EQUITY

Preferred Stock

At December 31, 2017, the Company was authorized to issue 25,000,000 shares of $0.0001 par value per share of preferred stock. There were no shares issued and outstanding at December 31, 2017 or December 31, 2016.

Common Stock

At December 31, 2017 the Company was authorized to issue 500,000,000 shares of $0.0001 par value per share of common stock. Each holder of common stock is entitled to vote on all matters and is entitled to one vote for each share held. As of December 31, 2017, there were 61,329,489 shares of the Company's common stock issued and outstanding.

In March 2017, we declared a cash dividend of $0.2425 per share, which was paid in April 2017 to stockholders of record as of March 31, 2017. In June 2017, we declared a dividend of $0.2425 per share, which was paid in July 2017 to common stockholders of record as of June 30, 2017. In September 2017, we declared a dividend of $0.2425 per share, which was paid in October 2017 to common stockholders of record as of September 29, 2017. In December 2017, we declared a dividend of $0.275 per share, which was paid in January 2018 to common stockholders of record as of December 29, 2017.

Common Stock Issuance Under the At-The-Market Program

In December 2016, the Company entered into 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 year ended December 31, 2016, we sold 32,513 shares under the ATM program at a weighted-average selling price of $20.01 per share, for net proceeds of approximately $641 thousand (after issuance costs). During the year ended December 31, 2017, we sold 1,347,010 shares under the ATM program at a weighted-average selling price of $24.35 per share, for net proceeds of approximately $32.2 million (after issuance costs). At December 31, 2017, there was $116.5 million available for issuance under the ATM program.

Noncontrolling Interest

At December 31, 2017, there were 409,320 FCPT OP units (“OP units”) outstanding held by third parties. During the year ended December 31, 2017, FCPT OP issued 174,576 OP units as partial consideration for the acquisition of four properties and redeemed 40,000 OP units for cash consideration of $988 thousand at a preceding 10-day share price average of $24.71 to an unaffiliated limited partner. 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 the Operating Partnership 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 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 $10.6 million and $5.5 million as of December 31, 2017 and 2016, respectively.

As of December 31, 2017, FCPT is the owner of approximately 99.3% of FCPT’s OP units. The remaining 0.7%, or 409,320, of FCPT’s OP units are held by unaffiliated limited partners. For the year ended December 31, 2017, FCPT OP distributed $461 thousand to limited partners.

Earnings Per Share

The following table presents the computation of basic and diluted net earnings per common share for the years ended December 31, 2017, 2016, and 2015.



	December 31,
(In thousands except share and per share data)	2017		2016		2015
Average common shares outstanding – basic	60,627,423		56,984,561		6,206,375
Effect of dilutive stock based compensation	68,411		16,003		57,546
Net effect of shares issued with respect to E&P dividend	—		2,567,503		—
Average common shares outstanding – diluted	60,695,834		59,568,067		6,263,921
Net income	$	71,892	$	156,850	$	5,699
Basic net earnings per share	$	1.18	$	2.75	$	0.92
Diluted net earnings per share	$	1.18	$	2.63	$	0.91

For the years ended December 31, 2017 and 2016, the number of outstanding equity awards that were anti-dilutive totaled 320,332 and 149,943, respectively. There were no anti-dilutive shares for the year ended December 31, 2015. 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 year ended December 31, 2017 and 2016 totaled 318,422 and 39,785, respectively.

Spin-Off

On November 9, 2015, in connection with the separation and spin-off of FCPT from Darden, Darden contributed to us 100% of the equity interest in entities that held 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”) and the underlying properties or interests therein associated with the Kerrow Restaurant Operating Business. In exchange, we issued to Darden 42,741,995 shares of our common stock, par value $0.0001 per share and paid to Darden $315.0 million in cash, which we funded from the proceeds of our term loan borrowings under the Loan Agreement. Subsequently, Darden distributed the 42,741,995 shares of our common stock pro rata to holders of Darden common stock whereby each Darden shareholder received one share of FCPT common stock for every three shares of Darden common stock held at the close of business on the record date, which was November 2, 2015, 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.

Darden obtained a private letter ruling from the IRS regarding the tax-free treatment of the Spin-Off. To preserve that tax-free treatment to Darden, for the two year period following the Spin-Off, we were prohibited, except in specific circumstances, from taking certain actions, including: (1) entering into any transaction pursuant to which all or a portion of our stock would be acquired, whether by merger or otherwise, (2) issuing equity securities beyond certain thresholds, or (3) repurchasing our common stock. In addition, we were prohibited from taking or failing to take any other action that prevents the Spin-Off and related transactions from being tax-free.