Four Corners Property Trust, Inc.

Good day and welcome to the FC-PT Announces Earnings for First Quarter 2020 Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Jerry Morgan. Please go ahead.

Thank you, Sarah. During the course of this call, we will make forward-looking statements which are based on beliefs and assumptions made by us. Our actual results will be affected by known and unknown factors that are beyond our control or ability to predict. Our assumptions are not a guarantee of future performance, and some will prove to be incorrect. For a more detailed description of some potential risks, please refer to our SEC filings, which can be found at scpt.com. All of the information presented on this call is current. As of today, May 7th, 2020. In addition, reconciliation to non-GAAP financial measures presented on this call, such as FFO and AFFO, can be found on the company's supplemental report, also available on our website. And with that, I'll turn the call over to Bill.

Good morning. Thank you for joining us to discuss our first quarter results and ongoing response to COVID-19. First, our best wishes to all of you and your family's health and safety during these uncertain times, and our thanks to all the medical and other service providers who are working during this time for all of our benefit. I'll begin with a few broad comments about our response to the current environment before discussing the first quarter results and the second quarter collection results, including in our earnings release. First, my sincere thanks and admiration to all the FCBT team who have continued to perform tirelessly from home over the last two months. A special acknowledgement to our team under Jim Bratt and Carol Dilts within Carol Longhorn Group in San Antonio, who have been innovative in achieving to-go business over the past six weeks, approaching 30% of regular levels with a much-produced team, and this is prior to returning to 25% maximum occupancy in restaurant dining in Texas last week. The last two months have been an unprecedented environment for restaurant operators, but many have shown tenacity in adjusting their operating model. We are starting to see different parts of the country reopen, and restaurant traffic will rebound accordingly. strong operators like Darden and Brinker and others should benefit in the long run from their scale. We believe the strength of our portfolio, which was built on strong locations, well-capitalized tenants, and benefits from industry-leading rent coverage, will relatively outperform during this time. Now, turning to our reported results in the first quarter. Our portfolio performed as expected in the quarter as we benefited from a full quarter of rent from properties acquired at year-end. We achieved AFFO per share of 37 cents, which represents an 8.8 year-over-year increase. During the first quarter, FCPT acquired 23 properties for a combined purchase price of $36.2 million at an initial weighted average cash yield of 6.9 prior to our decision in March to extend deadlines on the existing pipeline in response to COVID-19. Speaking to the quality of the first quarter acquisitions, 19 of the 24 leases are with the brand's corporate operator, and our average basis per property is less than 1.6 million. Further, 14 of the 23 properties are ground leases, where FCPT owns the land and the tenant constructed the building, which equates to low rents. With respect to the acquisition environment in general, we have paused our acquisition activities by requesting counterparties to extend deadlines until later in the year, but we believe we will be poised for a great acquisition environment in the near future, as competition for acquisitions will decline, which should improve pricing. We have spent the last four years being disciplined in how we construct and underwrite acquisitions and finance our balance sheet, which will position us well. With regard to second quarter rent collections, rents continue to be received daily for April, and we currently stand at over 89% collected. We are also off to a strong start on May collections, with over 83% collected through May 5th, with additional rent payments coming. The team remains engaged in construction rent deferral conversations with tenants. Of course, we will continue to enforce the provisions of the leases in cases where tenants choose not to pay, and we are not discussing rent forgiveness with tenants, nor are we lending money to any tenants. We would note that the number of tenants seeking lease modification has decreased in recent weeks. It is also noteworthy that many of our tenants have raised equity recently. Darden raised $527 million, Brinker announced last night, that it raised around $125 million, and BJ's recently raised $70 million as examples. We are in preliminary discussions with a few of our tenants to exchange short-term rent deferments for concessions, including lease extensions and conversion of five-year bumps into annual rent increases. That approach has been limited in scope, will improve our portfolio, and drive long-term value for our shareholders. But it may put the rent collections for May slightly below April. Regardless, we expect collections to continue to rise in the coming weeks for both periods. Finally, before I turn it over to Jerry to discuss some of the financial results in our liquidity position, a few words on our dividend. I will remind everyone that we paid our declared first quarter dividend in mid-April. The FCTB board and I will review the second quarter dividend payment in early June based on a full assessment of the environment. Our dividend payout ratio is approximately 83% in the first quarter, which is a conservative level. Now, Jerry will take you through our financial results.