | 1,132 | 293 | 9,234 | 115 |
Interest Rate Contract [Member] | Designated as Hedging Instrument [Member] | Operating Income (Loss) [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | 748 | (196) | $ 1,562 | $ (1,230) |
Total Amount of Interest expense Presented in the Consolidated Statements of Income | $ 4,934 | $ 5,463 |
Derivatives Offsetting (Details
Derivatives Offsetting (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Offsetting of Derivative Assets | ||
Net Amounts of Assets Presented in the Consolidated Balance Sheet | $ 12,634 | $ 4,997 |
Offsetting of Derivative Liabilities | ||
Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | 0 | 8 |
Swap [Member] | ||
Offsetting of Derivative Assets | ||
Gross Amounts of Recognized Assets | 12,634 | 4,997 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts of Assets Presented in the Consolidated Balance Sheet | 12,634 | 4,997 |
Gross Amounts Not Offset in the Consolidated Balance Sheet, Financial Instruments | 0 | (8) |
Gross Amounts Not Offset in the Consolidated Balance Sheet, Cash Collateral Received | 0 | 0 |
Net Amount | 12,634 | 4,989 |
Offsetting of Derivative Liabilities | ||
Gross Amounts of Recognized Liabilities | 0 | 8 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | 0 | 8 |
Gross Amounts Not Offset in the Consolidated Balance Sheet, Financial Instruments | 0 | (8) |
Gross Amounts Not Offset in the Consolidated Balance Sheet, Cash Collateral Posted | 0 | 0 |
Net Amount | $ 0 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Provision for (benefit) from income tax | $ 64 | $ 33 | $ 189 | $ 139 |
Equity (Details)
Equity (Details) - USD ($) $ / shares in Units, $ in Millions | Aug. 07, 2018 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Class of Stock [Line Items] | |||||||
Preferred stock, shares authorized | 25,000,000 | 25,000,000 | 25,000,000 | ||||
Preferred stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Preferred stock, shares issued | 0 | 0 | 0 | ||||
Preferred stock, shares outstanding | 0 | 0 | 0 | ||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | ||||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Dividends declared per common share (in USD per share) | $ 0.275 | $ 0.2750 | $ 0.2425 | $ 0.8250 | $ 0.7275 | ||
Common stock, dividends paid per share (in USD per share) | $ 0.275 | ||||||
Common stock, shares issued | 67,441,692 | 67,441,692 | 61,329,489 | ||||
Common stock, shares outstanding | 67,441,692 | 67,441,692 | 61,329,489 | ||||
Stock Offering [Member] | |||||||
Class of Stock [Line Items] | |||||||
Common stock, par value (in USD per share) | $ 0.01 | ||||||
Number of shares sold | 4,025,000 | ||||||
Price per share (in USD per share) | $ 25 | ||||||
Proceeds from issuance of stock | $ 100.6 | ||||||
Net proceeds from issuance of stock | $ 96.4 |
Equity At the Market Offering (
Equity At the Market Offering (Details) - USD ($) | Oct. 20, 2015 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Subsidiary, Sale of Stock [Line Items] | ||||||
Shares, new issues | 2,100,000 | |||||
Units of partnership interest, amount | 409,320 | 409,320 | ||||
Redemption value | $ 10,500,000 | $ 10,500,000 | $ 10,600,000 | |||
Noncontrolling interest, ownership percentage by parent | 99.40% | 99.40% | ||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 0.60% | 0.60% | ||||
Distribution to limited partners | $ 338,000 | |||||
At-The-Market Offering [Member] | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Stock issuance, sales agreement, authorized offering price, maximum | $ 150,000,000 | |||||
Shares, new issues | 488,174 | 2,022,106 | ||||
Share price (in USD per share) | $ 26.70 | $ 23.87 | ||||
Net proceeds from issuance of stock | $ 12,700,000 | $ 47,305,000 | $ 28,787,000 | |||
Stock issuance, sales agreement, value available for issuance | $ 68,300,000 | $ 68,300,000 |
Equity Earnings Per Share (Deta
Equity Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Equity [Abstract] | ||||
Weighted average common shares outstanding – basic | 65,347,842 | 61,112,051 | 62,804,123 | 60,457,949 |
Effect of dilutive shares underlying stock-based compensation | 230,133 | 144,094 | 183,159 | 109,203 |
Weighted average common shares outstanding – diluted | 65,577,975 | 61,256,145 | 62,987,282 | 60,567,152 |
Net income available to common shareholders | $ 17,496 | $ 19,205 | $ 61,193 | $ 53,044 |
Basic net income per share (in USD per share) | $ 0.27 | $ 0.31 | $ 0.97 | $ 0.88 |
Diluted net income per share (in USD per share) | $ 0.27 | $ 0.31 | $ 0.97 | $ 0.88 |
Antidilutive securities excluded from computation of earnings per share, amount | 278,071 | 271,443 | 311,881 | 270,749 |
Weighted average units of partnership interest, amount | 409,320 | 425,729 |
Stock-Based Compensation Narrat
Stock-Based Compensation Narrative (Details) - USD ($) $ in Millions | Oct. 20, 2015 | Sep. 30, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Issuance of common stock in connection with Spin-Off, shares | 2,100,000 | |
Shares available for issuance | 1,633,801 | |
Unrecognized compensation cost | $ 4 | |
Period for recognition (in years) | 1 year 4 months 12 days |
Stock-Based Compensation Rollfo
Stock-Based Compensation Rollforward (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized [Roll Forward] | |
Unrecognized compensation cost at January 1, 2018 | $ 3,878 |
Equity grants | 3,206 |
Equity grant forfeitures | (56) |
Equity compensation expense | (3,037) |
Unrecognized Compensation Cost at September 30, 2018 | 3,991 |
Restricted Stock Units (RSUs) [Member] | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized [Roll Forward] | |
Unrecognized compensation cost at January 1, 2018 | 524 |
Equity grants | 414 |
Equity grant forfeitures | 0 |
Equity compensation expense | (564) |
Unrecognized Compensation Cost at September 30, 2018 | 374 |
Restricted Stock [Member] | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized [Roll Forward] | |
Unrecognized compensation cost at January 1, 2018 | 1,052 |
Equity grants | 1,612 |
Equity grant forfeitures | (56) |
Equity compensation expense | (1,082) |
Unrecognized Compensation Cost at September 30, 2018 | 1,526 |
Performance Shares [Member] | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized [Roll Forward] | |
Unrecognized compensation cost at January 1, 2018 | 2,302 |
Equity grants | 1,180 |
Equity grant forfeitures | 0 |
Equity compensation expense | (1,391) |
Unrecognized Compensation Cost at September 30, 2018 | $ 2,091 |
Stock-Based Compensation RSUs a
Stock-Based Compensation RSUs and Restricted Stock Awards (Details) - shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Average closing market price, common stock, period (in days) | 5 days | |
RSUs outstanding (in shares) | 78,791 | 64,983 |
RSUs granded (in shares) | 17,896 | |
Restrictions on RSUs (in shares) | 4,088 | |
Units forfeited (in shares) | 0 | |
Restricted Stock Award [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Average closing market price, common stock, period (in days) | 5 days | |
RSUs outstanding (in shares) | 100,402 | 81,909 |
RSUs granded (in shares) | 67,845 | |
Restrictions on RSUs (in shares) | 47,292 | |
Units forfeited (in shares) | 2,060 | |
Units forfeited and returned (in shares) | 7,126 | |
Minimum [Member] | Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
RSU vesting period (in years) | 1 year | |
Minimum [Member] | Restricted Stock Award [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
RSU vesting period (in years) | 1 year | |
Maximum [Member] | Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
RSU vesting period (in years) | 3 years | |
Maximum [Member] | Restricted Stock Award [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
RSU vesting period (in years) | 3 years |
Stock-Based Compensation Perfor
Stock-Based Compensation Performance- Based Restricted Stock Awards (Details) - Performance Shares [Member] $ in Millions | 9 Months Ended | |
Sep. 30, 2018USD ($)shares | Dec. 31, 2017shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance shares granted (in shares) | 68,490 | |
Unvested PSUs (in shares) | 204,068 | 135,578 |
Compensation expense | $ | $ 2.1 | |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage multiplier | 0 | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage multiplier | 2 |
Assets and Liabilities at Fair
Assets and Liabilities at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Derivative assets | $ 12,634 | $ 4,997 |
Liabilities | ||
Derivative liabilities | 0 | 8 |
Fair Value, Measurements, Recurring [Member] | ||
Assets | ||
Derivative assets | 12,634 | 4,997 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Assets | ||
Derivative assets | 0 | 0 |
Liabilities | ||
Derivative liabilities | 0 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Assets | ||
Derivative assets | 12,634 | |
Liabilities | ||
Derivative liabilities | 8 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Assets | ||
Derivative assets | $ 0 | 0 |
Liabilities | ||
Derivative liabilities | $ 0 |
Financial Liabilities (Details)
Financial Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Notes Payable to Banks [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Note payable, carrying value | $ 400,000 | $ 400,000 |
Notes payable, fair value disclosure | 392,386 | 406,637 |
Unsecured Debt [Member] | The Notes, Seven Year Term [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Note payable, carrying value | 50,000 | 50,000 |
Notes payable, fair value disclosure | 49,622 | 50,043 |
Unsecured Debt [Member] | The Notes, Ten Year Term [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Note payable, carrying value | 75,000 | 75,000 |
Notes payable, fair value disclosure | $ 75,153 | $ 75,184 |
Operating Leases (Details)
Operating Leases (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2018 (three months) | $ 148 |
2,019 | 550 |
2,020 | 400 |
2,021 | 103 |
Thereafter | 0 |
Total Future Lease Commitments | $ 1,201 |
Ground Leases (Details)
Ground Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Rent expense ground lease | $ 183 | $ 155 | $ 536 | $ 468 |
Segments (Details)
Segments (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018state | Sep. 30, 2017segment | Sep. 30, 2018segment | Sep. 30, 2017segment | |
Segment Reporting [Abstract] | ||||
Number of operating segments | 2 | 2 | 2 | 2 |
Segments Income by Segment (Det
Segments Income by Segment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Rental revenue | $ 36,122,000 | $ 33,511,000 | $ 105,600,000 | $ 99,371,000 |
General and administrative | 3,225,000 | 2,899,000 | 10,098,000 | 9,215,000 |
Depreciation and amortization | 5,743,000 | 5,425,000 | 16,312,000 | 16,254,000 |
Restaurant expenses | 4,713,000 | 4,571,000 | 14,370,000 | 13,823,000 |
Interest expense | 4,934,000 | 5,463,000 | 14,667,000 | 14,066,000 |
Total expenses | 18,615,000 | 18,358,000 | 55,447,000 | 53,358,000 |
Other income | 164,000 | 172,000 | 752,000 | 211,000 |
Realized gain on sale, net | 0 | 4,042,000 | 10,879,000 | 7,333,000 |
Income before income taxes | 17,671,000 | 19,367,000 | 61,784,000 | 53,557,000 |
Income tax expense | (64,000) | (33,000) | (189,000) | (139,000) |
Income tax expense, including real estate allocated tax | (33,000) | |||
Net income | 17,607,000 | 19,334,000 | 61,595,000 | 53,418,000 |
Net income, including real estate allocated tax | 19,334,000 | |||
Operating Segments [Member] | Real Estate Operations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 31,424,000 | 28,934,000 | 90,809,000 | 85,222,000 |
General and administrative | 3,225,000 | 2,899,000 | 10,098,000 | 9,215,000 |
Depreciation and amortization | 5,614,000 | 5,286,000 | 15,931,000 | 15,812,000 |
Restaurant expenses | 0 | 0 | 0 | 0 |
Interest expense | 4,934,000 | 5,463,000 | 14,667,000 | 14,066,000 |
Total expenses | 13,773,000 | 13,648,000 | 40,696,000 | 39,093,000 |
Other income | 164,000 | 172,000 | 752,000 | 211,000 |
Realized gain on sale, net | 0 | |||
Income before income taxes | 17,815,000 | 19,500,000 | 61,744,000 | 53,673,000 |
Income tax expense | (38,000) | 0 | (100,000) | (56,000) |
Net income | 17,777,000 | 19,500,000 | 61,644,000 | 53,617,000 |
Operating Segments [Member] | Restaurant Operations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 4,798,000 | 4,676,000 | 15,091,000 | 14,445,000 |
General and administrative | 0 | 0 | 0 | 0 |
Depreciation and amortization | 129,000 | 139,000 | 381,000 | 442,000 |
Restaurant expenses | 4,813,000 | 4,670,000 | 14,670,000 | 14,119,000 |
Interest expense | 0 | 0 | 0 | 0 |
Total expenses | 4,942,000 | 4,809,000 | 15,051,000 | 14,561,000 |
Other income | 0 | 0 | 0 | 0 |
Realized gain on sale, net | 0 | 0 | 0 | 0 |
Income before income taxes | (144,000) | (133,000) | 40,000 | (116,000) |
Income tax expense | (26,000) | (33,000) | (89,000) | (83,000) |
Net income | (170,000) | (166,000) | (49,000) | (199,000) |
Intersegment Eliminations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | (100,000) | (99,000) | (300,000) | (296,000) |
General and administrative | 0 | 0 | 0 | 0 |
Depreciation and amortization | 0 | 0 | 0 | 0 |
Restaurant expenses | (100,000) | (99,000) | (300,000) | (296,000) |
Interest expense | 0 | 0 | 0 | 0 |
Total expenses | (100,000) | (99,000) | (300,000) | (296,000) |
Other income | 0 | 0 | 0 | 0 |
Realized gain on sale, net | 0 | 0 | 0 | 0 |
Income before income taxes | 0 | 0 | 0 | 0 |
Income tax expense | 0 | 0 | 0 | 0 |
Net income | 0 | 0 | 0 | 0 |
Rental Revenue [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 31,324,000 | 28,835,000 | 90,509,000 | 84,926,000 |
Rental Revenue [Member] | Operating Segments [Member] | Real Estate Operations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 31,324,000 | 28,835,000 | 90,509,000 | 84,926,000 |
Rental Revenue [Member] | Operating Segments [Member] | Restaurant Operations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 0 | 0 | 0 | 0 |
Rental Revenue [Member] | Intersegment Eliminations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 0 | 0 | 0 | 0 |
Intercompany Rental Revenue [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 0 | 0 | 0 | 0 |
Intercompany Rental Revenue [Member] | Operating Segments [Member] | Real Estate Operations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 100,000 | 99,000 | 300,000 | 296,000 |
Intercompany Rental Revenue [Member] | Operating Segments [Member] | Restaurant Operations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 0 | 0 | 0 | 0 |
Intercompany Rental Revenue [Member] | Intersegment Eliminations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | (100,000) | (99,000) | (300,000) | (296,000) |
Restaurant Revenue [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 4,798,000 | 4,676,000 | 15,091,000 | 14,445,000 |
Restaurant Revenue [Member] | Operating Segments [Member] | Real Estate Operations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 0 | 0 | 0 | 0 |
Restaurant Revenue [Member] | Operating Segments [Member] | Restaurant Operations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 4,798,000 | 4,676,000 | 15,091,000 | 14,445,000 |
Restaurant Revenue [Member] | Intersegment Eliminations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Segments Additional Information
Segments Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Segment Reporting Information [Line Items] | ||
Gross real estate investments | $ 1,763,862 | $ 1,564,955 |
Accumulated depreciation | (610,835) | (598,846) |
Total real estate investments, net | 1,153,027 | 966,109 |
Cash and cash equivalents | 26,890 | 64,466 |
Total assets | 1,236,178 | 1,068,659 |
Long-term debt, net of deferred financing costs | 516,904 | 515,539 |
Operating Segments [Member] | Real Estate Operations [Member] | ||
Segment Reporting Information [Line Items] | ||
Gross real estate investments | 1,747,094 | 1,548,259 |
Accumulated depreciation | (604,064) | (592,293) |
Total real estate investments, net | 1,143,030 | 955,966 |
Cash and cash equivalents | 26,028 | 63,229 |
Total assets | 1,224,865 | 1,056,500 |
Long-term debt, net of deferred financing costs | 516,904 | 515,539 |
Operating Segments [Member] | Restaurant Operations [Member] | ||
Segment Reporting Information [Line Items] | ||
Gross real estate investments | 16,768 | 16,696 |
Accumulated depreciation | (6,771) | (6,553) |
Total real estate investments, net | 9,997 | 10,143 |
Cash and cash equivalents | 862 | 1,237 |
Total assets | 11,313 | 12,159 |
Long-term debt, net of deferred financing costs | $ 0 | $ 0 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) | 1 Months Ended | |
Oct. 31, 2018USD ($)property | Sep. 30, 2018USD ($) | |
Subsequent Event [Line Items] | ||
Contingent liabilities | $ 0 | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Consideration transferred | $ 5,700,000 | |
Number of real estate properties | property | 3 | |
Investment yield | 6.80% | |
Operating leases, term of contract (in years) | 10 years |