2018 Q4 Form 10-Q Financial Statement

#000165013218000112 Filed on October 30, 2018

View on sec.gov

Income Statement

Concept 2018 Q4 2018 Q3 2017 Q3
Revenue $38.04M $36.12M $33.51M
YoY Change 12.4% 7.79% 8.78%
Cost Of Revenue
YoY Change
Gross Profit
YoY Change
Gross Profit Margin
Selling, General & Admin $8.190M $7.940M $7.470M
YoY Change 4.07% 6.29% 7.95%
% of Gross Profit
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $6.100M $5.700M $5.500M
YoY Change 17.31% 3.64% 10.0%
% of Gross Profit
Operating Expenses $15.81M $13.66M $12.90M
YoY Change 17.69% 5.96% -16.93%
Operating Profit
YoY Change
Interest Expense $5.293M $4.934M $5.463M
YoY Change -2.04% -9.68% 53.93%
% of Operating Profit
Other Income/Expense, Net $30.00K $160.0K $170.0K
YoY Change -72.73% -5.88% 1600.0%
Pretax Income $21.41M $17.67M $19.37M
YoY Change 16.87% -8.76% 26.65%
Income Tax $74.00K $64.00K $33.00K
% Of Pretax Income 0.35% 0.36% 0.17%
Net Earnings $21.33M $17.50M $19.21M
YoY Change 15.47% -8.9% 26.02%
Net Earnings / Revenue 56.08% 48.44% 57.31%
Basic Earnings Per Share $0.31 $0.27 $0.31
Diluted Earnings Per Share $0.31 $0.27 $0.31
COMMON SHARES
Basic Shares Outstanding 67.76M shares 65.35M shares 61.11M shares
Diluted Shares Outstanding 65.58M shares 61.26M shares

Balance Sheet

Concept 2018 Q4 2018 Q3 2017 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $92.00M $26.90M $82.90M
YoY Change 42.64% -67.55% 338.62%
Cash & Equivalents $92.04M $26.89M $82.87M
Short-Term Investments
Other Short-Term Assets $800.0K $400.0K $200.0K
YoY Change 33.33% 100.0% 0.0%
Inventory $183.0K $147.0K $159.0K
Prepaid Expenses
Receivables $800.0K $400.0K $200.0K
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $93.80M $27.80M $83.50M
YoY Change 42.77% -66.71% 332.64%
LONG-TERM ASSETS
Property, Plant & Equipment $1.191B $1.153B $948.3M
YoY Change 23.25% 21.59% 14.97%
Goodwill
YoY Change
Intangibles $19.00M $12.55M $2.494M
YoY Change 395.38% 403.17%
Long-Term Investments
YoY Change
Other Assets $33.10M $29.60M $24.50M
YoY Change 20.8% 20.82% 9.87%
Total Long-Term Assets $1.249B $1.208B $978.3M
YoY Change 24.56% 23.52% 15.49%
TOTAL ASSETS
Total Short-Term Assets $93.80M $27.80M $83.50M
Total Long-Term Assets $1.249B $1.208B $978.3M
Total Assets $1.343B $1.236B $1.062B
YoY Change 25.68% 16.43% 22.55%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $1.000M $800.0K $1.000M
YoY Change -9.09% -20.0% 100.0%
Accrued Expenses $3.800M $4.900M $4.200M
YoY Change 15.15% 16.67% 35.48%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $26.00M $32.50M $28.00M
YoY Change -11.86% 16.07% 7.69%
LONG-TERM LIABILITIES
Long-Term Debt $615.9M $516.9M $518.4M
YoY Change 19.48% -0.29% 31.74%
Other Long-Term Liabilities $2.300M $1.700M $1.600M
YoY Change 76.92% 6.25% -78.38%
Total Long-Term Liabilities $618.2M $518.6M $520.0M
YoY Change 19.62% -0.27% 29.71%
TOTAL LIABILITIES
Total Short-Term Liabilities $26.00M $32.50M $28.00M
Total Long-Term Liabilities $618.2M $518.6M $520.0M
Total Liabilities $644.1M $551.1M $548.1M
YoY Change 17.89% 0.55% 28.35%
SHAREHOLDERS EQUITY
Retained Earnings $46.02M $44.39M $34.81M
YoY Change 26.71% 27.53% 336.34%
Common Stock
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $699.0M $677.2M $505.9M
YoY Change
Total Liabilities & Shareholders Equity $1.343B $1.236B $1.062B
YoY Change 25.68% 16.43% 22.55%

Cashflow Statement

Concept 2018 Q4 2018 Q3 2017 Q3
OPERATING ACTIVITIES
Net Income $21.33M $17.50M $19.21M
YoY Change 15.47% -8.9% 26.02%
Depreciation, Depletion And Amortization $6.100M $5.700M $5.500M
YoY Change 17.31% 3.64% 10.0%
Cash From Operating Activities $15.10M $24.80M $21.00M
YoY Change -19.25% 18.1% 14.75%
INVESTING ACTIVITIES
Capital Expenditures -$52.00M -$178.3M -$6.400M
YoY Change 110.53% 2685.94% -73.0%
Acquisitions
YoY Change
Other Investing Activities $5.600M $0.00 $2.000M
YoY Change -28.21% -100.0%
Cash From Investing Activities -$46.40M -$178.2M -$4.300M
YoY Change 172.94% 4044.19% -81.86%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 97.70M 91.60M -15.10M
YoY Change -738.56% -706.62% 4.14%
NET CHANGE
Cash From Operating Activities 15.10M 24.80M 21.00M
Cash From Investing Activities -46.40M -178.2M -4.300M
Cash From Financing Activities 97.70M 91.60M -15.10M
Net Change In Cash 66.40M -61.80M 1.600M
YoY Change -588.24% -3962.5% -108.04%
FREE CASH FLOW
Cash From Operating Activities $15.10M $24.80M $21.00M
Capital Expenditures -$52.00M -$178.3M -$6.400M
Free Cash Flow $67.10M $203.1M $27.40M
YoY Change 54.61% 641.24% -34.76%

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us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
53557000 USD
CY2018Q3 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
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17671000 USD
us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
61784000 USD
CY2017Q3 us-gaap Income Tax Expense Benefit
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33000 USD
us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
139000 USD
CY2018Q3 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
64000 USD
us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
189000 USD
us-gaap Income Taxes Paid Net
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522000 USD
us-gaap Income Taxes Paid Net
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us-gaap Increase Decrease In Deferred Revenue
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us-gaap Increase Decrease In Deferred Revenue
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5000 USD
us-gaap Increase Decrease In Derivative Assets
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-105000 USD
us-gaap Increase Decrease In Derivative Assets
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us-gaap Increase Decrease In Other Operating Capital Net
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us-gaap Increase Decrease In Other Operating Capital Net
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CY2017Q3 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
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us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
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CY2018Q3 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
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us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
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CY2017Q4 us-gaap Intangible Assets Gross Excluding Goodwill
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CY2018Q3 us-gaap Intangible Assets Gross Excluding Goodwill
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13490000 USD
CY2017Q4 us-gaap Intangible Assets Net Excluding Goodwill
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3835000 USD
CY2018Q3 us-gaap Intangible Assets Net Excluding Goodwill
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us-gaap Interest Expense
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4934000 USD
us-gaap Interest Expense
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us-gaap Net Cash Provided By Used In Financing Activities
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us-gaap Net Cash Provided By Used In Operating Activities
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us-gaap Net Income Loss
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us-gaap Net Income Loss
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us-gaap Net Income Loss Attributable To Noncontrolling Interest
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CY2018Q3 us-gaap Net Income Loss Attributable To Noncontrolling Interest
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us-gaap Net Income Loss Attributable To Noncontrolling Interest
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us-gaap Noncash Or Part Noncash Acquisition Debt Assumed1
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us-gaap Noncash Or Part Noncash Acquisition Debt Assumed1
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CY2017Q3 us-gaap Number Of Operating Segments
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CY2018Q3 us-gaap Number Of Operating Segments
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2 state
us-gaap Number Of Operating Segments
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18358000 USD
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CY2018Q3 us-gaap Other Assets
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CY2017Q4 us-gaap Other Assets Miscellaneous
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CY2018Q3 us-gaap Other Assets Miscellaneous
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CY2017Q3 us-gaap Other Comprehensive Income Derivatives Qualifying As Hedges Net Of Tax Portion Attributable To Parent
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us-gaap Other Comprehensive Income Derivatives Qualifying As Hedges Net Of Tax Portion Attributable To Parent
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CY2018Q3 us-gaap Other Comprehensive Income Derivatives Qualifying As Hedges Net Of Tax Portion Attributable To Parent
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384000 USD
us-gaap Other Comprehensive Income Derivatives Qualifying As Hedges Net Of Tax Portion Attributable To Parent
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7672000 USD
CY2017Q3 us-gaap Other Comprehensive Income Loss Derivatives Qualifying As Hedges Net Of Tax
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us-gaap Other Comprehensive Income Loss Derivatives Qualifying As Hedges Net Of Tax
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115000 USD
CY2018Q3 us-gaap Other Comprehensive Income Loss Derivatives Qualifying As Hedges Net Of Tax
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1132000 USD
us-gaap Other Comprehensive Income Loss Derivatives Qualifying As Hedges Net Of Tax
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9234000 USD
us-gaap Other Comprehensive Income Loss Net Of Tax
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7672000 USD
CY2017Q3 us-gaap Other Comprehensive Income Loss Net Of Tax Portion Attributable To Noncontrolling Interest
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4000 USD
us-gaap Other Comprehensive Income Loss Net Of Tax Portion Attributable To Noncontrolling Interest
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7000 USD
CY2018Q3 us-gaap Other Comprehensive Income Loss Net Of Tax Portion Attributable To Noncontrolling Interest
OtherComprehensiveIncomeLossNetOfTaxPortionAttributableToNoncontrollingInterest
2000 USD
us-gaap Other Comprehensive Income Loss Net Of Tax Portion Attributable To Noncontrolling Interest
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51000 USD
CY2017Q3 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci On Derivatives Net Of Tax
OtherComprehensiveIncomeLossReclassificationAdjustmentFromAOCIOnDerivativesNetOfTax
-196000 USD
us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci On Derivatives Net Of Tax
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-1230000 USD
CY2018Q3 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci On Derivatives Net Of Tax
OtherComprehensiveIncomeLossReclassificationAdjustmentFromAOCIOnDerivativesNetOfTax
748000 USD
us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci On Derivatives Net Of Tax
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1562000 USD
CY2017Q3 us-gaap Other Cost Of Services
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4571000 USD
us-gaap Other Cost Of Services
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13823000 USD
CY2018Q3 us-gaap Other Cost Of Services
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4713000 USD
us-gaap Other Cost Of Services
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14370000 USD
CY2017Q3 us-gaap Other Income
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172000 USD
us-gaap Other Income
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211000 USD
CY2018Q3 us-gaap Other Income
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164000 USD
us-gaap Other Income
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752000 USD
CY2017Q4 us-gaap Other Liabilities
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5706000 USD
CY2018Q3 us-gaap Other Liabilities
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7377000 USD
us-gaap Payments For Proceeds From Deposits On Real Estate Acquisitions
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757000 USD
us-gaap Payments For Proceeds From Deposits On Real Estate Acquisitions
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86000 USD
us-gaap Payments Of Capital Distribution
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338000 USD
us-gaap Payments Of Capital Distribution
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348000 USD
us-gaap Payments Of Dividends
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43875000 USD
us-gaap Payments Of Dividends
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50975000 USD
us-gaap Payments Of Financing Costs
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0 USD
us-gaap Payments To Acquire Property Plant And Equipment
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70366000 USD
us-gaap Payments To Acquire Property Plant And Equipment
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216272000 USD
us-gaap Payments To Minority Shareholders
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988000 USD
us-gaap Payments To Minority Shareholders
PaymentsToMinorityShareholders
0 USD
CY2017Q4 us-gaap Preferred Stock Par Or Stated Value Per Share
PreferredStockParOrStatedValuePerShare
0.0001
CY2018Q3 us-gaap Preferred Stock Par Or Stated Value Per Share
PreferredStockParOrStatedValuePerShare
0.0001
CY2017Q4 us-gaap Preferred Stock Shares Authorized
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25000000 shares
CY2018Q3 us-gaap Preferred Stock Shares Authorized
PreferredStockSharesAuthorized
25000000 shares
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PreferredStockSharesIssued
0 shares
CY2018Q3 us-gaap Preferred Stock Shares Issued
PreferredStockSharesIssued
0 shares
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CY2018Q3 us-gaap Preferred Stock Shares Outstanding
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0 shares
CY2018Q3 us-gaap Preferred Stock Value Outstanding
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0 USD
CY2017Q4 us-gaap Prepaid Expense Current And Noncurrent
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616000 USD
CY2018Q3 us-gaap Prepaid Expense Current And Noncurrent
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361000 USD
us-gaap Proceeds From Issuance Of Long Term Debt
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125000000 USD
us-gaap Proceeds From Issuance Of Long Term Debt
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us-gaap Proceeds From Lines Of Credit
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36000000 USD
us-gaap Proceeds From Lines Of Credit
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us-gaap Proceeds From Repayments Of Debt
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us-gaap Proceeds From Repayments Of Debt
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us-gaap Proceeds From Repayments Of Secured Debt
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us-gaap Proceeds From Repayments Of Secured Debt
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0 USD
us-gaap Proceeds From Sale Of Buildings
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10734000 USD
us-gaap Proceeds From Sale Of Buildings
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CY2017Q3 us-gaap Profit Loss
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us-gaap Profit Loss
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53418000 USD
CY2018Q3 us-gaap Profit Loss
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17607000 USD
us-gaap Profit Loss
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61595000 USD
CY2018Q3 us-gaap Real Estate Heldforsale
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0 USD
CY2017Q4 us-gaap Real Estate Investment Property Accumulated Depreciation
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598846000 USD
CY2018Q3 us-gaap Real Estate Investment Property Accumulated Depreciation
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610835000 USD
CY2017Q4 us-gaap Real Estate Investment Property At Cost
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1564955000 USD
CY2018Q3 us-gaap Real Estate Investment Property At Cost
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CY2018Q3 us-gaap Real Estate Investment Property Net
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1153027000 USD
CY2017Q4 us-gaap Redeemable Noncontrolling Interest Equity Redemption Value
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10600000 USD
CY2018Q3 us-gaap Redeemable Noncontrolling Interest Equity Redemption Value
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10500000 USD
CY2017Q4 us-gaap Restricted Cash And Cash Equivalents
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4905000 USD
CY2018Q3 us-gaap Restricted Cash And Cash Equivalents
RestrictedCashAndCashEquivalents
0 USD
CY2017Q4 us-gaap Retained Earnings Accumulated Deficit
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36318000 USD
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44393000 USD
CY2017Q3 us-gaap Revenue From Contract With Customer Including Assessed Tax
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us-gaap Revenue From Contract With Customer Including Assessed Tax
RevenueFromContractWithCustomerIncludingAssessedTax
99371000 USD
CY2018Q3 us-gaap Revenue From Contract With Customer Including Assessed Tax
RevenueFromContractWithCustomerIncludingAssessedTax
36122000 USD
us-gaap Revenue From Contract With Customer Including Assessed Tax
RevenueFromContractWithCustomerIncludingAssessedTax
105600000 USD
CY2017Q3 us-gaap Revenues
Revenues
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us-gaap Revenues
Revenues
99371000 USD
CY2018Q3 us-gaap Revenues
Revenues
36122000 USD
us-gaap Revenues
Revenues
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us-gaap Share Based Compensation
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1920000 USD
us-gaap Share Based Compensation
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2871000 USD
CY2018Q3 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Number Of Shares Authorized
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1633801 shares
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3609000 USD
us-gaap Stock Issued1
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2871000 USD
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CY2018Q3 us-gaap Units Of Partnership Interest Amount
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CY2017Q3 us-gaap Weighted Average Number Of Diluted Shares Outstanding
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61256145 shares
us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
60567152 shares
CY2018Q3 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
65577975 shares
us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
62987282 shares
CY2017Q3 us-gaap Weighted Average Number Of Shares Outstanding Basic
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61112051 shares
us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
60457949 shares
CY2018Q3 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
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us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
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us-gaap Derivatives Methods Of Accounting Hedging Derivatives
DerivativesMethodsOfAccountingHedgingDerivatives
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:138%;padding-bottom:8px;padding-top:12px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;font-style:italic;font-weight:bold;text-decoration:none;">Derivative Instruments and Hedging Activities</font></div><div style="line-height:138%;padding-bottom:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">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&#8217;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.</font></div><div style="line-height:138%;padding-bottom:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">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 (&#8220;U.S. GAAP&#8221;), changes in the derivatives&#8217; 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.</font></div><div style="line-height:138%;padding-bottom:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">In August 2017, the FASB issued ASU No. 2017-12, &#8220;Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities.&#8221; ASU 2017-12 is intended to simplify hedge accounting by better aligning an entity&#8217;s financial reporting for hedging relationships with its risk management activities.</font></div></div>
us-gaap Prior Period Reclassification Adjustment Description
PriorPeriodReclassificationAdjustmentDescription
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:138%;padding-bottom:8px;padding-top:12px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;font-style:italic;font-weight:bold;text-decoration:none;">Reclassifications</font></div><div style="line-height:138%;padding-bottom:8px;padding-top:13px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">Certain amounts previously reported under specific financial statement captions have been reclassified to be consistent with the current period presentation. </font></div></div>
us-gaap Revenue Recognition Leases
RevenueRecognitionLeases
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:138%;padding-bottom:8px;padding-top:12px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;font-style:italic;font-weight:bold;text-decoration:none;">Revenue Recognition</font></div><div style="line-height:138%;padding-bottom:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">Effective January 1, 2018, the Company adopted FASB ASU No. 2014-09, &#8220;Revenue from Contracts with Customers&#8221; 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, &#8220;Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.&#8221; Through the evaluation and implementation process, we have determined FCPT&#8217;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.</font></div><div style="line-height:138%;padding-bottom:8px;text-align:justify;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:italic;font-weight:normal;text-decoration:none;">Rental Revenue</font></div><div style="line-height:138%;padding-bottom:8px;padding-top:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">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 </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">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.</font></div><div style="line-height:138%;padding-bottom:8px;padding-top:13px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">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.</font></div><div style="line-height:138%;padding-bottom:8px;padding-top:13px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">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.</font></div><div style="line-height:138%;padding-bottom:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">Refer to the </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:italic;">Application of New Accounting Standards</font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;"> section below for discussion of FASB ASU 2016-02, &#8220;Leases (Topic 842)&#8221;.</font></div><div style="line-height:138%;padding-bottom:8px;text-align:justify;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:italic;font-weight:normal;text-decoration:none;">Restaurant Revenue</font></div><div style="line-height:138%;padding-bottom:8px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">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 $</font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">68 thousand</font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;"> and $</font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">90 thousand</font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">, 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. </font></div><div style="line-height:138%;padding-bottom:8px;padding-top:12px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;font-style:italic;font-weight:bold;text-decoration:none;"></font></div></div>
us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:138%;padding-bottom:8px;padding-top:12px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;font-style:italic;font-weight:bold;text-decoration:none;">Use of Estimates</font></div><div style="line-height:138%;padding-bottom:8px;padding-top:13px;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">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&#8217;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.</font></div></div>

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