FrontView REIT Announces Fourth Quarter and Full Year 2024 Results and Initiates 2025 Guidance
DALLAS--(BUSINESS WIRE)--March 19, 2025--
FrontView REIT, Inc. (NYSE: FVR) (the "Company", "FrontView", "we", "our", or "us"), today announced its operating results for the quarter and year ended December 31, 2024.
MANAGEMENT COMMENTARY
Stephen Preston, Co-CEO, Co-President, and Chairman, commented, "We are pleased to report a very successful first quarter as a public company, demonstrating our ability to drive growth by acquiring over $100 million in high-quality assets at above-market cap rates. Our differentiated sourcing strategy and focus on transacting outside of the competitive public peer landscape--where we instead compete with less sophisticated buyers--continue to pay off. Unlike many public peers facing increased competition, we are benefiting from elevated cap rates in our niche market, partially driven by the stickiness of interest rates for players in the space. This dynamic, coupled with our disciplined approach, enabled us to already lock in forecasted Q1 2025 acquisitions at attractive yields. We are initiating 2025 AFFO per share guidance of $1.20 to $1.26 and remain focused on delivering superior risk-adjusted returns for our shareholders."
FOURTH QUARTER 2024 HIGHLIGHTS
INVESTMENT ACTIVITY During the fourth quarter, we acquired 29 new
properties for $103.4 million at a weighted average
cash capitalization rate of 7.9% and a weighted
average lease term of 11 years. The acquisitions
were spread across 7 industries, 17 tenants, and 16
states, including 12 new tenants and 4 new states
Subsequent to quarter end and through the date of
this release, we acquired 15 new properties for
$37.9 million at a weighted average cash
capitalization rate of 7.8% and a weighted average
lease term of 12.5 years. The acquisitions were
spread across 7 industries, 11 tenants, and 11
states, including 5 new tenants and 2 new states. As
of the date of this release, we have an additional
$18.2 million of properties under signed PSA that
have a weighted average cash capitalization rate of
8.2%. The properties are spread across 4 industries,
4 tenants, and 3 states. During the fourth quarter,
we sold 1 property for gross proceeds of $2.1
million at a 6.9% cash capitalization rate,
recognizing a $0.05 million gain over our original
purchase price.
------------------------ ----------------------------------------------------
OPERATING Generated net loss of $21.5 million, or $0.78 per
RESULTS share. Generated adjusted funds from operations
("AFFO") of $9.1 million, or $0.33 per share.
Generated pro forma adjusted AFFO of $7.4 million,
or $0.27 per pro forma share. Incurred $2.9 million
of general and administrative expenses, inclusive of
$0.6 million of stock-based compensation and $0.1
million of property and asset management fees that
were incurred during the first two days of the
quarter prior to our initial public offering
("IPO"). Portfolio was approximately 98% leased
based on number of properties, with seven of our 307
properties vacant and not subject to a lease at
quarter end.
------------------------ ----------------------------------------------------
CAPITAL MARKETS ACTIVITY As of December 31, 2024, we had total outstanding
debt of $268.5 million, Net Debt of $263.4 million,
and a Net Debt to Annualized Adjusted EBITDAre ratio
of 5.2x. During the quarter, we completed our IPO,
selling 14.3 million shares of our common stock for
gross proceeds of $271.5 million, prior to
underwriting discounts and inclusive of the
underwriters' additional purchase of 1.09 million
shares. We used the proceeds from our IPO to repay
our prior CIBC revolving credit facility and CIBC
term loan, and retained $82.3 million of cash to be
used for acquisitions and general corporate
purposes. We fully invested the proceeds by the end
of the quarter. Concurrent with our IPO, we closed
on a new $250.0 million revolving credit facility
("Revolving Credit Facility") and a new $200.0
million term loan ("Term Loan"). We drew down the
term loan, in full, on December 30, 2024. The new
loans have a five-year duration after consideration
of extension options and bear interest at adjusted
SOFR plus 1.2%. We used the term loan and borrowings
under our revolving credit facility to repay, in
full, our fixed-rate $253 million ABS notes that
matured on December 30, 2024. Declared a quarterly
dividend of $0.215 per share and OP unit to holders
of record as of March 31, 2025, payable on or before
April 15, 2025. Subsequent to quarter end, on March
4, 2025 we entered into $200 million in interest
rate swap notional to fix our Term Loan at an all-in
rate of 4.96%.
------------------------ ----------------------------------------------------
SUMMARIZED FINANCIAL RESULTS
For the three months ended December
31, For the year ended December 31,
------------------------------------- --------------------------------------
Pro Pro
Forma Historical Historical Forma Historical Historical
(in thousands,
except per share
data) 2024 2024 2023 2024 2024 2023
-------- ----------- ------------ -------- ------------ ------------
Revenues $ 16,868 $ 15,514 $ 14,343 $ 66,685 $ 59,917 $ 48,266
Net (loss)
income,
including
non-controlling
interest $(22,009) $ (21,488) $ 8,429 $(26,613) $ (31,209) $ (1,524)
Net (loss) income
per share (0.79) (0.78) -- (0.96) -- --
FFO $ (9,708) $ (9,963) $ 2,322 $ 11,226 $ 1,985 $ 11,438
FFO per share (0.35) (0.36) -- 0.40 -- --
AFFO $ 7,404 $ 9,055 $ 4,844 $ 30,337 $ 23,543 $ 21,055
AFFO per share 0.27 0.33 -- 1.09 -- --
Diluted Weighted
Average Shares
Outstanding 27,823 27,578 -- 27,823 -- --
FFO, AFFO, and Pro Forma AFFO are measures that are not calculated in accordance with accounting principles generally accepted in the United States of America ("GAAP"). See the Reconciliation of Non-GAAP Measures later in this press release.
REAL ESTATE PORTFOLIO
As of December 31, 2024, we owned a diversified portfolio of 307 individual net leased commercial properties, comprising approximately 2.4 million rentable square feet of operational space. As of December 31, 2024, all but seven of our properties were subject to a lease, and our properties were occupied by 320 different commercial tenants, with no single tenant accounting for more than 2.9% of our annualized base rent ("ABR"). Properties subject to a lease represent 97.7% of the number of properties in our portfolio. The ABR weighted average lease term, pursuant to leases on properties in the portfolio as of December 31, 2024, was 7.2 years.
DISTRIBUTIONS
On March 18, 2025, our board of directors declared a quarterly dividend of $0.215 per common share and OP unit to holders of record as of March 31, 2025, payable on or before April 15, 2025.
2025 GUIDANCE
For 2025, FrontView expects to report AFFO of between $1.20 and $1.26 per diluted share.
The guidance is based on the following key assumptions:
(i) investments in real estate properties between $175 million and $200 million;
(ii) dispositions of real estate properties between $5 million and $20 million;
(iii) bad debt expense of between 2% and 3% of cash NOI;
(iv) non-reimbursed property and operating expenses of between $2.0 million and $2.6 million;
(v) total cash general and administrative expenses between $8.9 million and $9.5 million.
Our per share results are sensitive to both the timing and amount of real estate investments, property dispositions, and capital markets activities that occur throughout the quarter.
We do not provide guidance for the most comparable GAAP financial measure, net income, or a reconciliation of the forward-looking non-GAAP financial measure of AFFO to net income computed in accordance with GAAP, because we are unable to reasonably predict, without unreasonable efforts, certain items that would be contained in the GAAP measure, including items that are not indicative of our ongoing operations, including, without limitation, potential impairments of real estate assets, net gain/loss on dispositions of real estate assets, changes in allowance for credit losses, and stock-based compensation expense. These items are uncertain, depend on various factors, and could have a material impact on our GAAP results for the guidance periods.
CONFERENCE CALL AND WEBCAST
The Company will host its fourth quarter earnings conference call and audio webcast on Thursday, March 20, 2025, at 10:00 a.m. Central Time.
To access the live webcast, which will be available in listen-only mode, please visit: https://events.q4inc.com/attendee/968397175. If you prefer to listen via phone, U.S. participants may dial: 1-800-549-8228 (toll free) or 646-564-2877 (local), conference ID 76353.
A replay of the conference call webcast will be available approximately one hour after the conclusion of the live broadcast. To listen to a replay of the call via the web, which will be available for one year, please visit: https://www.frontviewreit.com.
About FrontView REIT, Inc.
FrontView is an internally-managed net-lease REIT that acquires, owns and manages primarily properties with frontage that are net leased to a diversified group of tenants. FrontView is differentiated by an investment approach focused on properties that are in prominent locations with direct frontage on high-traffic roads that are highly visible to consumers. As of December 31, 2024, FrontView owned a well-diversified portfolio of 307 properties with direct frontage across 35 U.S. states. FrontView's focuses on service-oriented tenants, including quick-service restaurants, cellular stores, financial institutions, automotive stores and dealers, medical and dental providers, convenience and gas stores, car washes, home improvement stores, grocery stores, fitness operators, professional services as well as general retail tenants.
Forward-Looking Statements
This press release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, our plans, strategies, and prospects, both business and financial. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "outlook," "potential," "may," "will," "should," "could," "seeks," "approximately," "projects," "predicts," "expect," "intends," "anticipates," "estimates," "plans," "would be," "believes," "continues, " or the negative version of these words or other comparable words. Forward-looking statements, including our 2025 guidance and assumptions, involve known and unknown risks and uncertainties, which may cause FVR's actual future results to differ materially from expected results, including, without limitation, risks and uncertainties related to general economic conditions, including but not limited to increases in the rate of inflation and/or interest rates, local real estate conditions, tenant financial health, property investments and acquisitions, and the timing and uncertainty of completing these property investments and acquisitions, and uncertainties regarding future distributions to our stockholders. These and other risks, assumptions, and uncertainties are described in Item 1A. "Risk Factors" of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which the Company expects to file with the SEC on March 20, 2025, which you are encouraged to read, and will be available on the SEC's website at www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. The Company assumes no obligation to, and does not currently intend to, update any forward-looking statements after the date of this press release, whether as a result of new information, future events, changes in assumptions, or otherwise.
Notice Regarding Non-GAAP Financial Measures
In addition to our reported results and net earnings per diluted share, which are financial measures presented in accordance with GAAP, this press release contains and may refer to certain non-GAAP financial measures, including Funds from Operations ("FFO"), AFFO, Pro Forma AFFO, Net Debt, Net Debt to Annualized Adjusted EBITDAre, and Pro Forma Net Debt to Annualized Adjusted EBITDAre. We believe the use of FFO, AFFO, and Pro Forma AFFO are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs. FFO, AFFO, and Pro Forma AFFO should not be considered alternatives to net income as a performance measure or to cash flows from operations, as reported on our statement of cash flows, or as a liquidity measure, and should be considered in addition to, and not in lieu of, GAAP financial measures. We believe presenting Pro Forma Net Debt to Annualized Adjusted EBITDAre is useful to investors because it provides information about gross debt less cash and cash equivalents, which could be used to repay debt, compared to our performance as measured using Annualized Adjusted EBITDAre. You should not consider our Annualized Adjusted EBITDAre as an alternative to net income or cash flows from operating activities determined in accordance with GAAP. A reconciliation of non-GAAP measures to the most directly comparable GAAP financial measure and statements of why management believes these measures are useful to investors are included below.
FRONTVIEW REIT INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
Successor Predecessor
December 31, December 31,
2024 2023
-------------- ----------------
ASSETS
Real estate held for investment,
at cost
Land $ 332,944 $ 314,748
Buildings and improvements 386,462 332,432
--------- ---------
Total real estate held for
investment, at cost 719,406 647,180
Less accumulated depreciation (40,398) (28,734)
--------- ---------
Real estate held for investment,
net 679,008 618,446
Assets held for sale 5,898 2,859
Cash, cash equivalents and
restricted cash 5,094 17,129
Intangible lease assets, net 114,868 119,432
Other assets 16,941 14,141
--------- ---------
Total assets $ 821,809 $ 772,007
========= =========
LIABILITIES, CONVERTIBLE
NON-CONTROLLING PREFERRED INTERESTS
AND EQUITY
Liabilities
Debt, net $ 266,538 $ 436,452
Intangible lease liabilities, net 14,735 17,416
Accounts payable and accrued
liabilities 17,858 17,452
--------- ---------
Total liabilities 299,131 471,320
--------- ---------
Convertible non-controlling preferred
interests -- 103,616
Equity
Partners' capital -- 197,071
FrontView REIT, Inc. equity
Common Stock, $0.01 par value
450,000 shares authorized,
17,291 shares issued and
outstanding as of December 31,
2024 173 --
Additional paid-in capital 331,482 --
Accumulated deficit (6,834) --
--------- ---------
Total FrontView REIT, Inc. equity 324,821 --
Non-controlling interests 197,857 --
--------- ---------
Total equity 522,678 --
--------- ---------
Total liabilities, convertible
non-controlling preferred interests
and equity $ 821,809 $ 772,007
========= =========
FRONTVIEW REIT INC.
CONSOLIDATED STATEMENT OF INCOME (LOSS)
(in thousands, except per share amounts)
Combined
Successor and
Predecessor Predecessor Successor Predecessor Predecessor
Period from Period from
Three Months October 3, January 1,
Ended Three Months 2024 through 2024 through Year Ended
December 31, Ended December December 31, October 2, December 31,
2024 31, 2023 2024 2024 2023
------------- --------------- -------------- -------------- ---------------
Revenues
Rental revenues $ 15,514 $ 14,343 $15,177 $ 44,740 $ 48,266
Operating expenses
Depreciation
and
amortization 7,634 7,415 7,468 21,581 24,730
Property
operating
expenses 2,218 1,884 2,170 5,742 5,825
Property
management
fees 60 494 -- 1,561 1,616
Asset
management
fees 22 1,034 -- 3,124 4,139
General and
administrative
expenses 2,850 2,026 2,787 2,122 8,055
------- --- ------- ------ ----- ------- ---- -------
Total operating
expenses 12,784 12,853 12,425 34,130 44,365
Other expenses
(income)
Interest
expense 3,593 6,498 3,452 19,896 18,377
Gain on sale of
real estate -- (1,057) -- (337) (725)
Impairment loss 3,891 407 3,891 591 407
Income taxes 236 110 231 349 316
------- --- ------- ------ ----- ------- ---- -------
Total other
expenses 7,720 5,958 7,574 20,499 18,375
------- --- ------- ------ ----- ------- ---- -------
Operating loss (4,990) (4,468) (4,822) (9,889) (14,474)
Internalization
expense (16,498) -- -- (16,498) --
Gain from
acquisition of
equity method
investment -- 12,988 -- -- 12,988
Equity loss from
investment in an
unconsolidated
entity -- (91) -- -- (38)
------- --- ------- ------ ----- ------- ---- -------
Net (loss) income (21,488) 8,429 (4,822) (26,387) (1,524)
Less: Net loss
(income)
attributable to
convertible non-
controlling
preferred
interests 4,519 (2,274) -- 7,171 424
Less: Net loss
attributable to
non-controlling
interests 1,825 -- 1,825 -- --
------- --- ------- ------ ----- ------- ---- -------
Net (loss) income
attributable to
NADG NNN Property
Fund LP
(Predecessor) and
to FrontView
REIT, Inc.
(Successor) $(15,144) $ 6,155 $(2,997) $(19,216) $ (1,100)
======= ======= ====== ==== ======= === =======
Weighted average
number of common
shares
outstanding
Basic -- -- 16,259 -- --
======= === ======= ====== ===== ======= ==== =======
Diluted -- -- 27,578 -- --
======= === ======= ====== ===== ======= ==== =======
Net loss per share
attributable to
Common Stock
holders
------------- --------------- -------------- -------------- ---------------
Basic $ -- $ -- $ (0.19) $ -- $ --
======= === ======= ====== ==== ======= ==== =======
Diluted $ -- $ -- $ (0.19) $ -- $ --
======= === ======= ====== ==== ======= ==== =======
Reconciliation of Non-GAAP Measures
The following is a reconciliation of historical and pro forma net income to FFO and AFFO for the following periods:
Successor Successor Predecessor Predecessor
Pro Forma Historical Historical Historical
Period from Period from
October 3, January 1,
Year Ended 2024 through 2024 through Year Ended
December 31, December 31, October 2, December 31,
(in thousands) 2024 2024 2024 2023
------------ -------------- -------------- ---------------
Net loss $(26,613) $(4,822) $(26,387) $ (1,524)
Depreciation on
real property
and amortization
of real estate
intangibles 33,357 7,468 21,581 24,730
Share of 50/50
Joint Venture's
depreciation on
real property
and amortization
of real estate
intangibles -- -- -- 1,798
Gain on sale of
real estate -- -- (337) (725)
Share of 50/50
Joint Venture's
gain on sale of
real estate -- -- -- (260)
Impairment loss
on real estate
held for
investment 4,482 3,891 591 407
Gain from
acquisition of
equity method
investment -- -- -- (12,988)
------- ------ ----- ------- ---- -------
FFO $ 11,226 $ 6,537 $ (4,552) $ 11,438
------- ------ ----- ------- --- -------
Straight-line
rent
adjustments (1,806) (322) (971) (1,350)
Share of 50/50
Joint Venture's
straight-line
rent
adjustments -- -- -- (43)
Amortization of
financing
transaction and
discount costs 1,601 1,588 3,145 2,792
Share of 50/50
Joint Venture's
amortization of
debt issuance
cost -- -- -- 226
Amortization of
above/below
market lease
intangibles 2,048 164 1,341 1,469
Share of 50/50
Joint Venture's
amortization of
above/below
market lease
intangibles -- -- -- 90
Stock-based
compensation 2,496 608 -- --
Lease termination
fees (1,726) (342) (1,384) --
Adjustment for
structuring and
public company
readiness costs -- 662 487 4,092
Adjustment for
Internalization
expenses 16,498 -- 16,498 2,169
Other
non-recurring
expenses -- 84 -- 172
------- ------ ----- ------- ---- -------
AFFO $ 30,337 $ 8,979 $ 14,564 $ 21,055
======= ====== ===== ======= ==== =======
Our reported results and net earnings per diluted share are presented in accordance with GAAP. We also disclose FFO and AFFO, each of which are non-GAAP measures. We believe these non-GAAP financial measures are industry measures used by analysts and investors to compare the operating performance of REITs. FFO and AFFO should not be considered alternatives to net income as a performance measure or to cash flows from operations, as reported on our statement of cash flows, or as a liquidity measure, and should be considered in addition to, and not in lieu of, GAAP financial measures.
We compute FFO in accordance with the standards established by the Board of Governors of Nareit. Nareit defines FFO as GAAP net income or loss adjusted to exclude net gains (losses) from sales of certain depreciated real estate assets, depreciation and amortization expense from real estate assets, gains and losses from change in control, and impairment charges related to certain previously depreciated real estate assets. FFO is used by management, investors, and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers, primarily because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. To derive AFFO, we modify the Nareit computation of FFO to include other adjustments to GAAP net income related to certain non-cash or non-recurring revenues and expenses, including straight-line rents, cost of debt extinguishments, amortization of lease intangibles, amortization of debt issuance costs, amortization of net mortgage premiums, (gain) loss on interest rate swaps and other non-cash interest expense, realized gains or losses on foreign currency transactions, Internalization expenses, structuring and public company readiness costs, extraordinary items, and other specified non-cash items. We believe that such items are not a result of normal operations and thus we believe excluding such items assists
management and investors in distinguishing whether changes in our operations are due to growth or decline of operations at our properties or from other factors. We use AFFO as a measure of our performance when we formulate corporate goals. We believe that AFFO is a useful supplemental measure for investors to consider because it will help them to better assess our operating performance without the distortions created by one-time cash and non-cash revenues or expenses.
Our leases typically include cash rents that increase through lease escalations over the term of the lease. Our leases do not typically include significant front-loading or back-loading of payments, or significant rent-free periods. Therefore, we find it useful to evaluate rent on a contractual basis as it allows for comparison of existing rental rates to market rental rates. We further exclude costs or gains recorded on the extinguishment of debt, non-cash interest expense and gains, the amortization of debt issuance costs, net mortgage premiums, and lease intangibles, realized gains and losses on foreign currency transactions, Internalization expenses, and structuring and public company readiness costs, as these items are not indicative of ongoing operational results.
FFO and AFFO may not be comparable to similarly titled measures employed by other REITs, and comparisons of our FFO and AFFO with the same or similar measures disclosed by other REITs may not be meaningful.
Neither the SEC nor any other regulatory body has passed judgment on the acceptability of the adjustments to FFO that we use to calculate AFFO. In the future, the SEC, Nareit or another regulatory body may decide to standardize the allowable adjustments across the REIT industry and in response to such standardization we may have to adjust our calculation and characterization of AFFO accordingly.
The following is a reconciliation of historical and pro forma net income to EBITDA, EBITDAre, and Adjusted EBITDAre, debt to Net Debt and Net Debt to Annualized Adjusted EBITDAre as of and for the three months ended December 31, 2024 and 2023:
Combined
Successor and
Successor Predecessor Predecessor
Pro Forma Historical Historical
Three Months Three Months Three Months
(unaudited, in Ended December Ended December Ended December
thousands) 31, 2024 31, 2024 31, 2023
----------------- ----------------- -----------------
Net (loss)
income $ (22,009) $ (21,488) $ 8,429
Depreciation
and
amortization 8,410 7,634 7,993
Share of 50/50
Joint
Venture's
depreciation
and
amortization -- -- 122
Interest
expense 4,517 3,593 6,498
Share of 50/50
Joint
Venture's
interest
expense -- -- 130
Income taxes 236 236 110
Share of 50/50
Joint
Venture's
income taxes -- -- 2
------- ---- ------- ---- ------- ----
EBITDA $ (8,846) $ (10,025) $ 23,283
------- --- ------- --- ------- ----
Gain on sale of
real estate -- -- (1,057)
Impairment loss
on real estate
held for
investment 3,891 3,891 407
Gain from
acquisition of
equity method
investment -- -- (12,988)
------- ---- ------- ---- ------- ---
EBITDAre $ (4,955) $ (6,134) $ 9,645
------- --- ------- --- ------- ----
Adjustment for
current period
investment
activity (1) -- 1,354 --
Adjustment for
current period
disposition
activity (2) -- -- (36)
Adjustment for
non-cash
compensation
expense (3) 624 608 --
Adjustment to
exclude
non-recurring
(income)
expenses (4) 16,238 16,760 1,361
Adjustment to
exclude net
write-offs of
accrued rental
income 63 63 --
------- ---- ------- ---- ------- ----
Adjusted
EBITDAre 11,970 12,651 10,970
======= ==== ======= ==== ======= ====
Annualized
EBITDAre (19,820) (24,536) 38,580
======= === ======= === ======= ====
Annualized
adjusted
EBITDAre $ 47,880 $ 50,604 $ 43,880
======= ==== ======= ==== ======= ====
(1) Reflects an adjustment to give effect to all acquisitions during the
period as if they had been acquired as of the beginning of the period.
(2) Reflects an adjustment to give effect to all dispositions during the
period as if they had been sold as of the beginning of the period.
(3) Reflects an adjustment to exclude non-cash stock-based compensation
expense.
(4) Reflects an adjustment to exclude non-recurring expenses including IPO
costs, lease termination fees and non-recurring income or expenses.
December 31,
---------------------------------------
Pro Forma Historical Historical
(in thousands) 2024 2024 2023
-------- ----------- -----------
Debt
Term Loan $200,000 $ 200,000 $ --
Revolving Credit
Facility 68,500 68,500 --
ABS Notes -- -- 254,489
CIBC Revolving Credit
Facility -- -- 168,890
CIBC Term Loan -- -- 17,000
------- ------- -------
Gross Debt 268,500 268,500 440,379
Cash, cash equivalents
and restricted cash (5,094) (5,094) (17,129)
------- ------- -------
Net Debt $263,406 $ 263,406 $ 423,250
Leverage Ratios:
Net Debt to Annualized
EBITDAre (13.3) (10.7) 11.0
======= ======= =======
Net Debt to Annualized
Adjusted EBITDAre 5.5 5.2 9.6
======= ======= =======
Net Debt is a non-GAAP financial measure. We define Net Debt as our total debt less cash, cash equivalents and restricted cash. The ratios of Net Debt to EBITDAre and Net Debt to Annualized Adjusted EBITDAre represent Net Debt as of the end of the applicable period divided by EBITDAre or Annualized Adjusted EBITDAre for the period, respectively. We believe that these ratios are useful to investors and analysts because they provide information about Gross Debt less cash and cash equivalents, which could be useful to repay debt, compared to our performance as measured using EBITDAre and Annualized Adjusted EBITDAre.
We compute EBITDA as earnings before interest, income taxes and depreciation and amortization. EBITDA is a measure commonly used in our industry. We believe that this ratio provides investors and analysts with a measure of our leverage that includes our operating results unaffected by the differences in capital structures, capital investment cycles and useful life of related assets compared to other companies in our industry. In 2017, Nareit issued a white paper recommending that companies that report EBITDA also report EBITDAre in financial reports. We compute EBITDAre in accordance with the definition adopted by Nareit. Nareit defines EBITDAre as EBITDA (as defined above) excluding gains (loss) from the sales of depreciable property and provisions for impairment on investment in real estate. We believe EBITDA and EBITDAre are useful to investors and analysts because they provide important supplemental information about our operating performance exclusive of certain non-cash and other costs. EBITDA and EBITDAre are not measures of financial performance under GAAP, and our EBITDA and EBITDAre may not be comparable to similarly titled measures of other companies. You should not consider our EBITDA and EBITDAre as alternatives to net income or cash flows from operating activities determined in accordance with GAAP.
We compute adjusted EBITDAre as EBITDAre for the applicable quarter, as adjusted to (i) reflect all investment and disposition activity that took place during the applicable quarter as if each transaction had been completed on the first day of the quarter, (ii) exclude certain GAAP income and expense amounts that we believe are infrequent and unusual in nature because they relate to unique circumstances or transactions that had not previously occurred and which we do not anticipate occurring in the future, (iii) eliminate the impact of lease termination fees from certain of our tenants, and (iv) exclude non-cash stock-based compensation expense.
Annualized adjusted EBITDAre is calculated by multiplying adjusted EBITDAre for the applicable quarter by four, which we believe provides a meaningful estimate of our current run rate for all of our investments as of the end of the most recently completed quarter given the contractual nature of our long term net leases. You should not unduly rely on this measure as it is based on assumptions and estimates that may prove to be inaccurate. Our actual reported EBITDAre for future periods may be significantly different from our annualized adjusted EBITDAre. Our actual reported EBITDAre for future periods may be significantly different from our Annualized Adjusted EBITDAre.
Adjusted EBITDAre and Annualized Adjusted EBITDAre are not measurements of performance under GAAP, and our Adjusted EBITDAre and Annualized Adjusted EBITDAre may not be comparable to similarly titled measures of other companies. You should not consider our Adjusted EBITDAre and Annualized Adjusted EBITDAre as alternatives to net income or cash flows from operating activities determined in accordance with GAAP.
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(END) Dow Jones Newswires
March 19, 2025 17:29 ET (21:29 GMT)