Four Corners Property Trust, Inc.

Good morning or good afternoon all and welcome to today's Four Corners Property Trust fourth quarter 2021 financials conference call. My name is Adam and I'll be your operator today. If you'd like to ask a question during the Q&A portion of today's call, you may do so by pressing star one on your telephone keypad. I will now hand you over to Gerry Morgan to begin. So Gerry, please go ahead when you were ready.

Thank you, Adam. 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, including uncertainty related to the remaining scope, severity, and duration of the COVID-19 pandemic 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 fcpt.com. All of the information presented on this call is current as of today, February 17, 2022. In addition, reconciliation to non-GAAP financial measures presented on this call, such as FFO and ANFFO, can be found in the company supplemental report also available on the website. And with that, I'll turn the call over to Bill.

Good morning. Thank you for joining us to discuss our fourth quarter results. I'm going to make introductory remarks. Patrick Warnick will review some details around acquisitions and the pipeline. And then back to Jerry and Nicole Stewart, our chief accounting officer, to discuss the financial results. In summary, we continue to have industry-leading collections at 99.8% for the quarter. and occupancy improves to 99.9%. Our restaurant and other retail tenants are experiencing top line performance often above pre-pandemic levels. We also acquired 33 properties in the fourth quarter, characterized by low rents and high quality tenants. We reported fourth quarter AFFO of 41 cents per share, which represents a 10% increase year over year. Full year 2021 AFFO per share was $1.56, or an 8% increase compared to 2020. One item I do want to point out here is that those AFFO figures included the impact of Carrow restaurants, our Longhorn Steakhouse operating business in San Antonio. Carrow had a weaker 2020 due to the impact of dining restrictions in the early days of the pandemic. But the business fully rebounded last year with a strong result of $2 million of positive EBITDA. We're very excited about their results and outlook for 2020, but we understand many investors focus on our core contractual recurring rent revenue. If we remove the impact of CARO on our AFFO growth for both 2020 and 2021, and instead just focus on our core real estate operations, AFFO grew by 8.1% in Q4 and 6.3% for the full year as compared to 2020. We thought this nuance was worth highlighting. Moving on to our attendance performance, restaurant operators continue to have strong results in the most recent quarter. Quick service restaurants are operating at approximately 118% of 2019 weekly levels, and casual dining is operating in line with 2019 levels, even with the recent cold weather in much of the country. Our two largest tenants, Darden Restaurants and Brinker International, announced their earnings publicly in the past two months. Those were highlighted by strong sales comps versus last year and pre-pandemic periods. As compared to the same quarter two years ago, average store sales at Olive Garden, Longhorn, and Chili's have increased by 5.2%, 22.3%, and 5% respectively. Combined, these brands represent approximately 66% of our rental revenue and are just a sample of the positive performance we're seeing amongst our portfolio's restaurant tenants. We remain highly confident we've aligned our portfolio with best-in-class operators, and the results are continuing to speak for themselves. Turning to investments, which Patrick will detail in a moment, we acquired 33 properties in the quarter for a combined price of $70.5 million and an initial cash yield of 6.4%. The acquisitions represent strong tenant credit profiles. The group includes three dual tenant properties, and 34 of the 36 leases are with corporate operators. The fourth quarter's investments include 10 new brands, bringing us to a total of 112 brands in the portfolio. In total for 2021, we acquired $257 million across 122 properties. Taking a step back, to put that $257 million figure of new investments into perspective. It compares to 223 million in 2020 and 199 million in 2019. This represents average growth of 14% in acquisition volume in the last two years and demonstrates how our investment platform and widening segment exposure has allowed us to consistently increase our volumes. With that, I'll turn it over to Patrick for some additional comments on recent acquisitions in the overall investment environment. Thanks, Bill.