10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended March 31, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     .

Commission File No. 001-36739  

STORE CAPITAL CORPORATION

(Exact name of registrant as specified in its charter)

Maryland	45-2280254
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

8377 East Hartford Drive, Suite 100, Scottsdale, Arizona 85255

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (480) 256-1100

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	STOR	New York Stock Exchange

As of May 3, 2022, there were 280,567,570 shares of the registrant’s $0.01 par value common stock outstanding.

TABLE OF CONTENTS

Part I. - FINANCIAL INFORMATION	Page
Item 1. Financial Statements	3
Condensed Consolidated Balance Sheets as of March 31, 2022 (unaudited) and December 31, 2021	3
Condensed Consolidated Statements of Income for the three months ended March 31, 2022 and 2021 (unaudited)	4
Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2022 and 2021 (unaudited)	5
Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2022 and 2021 (unaudited)	6
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021 (unaudited)	7
Notes to Condensed Consolidated Financial Statements (unaudited)	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3. Quantitative and Qualitative Disclosures About Market Risk	45
Item 4. Controls and Procedures	46
Part II. - OTHER INFORMATION	46
Item 1. Legal Proceedings	46
Item 1A. Risk Factors	46
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 3. Defaults Upon Senior Securities	47
Item 4. Mine Safety Disclosures	47
Item 5. Other Information	47
Item 6. Exhibits	48
Signatures	49

2

2

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

STORE Capital Corporation

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

	March 31,		December 31,
	2022		2021
	(unaudited)		(audited)
Assets
Investments:
Real estate investments:
Land and improvements	$	3,239,050	$	3,133,402
Buildings and improvements		7,096,841		6,802,918
Intangible lease assets		59,216		54,971
Total real estate investments		10,395,107		9,991,291
Less accumulated depreciation and amortization		(1,224,223)		(1,159,292)
		9,170,884		8,831,999
Real estate investments held for sale, net		33,234		25,154
Operating ground lease assets		32,960		33,318
Loans and financing receivables, net		736,410		697,269
Net investments		9,973,488		9,587,740
Cash and cash equivalents		39,340		64,269
Other assets, net		118,320		121,073
Total assets	$	10,131,148	$	9,773,082
Liabilities and stockholders’ equity
Liabilities:
Credit facility	$	359,000	$	130,000
Unsecured notes payable, net		1,783,440		1,782,813
Non-recourse debt obligations of consolidated special purpose entities, net		2,410,834		2,425,708
Dividends payable		107,644		105,415
Operating lease liabilities		37,330		37,637
Accrued expenses, deferred revenue and other liabilities		145,909		147,380
Total liabilities		4,844,157		4,628,953
Stockholders’ equity:
Common stock, $0.01 par value per share, 375,000,000 shares authorized, 279,595,851 and 273,806,225 shares issued and outstanding, respectively		2,796		2,738
Capital in excess of par value		5,910,856		5,745,692
Distributions in excess of retained earnings		(624,558)		(602,137)
Accumulated other comprehensive loss		(2,103)		(2,164)
Total stockholders’ equity		5,286,991		5,144,129
Total liabilities and stockholders’ equity	$	10,131,148	$	9,773,082

See accompanying notes.

3

STORE Capital Corporation

Condensed Consolidated Statements of Income

(unaudited)

(In thousands, except share and per share data)

	Three Months Ended March 31,
	2022		2021
Revenues:
Rental revenues	$	202,061	$	169,328
Interest income on loans and financing receivables		14,930		12,563
Other income		5,125		370
Total revenues		222,116		182,261
Expenses:
Interest		43,999		41,828
Property costs		4,241		4,663
General and administrative		17,016		25,006
Depreciation and amortization		72,639		63,567
Provisions for impairment		912		7,350
Total expenses		138,807		142,414
Other income:
Net gain on dispositions of real estate		6,076		15,670
Loss from non-real estate, equity method investment		(2,157)		(363)
Income before income taxes		87,228		55,154
Income tax expense		206		194
Net income	$	87,022	$	54,960
Net income per share of common stock—basic and diluted	$	0.32	$	0.21
Weighted average common shares outstanding:
Basic		275,003,273		266,366,698
Diluted		275,003,273		266,366,698

See accompanying notes.

4

STORE Capital Corporation

Condensed Consolidated Statements of Comprehensive Income

(unaudited)

(In thousands)

	Three Months Ended March 31,
	2022		2021
Net income	$	87,022	$	54,960
Other comprehensive income (loss):
Unrealized losses on cash flow hedges		—		(3)
Cash flow hedge losses reclassified to interest expense		61		365
Total other comprehensive income		61		362
Total comprehensive income	$	87,083	$	55,322

See accompanying notes.

5

STORE Capital Corporation

Condensed Consolidated Statements of Stockholders’ Equity

(unaudited)

(In thousands, except share and per share data)

						Distributions		Accumulated
				Capital in		in Excess of		Other		Total
	Common Stock			Excess of		Retained		Comprehensive		Stockholders’
	Shares	Par Value		Par Value		Earnings		Loss		Equity
Three Months Ended March 31, 2022
Balance at December 31, 2021	273,806,225	$	2,738	$	5,745,692	$	(602,137)	$	(2,164)	$	5,144,129
Net income	—		—		—		87,022		—		87,022
Other comprehensive income	—		—		—		—		61		61
Issuance of common stock, net of costs of $2,269	5,539,138		55		166,107		—		—		166,162
Equity-based compensation	439,314		3		3,065		81		—		3,149
Shares repurchased under stock compensation plan	(188,826)		—		(4,008)		(1,880)		—		(5,888)
Common dividends declared ($0.385 per share)	—		—		—		(107,644)		—		(107,644)
Balance at March 31, 2022	279,595,851	$	2,796	$	5,910,856	$	(624,558)	$	(2,103)	$	5,286,991
						Distributions		Accumulated
				Capital in		in Excess of		Other		Total
	Common Stock			Excess of		Retained		Comprehensive		Stockholders’
	Shares	Par Value		Par Value		Earnings		Loss		Equity
Three Months Ended March 31, 2021
Balance at December 31, 2020	266,112,676	$	2,661	$	5,475,889	$	(459,977)	$	(2,795)	$	5,015,778
Net income	—		—		—		54,960		—		54,960
Other comprehensive income	—		—		—		—		362		362
Issuance of common stock, net of costs of $1,961	3,483,051		35		114,068		—		—		114,103
Equity-based compensation	679,586		4		12,901		—		—		12,905
Shares repurchased under stock compensation plan	(267,242)		—		(5,579)		(3,227)				(8,806)
Common dividends declared ($0.36 per share)	—		—		—		(97,897)		—		(97,897)
Balance at March 31, 2021	270,008,071	$	2,700	$	5,597,279	$	(506,141)	$	(2,433)	$	5,091,405

See accompanying notes.

6

STORE Capital Corporation

Condensed Consolidated Statements of Cash Flows

(unaudited)

(In thousands)

	Three Months Ended March 31,
	2022		2021
Operating activities
Net income	$	87,022	$	54,960
Adjustments to net income:
Depreciation and amortization		72,639		63,567
Amortization of deferred financing costs and other noncash interest expense		2,161		2,100
Amortization of equity-based compensation		3,068		12,905
Provisions for impairment		912		7,350
Net gain on dispositions of real estate		(6,076)		(15,670)
Loss from non-real estate, equity method investment		2,157		363
Noncash revenue and other		(1,945)		(2,108)
Changes in operating assets and liabilities:
Other assets		1,798		5,350
Accrued expenses, deferred revenue and other liabilities		(849)		(4,928)
Net cash provided by operating activities		160,887		123,889
Investing activities
Acquisition of and additions to real estate		(467,495)		(246,195)
Investment in loans and financing receivables		(45,721)		(24,914)
Collections of principal on loans and financing receivables		5,090		2,460
Proceeds from dispositions of real estate		52,109		137,471
Net cash used in investing activities		(456,017)		(131,178)
Financing activities
Borrowings under credit facility		266,000		—
Repayments under credit facility		(37,000)		—
Repayments under non-recourse debt obligations of consolidated special purpose entities		(16,075)		(21,686)
Financing costs paid		(45)		(14)
Proceeds from the issuance of common stock		168,431		116,063
Stock issuance costs paid		(2,252)		(2,034)
Shares repurchased under stock compensation plans		(5,888)		(8,806)
Dividends paid		(106,686)		(98,193)
Net cash provided by (used in) financing activities		266,485		(14,670)
Net decrease in cash, cash equivalents and restricted cash		(28,645)		(21,959)
Cash, cash equivalents and restricted cash, beginning of period		70,049		176,576
Cash, cash equivalents and restricted cash, end of period	$	41,404	$	154,617
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	39,340	$	145,565
Restricted cash included in other assets		2,064		9,052
Total cash, cash equivalents and restricted cash	$	41,404	$	154,617
Supplemental disclosure of noncash investing and financing activities:
Accrued tenant improvements included in real estate investments	$	14,951	$	14,515
Accrued financing and stock issuance costs		17		17
Supplemental disclosure of cash flow information:
Cash paid during the period for interest, net of amounts capitalized	$	40,084	$	40,765
Cash paid during the period for income and franchise taxes		100		60

See accompanying notes.

7

STORE Capital Corporation

Notes to Condensed Consolidated Financial Statements

March 31, 2022

1. Organization

STORE Capital Corporation (STORE Capital or the Company) was incorporated under the laws of Maryland on May 17, 2011 to acquire single-tenant operational real estate to be leased on a long-term, net basis to companies that operate across a wide variety of industries within the service, retail and manufacturing sectors of the United States economy. From time to time, it also provides mortgage financing to its customers.

On November 21, 2014, the Company completed the initial public offering of its common stock. The shares began trading on the New York Stock Exchange on November 18, 2014 under the ticker symbol “STOR”.

STORE Capital has made an election to qualify, and believes it is operating in a manner to continue to qualify, as a real estate investment trust (REIT) for federal income tax purposes beginning with its initial taxable year ended December 31, 2011. As a REIT, it will generally not be subject to federal income taxes to the extent that it distributes all of its taxable income to its stockholders and meets other specific requirements.

2. Summary of Significant Accounting Principles

Basis of Accounting and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the rules and regulations of the U.S. Securities and Exchange Commission (SEC). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of interim periods are not necessarily indicative of the results for the entire year. Certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted from these statements and, accordingly, these statements should be read in conjunction with the Company’s audited consolidated financial statements as filed with the SEC in its Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

These condensed consolidated statements include the accounts of STORE Capital and its subsidiaries, which are wholly owned and controlled by the Company through its voting interest. One of the Company’s wholly owned subsidiaries, STORE Capital Advisors, LLC, provides all of the general and administrative services for the day-to-day operations of the consolidated group, including property acquisition and lease origination, real estate portfolio management and marketing, accounting and treasury services. The remaining subsidiaries were formed to acquire and hold real estate investments or to facilitate non-recourse secured borrowing activities. Generally, the initial operations of the real estate subsidiaries are funded by an interest-bearing intercompany loan from STORE Capital, and such intercompany loan is repaid when the subsidiary issues long-term debt secured by its properties. All intercompany account balances and transactions have been eliminated in consolidation.

Certain of the Company’s wholly owned consolidated subsidiaries were formed as special purpose entities. Each special purpose entity is a separate legal entity and is the sole owner of its assets and liabilities. The assets of the special purpose entities are not available to pay or otherwise satisfy obligations to the creditors of any owner or affiliate of the special purpose entity. At March 31, 2022 and December 31, 2021, these special purpose entities held assets totaling $8.9 billion and $8.5 billion, respectively, and had third-party liabilities totaling $2.6 billion and $2.6 billion, respectively. These assets and liabilities are included in the accompanying condensed consolidated balance sheets.

8

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Although management believes its estimates are reasonable, actual results could differ from those estimates.

Segment Reporting

The Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) Topic 280, Segment Reporting, established standards for the manner in which enterprises report information about operating segments. The Company views its operations as one reportable segment.

Investment Portfolio

STORE Capital invests in real estate assets through three primary transaction types as summarized below. At the beginning of 2019, the Company adopted Accounting Standards Update (ASU) 2016-02, Leases (Topic 842) (ASC Topic 842) which had an impact on certain accounting related to the Company’s investment portfolio.

● Real Estate Investments – investments are generally made through sale-leaseback transactions in which the Company acquires the real estate from the owner-operators and then leases the real estate back to them through long-term leases which are generally classified as operating leases; the operators become the Company’s long-term tenants (its customers). Certain of the lease contracts that are associated with a sale-leaseback transaction may contain terms, such as a tenant purchase option, which results in the transaction being accounted for as a financing arrangement, due to the adoption of ASC Topic 842, rather than as an investment in real estate subject to an operating lease.

● Mortgage Loans Receivable – investments are made by issuing mortgage loans to the owner-operators of the real estate that serve as the collateral for the loans and the operators become long-term borrowers and customers of the Company. On occasion, the Company may also make other types of loans to its customers, such as equipment loans.

● Hybrid Real Estate Investments – investments are made through modified sale-leaseback transactions, where the Company acquires land from the owner-operators, leases the land back through long-term leases and simultaneously issues mortgage loans to the operators secured by the buildings and improvements on the land. Prior to 2019, these hybrid real estate investment transactions were generally accounted for as direct financing leases. Subsequent to the adoption of ASC Topic 842, new or modified hybrid real estate investment transactions are generally accounted for as operating leases of the land and mortgage loans on the buildings and improvements.

Impact of the COVID-19 Pandemic

Since the beginning of the novel coronavirus (COVID-19) pandemic in early 2020, the Company has provided to certain tenants rent deferral arrangements in the form of both short-term notes and lease modifications. The FASB provided accounting relief under which concessions provided to tenants in direct response to the COVID-19 pandemic are not required to be evaluated or accounted for as lease modifications in accordance with ASC Topic 842. The Company elected to apply this accounting relief to the rent deferral arrangements it has entered into with its tenants, which primarily affected the timing (but not the amount) of lease and loan payments due to the Company under its contracts; net revenue recognized under these deferral arrangements results in a corresponding increase in receivables that are included in other assets, net on the condensed consolidated balance sheets. For the three months ended March 31, 2022, the Company recognized an additional $0.7 million of net revenue and collected $3.4 million of the receivables associated with these deferral arrangements. During the three months ended March 31, 2021, the Company recognized $2.0 million and collected $5.9 million in repayments of amounts deferred.

9

Accounting for Real Estate Investments

Classification and Cost

STORE Capital records the acquisition of real estate properties at cost, including acquisition and closing costs. The Company allocates the cost of real estate properties to the tangible and intangible assets and liabilities acquired based on their estimated relative fair values. Intangible assets and liabilities acquired may include the value of existing in-place leases, above-market or below-market lease value of in-place leases and ground lease-related intangibles, as applicable. Management uses multiple sources to estimate fair value, including independent appraisals and information obtained about each property as a result of its pre-acquisition due diligence and its marketing and leasing activities. Certain of the Company’s lease contracts allow its tenants the option, at their election, to purchase the leased property from the Company at a specified time or times (generally at the greater of the then-fair market value or the Company’s cost, as defined in the lease contracts). Subsequent to the adoption of ASC Topic 842, for real estate assets acquired through a sale-leaseback transaction and subject to a lease contract which contains a purchase option, the Company accounts for such an acquisition as a financing arrangement and records the investment in loans and financing receivables on the condensed consolidated balance sheet; should the purchase option later expire or be removed from the lease contract, the Company would derecognize the asset accounted for as a financing arrangement and recognize the transferred leased asset in real estate investments.

In-place lease intangibles are valued based on management’s estimates of lost rent and carrying costs during the time it would take to locate a tenant if the property were vacant, considering current market conditions and costs to execute similar leases. In estimating lost rent and carrying costs, management considers market rents, real estate taxes, insurance, costs to execute similar leases (including leasing commissions) and other related costs. The value assigned to in-place leases is amortized on a straight-line basis as a component of depreciation and amortization expense typically over the remaining term of the related leases.

The fair value of any above-market or below-market lease is estimated based on the present value of the difference between the contractual amounts to be paid pursuant to the in-place lease and management’s estimate of current market lease rates for the property, measured over a period equal to the remaining term of the lease. Capitalized above-market lease intangibles are amortized over the remaining term of the respective leases as a decrease to rental revenue. Below-market lease intangibles are amortized as an increase in rental revenue over the remaining term of the respective leases plus the fixed-rate renewal periods on those leases, if any. Should a lease terminate early, the unamortized portion of any related lease intangible is immediately recognized in operations.

The Company’s real estate portfolio is depreciated using the straight-line method over the estimated remaining useful life of the properties, which generally ranges from 30 to 40 years for buildings and is generally 15 years for land improvements. Properties classified as held for sale are recorded at the lower of their carrying value or their fair value, less anticipated selling costs. Any properties classified as held for sale are not depreciated.

Revenue Recognition

STORE Capital leases real estate to its tenants under long-term net leases that are predominantly classified as operating leases. The Company’s leases generally provide for rent escalations throughout the lease terms. For leases that provide for specific contractual escalations, rental revenue is recognized on a straight-line basis so as to produce a constant periodic rent over the term of the lease. Accordingly, straight-line operating lease receivables, calculated as the aggregate difference between the rental revenue recognized on a straight-line basis and scheduled rents, represent unbilled rent receivables that the Company will receive only if the tenants make all rent payments required through the expiration of the leases; these receivables are included in other assets, net on the condensed consolidated balance sheets. The Company reviews its straight-line operating lease receivables for collectibility on a contract by contract basis and any amounts not considered substantially collectible are written off against rental revenues. As of March 31, 2022 and December 31, 2021, the Company had $40.9 million and $39.4 million, respectively, of straight-line operating lease receivables. Leases that have contingent rent escalators indexed to future increases in the Consumer Price Index (CPI) may adjust over a one-year period or over multiple-year periods. Generally, these escalators increase rent at the lesser of (a) 1 to 1.25 times the increase in the CPI over a specified period or (b) a fixed percentage. Because of the volatility and uncertainty with respect to future changes in the CPI, the Company’s inability to determine the extent to which any

10

specific future change in the CPI is probable at each rent adjustment date during the entire term of these leases and the Company’s view that the multiplier does not represent a significant leverage factor, increases in rental revenue from leases with this type of escalator are recognized only after the changes in the rental rates have actually occurred.

In addition to base rental revenue, certain leases also have contingent rentals that are based on a percentage of the tenant’s gross sales; the Company recognizes contingent rental revenue when the threshold upon which the contingent lease payment is based is actually reached. Approximately 3.8% of the Company’s investment portfolio is subject to leases that provide for contingent rent based on a percentage of the tenant’s gross sales (for most of these leases, the contingent rent payment is for a temporary period); historically, contingent rent recognized has been less than 2.0% of rental revenues.

The Company reviews its operating lease receivables for collectibility on a regular basis, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area where the property is located. In the event that the collectibility of lease payments with respect to any tenant is not probable, a direct write-off of the receivable is made and any future rental revenue is recognized only when the tenant makes a rental payment or when collectibility is again deemed probable.

Direct costs incremental to successful lease origination, offset by any lease origination fees received, are deferred and amortized over the related lease term as an adjustment to rental revenue. The Company periodically commits to fund the construction of new properties for its customers; rental revenue collected during the construction period is deferred and amortized over the remaining lease term when the construction project is complete. Substantially all of the Company’s leases are triple net, which means that the lessees are directly responsible for the payment of all property operating expenses, including property taxes, maintenance and insurance. For a few lease contracts, the Company collects property taxes from its customers and remits those taxes to governmental authorities. Subsequent to the adoption of ASC Topic 842, these property tax payments are presented on a gross basis as part of both rental revenues and property costs in the condensed consolidated statements of income.

Impairment

STORE Capital reviews its real estate investments and related lease intangibles periodically for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through operations. Such events or changes in circumstances may include an expectation to sell certain assets in accordance with the Company’s long-term strategic plans. Management considers factors such as expected future undiscounted cash flows, capitalization and discount rates, terminal value, tenant improvements, market trends (such as the effects of leasing demand and competition) and other factors including bona fide purchase offers received from third parties in making this assessment. These factors are classified as Level 3 inputs within the fair value hierarchy, discussed in Fair Value Measurement below. If an asset is determined to be impaired, the impairment is calculated as the amount by which the carrying value of the asset exceeds its estimated fair value. Estimating future cash flows is highly subjective and such estimates could differ materially from actual results.

During the three months ended March 31, 2022, the Company recognized aggregate provisions for the impairment of real estate of $1.2 million. The estimated fair value of the impaired real estate assets at March 31, 2022 was $8.4 million. The Company recognized an aggregate provision for the impairment of real estate of $5.4 million during the three months ended March 31, 2021.

Accounting for Loans and Financing Receivables

Loans Receivable – Classification, Cost and Revenue Recognition

STORE Capital holds its loans receivable, which are primarily mortgage loans secured by real estate, for long-term investment. Loans receivable are carried at amortized cost including related unamortized discounts or premiums, if any.

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The Company recognizes interest income on loans receivable using the effective-interest method applied on a loan-by-loan basis. Direct costs associated with originating loans are offset against any related fees received and the balance, along with any premium or discount, is deferred and amortized as an adjustment to interest income over the term of the related loan receivable using the effective-interest method. A loan receivable is placed on nonaccrual status when the loan has become more than 60 days past due, or earlier if management determines that full recovery of the contractually specified payments of principal and interest is doubtful. While on nonaccrual status, interest income is recognized only when received. As of March 31, 2022 and December 31, 2021, the Company had loans receivable with an aggregate outstanding principal balance of $26.4 million and $28.8 million, respectively, on nonaccrual status.

Direct Financing Receivables – Classification, Cost and Revenue Recognition

Direct financing receivables include hybrid real estate investment transactions completed prior to 2019. The Company recorded the direct financing receivables at their net investment, determined as the aggregate minimum lease payments and the estimated residual value of the leased property less unearned income. The unearned income is recognized over the life of the related contracts so as to produce a constant rate of return on the net investment in the asset. Subsequent to the adoption of ASC Topic 842, existing direct financing receivables will continue to be accounted for in the same manner, unless the underlying contracts are modified.

Impairment and Provision for Credit Losses

The Company accounts for provision of credit losses in accordance with ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASC Topic 326). In accordance with ASC Topic 326, the Company evaluates the collectibility of its loans and financing receivables at the time each financing receivable is issued and subsequently on a quarterly basis utilizing an expected credit loss model based on credit quality indicators. The primary credit quality indicator is the implied credit rating associated with each borrower, utilizing two categories, investment grade and non-investment grade. The Company computes implied credit ratings based on regularly received borrower financial statements using Moody’s Analytics RiskCalc. The Company considers the implied credit ratings, loan and financing receivable term to maturity and underlying collateral value and quality, if any, to calculate the expected credit loss over the remaining life of the receivable. For the three months ended March 31, 2022, the Company recognized an estimated $0.3 million net reduction of prior provisions for credit losses related to its loans and financing receivables; the reduction of the provision for credit losses is included in provisions for impairment on the condensed consolidated statements of income. The Company recognized an estimated $2.0 million of provisions for credit losses for the three months ended March 31, 2021.

Accounting for Operating Ground Lease Assets

As part of certain real estate investment transactions, the Company may enter into long-term operating ground leases as a lessee. The Company is required to recognize an operating ground lease (or right-of-use) asset and related operating lease liability for each of these operating ground leases. Operating ground lease assets and operating lease liabilities are recognized based on the present value of the lease payments. The Company uses its estimated incremental borrowing rate, which is the estimated rate at which the Company could borrow on a collateralized basis with similar payments over a similar term, in determining the present value of the lease payments.

Many of these operating lease contracts include options for the Company to extend the lease; the option periods are included in the minimum lease term only if it is reasonably likely the Company will exercise the option(s). Rental expense for the operating ground lease contracts is recognized in property costs on a straight-line basis over the lease term. Some of the contracts have contingent rent escalators indexed to future increases in the CPI and a few contracts have contingent rentals that are based on a percentage of the gross sales of the property; these payments are recognized in expense as incurred. The payment obligations under these contracts are typically the responsibility of the tenants operating on the properties, in accordance with the Company’s leases with the respective tenants. As a result, the Company also recognizes sublease rental revenue on a straight-line basis over the term of the Company’s sublease with the tenant; the sublease income is included in rental revenues.

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Cash and Cash Equivalents

Cash and cash equivalents include cash and highly liquid investment securities with maturities at acquisition of three months or less. The Company invests cash primarily in money-market funds of a major financial institution, consisting predominantly of U.S. Government obligations.

Restricted Cash

Restricted cash may include reserve account deposits held by lenders, including deposits required to be used for future investment in real estate assets, escrow deposits and cash proceeds from the sale of assets held by a qualified intermediary to facilitate tax-deferred exchange transactions under Section 1031 of the Internal Revenue Code. The Company had $2.1 million and $5.8 million of restricted cash at March 31, 2022 and December 31, 2021, respectively, which are included in other assets, net, on the condensed consolidated balance sheets.

Deferred Costs

Financing costs related to the issuance of the Company’s long-term debt are deferred and amortized as an increase to interest expense over the term of the related debt instrument using the effective-interest method and are reported as a reduction of the related debt balance on the condensed consolidated balance sheets. Deferred financing costs related to the establishment of the Company's credit facility are deferred and amortized to interest expense over the term of the credit facility and are included in other assets, net, on the condensed consolidated balance sheets.

Derivative Instruments and Hedging Activities

The Company may enter into derivative contracts as part of its overall financing strategy to manage the Company’s exposure to changes in interest rates associated with current and/or future debt issuances. The Company does not use derivatives for trading or speculative purposes. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company enters into derivative financial instruments only with counterparties with high credit ratings and with major financial institutions with which the Company may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations.

The Company records its derivatives on the balance sheet at fair value. All derivatives subject to a master netting arrangement in accordance with the associated master International Swap and Derivatives Association agreement have been presented on a net basis by counterparty portfolio for purposes of balance sheet presentation and related disclosures.  The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the earnings effect of the hedged forecasted transactions in a cash flow hedge. The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss). Amounts reported in accumulated other comprehensive income (loss) related to cash flow hedges are reclassified to operations as an adjustment to interest expense as interest payments are made on the hedged debt transaction. As of March 31, 2022, the Company had no derivative instruments in place.

In April 2022, the Company entered into several interest rate swap agreements. One of the interest rate swap agreements has a notional amount of $200 million and was designated as a cash flow hedge of the Company's $200 million floating-rate bank term loan issued in April 2022 and due in May 2029. The remaining interest rate swap agreements have an aggregate notional amount of $400 million and were designated as cash flow hedges of the Company's $400 million floating-rate bank term loan issued in April 2022 and due in May 2027 (Note 4).

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Fair Value Measurement

The Company estimates the fair value of financial and non-financial assets and liabilities based on the framework established in fair value accounting guidance. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The hierarchy described below prioritizes inputs to the valuation techniques used in measuring the fair value of assets and liabilities. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs to be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows:

● Level 1—Quoted market prices in active markets for identical assets and liabilities that the Company has the ability to access.

● Level 2—Significant inputs that are observable, either directly or indirectly. These types of inputs would include quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets in inactive markets and market-corroborated inputs.

● Level 3—Inputs that are unobservable and significant to the overall fair value measurement of the assets or liabilities. These types of inputs include the Company’s own assumptions.

Share-based Compensation

Directors and key employees of the Company have been granted long-term incentive awards, including restricted stock awards (RSAs) and restricted stock unit awards (RSUs), which provide such directors and employees with equity interests as an incentive to remain in the Company’s service and to align their interests with those of the Company’s stockholders.

The Company estimates the fair value of RSAs based on the closing price per share of the common stock on the date of grant and recognizes that amount in general and administrative expense ratably over the vesting period at the greater of the amount amortized on a straight-line basis or the amount vested. During the three months ended March 31, 2022, the Company granted RSAs representing 177,311 shares of restricted common stock to its directors and employees. During the same period, RSAs representing 102,496 shares of restricted stock vested and RSAs representing 35,602 shares were forfeited. In connection with the vesting of RSAs, the Company repurchased 68,351 shares as a result of participant elections to surrender common shares to the Company to satisfy statutory tax withholding obligations under the Company’s equity-based compensation plans. As of March 31, 2022, the Company had 476,637 shares of restricted common stock outstanding.

The Company’s RSUs granted in 2019 through 2022 contain both a market condition and a performance condition as well as a service condition. The Company values the RSUs with a market condition using a Monte Carlo simulation model and values the RSUs with a performance condition based on the fair value of the awards expected to be earned and recognizes those amounts in general and administrative expense on a tranche-by-tranche basis ratably over the vesting periods. During the three months ended March 31, 2022, the Company awarded 629,307 RSUs to its executive officers. In connection with the vesting of 297,605 RSUs, the Company repurchased 120,475 shares during the three months ended March 31, 2022 as a result of participant elections to surrender common shares to the Company to satisfy statutory tax withholding obligations under the Company’s equity-based compensation plan. As of March 31, 2022, there were 1,635,061 RSUs outstanding.

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Income Taxes

As a REIT, the Company generally will not be subject to federal income tax. It is still subject, however, to state and local income taxes and to federal income and excise tax on its undistributed income. STORE Investment Corporation is the Company’s wholly owned taxable REIT subsidiary (TRS) created to engage in non-qualifying REIT activities. The TRS is subject to federal, state and local income taxes.

Management of the Company determines whether any tax positions taken or expected to be taken meet the “more-likely-than-not” threshold of being sustained by the applicable federal, state or local tax authority. Certain state tax returns filed for 2017 and tax returns filed for 2018 through 2021 are subject to examination by these jurisdictions. As of March 31, 2022, management concluded that there is no tax liability relating to uncertain income tax positions. The Company’s policy is to recognize interest related to any underpayment of income taxes as interest expense and to recognize any penalties as general and administrative expense. There was no accrual for interest or penalties at March 31, 2022 or December 31, 2021.

Net Income Per Common Share

Net income per common share has been computed pursuant to the guidance in the FASB ASC Topic 260, Earnings Per Share. The guidance requires the classification of the Company’s unvested restricted common shares, which contain rights to receive non-forfeitable dividends, as participating securities requiring the two-class method of computing net income per common share. The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted net income per common share (dollars in thousands):

	Three Months Ended March 31,
	2022		2021
Numerator:
Net income	$	87,022	$	54,960
Less: earnings attributable to unvested restricted shares		(102)		(227)
Net income used in basic and diluted income per share	$	86,920	$	54,733
Denominator:
Weighted average common shares outstanding		275,463,866		266,991,452
Less: Weighted average number of shares of unvested restricted stock		(460,593)		(624,754)
Weighted average shares outstanding used in basic income per share		275,003,273		266,366,698
Effects of dilutive securities:
Add: Treasury stock method impact of potentially dilutive securities (a)		—		—
Weighted average shares outstanding used in diluted income per share		275,003,273		266,366,698

(a) For the three months ended March 31, 2022 and 2021, excludes 144,661 shares and 244,602 shares, respectively, related to unvested restricted shares as the effect would have been antidilutive.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or the SEC. The Company adopts the new pronouncements as of the specified effective date. When permitted, the Company may elect to early adopt the new pronouncements. Unless otherwise discussed, these new accounting pronouncements include technical corrections to existing guidance or introduce new guidance related to specialized industries or entities and, therefore, will have minimal, if any, impact on the Company’s financial position, results of operations or cash flows upon adoption.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-

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indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

3. Investments

At March 31, 2022, STORE Capital had investments in 2,965 property locations representing 2,911 owned properties (of which 86 are accounted for as financing arrangements and 23 are accounted for as direct financing receivables), 24 properties where all the related land is subject to an operating ground lease and 30 properties which secure mortgage loans. The gross investment portfolio totaled $11.2 billion at March 31, 2022 and consisted of the gross acquisition cost of the real estate investments totaling $10.4 billion, loans and financing receivables with an aggregate carrying amount of $736.4 million and operating ground lease assets totaling $33.0 million. As of March 31, 2022, approximately 35% of these investments are assets of consolidated special purpose entity subsidiaries and are pledged as collateral under the non-recourse obligations of these special purpose entities (Note 4).

The gross dollar amount of the Company’s investments includes the investment in land, buildings, improvements and lease intangibles related to real estate investments as well as the carrying amount of the loans and financing receivables and operating ground lease assets. During the three months ended March 31, 2022, the Company had the following gross real estate and other investment activity (dollars in thousands):

	Number of	Dollar
	Investment	Amount of
	Locations	Investments
Gross investments, December 31, 2021	2,866	$	10,748,937
Acquisition of and additions to real estate (a)	97		466,817
Investment in loans and financing receivables	14		45,721
Sales of real estate	(11)		(52,490)
Principal collections on loans and financing receivables	(1)		(5,090)
Net change in operating ground lease assets (b)			(358)
Provisions for impairment			(912)
Other			(4,607)
Gross investments, March 31, 2022 (c)			11,198,018
Less accumulated depreciation and amortization (c)			(1,224,530)
Net investments, March 31, 2022	2,965	$	9,973,488

(a) Excludes $15.6 million of tenant improvement advances disbursed in 2022 which were accrued as of December 31, 2021.

(b) Represents amortization recognized on operating ground lease assets during the three months ended March 31, 2022.

(c) Includes the dollar amount of investments ($33.5 million) and the accumulated depreciation ($0.3 million) related to real estate investments held for sale at March 31, 2022.

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The following table summarizes the revenues the Company recognized from its investment portfolio (in thousands):

	Three Months Ended March 31,
	2022		2021
Rental revenues:
Operating leases (a)(c)	$	201,892	$	169,316
Sublease income - operating ground leases (b)		703		703
Amortization of lease related intangibles and costs		(534)		(691)
Total rental revenues	$	202,061	$	169,328
Interest income on loans and financing receivables:
Mortgage and other loans receivable (c)	$	7,879	$	5,929
Sale-leaseback transactions accounted for as financing arrangements		5,327		4,096
Direct financing receivables		1,724		2,538
Total interest income on loans and financing receivables	$	14,930	$	12,563

(a) For the three months ended March 31, 2022 and 2021, includes $654,000 and $621,000, respectively, of property tax tenant reimbursement revenue and includes $0.4 million and $3.1 million, respectively, of variable lease revenue.

(b) Represents total revenue recognized for the sublease of properties subject to operating ground leases to the related tenants; includes both payments made by the tenants to the ground lessors and straight-line revenue recognized for scheduled increases in the sublease rental payments.

(c) For the three months ended March 31, 2022 and 2021, includes $0.7 million and $2.0 million, respectively, of revenue that has been recognized related to rent and financing relief arrangements granted as a result of the COVID-19 pandemic with a corresponding increase in receivables which are included in other assets, net on the condensed consolidated balance sheets.

The Company has elected to account for the lease and nonlease components in its lease contracts as a single component if the timing and pattern of transfer for the separate components are the same and, if accounted for separately, the lease component would classify as an operating lease.

Significant Credit and Revenue Concentration

STORE Capital’s real estate investments are leased or financed to 573 customers geographically dispersed throughout 49 states. Only one state, Texas (11%), accounted for 10% or more of the total dollar amount of STORE Capital’s investment portfolio at March 31, 2022. None of the Company’s customers represented more than 10% of the Company’s real estate investment portfolio at March 31, 2022, with the largest customer representing 2.9% of the total investment portfolio. On an annualized basis, as of March 31, 2022, the largest customer also represented 3.0% of the Company’s total investment portfolio revenues and the Company’s customers operated their businesses across approximately 895 concepts; the largest of these concepts represented 2.2% of the Company’s total investment portfolio revenues.

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The following table shows information regarding the diversification of the Company’s total investment portfolio among the different industries in which its tenants and borrowers operate as of March 31, 2022 (dollars in thousands):

				Percentage of
	Number of	Dollar		Total Dollar
	Investment	Amount of		Amount of
	Locations	Investments		Investments
Restaurants	763	$	1,350,702	12	%
Early childhood education centers	277		650,023	6
Metal fabrication	112		642,473	6
Automotive repair and maintenance	241		626,362	6
Health clubs	91		570,156	5
Furniture stores	64		413,447	4
Farm and ranch supply stores	41		377,293	3
All other service industries	1,019		3,906,607	35
All other retail industries	155		1,138,141	10
All other manufacturing industries	202		1,522,814	13
Total (a)	2,965	$	11,198,018	100	%

(a) Includes the dollar amount of investments ($33.5 million) related to real estate investments held for sale at March 31, 2022.

Real Estate Investments

The weighted average remaining noncancelable lease term of the Company’s operating leases with its tenants at March 31, 2022 was approximately 13.3 years. Substantially all the leases are triple net, which means that the lessees are responsible for the payment of all property operating expenses, including property taxes, maintenance and insurance; therefore, the Company is generally not responsible for repairs or other capital expenditures related to the properties while the triple-net leases are in effect. At March 31, 2022, 16 of the Company’s properties were vacant and not subject to a lease.

Scheduled future minimum rentals to be received under the remaining noncancelable term of the operating leases in place as of March 31, 2022, are as follows (in thousands):

Remainder of 2022	$	628,535
2023		838,444
2024		830,643
2025		827,634
2026		821,328
2027		809,939
Thereafter		6,444,417
Total future minimum rentals (a)	$	11,200,940

(a) Excludes future minimum rentals to be received under lease contracts associated with sale-leaseback transactions accounted for as financing arrangements. See Loans and Financing Receivables section below.

Substantially all the Company’s leases include one or more renewal options (generally two to four five-year options). Since lease renewal periods are exercisable at the option of the lessee, the preceding table presents future minimum lease payments due during the initial lease term only. In addition, the future minimum lease payments presented above do not include any contingent rentals such as lease escalations based on future changes in CPI.

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Intangible Lease Assets

The following details intangible lease assets and related accumulated amortization (in thousands):

	March 31,		December 31,
	2022		2021
In-place leases	$	39,767	$	35,522
Ground lease-related intangibles		19,449		19,449
Above-market leases		—		—
Total intangible lease assets		59,216		54,971
Accumulated amortization		(24,643)		(25,285)
Net intangible lease assets	$	34,573	$	29,686

Aggregate lease intangible amortization included in expense was $0.9 million during both the three months ended March 31, 2022 and 2021. The amount amortized as a decrease to rental revenue for capitalized above-market lease intangibles was $0.2 million during the three months ended March 31, 2021.

Based on the balance of the intangible assets at March 31, 2022, the aggregate amortization expense is expected to be $2.7 million for the remainder of 2022, $3.2 million in 2023, $2.7 million in 2024, $2.2 million in 2025, $2.1 million in 2026 and $1.9 million in 2027. The weighted average remaining amortization period is approximately 10 years for the in-place lease intangibles and approximately 42 years for the amortizing ground lease-related intangibles.

Operating Ground Lease Assets

As of March 31, 2022, STORE Capital had operating ground lease assets aggregating $33.0 million. Typically, the lease payment obligations for these leases are the responsibility of the tenants operating on the properties, in accordance with the Company’s leases with those respective tenants. The Company recognized total lease cost for these operating ground lease assets of $755,000 and $794,000 during the three months ended March 31, 2022 and 2021, respectively. The Company also recognized, in rental revenues, sublease revenue associated with its operating ground leases of $703,000 for both the three months ended March 31, 2022 and 2021, respectively.

The future minimum lease payments to be paid under the operating ground leases as of March 31, 2022 were as follows (in thousands):

			Ground
	Ground		Leases
	Leases		Paid by
	Paid by		STORE Capital's
	STORE Capital		Tenants (a)		Total
Remainder of 2022	$	300	$	2,081	$	2,381
2023		4,149		2,629		6,778
2024		55		2,711		2,766
2025		57		2,395		2,452
2026		57		2,233		2,290
2027		57		2,227		2,284
Thereafter		3,014		42,282		45,296
Total lease payments		7,689		56,558		64,247
Less imputed interest		(2,855)		(27,897)		(30,752)
Total operating lease liabilities - ground leases	$	4,834	$	28,661	$	33,495

(a) STORE Capital’s tenants, who are generally sub-tenants under the ground leases, are responsible for paying the rent under these ground leases. In the event the tenant fails to make the required ground lease payments, the Company would be primarily responsible for the payment, assuming the Company does not re-tenant the property or sell the leasehold interest. Of the total $56.6 million commitment, $19.0 million is due for periods beyond the current term of the Company’s leases with the tenants. Amounts exclude contingent rent due under three leases where the ground lease payment, or a portion thereof, is based on the level of the tenant’s sales.

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Loans and Financing Receivables

The Company’s loans and financing receivables are summarized below (dollars in thousands):

	Interest		Maturity	March 31,		December 31,
Type	Rate (a)		Date	2022		2021
Six mortgage loans receivable	7.98	%	2022 - 2026	$	114,896	$	114,911
Three mortgage loans receivable	8.75	%	2032 - 2036		11,689		14,444
Fifteen mortgage loans receivable (b)	8.72	%	2051 - 2060		217,991		216,547
Total mortgage loans receivable					344,576		345,902
Equipment and other loans receivable	7.95	%	2022 - 2036		21,744		25,409
Total principal amount outstanding—loans receivable					366,320		371,311
Unamortized loan origination costs					1,025		1,046
Sale-leaseback transactions accounted for as financing arrangements (c)	7.55	%	2034 - 2043		298,772		255,483
Direct financing receivables					78,559		78,637
Allowance for credit and loan losses (d)					(8,266)		(9,208)
Total loans and financing receivables				$	736,410	$	697,269

(a) Represents the weighted average interest rate as of the balance sheet date.

(b) Four of these mortgage loans allow for prepayment in whole, but not in part, with penalties ranging from 20% to 70% depending on the timing of the prepayment.

(c) In accordance with ASC Topic 842, represents sale-leaseback transactions accounted for as financing arrangements rather than as investments in real estate subject to operating leases. Interest rate shown is the weighted average initial rental or capitalization rate on the leases; the leases mature between 2034 and 2043 and the purchase options expire between 2024 and 2042.

(d) Balance includes $2.5 million of loan loss reserves recognized prior to December 31, 2019, $2.5 million credit loss reserves recognized upon the adoption of ASC Topic 326 on January 1, 2020 and an aggregate $3.3 million of credit losses recognized since the adoption of ASC Topic 326.

Loans Receivable

At March 31, 2022, the Company held 42 loans receivable with an aggregate carrying amount of $360.6 million. Twenty-four of the loans are mortgage loans secured by land and/or buildings and improvements on the mortgaged property; the interest rates on 11 of the mortgage loans are subject to increases over the term of the loans. Six of the mortgage loans are shorter-term loans (maturing prior to 2027) that generally require monthly interest-only payments with a balloon payment at maturity. The remaining mortgage loans receivable generally require the borrowers to make monthly principal and interest payments based on a 40-year amortization period with balloon payments, if any, at maturity or earlier upon the occurrence of certain other events. The equipment and other loans generally require the borrower to make monthly interest-only payments with a balloon payment at maturity.

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The long-term mortgage loans receivable generally allow for prepayments in whole, but not in part, without penalty or with penalties ranging from 1% to 20%, depending on the timing of the prepayment, except as noted in the table above. All other loans receivable allow for prepayments in whole or in part without penalty. Absent prepayments, scheduled maturities are expected to be as follows (in thousands):

	Scheduled
	Principal		Balloon		Total
	Payments		Payments		Payments
Remainder of 2022	$	2,230	$	28,930	$	31,160
2023		3,099		80,698		83,797
2024		1,964		—		1,964
2025		1,902		—		1,902
2026		1,977		20,371		22,348
2027		1,687		548		2,235
Thereafter		172,616		50,298		222,914
Total principal payments	$	185,475	$	180,845	$	366,320

Sale-Leaseback Transactions Accounted for as Financing Arrangements

As of March 31, 2022 and December 31, 2021, the Company had $298.8 million and $255.5 million, respectively, of investments acquired through sale-leaseback transactions accounted for as financing arrangements rather than as investments in real estate subject to an operating lease; revenue from these arrangements is recognized in interest income rather than as rental revenue. The scheduled future minimum rentals to be received under these agreements (which will be reflected in interest income) as of March 31, 2022, were as follows (in thousands):

Remainder of 2022	$	17,210
2023		23,016
2024		23,151
2025		23,291
2026		23,385
2027		23,485
Thereafter		280,926
Total future scheduled payments	$	414,464

Direct Financing Receivables

As of both March 31, 2022 and December 31, 2021, the Company had $78.6 million of investments accounted for as direct financing leases under previous accounting guidance; the components of these investments were as follows (in thousands):

	March 31,		December 31,
	2022		2021
Minimum lease payments receivable	$	157,409	$	159,371
Estimated residual value of leased assets		8,938		8,938
Unearned income		(87,788)		(89,672)
Net investment	$	78,559	$	78,637

As of March 31, 2022, the future minimum lease payments to be received under the direct financing lease receivables are expected to be $5.9 million for the remainder of 2022, average approximately $8.0 million for each of the next five years and $111.7 million thereafter.

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Provision for Credit Losses

In accordance with ASC Topic 326, the Company evaluates the collectibility of its loans and financing receivables at the time each financing receivable is issued and subsequently on a quarterly basis utilizing an expected credit loss model based on credit quality indicators. The Company groups individual loans and financing receivables based on the implied credit rating associated with each borrower. Based on credit quality indicators as of March 31, 2022, $161.9 million of loans and financing receivables were categorized as investment grade and $581.8 million were categorized as non-investment grade. During the three months ended March 31, 2022, there were $0.3 million of reductions of prior provisions for credit losses recognized, no write-offs charged against the allowance and no recoveries of amounts previously written off.

As of March 31, 2022, the year of origination for loans and financing receivables with a credit quality indicator of investment grade was $26.5 million in 2022, $17.0 million in 2021, none in 2020, $88.9 million in 2019, none in 2018, and $29.5 million prior to 2018. The year of origination for loans and financing receivables with a credit quality indicator of non-investment grade was $14.5 million in 2022, $103.3 million in 2021, $136.2 million in 2020, $146.5 million in 2019, $27.4 million in 2018 and $153.9 million prior to 2018.

4. Debt

Credit Facility

The Company has an unsecured revolving credit facility with a group of lenders that is used to partially fund real estate acquisitions pending the issuance of long-term, fixed-rate debt. The credit facility has immediate availability of $600 million and an accordion feature of $1.0 billion, which allows the size of the facility to be increased up to $1.6 billion. The facility matures in June 2025 and includes two six-month extension options, subject to certain conditions and the payment of a 0.0625% extension fee. At March 31, 2022, the Company had $359 million of borrowings outstanding on the facility.

Borrowings under the facility require monthly payments of interest at a rate selected by the Company of either (1) LIBOR plus a credit spread ranging from 0.70% to 1.40%, or (2) the Base Rate, as defined in the credit agreement, plus a credit spread ranging from 0.00% to 0.40%. The credit spread used is based on the Company’s credit rating as defined in the credit agreement. The Company is required to pay a facility fee on the total commitment amount ranging from 0.10% to 0.30%. Currently, the applicable credit spread for LIBOR-based borrowings is 0.85% and the facility fee is 0.20%.

Under the terms of the facility, the Company is subject to various restrictive financial and nonfinancial covenants which, among other things, require the Company to maintain certain leverage ratios, cash flow and debt service coverage ratios and secured borrowing ratios. Certain of these ratios are based on the Company’s pool of unencumbered assets, which aggregated approximately $7.3 billion at March 31, 2022.

The facility is recourse to the Company and, as of March 31, 2022, the Company was in compliance with the covenants under the facility.

At March 31, 2022 and December 31, 2021, unamortized financing costs related to the Company’s credit facility totaled $3.5 million and $3.7 million, respectively, and are included in other assets, net, on the condensed consolidated balance sheets.

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Unsecured Notes Payable, net

The Company has completed four public offerings of ten-year unsecured notes (Public Notes). In March 2018, February 2019 and November 2020, the Company completed public offerings of $350 million each in aggregate principal amount. In November 2021, the Company completed a public offering of $375 million in aggregate principal amount. The Public Notes have coupon rates of 4.50%, 4.625%, 2.75% and 2.70%, respectively, and interest is payable semi-annually in arrears in March and September of each year for the 2018 and 2019 Public Notes, May and November of each year for the 2020 Public Notes, and June and December of each year for the 2021 Public Notes. The notes were issued at 99.515%, 99.260%, 99.558% and 99.877%, respectively, of their principal amounts.

The supplemental indentures governing the Public Notes contain various restrictive covenants, including limitations on the Company’s ability to incur additional secured and unsecured indebtedness. As of March 31, 2022, the Company was in compliance with these covenants. The Public Notes can be redeemed, in whole or in part, at par within three months of their maturity date or at a redemption price equal to the sum of (i) the principal amount of the notes being redeemed plus accrued and unpaid interest and (ii) the make-whole premium, as defined in the supplemental indentures governing these notes.

In April 2022, the Company entered into an aggregate $600 million of floating-rate, unsecured term loans with a group of lenders; the loans consist of a $400 million five-year loan and a $200 million seven-year loan. In conjunction with entering into these floating-rate term loans, the Company also entered into interest rate swap agreements that effectively convert the floating rates to a weighted average fixed rate of 3.68%. The financial covenants of the term loans match the covenants of the unsecured revolving credit facility. The term loans are senior unsecured obligations of the Company and may be prepaid at any time; the seven-year loan has a prepayment premium of 2% if repaid in year one and 1% if repaid in year two.

The Company has entered into Note Purchase Agreements (NPAs) with institutional purchasers that provided for the private placement of three series of senior unsecured notes aggregating $375 million (the Notes). Interest on the Notes is payable semi-annually in arrears in May and November of each year. On each interest payment date, the interest rate on each series of Notes may be increased by 1.0% should the Company’s Applicable Credit Rating (as defined in the NPAs) fail to be an investment-grade credit rating; the increased interest rate would remain in effect until the next interest payment date on which the Company obtains an investment grade credit rating. The Company may prepay at any time all, or any part, of any series of Notes, in an amount not less than 5% of the aggregate principal amount of the series then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid plus a Make-Whole Amount (as defined in the NPAs). The Notes are senior unsecured obligations of the Company.

The NPAs contain a number of financial covenants that are similar to the Company’s unsecured credit facility as summarized above. Subject to the terms of the NPAs and the Notes, upon certain events of default, including, but not limited to, (i) a payment default under the Notes, and (ii) a default in the payment of certain other indebtedness by the Company or its subsidiaries, all amounts outstanding under the Notes will become due and payable at the option of the purchasers. As of March 31, 2022, the Company was in compliance with its covenants under the NPAs.

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The Company’s senior unsecured notes payable are summarized below (dollars in thousands):

	Maturity	Interest		March 31,		December 31,
	Date	Rate		2022		2021
Notes Payable:
Series A issued November 2015	Nov. 2022	4.95	%	$	75,000	$	75,000
Series B issued November 2015	Nov. 2024	5.24	%		100,000		100,000
Series C issued April 2016	Apr. 2026	4.73	%		200,000		200,000
Public Notes issued March 2018	Mar. 2028	4.50	%		350,000		350,000
Public Notes issued February 2019	Mar. 2029	4.625	%		350,000		350,000
Public Notes issued November 2020	Nov. 2030	2.75	%		350,000		350,000
Public Notes issued November 2021	Dec. 2031	2.70	%		375,000		375,000
Total notes payable					1,800,000		1,800,000
Unamortized discount					(4,584)		(4,740)
Unamortized deferred financing costs					(11,976)		(12,447)
Total unsecured notes payable, net				$	1,783,440	$	1,782,813

Non-recourse Debt Obligations of Consolidated Special Purpose Entities, net

During 2012, the Company implemented its STORE Master Funding debt program pursuant to which certain of its consolidated special purpose entities issue multiple series of non-recourse net-lease mortgage notes from time to time that are collateralized by the assets and related leases (collateral) owned by these entities. One of the principal features of the program is that, as additional series of notes are issued, new collateral is contributed to the collateral pool, thereby increasing the size and diversity of the collateral pool for the benefit of all noteholders, including those who invested in prior series. Another feature of the program is the ability to substitute collateral from time to time subject to meeting certain prescribed conditions and criteria. The notes issued under this program are generally segregated into Class A amortizing notes and Class B non-amortizing notes. The Company has retained the Class B notes which aggregate $190.0 million at March 31, 2022.

The Class A notes require monthly principal and interest payments with a balloon payment due at maturity and these notes may be prepaid at any time, subject to a yield maintenance prepayment premium if prepaid more than 24 or 36 months prior to maturity. As of March 31, 2022, the aggregate collateral pool securing the net-lease mortgage notes was comprised primarily of single-tenant commercial real estate properties with an aggregate investment amount of approximately $3.6 billion.

A number of additional consolidated special purpose entity subsidiaries of the Company have financed their real estate properties with traditional first mortgage debt. The notes generally require monthly principal and interest payments with balloon payments due at maturity. In general, these mortgage notes payable can be prepaid in whole or in part upon payment of a yield maintenance premium. The mortgage notes payable are collateralized by real estate properties owned by these consolidated special purpose entity subsidiaries with an aggregate investment amount of approximately $301.4 million at March 31, 2022.

The mortgage notes payable, which are obligations of the consolidated special purpose entities described in Note 2, contain various covenants customarily found in mortgage notes, including a limitation on the issuing entity’s ability to incur additional indebtedness on the underlying real estate. Although this mortgage debt generally is non-recourse, there are customary limited exceptions to recourse for matters such as fraud, misrepresentation, gross negligence or willful misconduct, misapplication of payments, bankruptcy and environmental liabilities. Certain of the mortgage notes payable also require the posting of cash reserves with the lender or trustee if specified coverage ratios are not maintained by the Company or one of its tenants.

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The Company’s non-recourse debt obligations of consolidated special purpose entity subsidiaries are summarized below (dollars in thousands):

	Maturity	Interest		March 31,		December 31,
	Date	Rate		2022		2021
Non-recourse net-lease mortgage notes:
$140,000 Series 2014-1, Class A-2	Apr. 2024 (a)	5.00	%	$	134,517	$	134,692
$150,000 Series 2018-1, Class A-1	Oct. 2024 (b)	3.96	%		141,677		142,051
$50,000 Series 2018-1, Class A-3	Oct. 2024 (b)	4.40	%		48,792		48,917
$270,000 Series 2015-1, Class A-2	Apr. 2025 (b)	4.17	%		260,663		260,999
$200,000 Series 2016-1, Class A-1 (2016)	Oct. 2026 (b)	3.96	%		179,124		180,190
$82,000 Series 2019-1, Class A-1	Nov. 2026 (b)	2.82	%		78,488		78,590
$46,000 Series 2019-1, Class A-3	Nov. 2026 (b)	3.32	%		45,463		45,521
$135,000 Series 2016-1, Class A-2 (2017)	Apr. 2027 (b)	4.32	%		122,341		123,046
$228,000 Series 2018-1, Class A-2	Oct. 2027 (c)	4.29	%		215,348		215,918
$164,000 Series 2018-1, Class A-4	Oct. 2027 (c)	4.74	%		160,037		160,447
$168,500 Series 2021-1, Class A-1	Jun. 2028 (b)	2.12	%		167,868		168,079
$89,000 Series 2021-1, Class A-3	Jun. 2028 (b)	2.86	%		88,666		88,778
$168,500 Series 2021-1, Class A-2	Jun. 2033 (c)	2.96	%		167,868		168,079
$89,000 Series 2021-1, Class A-4	Jun. 2033 (c)	3.70	%		88,666		88,778
$244,000 Series 2019-1, Class A-2	Nov. 2034 (c)	3.65	%		233,549		233,854
$136,000 Series 2019-1, Class A-4	Nov. 2034 (c)	4.49	%		134,413		134,583
Total non-recourse net-lease mortgage notes					2,267,480		2,272,522
Non-recourse mortgage notes:
$13,000 note issued May 2012		5.195	%		—		9,961
$26,000 note issued August 2012	Sept. 2022	5.05	%		19,879		20,085
$6,400 note issued November 2012	Dec. 2022	4.707	%		4,887		4,938
$11,895 note issued March 2013	Apr. 2023	4.7315	%		9,216		9,309
$17,500 note issued August 2013	Sept. 2023	5.46	%		14,084		14,212
$10,075 note issued March 2014	Apr. 2024	5.10	%		8,756		8,808
$65,000 note issued June 2016	Jul. 2026	4.75	%		58,908		59,223
$41,690 note issued March 2019	Mar. 2029	4.80	%		41,130		41,291
$6,944 notes issued March 2013	Apr. 2038	4.50	% (d)		5,294		5,332
$6,350 notes issued March 2019 (assumed in December 2020)	Apr. 2049	4.64	%		6,079		6,106
Total non-recourse mortgage notes					168,233		179,265
Unamortized discount					(473)		(496)
Unamortized deferred financing costs					(24,406)		(25,583)
Total non-recourse debt obligations of consolidated special purpose entities, net				$	2,410,834	$	2,425,708

(a) Notes were repaid, without penalty, in April 2022 using a portion of the proceeds from the aggregate $600 million of term loans the Company entered into in April 2022.

(b) Prepayable, without penalty, 24 months prior to maturity.

(c) Prepayable, without penalty, 36 months prior to maturity.

(d) Interest rate is effective until March 2023 and will reset to the lender’s then prevailing interest rate.

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Long-term Debt Maturity Schedule

As of March 31, 2022, the scheduled maturities, including balloon payments, on the Company’s aggregate long-term debt obligations are as follows (in thousands):

	Scheduled
	Principal		Balloon
	Payments		Payments		Total
Remainder of 2022	$	18,184	$	99,290	$	117,474
2023		23,565		22,182		45,747
2024		22,331		426,914		449,245
2025		20,037		256,612		276,649
2026		17,926		532,142		550,068
2027		9,506		460,472		469,978
Thereafter		30,702		2,295,850		2,326,552
	$	142,251	$	4,093,462	$	4,235,713

5. Stockholders’ Equity

In November 2020, the Company established its fifth “at the market” equity distribution program, or ATM program, pursuant to which, from time to time, it may offer and sell up to $900 million of registered shares of common stock through a group of banks acting as its sales agents (the 2020 ATM Program).

The following tables outline the common stock issuances under the 2020 ATM Program (in millions except share and per share information):

Three Months Ended March 31, 2022
Shares Sold	Weighted Average Price per Share		Gross Proceeds		Sales Agents' Commissions		Other Offering Expenses		Net Proceeds
5,539,138	$	30.41	$	168.4	$	(2.1)	$	(0.1)	$	166.2
Inception of Program Through March 31, 2022
Shares Sold	Weighted Average Price per Share		Gross Proceeds		Sales Agents' Commissions		Other Offering Expenses		Net Proceeds
16,380,669	$	32.31	$	529.2	$	(7.6)	$	(0.7)	$	520.9

6. Commitments and Contingencies

The Company is subject to various legal proceedings and claims that arise in the ordinary course of its business. Management believes that the final outcome of such matters will not have a material adverse effect on the Company’s financial position or results of operations.

In the normal course of business, the Company enters into various types of commitments to purchase real estate properties. These commitments are generally subject to the Company’s customary due diligence process and, accordingly, a number of specific conditions must be met before the Company is obligated to purchase the properties. As of March 31, 2022, the Company had commitments to its customers to fund improvements to owned or mortgaged real estate properties totaling approximately $156.6 million, of which $136.7 million is expected to be funded in the next twelve months. These additional investments will generally result in increases to the rental revenue or interest income due under the related contracts.

The Company has employment agreements with each of its executive officers that provide for minimum annual

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base salaries, and annual cash and equity incentive compensation based on the satisfactory achievement of reasonable performance criteria and objectives to be adopted by the Company’s Board of Directors each year. In the event an executive officer’s employment terminates under certain circumstances, the Company would be liable for cash severance, continuation of healthcare benefits and, in some instances, accelerated vesting of equity awards that he or she has been awarded as part of the Company’s incentive compensation program.

7. Fair Value of Financial Instruments

The Company’s derivatives are required to be measured at fair value in the Company’s consolidated financial statements on a recurring basis. Derivatives are measured under a market approach, using prices obtained from a nationally recognized pricing service and pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy. The Company had no derivatives outstanding at either March 31, 2022 or December 31, 2021.

In addition to the disclosures for assets and liabilities required to be measured at fair value at the balance sheet date, companies are required to disclose the estimated fair values of all financial instruments, even if they are not carried at their fair value. The fair values of financial instruments are estimates based on market conditions and perceived risks at March 31, 2022 and December 31, 2021. These estimates require management’s judgment and may not be indicative of the future fair values of the assets and liabilities.

Financial assets and liabilities for which the carrying values approximate their fair values include cash and cash equivalents, restricted cash, accounts receivable, accounts payable and tenant deposits. Generally these assets and liabilities are short-term in duration and are recorded at fair value on the consolidated balance sheets. The Company believes the carrying value of the borrowings on its credit facility approximate fair value based on their nature, terms and variable interest rate. Additionally, the Company believes the carrying values of its fixed-rate loans receivable approximate fair values based on market quotes for comparable instruments or discounted cash flow analyses using estimates of the amount and timing of future cash flows, market rates and credit spreads.

The estimated fair values of the Company’s aggregate long-term debt obligations have been derived based on market observable inputs such as interest rates and discounted cash flow analyses using estimates of the amount and timing of future cash flows, market rates and credit spreads. These measurements are classified as Level 2 within the fair value hierarchy. At March 31, 2022, these debt obligations had an aggregate carrying value of $4,194.3 million and an estimated fair value of $4,147.3 million. At December 31, 2021, these debt obligations had an aggregate carrying value of $4,208.5 million and an estimated fair value of $4,478.4 million.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

In this Quarterly Report on Form 10-Q, we refer to STORE Capital Corporation as “we,” “us,” “our” or “the Company” unless we specifically state otherwise or the context indicates otherwise.

Special Note Regarding Forward-Looking Statements

This quarterly report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Such forward-looking statements include, without limitation, statements concerning our business and growth strategies, investment, financing and leasing activities and trends in our business, including trends in the market for long-term, triple-net leases of freestanding, single-tenant properties. Words such as “expects,” “anticipates,” “intends,” “plans,” “likely,” “will,” “believes,” “seeks,” “estimates,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the results of operations or plans expressed or implied by such forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore such statements included in this quarterly report may not prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved. For a further discussion of these and other factors that could impact future results, performance or transactions, see “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission on February 25, 2022.

Forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this quarterly report. New risks and uncertainties arise over time and it is not possible for us to predict those events or how they may affect us. Many of the risks identified herein and in our periodic reports have been and will continue to be heightened as a result of the ongoing and numerous adverse effects arising from the novel coronavirus (“COVID-19”) pandemic. We expressly disclaim any obligation or undertaking to update or revise any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except to the extent otherwise required by law.

Overview

We were formed in 2011 to invest in and manage Single Tenant Operational Real Estate, or STORE Property, which is our target market and the inspiration for our name. A STORE Property is a property location at which a company operates its business and generates sales and profits, which makes the location a profit center and, therefore, fundamentally important to that business. Due to the long-term nature of our leases, we focus our acquisition activity on properties that operate in industries we believe have long-term relevance, the majority of which are service industries. Our customers operate their businesses under a wide range of brand names or business concepts. As of March 31, 2022, approximately 895 brand names or business concepts in over 120 industries were represented in our investment portfolio. By acquiring the real estate from the operators and then leasing the real estate back to them, the operators become our long-term tenants, and we refer to them as our customers. Through the execution of these sale-leaseback transactions, we fill a need for our customers by providing them a source of long-term capital that enables them to avoid the need to incur debt and/or employ equity in order to finance the real estate that is essential to their business.

We are a Maryland corporation organized as an internally managed real estate investment trust, or REIT. As a REIT, we will generally not be subject to federal income tax to the extent that we distribute all our taxable income to our stockholders and meet other requirements.

Our shares of common stock have been listed on the New York Stock Exchange since our initial public offering, or IPO, in November 2014 and trade under the ticker symbol “STOR.”

Since our inception in 2011, we have selectively originated over $13.2 billion of real estate investments. As of March 31, 2022, our investment portfolio totaled approximately $11.2 billion, consisting of investments in 2,965

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property locations across the United States. All the real estate we acquire is held by our wholly owned subsidiaries, many of which are special purpose bankruptcy remote entities formed to facilitate the financing of our real estate. We predominantly acquire our single-tenant properties directly from our customers in sale-leaseback transactions where our customers sell us their operating properties and then simultaneously enter into long-term triple-net leases with us to lease the properties back. Accordingly, our properties are fully occupied and under lease from the moment we acquire them.

We generate our cash from operations primarily through the monthly lease payments, or “base rent”, we receive from our customers under their long-term leases with us. We also receive interest payments on loans receivable, which are a small part of our portfolio. We refer to the monthly scheduled lease and interest payments due from our customers as “base rent and interest”. Most of our leases contain lease escalations every year or every several years that are based on the lesser of the increase in the Consumer Price Index or a stated percentage (if such contracts are expressed on an annual basis, currently averaging approximately 1.8%), which ensures the monthly lease payments we will be entitled to receive will increase with greater certainty in an inflationary economic environment. As of March 31, 2022, approximately 99% of our leases (based on base rent) were “triple-net” leases, which means that our customers are responsible for all the operating costs such as maintenance, insurance and property taxes associated with the properties they lease from us, including any increases in those costs that may occur as a result of inflation. The remaining leases have some landlord responsibilities, generally related to maintenance and structural component replacement that may be required on such properties in the future, although we do not currently anticipate incurring significant capital expenditures or property-level operating costs under such leases. Because our properties are single tenant properties, almost all of which are under long-term leases, it is not necessary for us to perform any significant ongoing leasing activities on our properties. As of March 31, 2022, the weighted average remaining term of our leases (calculated based on base rent) was approximately 13.3 years, excluding renewal options, which are exercisable at the option of our tenants upon expiration of their base lease term. Leases approximating 99% of our base rent as of that date provide for tenant renewal options (generally two to four five-year options) and leases approximating 12% of our base rent provide our tenants the option, at their election, to purchase the property from us at a specified time or times (generally at the greater of the then fair market value or our cost, as defined in the lease contracts).

We have dedicated an internal team to review and analyze ongoing tenant financial performance, both at the corporate level and with respect to each property we own, in order to identify properties that may no longer be part of our long-term strategic plan. As part of that continuous active-management process, we may decide to sell properties where we believe the property no longer fits within our plan. Because generally we have been able to acquire assets and originate new leases at lease rates above the online commercial real estate auction marketplace, we have been able to sell these assets on both opportunistic and strategic bases, typically for a gain. This gain acts to partially offset any possible losses we may experience in the real estate portfolio.

Since early 2020, the world has been impacted by the COVID-19 pandemic. At various times, the COVID-19 pandemic has primarily impacted us through government mandated limits (i.e., required closures or limits on operations and social distancing requirements) imposed on our tenants’ businesses and continuing public perceptions regarding safety, which have impacted certain tenants’ ability to pay their rent to us. As government-mandated restrictions have been lifted, our tenants have increased their business activity and their ability to meet their financial obligations to us under their lease contracts. As a result, our rent and interest collections have returned to pre-pandemic levels and, essentially, all of our properties are open for business.

We worked directly with our impacted tenants during the pandemic to help them continue to meet their rent payment obligations to us, including providing short-term rent deferral arrangements. These arrangements included a structured rent relief program through which we allowed tenants that were highly and adversely impacted by the pandemic to defer the payment of their rent on a short-term basis. During the three months ended March 31, 2022, we recognized an additional $0.7 million of net revenue related to deferral arrangements and collected $3.4 million in repayments of amounts previously deferred. Our tenants continue to repay the receivables generated as a result of the deferral arrangements in accordance with their terms.

Liquidity and Capital Resources

As of March 31, 2022, our investment portfolio stood at approximately $11.2 billion, consisting of investments in 2,965 property locations. Substantially all of our cash from operations is generated by our investment portfolio.

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Our primary cash expenditures are the principal and interest payments we make on the debt we use to finance our real estate investment portfolio and the general and administrative expenses of managing the portfolio and operating our business. Since substantially all our leases are triple net, our tenants are generally responsible for the maintenance, insurance and property taxes associated with the properties they lease from us. When a property becomes vacant through a tenant default or expiration of the lease term with no tenant renewal, we incur the property costs not paid by the tenant, as well as those property costs accruing during the time it takes to locate a substitute tenant or sell the property. As of March 31, 2022, the weighted average remaining term of our leases was approximately 13.3 years and the contracts related to just 18 properties, representing 0.3% of our annual base rent and interest, are due to expire during the remainder of 2022; 78% of our leases have ten years or more remaining in their base lease term. As of March 31, 2022, 16 of our 2,965 properties were vacant and not subject to a lease, which represents a 99.5% occupancy rate. We expect to incur some property-level operating costs from time to time in periods during which properties that become vacant are being remarketed. In addition, we may recognize an expense for certain property costs, such as real estate taxes billed in arrears, if we believe the tenant is likely to vacate the property before making payment on those obligations or may be unable to pay such costs in a timely manner. Property costs are generally not significant to our operations, but the amount of property costs can vary quarter to quarter based on the timing of property vacancies and the level of underperforming properties. We may advance certain property costs on behalf of our tenants but expect that the majority of these costs will be reimbursed by the tenant and do not anticipate that they will be significant to our operations.

We intend to continue to grow through additional real estate investments. To accomplish this objective, we must continue to identify real estate acquisitions that are consistent with our underwriting guidelines and raise future additional capital to make such acquisitions. We acquire real estate with a combination of debt and equity capital, proceeds from the sale of properties and cash from operations that is not otherwise distributed to our stockholders in the form of dividends. When we sell properties, we generally reinvest the cash proceeds from those sales in new property acquisitions. We also periodically commit to fund the construction of new properties for our customers or to provide them funds to improve and/or renovate properties we lease to them. These additional investments will generally result in increases to the rental revenue or interest income due under the related contracts. As of March 31, 2022, we had commitments to our customers to fund improvements to owned or mortgaged real estate properties totaling approximately $156.6 million, the majority of which is expected to be funded in the next twelve months.

Financing Strategy

Our debt capital is initially provided on a short-term, temporary basis through a multi-year, variable rate unsecured revolving credit facility with a group of banks. We manage our long-term leverage position through the strategic and economic issuance of long-term fixed-rate debt on both a secured and unsecured basis. By matching the expected cash inflows from our long-term real estate leases with the expected cash outflows of our long-term fixed rate debt, we “lock in”, for as long as is economically feasible, the expected positive difference between our scheduled cash inflows on the leases and the cash outflows on our debt payments. By locking in this difference, or spread, we seek to reduce the risk that increases in interest rates would adversely impact our profitability. In addition, we may use various financial instruments designed to mitigate the impact of interest rate fluctuations on our cash flows and earnings, including hedging strategies such as interest rate swaps and caps, depending on our analysis of the interest rate environment and the costs and risks of such strategies. We also ladder our debt maturities in order to minimize the gap between our free cash flow (which we define as our cash from operations less dividends plus proceeds from our sale of properties) and our annual debt maturities; we have no significant debt maturities until 2024.

As of March 31, 2022, all our long-term debt was fixed-rate debt and our weighted average debt maturity was 6.6 years. As part of our long-term debt strategy, we develop and maintain broad access to multiple debt sources. We believe that having access to multiple debt markets increases our financing flexibility because different debt markets may attract different kinds of investors, thus expanding our access to a larger pool of potential debt investors. Also, a particular debt market may be more competitive than another at any particular point in time.

The long-term debt we have issued to date is comprised of both secured non-recourse borrowings, the vast majority of which is investment-grade rated, and senior investment-grade unsecured borrowings. We are currently rated Baa2, BBB and BBB by Moody’s Investors Service, S&P Global Ratings and Fitch Ratings, respectively. In October 2021, S&P Global Ratings raised its outlook on the Company to positive from stable and affirmed its BBB issuer credit rating. In conjunction with our investment-grade debt strategy, we target a level of debt net of cash and cash equivalents

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that approximates 5½ to 6 times our estimated annualized amount of earnings (excluding gains or losses on sales of real estate and provisions for impairment) before interest, taxes, depreciation and amortization (based on our current investment portfolio). Our leverage, expressed as the ratio of debt (net of cash and cash equivalents) to the cost of our investment portfolio, was approximately 41% at March 31, 2022.

Our secured non-recourse borrowings are obtained through multiple debt markets – primarily the asset-backed securities debt market. The vast majority of our secured non-recourse borrowings were made through an investment-grade-rated debt program we designed, which we call our Master Funding debt program. By design, this program provides flexibility not commonly found in most secured non-recourse debt and which is described in Non-recourse Secured Debt below. To a much lesser extent, we may also obtain fixed-rate non-recourse mortgage financing through the commercial mortgage-backed securities debt market or from banks and insurance companies secured by specific properties we pledge as collateral.

Our goal is to employ a prudent blend of secured non-recourse debt through our flexible Master Funding debt program, paired with senior unsecured debt that uses our investment grade credit ratings. By balancing the mix of secured and unsecured debt, we can effectively leverage those properties subject to the secured debt in the range of 60%-70% and, at the same time, target a more conservative level of overall corporate leverage by maintaining a large pool of properties that are unencumbered. As of March 31, 2022, our secured non-recourse borrowings had a loan-to-cost ratio of approximately 63% and approximately 35% of our investment portfolio serves as collateral for this long-term debt. The remaining 65% of our portfolio properties, aggregating approximately $7.3 billion at March 31, 2022, are unencumbered and this unencumbered pool of properties provides us the flexibility to access long-term unsecured borrowings. The result is that our growing unencumbered pool of properties can provide higher levels of debt service coverage on the senior unsecured debt than would be the case if we employed only unsecured debt at our overall corporate leverage level. We believe this debt strategy can lead to a lower cost of capital for the Company, especially as we can issue AAA rated debt from our Master Funding debt program, as described further below.

The availability of debt to finance commercial real estate in the United States can, at times, be impacted by economic and other factors that are beyond our control. An example of adverse economic factors occurred during the recession of 2007 to 2009 when availability of debt capital for commercial real estate was significantly curtailed. We seek to reduce the risk that long-term debt capital may be unavailable to us by maintaining the flexibility to issue long-term debt in multiple debt capital markets, both secured and unsecured, and by limiting the period between the time we acquire our real estate and the time we finance our real estate with long-term debt. In addition, we have arranged our unsecured revolving credit facility to have a multi-year term with extension options in order to reduce the risk that short term real estate financing would not be available to us. As we continue to grow our real estate portfolio, we also intend to continue to manage our debt maturities to reduce the risk that a significant amount of our debt will mature in any single year in the future. Because our long-term secured debt generally requires monthly payments of principal, in addition to the monthly interest payments, the resulting principal amortization also reduces our refinancing risk upon maturity of the debt. As our outstanding debt matures, we may refinance the maturing debt as it comes due or choose to repay it using cash and cash equivalents or our unsecured revolving credit facility. For example, as part of our fourth issuance of senior unsecured public notes in November 2021, we prepaid, without penalty, $85.9 million of STORE Master Funding Series 2013-3 Class A-2 notes. Similar to this prepayment transaction, we may prepay other existing long-term debt in circumstances where we believe it would be economically advantageous to do so.

Unsecured Revolving Credit Facility

Typically, we use our $600 million unsecured revolving credit facility to acquire our real estate properties, until those borrowings are sufficiently large to warrant the economic issuance of long-term fixed-rate debt, the proceeds from which we use to repay the amounts outstanding under our revolving credit facility. As of March 31, 2022, we had $359.0 million outstanding under our unsecured revolving credit facility.

Our unsecured revolving credit facility also has an accordion feature of $1.0 billion, which gives us a maximum borrowing capacity of $1.6 billion. The facility matures in June 2025 and includes two six-month extension options, subject to certain conditions. Borrowings under the facility require monthly payments of interest at a rate selected by us of either (1) LIBOR plus a credit spread ranging from 0.70% to 1.40%, or (2) the Base Rate, as defined in the credit agreement, plus a credit spread ranging from 0.00% to 0.40%. The credit spread used is based on our credit rating as

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defined in the credit agreement. We are also required to pay a facility fee on the total commitment amount ranging from 0.10% to 0.30%. The currently applicable credit spread for LIBOR-based borrowings is 0.85% and the facility fee is 0.20%. Our credit agreement does allow for a further reduction in the pricing for LIBOR-based borrowings if certain environmental sustainability metrics are met.

Under the terms of the facility, we are subject to various restrictive financial and nonfinancial covenants which, among other things, require us to maintain certain leverage ratios, cash flow and debt service coverage ratios and secured borrowing ratios. Certain of these ratios are based on our pool of unencumbered assets, which aggregated approximately $7.3 billion at March 31, 2022. The facility is recourse to us, and, as of March 31, 2022, we were in compliance with the financial and nonfinancial covenants under the facility.

Senior Unsecured Term Debt

In November 2021, we completed our fourth issuance of underwritten public notes in an aggregate principal amount of $375.0 million with a coupon rate of 2.70%, and as of March 31, 2022, we had an aggregate principal amount of $1.4 billion of underwritten public notes outstanding. These senior unsecured notes bear a weighted average coupon rate of 3.63% and interest on these notes is paid semi-annually. The supplemental indentures governing our public notes contain various restrictive covenants, including limitations on our ability to incur additional secured and unsecured indebtedness. As of March 31, 2022, we were in compliance with these covenants. Prior to our inaugural issuance of public debt in March 2018, our unsecured long-term debt had been issued through the private placement of notes to institutional investors and through groups of lenders who also participate in our unsecured revolving credit facility; the financial covenants of the privately placed notes are similar to our unsecured revolving credit facility, and, as of March 31, 2022, we were in compliance with these covenants. The aggregate outstanding principal amount of our unsecured senior notes was $1.8 billion as of March 31, 2022.

In April 2022, we entered into an aggregate $600 million of floating-rate, unsecured term loans with a group of lenders; the loans consist of a $400 million five-year term loan and a $200 million seven-year term loan. In connection with entering into these floating-rate term loans, we also entered into interest rate swap agreements that effectively convert the floating rates to a weighted average fixed rate of 3.68%. The financial covenants of the term loans match the covenants of our unsecured revolving credit facility. The term loans may be prepaid at any time; the seven-year term loan requires a prepayment premium of 2% if repaid in year one and 1% if repaid in year two. In conjunction with this transaction, we paid down outstanding balances on our unsecured revolving credit facility and prepaid, without penalty, $134.5 million of STORE Master Funding Series 2014-1, Class A-2 notes, which were scheduled to mature in 2024 and bore an interest rate of 5.0%.

Non-recourse Secured Debt

As of March 31, 2022, approximately 32% of our real estate investment portfolio served as collateral for outstanding borrowings under our STORE Master Funding debt program. We believe our STORE Master Funding program allows for flexibility not commonly found in non-recourse debt, often making it preferable to traditional debt issued in the commercial mortgage-backed securities market. Under the program, STORE Capital serves as both master and special servicer for the collateral pool, allowing for active portfolio monitoring and prompt issue resolution. In addition, features of the program allowing for the sale or substitution of collateral, provided certain criteria are met, facilitate active portfolio management. Through this debt program, we arrange for bankruptcy remote, special purpose entity subsidiaries to issue multiple series of investment grade asset backed net lease mortgage notes, or ABS notes, from time to time as additional collateral is added to the collateral pool and leverage can be added in incremental note issuances based on the value of the collateral pool.

The ABS notes are generally issued by our wholly owned special purpose entity subsidiaries to institutional investors through the asset backed securities market. These ABS notes are typically issued in two classes, Class A and Class B. At the time of issuance, the Class A notes represent approximately 70% of the appraised value of the underlying real estate collateral owned by the issuing subsidiaries and are currently rated AAA or A+ by S&P Global Ratings. The Series 2018-1 transaction in October 2018 marked our inaugural issuance of AAA rated notes and our Series 2019-1 transaction in November 2019 marked our first issuance of 15-year notes. We believe these two precedent transactions

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both broadened the market for our STORE Master Funding debt program and gave us access to lower cost secured debt which is evidence by our most recent Series 2021-1 transaction in June 2021 which was issued at a weighted average coupon rate of 2.80%.

The Class B notes, which are subordinated to the Class A notes as to principal repayment, represent approximately 5% of the appraised value of the underlying real estate collateral and are currently rated BBB by S&P Global Ratings. As of March 31, 2022, there was an aggregate $190.0 million in principal amount of Class B notes outstanding. We have historically retained these Class B notes and they are held by one of our bankruptcy remote, special purpose entity subsidiaries. The Class B notes are not reflected in our financial statements because they eliminate in consolidation. Since the Class B notes are considered issued and outstanding, they provide us with additional financial flexibility in that we may sell them to a third party in the future or use them as collateral for short term borrowings as we have done from time to time in the past.

The ABS notes outstanding at March 31, 2022 totaled $2.3 billion in Class A principal amount and were supported by a collateral pool of approximately $3.6 billion representing 1,157 property locations operated by 212 customers. The amount of debt that can be issued in any new series is determined by the structure of the transaction and the aggregate amount of collateral in the pool at the time of issuance. In addition, the issuance of each new series of notes is subject to the satisfaction of several conditions, including that there is no event of default on the existing note series and that the issuance will not result in an event of default on, or the credit rating downgrade of, the existing note series.

A significant portion of our cash flow is generated by the special purpose entities comprising our STORE Master Funding debt program. For the three months ended March 31, 2022, excess cash flow, after payment of debt service and servicing and trustee expenses, totaled $47 million on cash collections of $78 million, which represents an overall ratio of cash collections to debt service, or debt service coverage ratio (as defined in the program documents), of greater than 2.4 to 1 on the STORE Master Funding program. If at any time the debt service coverage ratio generated by the collateral pool is less than 1.3 to 1, excess cash flow from the STORE Master Funding entities will be deposited into a reserve account to be used for payments to be made on the net lease mortgage notes, to the extent there is a shortfall. We currently expect to remain above program minimum debt service coverage ratios for the foreseeable future.

To a lesser extent, we also may obtain debt in discrete transactions through other bankruptcy remote, special purpose entity subsidiaries, which debt is solely secured by specific real estate assets and is generally non-recourse to us (subject to certain customary limited exceptions). These discrete borrowings are generally in the form of traditional mortgage notes payable, with principal and interest payments due monthly and balloon payments due at their respective maturity dates, which typically range from seven to ten years from the date of issuance. Our secured borrowings contain various covenants customarily found in mortgage notes, including a limitation on the issuing entity’s ability to incur additional indebtedness on the underlying real estate. Certain of the notes also require the posting of cash reserves with the lender or trustee if specified coverage ratios are not maintained by the special purpose entity or the tenant.

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Debt Summary

As of March 31, 2022, our aggregate secured and unsecured long-term debt had an outstanding principal balance of $4.2 billion, a weighted average maturity of 6.6 years and a weighted average interest rate of 3.9%. The following is a summary of the outstanding balance of our borrowings as well as a summary of the portion of our real estate investment portfolio that is either pledged as collateral for these borrowings or is unencumbered as of March 31, 2022:

			Gross Investment Portfolio Assets
			Special Purpose
	Outstanding		Entity		All Other
(In millions)	Borrowings		Subsidiaries		Subsidiaries		Total
STORE Master Funding net-lease mortgage notes payable	$	2,268	$	3,582	$	—	$	3,582
Other mortgage notes payable		168		301		—		301
Total non-recourse debt		2,436		3,883		—		3,883
Unsecured notes and term loans payable		1,800		—		—		—
Unsecured credit facility		359		—		—		—
Total unsecured debt (including revolving credit facility)		2,159		—		—		—
Unencumbered real estate assets		—		5,989		1,326		7,315
Total debt	$	4,595	$	9,872	$	1,326	$	11,198

Our decision to use either senior unsecured term debt, STORE Master Funding or other non-recourse traditional mortgage loan borrowings depends on our view of the most strategic blend of unsecured versus secured debt that is needed to maintain our targeted level of overall corporate leverage as well as on borrowing costs, debt terms, debt flexibility and the tenant and industry diversification levels of our real estate assets. As we continue to acquire real estate, we expect to balance the overall degree of leverage on our portfolio by growing our pool of portfolio assets that are unencumbered. Our growing pool of unencumbered assets will increase our financial flexibility by providing us with assets that can support senior unsecured financing or that can serve as substitute collateral for existing debt. Should market factors, which are beyond our control, adversely impact our access to these debt sources at economically feasible rates, our ability to grow through additional real estate acquisitions will be limited to any undistributed amounts available from our operations and any additional equity capital raises.

Equity

We access the equity markets in various ways. As part of these efforts, we have established “at the market” equity distribution programs, or ATM programs, pursuant to which, from time to time, we may offer and sell registered shares of our common stock through a group of banks acting as our sales agents. Most recently, in November 2020, we established a $900 million ATM program (the 2020 ATM Program).

The following tables outline the common stock issuances under the 2020 ATM Program (in millions except share and per share information):

Three Months Ended March 31, 2022
Shares Sold	Weighted Average Price per Share		Gross Proceeds		Sales Agents' Commissions		Other Offering Expenses		Net Proceeds
5,539,138	$	30.41	$	168.4	$	(2.1)	$	(0.1)	$	166.2
Inception of Program Through March 31, 2022
Shares Sold	Weighted Average Price per Share		Gross Proceeds		Sales Agents' Commissions		Other Offering Expenses		Net Proceeds
16,380,669	$	32.31	$	529.2	$	(7.6)	$	(0.7)	$	520.9

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Cash Flows

Substantially all our cash from operations is generated by our investment portfolio. As shown in the following table, net cash provided by operating activities for the three months ended March 31, 2022 increased by $37.0 million over the same period in 2021, primarily as a result of the increase in the size of our real estate investment portfolio, which generated additional rental revenue and interest income. Our investments in real estate, loans and financing receivables during the first three months of 2022 were $242.1 million more than the same period in 2021. During the three months ended March 31, 2022, our investment activity was primarily funded with a combination of cash from operations, borrowings on our revolving credit facility, proceeds from the issuance of stock and proceeds from the sale of real estate properties,. Investment activity during the same period in 2021 was primarily funded with a combination of cash from operations, proceeds from the issuance of stock and proceeds from the sale of real estate properties. From a financing perspective, our activities provided $266.5 million of net cash during the three months ended March 31, 2022 as compared to use of net cash of $14.7 million during the same period in 2021; cash financing activities in 2022 included $229.0 million of net borrowings on our unsecured revolving credit facility. We paid dividends to our stockholders totaling $106.7 million and $98.2 million during the first three months of 2022 and 2021, respectively; we increased our quarterly dividend in the third quarter of 2021 by 6.9% to an annualized $1.54 per common share.

	Three Months Ended March 31,				Increase
(In thousands)	2022		2021		(Decrease)
Net cash provided by operating activities	$	160,887	$	123,889	$	36,998
Net cash used in investing activities		(456,017)		(131,178)		(324,839)
Net cash provided by (used in) financing activities		266,485		(14,670)		281,155
Net (decrease) in cash, cash equivalents and restricted cash	$	(28,645)	$	(21,959)	$	(6,686)

As of March 31, 2022, we had liquidity of $39.3 million on our balance sheet. Management believes that our current cash balance, over $240.0 million of immediate borrowing capacity available on our unsecured revolving credit facility, the cash generated by our operations as well as the $1.0 billion of liquidity available to us under the accordion feature of our recently amended credit facility, is more than sufficient to fund our operations for the foreseeable future and allow us to acquire the real estate for which we currently have made commitments. In order to continue to grow our real estate portfolio in the future beyond the excess cash generated by our operations and our ability to borrow, we would expect to raise additional equity capital through the sale of our common stock.

Recently Issued Accounting Pronouncements

See Note 2 to the March 31, 2022 unaudited condensed consolidated financial statements.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles, or GAAP, requires our management to use judgment in the application of accounting policies, including making estimates and assumptions. We base estimates on the best information available to us at the time, our experience and on various other assumptions believed to be reasonable under the circumstances. These estimates affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, it is possible that different accounting would have been applied, resulting in a different presentation of our condensed consolidated financial statements. From time to time, we reevaluate our estimates and assumptions. In the event estimates or assumptions prove to be different from actual results, adjustments are made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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Real Estate Portfolio Information

As of March 31, 2022, our total investment in real estate and loans approximated $11.2 billion, representing investments in 2,965 property locations, substantially all of which are profit centers for our customers. These investments generate cash flows from approximately 790 contracts predominantly structured as net leases. The weighted average non-cancellable remaining term of our leases was approximately 13.3 years.

Our real estate portfolio is highly diversified. As of March 31, 2022, our 2,965 property locations were operated by 573 customers across the United States. Our customers are typically established regional and national operators, with approximately 50% of our base rent and interest coming from customers with over $200 million in annual revenues. Our largest customer represented approximately 3.0% of our portfolio at March 31, 2022, and our top ten largest customers represented 18.0% of base rent and interest. Our customers operate their businesses across approximately 895 brand names or business concepts in over 120 industries. The largest of the business concepts represented 2.2% of our base rent and interest as of March 31, 2022 and approximately 85% of the concepts represented less than 1% of base rent and interest.

The following tables summarize the diversification of our real estate portfolio based on the percentage of base rent and interest, annualized based on rates in effect on March 31, 2022, for all of our leases, loans and financing receivables in place as of that date.

Diversification by Customer

As of March 31, 2022, our property locations were operated by 573 customers and the following table identifies our ten largest customers:

	% of
	Base Rent		Number
	and		of
Customer	Interest		Properties
Spring Education Group Inc. (Stratford School/Nobel Learning Communities)	3.0	%	28
LBM Acquisition, LLC (Building materials distribution)	2.9		156
Fleet Farm Group LLC	2.2		9
Cadence Education, Inc. (Early childhood/elementary education)	2.0		75
Dufresne Spencer Group Holdings, LLC (Ashley Furniture HomeStore)	1.6		30
CWGS Group, LLC (Camping World/Gander Outdoors)	1.4		20
Great Outdoors Group, LLC (Cabela's)	1.3		9
American Multi-Cinema, Inc.	1.2		14
Zips Holdings, LLC	1.2		44
At Home Stores LLC	1.2		11
All other (563 customers)	82.0		2,569
Total	100.0	%	2,965

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Diversification by Industry

As of March 31, 2022, our customers’ business concepts were diversified across more than 120 industries within the service, retail and manufacturing sectors of the U.S. economy. The following table summarizes those industries into 79 industry groups:

	% of			Building
	Base Rent		Number	Square
	and		of	Footage
Customer Industry Group	Interest		Properties	(in thousands)
Service:
Restaurants—full service	7.0	%	360	2,547
Restaurants—limited service	4.9		403	1,286
Early childhood education centers	6.1		277	2,919
Automotive repair and maintenance	5.6		241	1,385
Health clubs	5.2		91	3,199
Pet care facilities	3.4		186	1,743
Lumber & construction materials wholesalers	3.2		167	6,865
All other service (32 industry groups)	28.7		666	27,859
Total service	64.1		2,391	47,803
Retail:
Farm and ranch supply	3.3		41	4,136
Furniture	3.2		64	3,569
All other retail (16 industry groups)	9.2		155	7,122
Total retail	15.7		260	14,827
Manufacturing:
Metal fabrication	5.9		112	14,499
All other manufacturing (21 industry groups)	14.3		202	26,390
Total manufacturing	20.2		314	40,889
Total	100.0	%	2,965	103,519

Diversification by Geography

Our portfolio is also highly diversified by geography, as our property locations can be found in every state except Hawaii. The following table details the top ten geographical locations of the properties as of March 31, 2022:

	% of
	Base Rent
	and		Number of
State	Interest		Properties
Texas	11.2	%	350
Illinois	6.1		181
California	5.8		80
Georgia	5.7		169
Florida	5.1		160
Wisconsin	5.0		87
Ohio	4.9		148
Arizona	4.3		90
Tennessee	3.7		124
Michigan	3.3		105
All other (39 states) (1)	44.9		1,471
Total	100.0	%	2,965

(1) Includes one property in Ontario, Canada which represents less than 0.1% of base rent and interest.

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Contract Expirations

The following table sets forth the schedule of our lease, loan and financing receivable expirations as of March 31, 2022:

	% of
	Base Rent
	and		Number of
Year of Lease Expiration or Loan Maturity (1)	Interest		Properties (2)
Remainder of 2022	0.3	%	18
2023	1.1		10
2024	0.6		21
2025	0.9		23
2026	1.5		55
2027	1.6		55
2028	2.9		68
2029	4.7		153
2030	3.4		147
2031	5.1		214
Thereafter	77.9		2,185
Total	100.0	%	2,949

(1) Expiration year of contracts in place as of March 31, 2022 and excludes any tenant option renewal periods.

(2) Excludes 16 properties that were vacant and not subject to a lease as of March 31, 2022.

Results of Operations

Overview

As of March 31, 2022, our real estate investment portfolio had grown to approximately $11.2 billion, consisting of investments in 2,965 property locations in 49 states, operated by more than 570 customers in various industries. Approximately 93% of the real estate investment portfolio represents commercial real estate properties subject to long-term leases, approximately 7% represents mortgage loan and financing receivables on commercial real estate properties and a nominal amount represents loans receivable secured by our tenants’ other assets.

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Three Months Ended March 31, 2022 Compared to Three Months Ended March 31, 2021

	Three Months Ended
	March 31,				Increase
(In thousands)	2022		2021		(Decrease)
Total revenues	$	222,116	$	182,261	$	39,855
Expenses:
Interest		43,999		41,828		2,171
Property costs		4,241		4,663		(422)
General and administrative		17,016		25,006		(7,990)
Depreciation and amortization		72,639		63,567		9,072
Provisions for impairment		912		7,350		(6,438)
Total expenses		138,807		142,414		(3,607)
Other income:
Net gain on dispositions of real estate		6,076		15,670		(9,594)
Loss from non-real estate, equity method investment		(2,157)		(363)		(1,794)
Income before income taxes		87,228		55,154		32,074
Income tax expense		206		194		12
Net income	$	87,022	$	54,960	$	32,062

Revenues

The increase in revenues period over period was driven primarily by the growth in the size of our real estate investment portfolio, which generated additional rental revenues and interest income. Our real estate investment portfolio grew from approximately $9.7 billion in gross investment amount representing 2,656 properties as of March 31, 2021 to approximately $11.2 billion in gross investment amount representing 2,965 properties at March 31, 2022. The weighted average real estate investment amounts outstanding during the three-month periods were approximately $10.8 billion in 2022 and $9.6 billion in 2021. Our real estate investments were made throughout the periods presented and were not all outstanding for the entire period; accordingly, a portion of the increase in revenues between periods is related to recognizing a full year of revenue in 2022 on acquisitions that were made during 2021. Similarly, the full revenue impact of acquisitions made during the first quarter of 2022 will not be seen until the second quarter of 2022. A smaller component of the increase in revenues between periods is related to rent escalations recognized on our lease contracts; over time, these rent increases can provide a strong source of revenue growth. During the three months ended March 31, 2022, we collected $4.6 million in early lease termination fees, primarily related to certain property sales, which are included in other income; we did not recognize any similar revenues during 2021.

As previously noted, we provided short-term rent deferral arrangements to certain of our tenants during the pandemic to help them continue to meet their rent payment obligations to us. Essentially all of our rent deferral arrangements with our tenants have now ended and our tenants continue to repay previously deferred rent in accordance with their agreements.

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The majority of our investments are made through sale-leaseback transactions in which we acquire the real estate from the owner-operators and then simultaneously lease the real estate back to them through long-term leases based on the tenant’s business needs. The initial rental or capitalization rates we achieve on sale-leaseback transactions, calculated as the initial annualized base rent divided by the purchase price of the properties, vary from transaction to transaction based on many factors, such as the terms of the lease, the property type including the property’s real estate fundamentals and the market rents in the area on the various types of properties we target across the United States. There are also online commercial real estate auction marketplaces for real estate transactions; properties acquired through these online marketplaces are often subject to existing leases and offered by third party sellers. In general, because we provide tailored customer lease solutions in sale-leaseback transactions, our lease rates historically have been higher and subject to less short-term market influences than what we have seen in the auction marketplace as a whole. In addition, since our real estate lease contracts are a substitute for both borrowings and equity that our customers would otherwise have to commit to their real estate locations, we believe there is a relationship between lease rates and market interest rates and that lease rates are also influenced by overall capital availability. During the three months ended March 31, 2022, the weighted average lease rate on our new investments was approximately 0.7% lower as compared to the same period in 2021 but was in line with rates achieved during late 2021. The weighted average initial capitalization rate on the properties we acquired during the first quarters of 2022 and 2021 was 7.1% and 7.8%, respectively. As we expected, we saw some capitalization rate compression across the industry in the first quarter of 2022; it appears that market lease rates have begun to stabilize and we have seen recent upward pressure on capitalization rates.

Interest Expense

We fund the growth in our real estate investment portfolio with excess cash flow from our operations after dividends and principal payments on debt, net proceeds from periodic sales of real estate, net proceeds from equity issuances and proceeds from issuances of long-term fixed-rate debt. We typically use our unsecured revolving credit facility to temporarily finance the properties we acquire.

The following table summarizes our interest expense for the periods presented:

	Three Months Ended
	March 31,
(Dollars in thousands)	2022			2021
Interest expense - credit facility	$	500		$	—
Interest expense - credit facility fees		300			300
Interest expense - long-term debt (secured and unsecured)		41,448			39,642
Capitalized interest		(410)			(214)
Amortization of deferred financing costs and other		2,161			2,100
Total interest expense	$	43,999		$	41,828
Credit facility:
Average debt outstanding	$	181,044		$	—
Average interest rate during the period (excluding facility fees)		1.1	%		—	%
Long-term debt (secured and unsecured):
Average debt outstanding	$	4,242,707		$	3,747,696
Average interest rate during the period		3.9	%		4.2	%

The increase in average outstanding long-term debt was the primary driver for the increase in interest expense on long-term debt. Long-term debt added after March 31, 2021 primarily consisted of $515.0 million of STORE Master Funding Series 2021-1 notes, which bear a weighted average interest rate of 2.80%, issued in late June 2021 and $375 million of 2.70% senior unsecured notes issued in November 2021. Long-term debt repaid in full, without penalties, since March 31, 2021 included our remaining $100 million bank term loan, $86.7 million of STORE Master Funding Series 2013-1 Class A-2 notes in May 2021; $83.3 million of Series 2013-2, Class A-2 notes in July 2021, and $85.9 million of STORE Master Funding Series 2013-3 Class A-2 notes in November 2021. The three series of STORE Master Funding notes that were repaid were scheduled to mature in 2023 and bore a weighted average interest rate of 5.06%. As of March 31, 2022, we had $4.2 billion of long-term debt outstanding with a weighted average interest rate of just over 3.9%.

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We typically use our revolving credit facility on a short-term, temporary basis to acquire real estate properties until those borrowings are sufficiently large to warrant the economic issuance of long-term fixed-rate debt, the proceeds of which we generally use to pay down the amounts outstanding under our revolving credit facility. Interest expense associated with our revolving credit facility increased from 2021 primarily as a result of the increased level of borrowings outstanding on the revolver during the first quarter of 2022. As of March 31, 2022, we had $359 million of borrowings outstanding under our revolving credit facility.

Property Costs

Approximately 99% of our leases are triple net, meaning that our tenants are generally responsible for the property-level operating costs such as taxes, insurance and maintenance. Accordingly, we generally do not expect to incur property-level operating costs or capital expenditures, except during any period when one or more of our properties is no longer under lease or when our tenant is unable to meet their lease obligations. Our need to expend capital on our properties is further reduced due to the fact that some of our tenants will periodically refresh the property at their own expense to meet their business needs or in connection with franchisor requirements. As of March 31, 2022, we owned 16 properties that were vacant and not subject to a lease and the lease contracts related to just 18 properties we own are due to expire during the remainder of 2022. We expect to incur some property costs related to the vacant properties until such time as those properties are either leased or sold. The amount of property costs can vary quarter to quarter based on the timing of property vacancies and the level of underperforming properties.

As of March 31, 2022, we had entered into operating ground leases as part of several real estate investment transactions. The ground lease payments made by our tenants directly to the ground lessors are presented on a gross basis in the condensed consolidated statement of income, both as rental revenues and as property costs. For the few lease contracts where we collect property taxes from our tenants and remit those taxes to governmental authorities, we reflect those payments on a gross basis as both rental revenue and as property costs.

The following is a summary of property costs (in thousands):

	Three Months Ended March 31,
	2022		2021
Property-level operating costs (a)	$	2,715	$	3,131
Ground lease-related intangibles amortization expense		117		117
Operating ground lease payments made by STORE Capital		33		73
Operating ground lease payments made by STORE Capital tenants		526		524
Operating ground lease straight-line rent expense		196		197
Property taxes payable from tenant impounds		654		621
Total property costs	$	4,241	$	4,663

(a) Property-level operating costs primarily include those expenses associated with vacant or nonperforming properties, property management costs for the few properties that have specific landlord obligations and the cost of performing property site inspections from time to time.

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General and Administrative Expenses

General and administrative expenses include compensation and benefits; professional fees such as portfolio servicing, legal, accounting and rating agency fees; and general office expenses such as insurance, office rent and travel costs. General and administrative costs totaled $17.0 million for the three months ended March 31, 2022 as compared to $25.0 million for the same period in 2021.

General and administrative expenses for the three months ended March 31, 2021 included $10.1 million related to the expense for certain modified performance-based stock based compensation awards granted in 2018 and 2019; excluding this one-time expense catch-up from first quarter 2021 expenses, general and administrative expenses increased $2.1 million for the first quarter of 2022 as compared to 2021.

We expect that general and administrative expenses will continue to rise in some measure as our real estate investment portfolio grows. Certain expenses, such as property related insurance costs and the costs of servicing the properties and loans comprising our real estate portfolio, increase in direct proportion to the increase in the size of the portfolio. However, general and administrative expenses as a percentage of the portfolio have decreased over time due to efficiencies and economies of scale. Excluding noncash, stock-based compensation expense from both periods, general and administrative expenses for the twelve-month period ended March 31, 2022 represented 0.44% of average portfolio assets as compared to 0.47% for the comparable twelve-month period ended March 31, 2021.

Depreciation and Amortization Expense

Depreciation and amortization expense, which increases in proportion to the increase in the size of our real estate portfolio, rose from $63.6 million for the three months ended March 31, 2021 to $72.6 million for the comparable period in 2022.

Provisions for Impairment

During the three months ended March 31, 2022, we recognized $1.2 million in provisions for the impairment of real estate and had a reduction of $0.3 million in provisions for credit losses related to our loans and financing receivables. We recognized an aggregate of $7.4 million in provisions for the impairment of real estate and credit losses during the three months ended March 31, 2021.

Net Gain on Dispositions of Real Estate

As part of our ongoing active portfolio management process, we sell properties from time to time in order to enhance the diversity and quality of our real estate portfolio and to take advantage of opportunities to recycle capital. During the three months ended March 31, 2022, we recognized a $6.1 million aggregate net gain on the sale of 11 properties. In comparison, for the three months ended March 31, 2021, we recognized a $15.7 million aggregate net gain on the sale of 44 properties.

Net Income

For the three months ended March 31, 2022, our net income was $87.0 million reflecting increases from $55.0 million for the comparable period in 2021. The change in net income is primarily comprised of a net increase resulting from the growth in our real estate investment portfolio, which generated additional rental revenues and interest income and lower general and administrative expenses which were primarily offset by increases in depreciation and amortization and lower net gain from dispositions of real estate, as noted above.

Non-GAAP Measures

Our reported results are presented in accordance with U.S. generally accepted accounting principles, or GAAP. We also disclose Funds from Operations, or FFO, and Adjusted Funds from Operations, or AFFO, both of which are

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non-GAAP measures. We believe these two non-GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs. FFO and AFFO do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or to cash flows from operations as reported on a statement of cash flows 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 definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as GAAP net income, excluding gains (or losses) from extraordinary items and sales of depreciable property, real estate impairment losses, and depreciation and amortization expense from real estate assets, including the pro rata share of such adjustments of unconsolidated subsidiaries.

To derive AFFO, we modify the NAREIT computation of FFO to include other adjustments to GAAP net income related to certain revenues and expenses that have no impact on our long-term operating performance, such as straight-line rents, amortization of deferred financing costs and stock-based compensation. In addition, in deriving AFFO, we exclude certain other costs not related to our ongoing operations, such as the amortization of lease-related intangibles and executive severance and transition costs.

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 (or losses) 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. Management believes that AFFO provides more useful information to investors and analysts because it modifies FFO to exclude certain additional revenues and expenses such as, as applicable, straight-line rents, including construction period rent deferrals, and the amortization of deferred financing costs, stock-based compensation, lease-related intangibles and executive severance and transition costs as such items have no impact on long-term operating performance. As a result, we believe AFFO to be a more meaningful measurement of ongoing performance that allows for greater performance comparability. Therefore, we disclose both FFO and AFFO and reconcile them to the most appropriate GAAP performance metric, which is net income. STORE Capital’s FFO and AFFO may not be comparable to similarly titled measures employed by other companies.

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The following is a reconciliation of net income (which we believe is the most comparable GAAP measure) to FFO and AFFO.

	Three Months Ended March 31,
(In thousands)	2022		2021
Net Income	$	87,022	$	54,960
Depreciation and amortization of real estate assets		72,566		63,507
Provision for impairment of real estate		1,200		5,350
Net gain on dispositions of real estate		(6,076)		(15,670)
Funds from Operations (a)		154,712		108,147
Adjustments:
Straight-line rental revenue:
Fixed rent escalations accrued		(1,502)		(1,511)
Construction period rent deferrals		1,366		628
Amortization of:
Equity-based compensation (b)		3,068		12,905
Deferred financing costs and other		2,161		2,100
Lease-related intangibles and costs		678		827
(Reduction in) provisions for loan losses		(288)		2,000
Lease termination fees		(4,174)		—
Capitalized interest		(410)		(214)
Loss from non-real estate, equity method investment		2,157		363
Adjusted Funds from Operations (a)	$	157,768	$	125,245

(a) FFO and AFFO for the three months ended March 31, 2022 and 2021, include approximately $0.7 million and $2.0 million, respectively, of net revenue that is subject to the short-term deferral arrangements entered into in response to the COVID-19 pandemic. We account for these deferral arrangements as rental revenue and a corresponding increase in receivables, which are included in other assets, net on the condensed consolidated balance sheet. For the three months ended March 31, 2022 and 2021, FFO and AFFO exclude $3.4 million and $5.9 million, respectively, collected under these short-term deferral arrangements.

(b) For the three months ended March 31, 2021, stock-based compensation expense included $10.1 million of expense related to the modification of certain performance-based awards granted in 2018 and 2019.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Our interest rate risk management objective is to limit the impact of future interest rate changes on our earnings and cash flows. We seek to match the cash inflows from our long-term leases with the expected cash outflows on our long-term debt. To achieve this objective, our consolidated subsidiaries primarily borrow on a fixed-rate basis for longer-term debt issuances. At March 31, 2022, all our long-term debt carried a fixed interest rate and the weighted average debt maturity was approximately 6.6 years. We are exposed to interest rate risk between the time we enter into a sale-leaseback transaction and the time we finance the related real estate with long-term fixed-rate debt. In addition, when that long-term debt matures, we may have to refinance the real estate at a higher interest rate. Market interest rates are sensitive to many factors that are beyond our control.

We address interest rate risk by employing the following strategies to help insulate us from any adverse impact of rising interest rates:

● We seek to minimize the time period between acquisition of our real estate and the ultimate financing of that real estate with long-term fixed-rate debt.

● By using serial issuances of long-term debt, we intend to ladder out our debt maturities to avoid a significant amount of debt maturing during any single period and to minimize the gap between free cash flow and annual debt maturities; free cash flow includes cash from operations less dividends plus proceeds from our sales of properties.

● Our secured long-term debt generally provides for some amortization of the principal balance over the term of the debt, which serves to reduce the amount of refinancing risk at debt maturity to the extent that we can refinance the reduced debt balance over a revised long-term amortization schedule.

● We seek to maintain a large pool of unencumbered real estate assets to give us the flexibility to choose among various secured and unsecured debt markets when we are seeking to issue new long-term debt.

● We may also use derivative instruments, such as interest rate swaps, caps and treasury lock agreements, as cash flow hedges to limit our exposure to interest rate movements with respect to various debt instruments.

In July 2017, the Financial Conduct Authority, or FCA (the authority that regulates LIBOR), first announced that it intended to stop compelling banks to submit rates for the calculation of LIBOR. Subsequently, the Alternative Reference Rates Committee, or ARRC, identified the Secured Overnight Financing Rate, or SOFR, as the preferred alternative to LIBOR for use in derivatives and other financial contracts. On March 5, 2021, the FCA announced that U.S. Dollar (USD) LIBOR will no longer be published after June 30, 2023. This latest announcement has several implications, including setting the spread that may be used to automatically convert contracts from USD LIBOR to SOFR.

The Company anticipates that LIBOR will continue to be available at least until June 30, 2023. Any changes adopted by the FCA or other governing bodies in the method used for determining LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR. If that were to occur, our interest payments could change. In addition, uncertainty about the extent and manner of future changes may result in interest rates and/or payments that are higher or lower than if LIBOR were to remain available in its current form.

At March 31, 2022, the Company’s $600 million unsecured revolving credit facility, which matures in June 2025, is its only contract indexed to LIBOR; as a result, during the recent amendment of this credit facility, alternative reference rate transition language was added to the credit agreement in anticipation of the LIBOR transition. While we expect LIBOR to be available in substantially its current form until June 30, 2023, it is possible that LIBOR will become unavailable prior to that point. This could result, for example, if sufficient banks decline to make submissions to the LIBOR administrator. In that case, the transition to an alternative reference rate could be accelerated.

See our Annual Report on Form 10-K for the year ended December 31, 2021 under the heading “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” for a more complete discussion of our interest rate sensitive assets and liabilities. As of March 31, 2022, our market risk has not changed materially from the amounts

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reported in our Annual Report on Form 10-K for the year ended December 31, 2021.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness as of March 31, 2022 of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the first fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting of the Company.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

We are subject to various legal proceedings and claims that arise in the ordinary course of our business, including instances in which we are named as defendants in lawsuits arising out of accidents causing personal injuries or other events that occur on the properties operated by our customers. These matters are generally covered by insurance and/or are subject to our right to be indemnified by our customers that we include in our leases. Management believes that the final outcome of such matters will not have a material adverse effect on our financial position, results of operations or liquidity.

Item 1A. Risk Factors.

There have been no material changes to the risk factors as disclosed in the section entitled “Risk Factors” beginning on page 14 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and filed with the Securities and Exchange Commission on February 25, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Unregistered Sales of Equity Securities

During the three months ended March 31, 2022, we did not sell any equity securities that were not registered under the Securities Act of 1933, as amended.

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Repurchases of Equity Securities

The restricted stock and restricted stock unit awards granted under our equity incentive plans permit our employees to elect to satisfy the minimum statutory tax withholding obligation due upon vesting by allowing the Company to repurchase an amount of shares otherwise deliverable on the vesting date having a fair market value equal to the withholding obligation. All of the shares repurchased by us during the first quarter of 2022 were in connection with this tax withholding obligation. During the three months ended March 31, 2022, we repurchased the following shares of our common stock:

Period	Total Number of Shares Purchased	Average Price Paid Per Share
January 1, 2022 through January 31, 2022	32,560	$	34.78
February 1, 2022 through February 28, 2022	156,266	$	30.43
March 1, 2022 through March 31, 2022	-	$	-
Total	188,826	$	31.18

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

None.

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Item 6. Exhibits

Exhibit		Description	Location
10.1	*	Employment Agreement dated as of April 15, 2021, by and among STORE Capital Corporation, STORE Capital Advisors, LLC, and Craig Barnett.	Filed herewith.
31.1		Rule 13a-14(a) Certification of the Chief Executive Officer.	Filed herewith.
31.2		Rule 13a-14(a) Certification of the Chief Financial Officer.	Filed herewith.
32.1		Section 1350 Certification of the Chief Executive Officer.	Furnished herewith.
32.2		Section 1350 Certification of the Chief Financial Officer.	Furnished herewith.
101.INS		Inline XBRL Instance Document – the instance does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.	Filed herewith.
101.SCH		Inline XBRL Taxonomy Extension Schema Document.	Filed herewith.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.	Filed herewith.
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.	Filed herewith.
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.	Filed herewith.
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.	Filed herewith.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)	Filed herewith.

*indicates management contract or compensatory plan.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	STORE CAPITAL CORPORATION
	(Registrant)
Date: May 5, 2022	By:	/s/ Sherry L. Rexroad
		Sherry L. Rexroad
		Executive Vice President – Chief Financial Officer, Treasurer and Assistant Secretary
		(Principal Financial Officer)

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EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

AMONG

STORE CAPITAL CORPORATION, STORE CAPITAL ADVISORS, LLC AND CRAIG BARNETT

This EMPLOYMENT AGREEMENT (the “Agreement”), dated as of April 15, 2021 (the “Effective Date”), is entered into by and among STORE Capital Corporation, a Maryland corporation (the “Guarantor”), STORE Capital Advisors, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Guarantor (the “Company”), and Craig Barnett (the “Executive”).

W I T N E S S E T H :

WHEREAS, the Company desires to secure the services of the Executive in the position set forth below, and the Executive desires to serve the Company in such capacity;

WHEREAS, the Guarantor desires to guaranty the obligations of the Company under this Agreement; and

WHEREAS, the Guarantor, the Company and the Executive desire to enter into this Agreement to, among other things, set forth the terms of such employment.

NOW, THEREFORE, in consideration of the future performance and responsibilities of the Executive and the Company and upon the other terms and conditions and mutual covenants hereinafter provided, the parties hereby agree as follows:

Section 1.  Employment.

(a)Position.  The Executive shall be employed by the Company during the Term (defined below) as its Executive Vice President – Underwriting and Portfolio Management.  The Executive shall report directly to the President or such other executive officer as the President shall determine.

(b)Duties.  The Executive’s principal employment duties and responsibilities shall be those duties and responsibilities customary for the positions of Executive Vice President – Underwriting and Portfolio Management and/or such other executive officer duties and responsibilities as the President (or such other executive officer as the President shall determine) shall from time to time reasonably assign to the Executive.

(c)Extent of Services.  Except for illnesses and vacation periods or as otherwise approved in writing by the President (or such other executive officer as the

President shall determine), the Executive shall devote substantially all of the Executive’s business time and attention and the Executive’s best efforts to the performance of the Executive’s duties and responsibilities under this Agreement.  Notwithstanding the foregoing, the Executive may (i) make any investment in entities unrelated to the Guarantor, so long as (A) the Executive is not obligated or required to, and shall not in fact, devote any material managerial efforts to such investment, and (B) such investment is not in violation of any other terms of this Agreement, including Section 10 hereof; (ii) participate in charitable, academic or community activities, and in trade or professional organizations; or (iii) hold directorships in other businesses as permitted by the Board of Directors of the Guarantor (the “Board”) (the activities in clauses (i) through (iii) above are collectively referred to herein as the “Excluded Activities”); provided, in each case, that none of the Excluded Activities, individually or in the aggregate, interfere with the performance of the Executive’s duties under this Agreement.

Section 2. Term.

(a)This Agreement shall become effective on the Effective Date and, unless terminated earlier as provided in Section 7, shall continue in full force and effect thereafter until April 15, 2025 (the “Initial Term”).

(b)In the event the Company consummates a Change in Control (as defined below) at any time following the second anniversary of the Effective Date or during any Renewal Term (as defined below), then this Agreement will automatically renew for a period of two (2) years following the date of consummation of such Change in Control (a “Change in Control Extension Term”).

(c)Upon the expiration of the Initial Term, any Change in Control Extension Term, and each Renewal Term, this Agreement will automatically renew for subsequent one (1) year terms (each a “Renewal Term”) unless either the Company or the Executive provides not less than sixty (60) days’ advance written notice to the other that such party does not wish to renew the Agreement for a subsequent Renewal Term.  In the event such notice of nonrenewal is given pursuant to this Section 2(c), this Agreement will expire at the end of the then current term.  The Initial Term, any Change in Control Extension Term, and each subsequent Renewal Term, taking into account any early termination of employment pursuant to Section 7, are referred to collectively as the “Term.”

(d)For purposes of this Agreement, a “Change in Control” will be deemed to have occurred if an event set forth in any one of the following paragraphs shall have occurred:

(i)any person or entity (other than the Guarantor, any trustee or other fiduciary holding securities under an employee benefit plan of the Guarantor, or any company owned, directly or indirectly, by the stockholders of

2

the Guarantor in substantially the same proportions as their ownership of capital stock of the Guarantor) becomes the Beneficial Owner (as such is defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of securities of the Guarantor (not including in the securities beneficially owned by such person or entity any securities acquired directly from the Guarantor or any affiliate thereof) representing 50% or more of the combined voting power of the then outstanding voting securities of the Guarantor;

(ii)the following individuals cease for any reason to constitute a majority of the number of directors then serving on the Board: individuals who, on the date hereof, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including, but not limited to, a consent solicitation, relating to the election of directors of the Guarantor) whose appointment or election by the Board or nomination for election by the Guarantor’s stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended;

(iii)there is consummated a merger, amalgamation or consolidation of the Guarantor with any other corporation, other than (A) a merger, amalgamation or consolidation into an entity, at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by stockholders of the Guarantor following the completion of such transaction in substantially the same proportions as their ownership of the Guarantor immediately prior to such sale, or (B) a merger, amalgamation or consolidation immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the Board of the entity surviving such merger, amalgamation or consolidation or, if the Guarantor or the entity surviving such merger is then a subsidiary, the ultimate parent thereof; or

(iv)the stockholders of the Guarantor approve a plan of complete liquidation or dissolution of the Guarantor or there is consummated an agreement for the sale or disposition by the Guarantor of all or substantially all of the Company’s assets, other than (A) a sale or disposition by the Guarantor of all or substantially all of the Guarantor’s assets to an entity, at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by stockholders of the Guarantor following the completion of such transaction in substantially the same proportions as their ownership of the Guarantor immediately prior to such sale, or (B) a sale or disposition of all or substantially all of the Guarantor’s assets immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the

3

board of directors of the entity to which such assets are sold or disposed or, if such entity is a subsidiary, the ultimate parent thereof.

Section 3.  Base Salary.  The Company shall pay the Executive a base salary annually (the “Base Salary”), which shall be payable in periodic installments according to the Company’s normal payroll practices.  The initial Base Salary hereunder shall be paid at the annualized rate of $375,000.  The Executive’s Base Salary shall be considered annually by the Board or the compensation committee thereof if such authority has been delegated to such committee (the Board or the Compensation Committee, as applicable, the “Committee”), and may be increased in the sole discretion of the Committee.  Any increase shall be retroactive to January 1 of the year in which such increase is approved.  The Base Salary, as adjusted by any subsequent increases, shall not be decreased during the Term. For purposes of this Agreement, the term “Base Salary” shall mean the amount of the Executive’s annual base salary as established and adjusted from time to time pursuant to this Section 3.

Section 4.  Annual Cash Incentive Bonus.

(a)The Executive shall be eligible to receive an annual cash incentive bonus (the “Cash Bonus”) for each fiscal year during the Term of this Agreement.  The target amount of the Cash Bonus for which the Executive is eligible shall be set by the Committee as a target percentage of Executive’s then-current Base Salary (the “Target Percentage”) and payment of a Cash Bonus (and the amount of such Cash Bonus) shall be based upon the satisfactory achievement of reasonable performance criteria and objectives (such criteria and objectives, the “Bonus Metrics”), which Bonus Metrics shall be adopted by the Committee, in its sole discretion, after consultation with management, each year prior to or as soon as practicable after the commencement of such year, but in no event later than March 1 of the applicable performance year and set forth in a written plan (the “Annual Bonus Plan”).  If the Committee determines that the applicable Bonus Metrics have been achieved at or above a “threshold” level with respect to the applicable performance year, then, based on the level of such achievement, the Executive shall be entitled to receive payment of the applicable Cash Bonus (which may be less than, equal to, or greater than the Target Percentage based on the level of performance achieved and the terms of the Annual Bonus Plan).  If the Committee determines that the applicable Bonus Metrics have not been achieved at a “threshold” level with respect to the applicable performance year, then no Cash Bonus under the Annual Bonus Plan shall be due and payable to the Executive for such year.

(b)The Cash Bonus, if any, shall be paid to the Executive no later than thirty (30) days after the date on which the Committee determines (i) whether or not the applicable Bonus Metrics for such performance year have been achieved, and the level of such achievement, and (ii) the amount of the actual Cash Bonus so earned; provided that, except as may be set forth in the Annual Bonus Plan, in no event shall any Cash Bonus, if

4

earned, be paid later than March 1 of the year following the performance year to which it relates.

(c)Except as otherwise provided in Section 8(a)(ii) or Section 8(b)(ii) in connection with the termination of the Executive’s employment under certain circumstances, the Executive must be employed by the Company throughout the entirety of an applicable performance year (January 1 through December 31) in order to receive all or any portion of a Cash Bonus.  For the avoidance of doubt, if the Executive was employed by the Company from January 1 through December 31 of such performance year, the Executive has met the employment criterion for Cash Bonus eligibility for that year and need not be employed by the Company thereafter, including at the time the Cash Bonus, if any, is determined or paid for that performance year, in order to receive payment of any Cash Bonus amount the Executive would otherwise be entitled to receive.

Section 5.  Equity Grants.  In addition to a Cash Bonus under Section 4, the Executive shall be eligible to receive equity awards, as determined by the Committee under any equity incentive plan(s) established by the Company, the Guarantor or any of their respective affiliates and as in effect from time to time.  The terms of any such equity awards shall be approved by the Committee and set forth in the applicable equity incentive plan and related grant documents.

Section 6.  Benefits.

(a)Paid Time Off.  During the Term, the Executive shall be entitled to such paid time off, including sick time and personal days, generally made available by the Company to other senior executive officers of the Company, subject to the terms and conditions of the Company’s paid-time off policy.

(b)Employee Benefit Plans.  During the Term, the Executive (and, where applicable, the Executive’s spouse and eligible dependents, if any, and their respective designated beneficiaries) shall be eligible to participate in and receive the benefit of each employee benefit plan sponsored or maintained by the Company and generally made available to other senior executive officers of the Company, subject to the generally applicable provisions thereof.  Nothing in this Agreement shall in any way limit the Company’s right to amend or terminate any such employee benefit plan in its sole discretion, with or without notice, so long as any such amendment affects the Executive and the other senior executive officers of the Company in a similar fashion.

(c)Other Benefits.  The perquisites set forth below are provided to the Executive subject to continued employment with the Company:

(i)Disability Insurance.  The Company shall maintain a supplemental, long-term disability policy on behalf of the Executive; provided

5

that the cost of such policy (to the Company) shall not exceed $15,000 per year or such higher amount as may be subsequently approved by the Committee.

(ii)Annual Physical.  The Company shall pay the cost of an annual medical examination for the Executive by a licensed physician in the Scottsdale or Phoenix, Arizona area selected by the Executive; provided that the cost for such annual medical examination shall not exceed $2,500 per year or such higher amount as may be subsequently approved by the Committee.

(iii)Club Dues.  The Company shall pay, or reimburse the Executive for, the monthly membership dues actually incurred by the Executive for one fitness or country club membership maintained by the Executive; provided that the payable or reimbursable amount shall not exceed $1,000 per month or such higher amount as may be subsequently approved by the Committee.  For the avoidance of doubt, except as specifically provided for above, the Company shall not pay, or reimburse the Executive for, any other expenses associated with such club membership (including, but not limited to, any initiation fees and personal expenditures at such club).

Section 7.  Termination.  The employment of the Executive by the Company pursuant to this Agreement shall terminate:

(a)Death or Disability.  Immediately upon the death or Disability of the Executive.  As used in this Agreement, “Disability” means the Executive’s inability to perform the essential functions of Executive’s position, with or without reasonable accommodation, due to a mental or physical disability.

(b)For Cause.  At the election of the Company, for Cause.  For purposes of this Agreement, “Cause” means the Executive's:

(i) refusal or neglect, in the reasonable judgment of the Board, to perform substantially all the Executive’s employment-related duties, which refusal or neglect is not cured within twenty (20) days’ of the Executive’s receipt of written notice from the Company;

(ii)willful misconduct;

(iii)personal dishonesty, incompetence or breach of fiduciary duty which, in any case, has a material adverse impact on the business or reputation of the Company or any of its affiliates, as determined in the Board’s reasonable discretion;

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(iv)conviction of or entrance of a plea of guilty or nolo contendere (or any applicable equivalent thereof) to a crime constituting a felony (or a crime or offense of equivalent magnitude in any jurisdiction);

(v)willful violation of any federal, state or local law, rule, or regulation that has a material adverse impact on the business or reputation of the Company or any of its affiliates, as determined in the Board’s reasonable discretion; or

(vi)material breach of any covenant contained in Section 10 of this Agreement.

Executive’s termination for Cause shall take effect immediately upon Executive’s receipt of written notice from the Company of such termination for Cause, which notice shall specify, with particularity, each basis for the Company’s determination that Cause exists.

(c)For Good Reason.  At the election of the Executive, for Good Reason.  For purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the following actions or omissions, without the Executive's written consent:

(i)A material reduction of, or other material adverse change in, the Executive’s duties or responsibilities (including in connection with a Change in Control, where the Executive’s duties or responsibilities are materially reduced, or materially adversely changed, as compared to the Executive’s duties or responsibilities prior to such Change in Control), such that Executive is no longer performing the duties or engaging in the responsibilities of an executive officer of the Company, or the assignment to the Executive of any duties or responsibilities that are materially inconsistent with the Executive’s position as an executive officer of the Company;

(ii)A material reduction by the Company in the Executive’s annual Base Salary or in the Target Percentage with respect to the Cash Bonus;

(iii)(A) the requirement by the Company that the primary location at which the Executive performs the Executive’s duties be changed to a location that is outside of a 35-mile radius of Scottsdale, Arizona, or (B) a substantial increase in the amount of travel that the Executive is required to do because of a relocation of the Company’s headquarters from Scottsdale, Arizona;

(iv)A material breach by the Company of any provision of this Agreement not otherwise specified in this Section 7(c), it being agreed and understood that any breach of the Company's obligations under Section 6(c) shall

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not constitute a material breach of this Agreement and the Executive's sole remedy for any breach of such Section 6(c) shall be monetary damages; and

(v)Any failure by the Company, in the event of a Change in Control (as hereinafter defined), to obtain from any successor to the Company an agreement to assume and perform this Agreement, as contemplated by Section 15(e).

Notwithstanding the foregoing, the Executive’s termination of employment for Good Reason shall not be effective, and Good Reason shall not be deemed to exist, until (A) the Executive provides the Company with written notice specifying, with particularity, each basis for the Executive’s determination that actions or omissions constituting Good Reason have occurred, and (B) the Company fails to cure or resolve the issues identified by the Executive’s notice within thirty (30) days of the Company’s receipt of such notice.  The Company and the Executive agree that such thirty (30) day period shall be utilized to engage in discussions in a good faith effort to cure or resolve the actions or omissions otherwise constituting Good Reason, and that the Executive will not be considered to have resigned from employment during such thirty (30) day period.

(d)Without Cause; Without Good Reason.  At the election of the Company, without Cause, upon thirty (30) days’ prior written notice to the Executive, or, at the election of the Executive, without Good Reason, upon thirty (30) days’ prior written notice to the Company.  For the avoidance of doubt, the exercise by the Company of its  right to not extend the Agreement, or the expiration of this Agreement by its terms at the end of the Term, shall constitute a termination at the election of the Company without Cause.

Section 8.  Effects of Termination.

(a)Termination By the Company Without Cause or By the Executive for Good Reason.  If the employment of the Executive is terminated by the Company for any reason other than Cause, death or Disability, or if the employment of the Executive is terminated by the Executive for Good Reason, then, subject to the terms and conditions of Section 15(i), the Company shall pay or provide to the Executive the following compensation and benefits:

(i)Accrued Obligations.  Any and all Base Salary, Cash Bonus and any other compensation-related payments that have been earned but not yet paid, including (if applicable) pay in lieu of accrued, but unused, vacation, and unreimbursed expenses that are owed as of the date of the termination of Executive’s employment, in each case that are related to any period of employment preceding the Executive’s termination date (the “Accrued Obligations”).  Any earned but unpaid Cash Bonus that is part of the Accrued Obligations shall be paid at the time provided for in Section 4 above.  Any

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Accrued Obligations that constitute retirement or deferred compensation shall be payable in accordance with the terms and conditions of the applicable plan, program or arrangement.  All other Accrued Obligations shall be paid within thirty (30) days of the date of termination, or, if earlier, not later than the time required by applicable law; provided that the payment of any unreimbursed expenses shall be subject to the Executive’s submission of substantiation of such expenses in accordance with the Company’s applicable expense policy;

(ii)Severance Payment.

(A)An amount equal to the Cash Bonus at the Target Percentage for which the Executive is eligible for the year in which the termination of employment occurs, prorated for the portion of such year during which the Executive was employed by the Company prior to the effective date of the Executive’s termination of employment; plus

(B)An amount equal to two times the sum of:

(1)the Executive’s Base Salary in effect on the date of termination, plus

(2)an amount equal to the greater of (x) the average Cash Bonus received by the Executive for the last two completed fiscal years during which Executive served as an Executive Vice President of the Company, or (y) the Cash Bonus at the Target Percentage (calculated on the basis of a full fiscal year) for which the Executive was eligible during the last completed fiscal year, regardless of whether the Executive actually received a Cash Bonus at such Target Percentage for that year.

The sum of the amounts payable under clauses (A) and (B) of this Section 8(a)(ii) are referred to, collectively, as the “Severance Payment.”  Subject to the provisions of Section 8(e), the Severance Payment shall be paid to the Executive in a single, lump sum cash payment within sixty-two (62) days following the effective date of the Executive’s termination of employment; and

(iii)COBRA Reimbursement.  If the Executive is eligible for, and elects to receive, continued coverage for the Executive and, if applicable, the Executive’s eligible dependents under the Company’s group health benefits plan(s) in accordance with the provisions of COBRA, the Company shall reimburse the Executive for a period of twelve (12) months following termination of the Executive’s employment (or, if less, for the period that the Executive is

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eligible for such COBRA continuation coverage) for the excess of (A) the amount that the Executive is required to pay monthly to maintain such continued coverage under COBRA, over (B) the amount that the Executive would have paid monthly to participate in the Company’s group health benefits plan(s) had the Executive continued to be an employee of the Company (the “COBRA Reimbursement” and such amount, the “COBRA Reimbursement Amount”). COBRA Reimbursements shall be made by the Company to the Executive consistent with the Company’s normal expense reimbursement policy; provided that the Executive submits documentation to the Company substantiating his payments for COBRA coverage.  However, if the Company determines in its sole discretion that it cannot, without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), provide any COBRA Reimbursements that otherwise would be due to the Executive under this Section 8(a)(iii), then the Company will, subject to the provisions of Section 15(i), in lieu of any such COBRA Reimbursements, provide to the Executive a taxable monthly payment in an amount equal to the COBRA Reimbursement Amount, which payments will be made regardless of whether the Executive elects COBRA continuation coverage (the “Alternative Payments”). Any Alternative Payments will cease to be provided when, and under the same terms and conditions, COBRA Reimbursements would have ceased under this Section 8(a)(iii). For the avoidance of doubt, the Alternative Payments may be used for any purpose, including, but not limited to, continuation coverage under COBRA, and will be subject to all applicable taxes and withholdings, if any. Notwithstanding anything to the contrary under this Agreement, if at any time the Company determines in its sole, good faith discretion that it cannot provide the Alternative Payments contemplated by the preceding sentence without violating Section 2716 of the Public Health Service Act, the Executive will not receive such payments.

(iv)Accelerated Vesting.  Any and all outstanding unvested shares of restricted common stock of the Guarantor that had been awarded to Executive under any equity incentive plan of the Guarantor (the “Unvested Shares”) shall immediately vest and any restrictions thereon shall immediately lapse upon such termination of employment. The acceleration of any other equity incentives granted to the Executive under any equity incentive plan of the Guarantor in connection with such termination of employment shall be governed by the applicable plan and related grant documents.

(b)Termination on Death or Disability.  If the employment of the Executive is terminated due to the Executive’s death or Disability, the Company shall have no further liability or further obligation to the Executive except that the Company shall pay or provide to the Executive (or, if applicable, the Executive’s estate or designated beneficiaries under any Company-sponsored employee benefit plan in the event of his death) the following compensation and benefits:

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(i)The Accrued Obligations, at the times provided and subject to the conditions set forth in Section 8(a)(i) above;

(ii)An amount equal to the Cash Bonus at the Target Percentage for which the Executive is eligible for the year in which the Executive’s death or Disability occurs, prorated for the portion of such year during which the Executive was employed by the Company prior to the Executive’s death or termination of employment due to Disability (less any payments in respect of such Cash Bonus related to that performance year received by the Executive during such year), such amount to be paid within thirty (30) days after the Executive’s death or such termination of employment due to Disability;

(iii)Any and all outstanding Unvested Shares shall immediately vest and any restrictions thereon shall immediately lapse upon the Executive’s death or termination of employment due to Disability (the acceleration of any other equity incentives granted to the Executive under any equity incentive plan of the Guarantor in connection with the termination of the Executive’s employment due to death or Disability shall be governed by the applicable plan and related grant documents); and

(iv)If the Executive is eligible for and elects to receive continued coverage under the Company’s medical and health benefits plan(s) in accordance with the provisions of COBRA for the Executive and, if applicable, the Executive’s eligible dependents, or if the Executive’s eligible dependents are eligible for such continued coverage due to the Executive’s death, then the Company shall reimburse the Executive or such dependents for a period of eighteen (18) months following the Executive’s termination of employment due to death or Disability (or, if less, for the period that the Executive or any such dependent is eligible for such COBRA continuation coverage) for the excess of (A) the amount that the Executive or any such dependent is required to pay monthly to maintain such continued coverage under COBRA, over (B) the amount that the Executive would have paid monthly to participate in the Company’s group health benefits plan(s) had the Executive continued to be an employee of the Company.

(c)By the Company for Cause or By the Executive Without Good Reason.  In the event that the Executive’s employment is terminated (i) by the Company for Cause, or (ii) voluntarily by the Executive without Good Reason, the Company’s sole obligation shall be to pay the Executive the Accrued Obligations at the times provided and subject to the conditions set forth in Section 8(a)(i) above.

(d)Termination of Authority; Resignation from Boards.  Immediately upon the termination of the Executive’s employment with the Company for any reason, or the expiration of this Agreement, notwithstanding anything else appearing in this

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Agreement or otherwise, the Executive will stop serving the functions of the Executive’s terminated or expired positions, and shall be without any of the authority or responsibility for such positions.  On request of the Board at any time following the termination or expiration of the Executive’s employment for any reason, the Executive shall resign from the Board (and the boards of directors or managers of the Company or any affiliate of the Company or the Guarantor) if then a member and shall execute such documentation as the Company shall reasonably request to evidence the cessation of the Executive’s terminated or expired positions.

(e)Release.  Prior to the payment by the Company of the payments and benefits provided under Sections 8(a)(ii)-(iv) or Sections 8(b)(ii)-(iv) due hereunder, if any, and in no event later than sixty-two (62) days following the effective date of Executive’s termination, the Executive (or, if applicable, Executive’s representative) shall, as a condition to receipt of such payments and benefits, deliver to the Company a General Release of Claims in a form acceptable to the Company that is effective and irrevocable with respect to all potential claims the Executive may have against the Company, the Guarantor or their respective affiliates related to the Executive’s employment.  The Company shall be responsible for providing a proposed form of release within ten (10) calendar days of the date of the Executive’s termination of employment.  If the Company timely provides a proposed form of release and the Executive does not timely execute and return it, or revokes such release after delivery, the Company shall not be required to pay the Executive all or any portion of such payments and benefits.

Section 9.  Section 280G of the Code.  Notwithstanding anything contained in this Agreement to the contrary, if the Executive would receive (a) any payment, deemed payment or other benefit as a result of the operation of Section 8 hereof that, together with any other payment, deemed payment or other benefit the Executive may receive under any other plan, program, policy or arrangement (collectively with the payments under Section 8 hereof, the “Covered Payments”), would constitute an “excess parachute payment” under Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) that would be or become subject to the tax (the “Excise Tax”) imposed under Section 4999 of the Code or any similar tax that may hereafter be imposed, and (b) a greater net after-tax benefit by limiting the Covered Payments so that the portion thereof that are parachute payments do not exceed the maximum amount of such parachute payments that could be paid to the  Executive without the Executive’s being subject to any Excise Tax (the “Safe Harbor Amount”), then the Covered Payments to the Executive shall be reduced (but not below zero) so that the aggregate amount of parachute payments that the Executive receives does not exceed the Safe Harbor Amount.  In the event that the Executive receives reduced payments and benefits hereunder, such payments and benefits shall be reduced in connection with the application of the Safe Harbor Amount in the following manner: first, the Executive’s Severance Payment under Section 8(a)(ii) shall be reduced, followed by, to the extent necessary and in order, (i) any COBRA Reimbursements or Alternative Payments under Section 8(a)(iii); (ii) the vesting

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of the Unvested Shares under Section 8(a)(iv); and (iii) the Accrued Obligations under Section 8(a)(i).  For purposes of determining whether any of the Covered Payments will be subject to the Excise Tax, such Covered Payments will be treated as “parachute payments” within the meaning of Section 280G of the Code, and all “parachute payments” in excess of the “base amount” (as defined under Section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the good faith judgment of a public accounting firm appointed by the Company prior to the change in control or tax counsel selected by such accounting firm (the “Accountants”), the Company has a reasonable basis to conclude that such Covered Payments (in whole or in part) either do not constitute “parachute payments” or represent reasonable compensation for personal services actually rendered (within the meaning of Section 280G(b)(4)(B) of the Code) in excess of the allocable portion of the “base amount,” or such “parachute payments” are otherwise not subject to such Excise Tax, and the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Accountants in accordance with the principles of Section 280G of the Code.

Section 10.  Noncompetition; Nonsolicitation and Confidentiality.

(a)Consideration.  The Executive acknowledges that, in the course of his employment with the Company, the Executive will serve as a member of the Company’s senior management and will become familiar with the Company’s trade secrets and with other confidential and proprietary information and that the Executive’s services will be of special, unique and extraordinary value to the Company, the Guarantor and their respective subsidiaries.  The Executive further acknowledges that the business of the Company, the Guarantor and their respective subsidiaries is national in scope and that the Company, the Guarantor and their respective subsidiaries, in the course of such business, works with customers and vendors throughout the United States, and competes with other companies located throughout the United States. Therefore, in consideration of the foregoing, Executive agrees that (i) the Executive shall comply with subparagraphs (b), (c), (d) and (e) of this Section 10 during the Term and (except in the case of the exercise by the Company of its  right to not extend the Agreement, or the expiration of this Agreement by its terms at the end of the Term) for the period of time following the Term specified in each such subparagraph, and (ii) the Company’s obligation to make any of the payments and benefits to be paid or provided to the Executive under this Agreement (including, without limitation, under Section 8 and Section 9) shall be subject to the Executive’s compliance with subparagraphs (b), (c), (d) and (e) of this Section 10, during the Term and for the period of time following the Term specified in each such subparagraph.

(b)Noncompetition.  During the Term and for a period of twelve (12) months following the termination of the Executive’s employment (the “Restricted Period”), the Executive shall not, anywhere in the United States where the Company, the Guarantor or its subsidiaries conduct business prior to the date of the Executive’s

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termination of employment (the “Restricted Territory”), directly or indirectly, whether as a principal, partner, member, employee, independent contractor, consultant, shareholder or otherwise, provide services to (i) any entity (or any division, unit or other segment of any entity) whose principal business is to purchase real estate from, and to lease such real estate back to, the owners and/or operators of businesses that (A) are operated from single-tenant locations within the United States, (B) generate sales and profits at each such location, and (C) operate within the service, retail, and manufacturing sectors, including, without limitation and for example only, restaurants, early childhood education centers, movie theaters, health clubs and furniture stores, or (ii) any other business or in respect of any other endeavor that is competitive with or similar to any other business activity (A) engaged in by the Company, the Guarantor or any of their respective subsidiaries prior to the date of the Executive’s termination of employment or (B) that has been submitted to the Board (or a committee thereof) for consideration and that is under active consideration by the Board (or a committee thereof) as of the date of the Executive’s termination of employment (the services described in Section 10(b)(i) and Section 10(b)(ii) are defined collectively as the “Restricted Business”).  Nothing in this Section 10 shall prohibit the Executive from making any passive investment in a public company, from owning five percent (5%) or less of the issued and outstanding voting securities of any entity, or from serving as a non-employee, independent director of a company that does not compete with the Company, the Guarantor or any of their respective subsidiaries (as described in this Section 10(b)), provided that such activities do not create a conflict of interest with Executive’s employment by the Company or result in the Executive being obligated or required to devote any managerial efforts to such entity.

Notwithstanding anything in this Section 10(b) to the contrary, if (i) the Executive’s employment is terminated under circumstances that the Company asserts do not obligate the Company to make the Severance Payment described in Section 8(a)(ii) (e.g., the Company asserts that the Executive’s employment is terminated for Cause), (ii) the Executive disagrees and timely invokes the arbitration process set forth in Section 12(a) to challenge such assertion, and (iii) the Company does not, within ten (10) business days after it receives the Executive’s written demand for arbitration, either make the Severance Payment, confirm in writing that it will make the Severance Payment if the Severance Payment is not yet due, or deposit the full amount of the Severance Payment in escrow with a third party unaffiliated bank pending the outcome of the arbitration, then this Section 10(b) shall cease to apply to the Executive, and such cessation shall be retroactive to the date of termination of employment.  To effectuate the purpose of this provision, the Company will, within ten (10) business days of the termination of Executive’s employment, regardless of who initiates such termination or the reason for it, provide the Executive with a written statement of the Company’s position regarding whether the Company is obligated to make the Severance Payment.

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(c)Non-Solicitation of Employees.  During the Restricted Period, except in accordance with performance of the Executive’s duties hereunder, the Executive shall not, directly or indirectly, induce any person who was employed by the Company, the Guarantor or any of their respective subsidiaries during Executive’s employment with the Company to terminate employment with that entity, and the Executive shall not, directly or indirectly, either individually or as owner, agent, employee, consultant or otherwise, employ, offer employment to or otherwise interfere with the employment relationship of the Company, the Guarantor or any of their respective subsidiaries with any person who is or was employed by the Company, the Guarantor or such subsidiary during Executive’s employment with the Company unless, at the time of such employment, offer or other interference, such person shall have ceased to be employed by such entity for a period of at least six months; provided, that the foregoing will not apply to individuals solicited or hired as a result of the use of an independent employment agency (so long as the agency was not directed to solicit or hire a particular individual) or to individuals who have responded to a public solicitation to the general population.

(d)Non-Solicitation of Clients.  During the Restricted Period, the Executive shall not solicit or otherwise attempt to establish any business relationship with any person or entity that is, or during the twelve (12) month period preceding the date of the Executive’s termination of employment with the Company was, a customer, client or distributor of the Company, the Guarantor or any of their respective subsidiaries if the solicitation or establishment of the business relationship is in connection with or on behalf of any Restricted Business that the Executive is precluded from providing services to pursuant to Section 10(b).

(e)Confidentiality.  At any time during or after the Executive’s employment with the Company, the Executive shall not, without the prior written consent of the Company, use, divulge, disclose or make accessible to any other person, firm, partnership, corporation or other entity any confidential or proprietary information pertaining to the business of the Company, the Guarantor or any of their respective subsidiaries (“Confidential Information”).  The Company acknowledges that, prior to his employment with the Company, the Executive has lawfully acquired extensive knowledge of the industries and businesses in which the Company engages and the Company’s and the Guarantor’s customers, and that the provisions of this Section 10 are not intended to restrict the Executive’s use of such previously acquired knowledge.  Upon termination of the Executive’s employment with the Company for any reason, the Executive shall return to the Company all Company property and all written Confidential Information in the possession of the Executive.  Notwithstanding anything in this Agreement or any other Company document to the contrary, the Executive shall be permitted, and the Company expressly acknowledges the Executive’s right, to divulge, disclose or make accessible to the Executive’s counsel any Confidential Information that, in the good faith judgment of the Executive (or the Executive’s counsel), is necessary or

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appropriate in order for counsel to evaluate the Executive’s rights, duties or obligations under this Agreement or in connection with the Executive’s status as an officer and/or director of the Company, the Guarantor or any of their respective subsidiaries.

In the event that the Executive receives a request or is required (by deposition, interrogatory, request for documents, subpoena, civil investigative demand or similar process) to disclose all or any part of the Confidential Information to a third party (other than his counsel), the Executive agrees to (a) promptly notify the Company in writing of the existence, terms and circumstances surrounding such request or requirement; (b) consult with the Company, at the Company’s request, on the advisability of taking legally available steps to resist or narrow such request or requirement; and (c) assist the Company, at the Company’s request and expense, in seeking a protective order or other appropriate remedy.  In the event that such protective order or other remedy is not obtained or that the Company requests no consultation or assistance from the Executive pursuant to this provision or otherwise waives compliance with the provisions hereof, the Executive shall not be liable for such disclosure unless such disclosure was caused by or resulted from a previous disclosure by the Executive not permitted by this Agreement.

In addition, nothing in this Agreement is intended to restrict Executive’s right to report to a governmental agency any alleged violations of the federal securities laws or other laws unrelated to the employment laws specified in Section 8(e) as applicable to the Executive.

Pursuant to the Defend Trade Secrets Act of 2016, Executive acknowledges that Executive shall not have criminal or civil liability under any Federal or State trade secret law for the disclosure of a trade secret that  (i) is made (A) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  In addition, if Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the trade secret to Executive’s attorney and may use the trade secret information in the court proceeding, if Executive (1) files any document containing the trade secret under seal; and (2) does not disclose the trade secret, except pursuant to court order.ve, or to receive financial rewards from the government for such reporting.

(f)Injunctive Relief with Respect to Covenants.  The Executive acknowledges and agrees that the covenants and obligations of the Executive with respect to noncompetition, nonsolicitation and confidentiality, as the case may be, set forth herein relate to special, unique and extraordinary matters and that a violation or threatened violation of any of the terms of such covenants or obligations will cause the Company irreparable injury for which adequate remedies are not available at law.  Therefore, the Executive agrees, to the fullest extent permitted by applicable law, that the Company shall be entitled to an injunction, restraining order or such other equitable relief

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(without the requirement to post bond) restraining the Executive from committing any violation of the covenants or obligations contained in this Section 10.  These injunctive remedies are cumulative and are in addition to any other rights and remedies the Company may have at law or in equity.  In connection with the foregoing provisions of this Section 10, the Executive represents that the Executive’s economic means and circumstances are such that such provisions will not prevent the Executive from providing for the Executive and the Executive’s family on a basis satisfactory to the Executive.

Nothing in this Section 10 shall impede, restrict or otherwise interfere with the Executive’s participation in any Excluded Activities.

The Executive agrees that the restraints imposed upon him pursuant to this Section 10 are necessary for the reasonable and proper protection of the Company, the Guarantor and their respective subsidiaries and affiliates, and that each and every one of the restraints is reasonable in respect to subject matter, length of time and geographic area.  The parties further agree that, in the event that any provision of this Section 10 shall be determined by any court or arbitrator of competent jurisdiction to be unenforceable by reason of its being extended over too great a time, too large a geographic area or too great a range of activities, such provision may be modified by the court or arbitrator to permit its enforcement to the maximum extent permitted by law.

Section 11.  Intellectual Property.  During the Term, the Executive shall promptly disclose to the Company or any successor or assign, and grant to the Company and its successors and assigns without any separate remuneration or compensation other than that received by the Executive in the course of the Executive’s employment, the Executive’s entire right, title and interest in and to any and all inventions, developments, discoveries, models, or any other intellectual property of any type or nature whatsoever developed solely during the Term (“Intellectual Property”), whether developed by the Executive during or after business hours, or alone or in connection with others, that is in any way related to the business of the Company, the Guarantor, their respective subsidiaries or their respective successors or assigns.  This provision shall not apply to books or articles authored by the Executive during non-work hours, consistent with the Executive’s obligations under this Agreement including Section 10 thereof, so long as such books or articles (a) are not funded in whole or in part by the Company, (b) do not interfere with the performance of the Executive’s duties under this Agreement, and (c) do not use or contain any Confidential Information or Intellectual Property of the Company, the Guarantor or their respective subsidiaries.  The Executive agrees, at the Company’s expense, to take all steps necessary or proper to vest title to all such Intellectual Property in the Company, and cooperate fully and assist the Company in any litigation or other proceedings involving any such Intellectual Property.

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Section 12.  Disputes.

(a)Arbitration.  Excluding requests for equitable relief by the Company under Section 10(f), all controversies, claims or disputes arising between the parties that are not resolved within sixty (60) days after written notice from one party to the other setting forth the nature of such controversy, claim or dispute shall be submitted to binding arbitration in Maricopa County, Arizona.  Arbitration of disputes under this Agreement shall proceed in accordance with the Employment Dispute Resolution Rules of the American Arbitration Association (“AAA”) as those rules are applied to individually negotiated employment agreements, as then in effect (“Rules”), provided that both parties shall have the opportunity to conduct pre-arbitration discovery. The arbitration shall be decided by a single arbitrator mutually agreed upon by the parties or, in the absence of such agreement, by an arbitrator selected according to the applicable rules of the AAA.

(b)Jury Waiver.  Each party to this Agreement understands and expressly acknowledges that in agreeing to submit the disputes described in Section 12(a) to binding arbitration, such party is knowingly and voluntarily waiving all rights to have such disputes heard and decided by the judicial process in any court in any jurisdiction.  This waiver includes, without limitation, the right otherwise enjoyed by such party to a jury trial.

(c)Limitations Period.  All arbitration proceedings pursuant to this Agreement shall be commenced within the time period provided for by the legally recognized statute of limitations applicable to the claim being asserted.  No applicable limitations period shall be deemed shortened or extended by this Agreement.

(d)Arbitrator’s Decision.  The arbitrator shall have the power to award any party any relief available to such party under applicable law, but may not exceed that power.  The arbitrator shall explain the reasons for the award and must produce a formal written opinion.  The arbitrator’s award shall be final and binding and judgment upon the award may be entered in any court of competent jurisdiction.  There shall be no appeal from the award except on those grounds specified by the Federal Arbitration Act and case law interpreting the Federal Arbitration Act.

(e)Legal Fees.  Notwithstanding anything to the contrary in Section 12(d), the Arbitrator shall have the discretion to order the Company to pay or promptly reimburse the Executive for the reasonable legal fees and expenses incurred by the Executive in successfully enforcing or defending any right of the Executive pursuant to this Agreement even if the Executive does not prevail on all issues; provided, however, that the Company shall have no obligation to reimburse the Executive unless the amount recovered by the Executive from the Company, exclusive of fees and costs, is at least equal to the greater of (i) $50,000, or (ii) 25% of the award sought by the Executive in any arbitration or other legal proceeding.

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(f)Availability of Provisional Injunctive Relief.  Notwithstanding the parties’ agreement to submit all disputes to final and binding arbitration, either party may file an action in any court of competent jurisdiction to seek and obtain provisional injunctive and equitable relief to ensure that any relief sought in arbitration is not rendered ineffectual by interim harm that could occur during the pendency of the arbitration proceeding.

Section 13.  Indemnification.  The Company shall indemnify the Executive, to the maximum extent permitted by applicable law and the governing instruments of the Company or the Guarantor, against all costs, charges and expenses incurred or sustained by the Executive, including the cost of legal counsel selected and retained by the Executive in connection with any action, suit or proceeding to which the Executive may be made a party by reason of the Executive being or having been an officer, director or employee of the Company, the Guarantor or their respective subsidiaries.

Section 14.  Cooperation in Future Matters.  The Executive hereby agrees that for a period of twelve (12) months following the Executive’s termination of employment, the Executive shall cooperate with the Company’s reasonable requests relating to matters that pertain to the Executive’s employment by the Company, including, without limitation, providing information or limited consultation as to such matters, participating in legal proceedings, investigations or audits on behalf of the Company or the Guarantor, or otherwise being reasonably available to the Company or the Guarantor for other related purposes.  Any such cooperation shall be performed at scheduled times taking into consideration the Executive’s other commitments, and the Executive shall be compensated at a reasonable hourly or per diem rate to be agreed upon by the parties to the extent such cooperation is required on more than an occasional and limited basis.  The Executive shall not be required to perform such cooperation to the extent it conflicts with any requirements of exclusivity of services for another employer or otherwise, nor in any manner that in the good faith belief of the Executive would conflict with his rights under or ability to enforce this Agreement.

Section 15.  General.

(a)Notices.  All notices and other communications hereunder shall be in writing or by written telecommunication, and shall be deemed to have been duly given if delivered personally or if sent by overnight courier or by certified mail, return receipt requested, postage prepaid or sent by written telecommunication or facsimile, to the relevant address set forth below, or to such other address as the recipient of such notice or communication shall have specified in writing to the other party hereto, in accordance with this Section 15(a):

19

to the Company or the Guarantor:

Store Capital Advisors, LLC8377 E. Hartford Drive, Suite 100

Scottsdale, Arizona 85255

Attention:President

Facsimile:480.256.1101

to the Executive:

At the Executive’s last residence shown on the records of the Company.

A copy of each notice provided by either party shall also be delivered to:

DLA Piper LLP (US)2525 East Camelback Road, Suite 1000Phoenix, Arizona 85016Attention: David P. LewisFacsimile: 480.606.5526email: david.lewis@dlapiper.com

Any such notice shall be effective (i) if delivered personally, when received; (ii) if sent by overnight courier, when receipted for; and (iii) on confirmed receipt if sent by written telecommunication or facsimile; provided that a copy of such communication is sent by regular mail, as described above.

(b)Severability.  If a court of competent jurisdiction finds or declares any provision of this Agreement invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired.

(c)Waivers.  No delay or omission by either party hereto in exercising any right, power or privilege hereunder shall impair such right, power or privilege, nor shall any single or partial exercise of any such right, power or privilege preclude any further exercise thereof or the exercise of any other right, power or privilege.

(d)Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(e)Assigns.  This Agreement shall be binding upon and inure to the benefit of the Company’s and the Guarantor’s successors and the Executive’s personal or legal representatives, executors, administrators, heirs, distributees, devisees and legatees.  This Agreement shall not be assignable by the Executive, it being understood and agreed

20

that this is a contract for the Executive’s personal services.  This Agreement shall not be assignable by the Company except that the Company shall assign it in connection with a transaction involving the succession by a third party to all or substantially all of the Company’s or the Guarantor’s business and/or assets (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise).  When assigned to a successor, the assignee shall assume this Agreement and expressly agree to perform this Agreement in the same manner and to the same extent as the Company and the Guarantor would be required to perform it in the absence of such an assignment.  For all purposes under this Agreement, the term “Company” or “Guarantor” shall include any successor to the Company’s or the Guarantor’s business and/or assets that executes and delivers the assumption agreement described in the immediately preceding sentence or that becomes bound by this Agreement by operation of law.

(f)Entire Agreement.  This Agreement contains the entire understanding of the parties and supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter hereof.  For the avoidance of doubt, the parties hereto acknowledge that that certain Employment Agreement, dated as of October 1, 2020 (as amended, supplemented or modified from time to time), by and among the Company, the Guarantor and the Executive, and any rights, obligations and liabilities of the parties thereunder, shall automatically be terminated upon the effectiveness of this Agreement. This Agreement may not be amended except by a written instrument hereafter signed by the Executive and a duly authorized representative of the Board (other than the Executive).

(g)Guarantee.  By executing this Agreement, the Guarantor hereby unconditionally guarantees all obligations of the Company under this Agreement.

(h)Governing Law and Jurisdiction.  Except for Section 12 of this Agreement, which shall be governed by the Federal Arbitration Act, this Agreement and the performance hereof shall be construed and governed in accordance with the laws of the State of Arizona, without giving effect to principles of conflicts of law.  Executive hereby expressly consents to the personal jurisdiction of the state and federal courts located in Arizona for any lawsuit filed there against Executive by the Company arising from or relating to this Agreement.

(i)409A Compliance.  It is intended that this Agreement comply with Section 409A of the Code and the Treasury Regulations and IRS guidance thereunder (collectively referred to as “Section 409A”).  Notwithstanding anything to the contrary, this Agreement shall, to the maximum extent possible, be administered, interpreted and construed in a manner consistent with Section 409A.  To the extent that any reimbursement, fringe benefit or other, similar plan or arrangement in which the Executive participates during the Term or thereafter provides for a “deferral of compensation” within the meaning of Section 409A of the Code, (i) the amount of the benefit provided thereunder in a taxable year of the Executive shall not affect the amount

21

of such benefit provided in any other taxable year of the Executive (except that a plan providing medical or health benefits may impose a generally applicable limit on the amount that may be reimbursed or paid), (ii) any portion of such benefit provided in the form of a reimbursement shall be paid to the Executive on or before the last day of the Executive’s taxable year following the Executive’s taxable year in which the expense was incurred, and (iii) such benefit shall not be subject to liquidation or exchange for any other benefit.  For all purposes under this Agreement, reference to the Executive’s “termination of employment” (and corollary terms) from the Company shall be construed to refer to the Executive’s “separation from service” (as determined under Treas. Reg. Section 1.409A-1(h), as uniformly applied by the Company) from the Company.  If the Executive is a “specified employee” within the meaning of Section 409A, any payment required to be made to the Executive hereunder upon or following the Executive’s date of termination for any reason other than death or “disability” (as such terms are used in Section 409A(a)(2) of the Code) shall, to the extent necessary to comply with and avoid imposition on the Executive of any tax penalty imposed under, Section 409A, be delayed and paid in a single lump sum during the ten (10) day period following the six (6) month anniversary of the date of termination. Any severance payments or benefits under this Agreement that would be considered deferred compensation under Section 409A will be paid on, or, in the case of installments, will not commence until, the sixty-second (62nd) day following separation from service, or, if later, such time as is required by the preceding sentence or by Section 409A.  Any installment payments that would have been made to the Executive during the sixty-two (62)-day period immediately following the Executive’s separation from service but for the preceding sentence will be paid to the Executive on the sixty-second (62nd) day following the Executive’s separation from service and the remaining payments shall be made as provided in this Agreement.

(j)Construction.  The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any party.  The headings of sections of this Agreement are for convenience of reference only and shall not affect its meaning or construction.

(k)Payments and Exercise of Rights After Death.  Any amounts payable hereunder after the Executive’s death shall be paid to the Executive’s designated beneficiary or beneficiaries, whether received as a designated beneficiary or by will or the laws of descent and distribution.  The Executive may designate a beneficiary or beneficiaries for all purposes of this Agreement, and may change at any time such designation, by notice to the Company making specific reference to this Agreement.  If no designated beneficiary survives the Executive or the Executive fails to designate a beneficiary for purposes of this Agreement prior to the Executive’s death, all amounts thereafter due hereunder shall be paid, as and when payable, to the Executive’s spouse, if such spouse survives the Executive, and otherwise to his estate.

22

(l)Consultation With Counsel.  The Executive acknowledges that, prior to the execution of this Agreement, the Executive has had a full and complete opportunity to consult with counsel or other advisers of the Executive’s own choosing concerning the terms, enforceability and implications of this Agreement, and that the Company has not made any representations or warranties to the Executive concerning the terms, enforceability and implications of this Agreement other than as are reflected in this Agreement.  The Company acknowledges that, following the execution of this Agreement, the Executive shall have the right to consult with counsel of the Executive’s choosing (at the Executive’s personal expense) concerning the terms, enforceability and implications of this Agreement and the Executive’s rights, duties and obligations hereunder and as an officer and/or director of the Company or the Guarantor and, in so doing, may divulge Confidential Information to his counsel.

(m)Withholding.  Any payments provided for in this Agreement shall be paid after deduction for any applicable income tax withholding required under federal, state or local law.

(n)Survival.  The provisions of Sections 8, 9, 10, 11, 12, 13, 14, and 15 shall survive the termination of this Agreement.

[Signature page follows]

23

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

STORE CAPITAL ADVISORS, LLC
By:	/s/ Catherine Long
Name:	Catherine Long
Title:	Executive Vice President – Chief Financial Officer, Treasurer and Assistant Secretary
STORE CAPITAL CORPORATION, as guarantor of the Company’s obligations hereunder
By:		/s/ Mary Fedewa
Name:		Mary Fedewa
Title:		President and Chief Operating Officer
EXECUTIVE
/s/ Craig Barnett
Craig Barnett

[Signature Page to Barnett Employment Agreement]

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Mary Fedewa, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of STORE Capital Corporation for the quarter ended March 31, 2022;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 

Date: May 5, 2022
	/s/ Mary Fedewa
	Mary Fedewa
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Sherry L. Rexroad, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of STORE Capital Corporation for the quarter ended March 31, 2022;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 5, 2022
	/s/ Sherry L. Rexroad
	Sherry L. Rexroad
	Executive Vice President, Chief Financial Officer and Treasurer
	(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of STORE Capital Corporation (the “Company”) for the quarter ended March 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mary Fedewa, as President and Chief Executive Officer of the Company, hereby certify pursuant to Title 18, Chapter 63, Section 1350 of the United States Code, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	May 5, 2022	/s/ Mary Fedewa
		Name:	Mary Fedewa
		Title:	President and Chief Executive Officer
			(Principal Executive Officer)

The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and will not be deemed incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of the general incorporation language in such filing, except to the extent the Company specifically incorporates it by reference.

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of STORE Capital Corporation (the “Company”) for the quarter ended March 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Sherry L. Rexroad, as Executive Vice President, Chief Financial Officer and Treasurer of the Company, hereby certify pursuant to Title 18, Chapter 63, Section 1350 of the United States Code, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 5, 2022
	/s/ Sherry L. Rexroad
	Name:	Sherry L. Rexroad
	Title:	Executive Vice President, Chief Financial Officer and Treasurer
		(Principal Financial Officer)

The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and will not be deemed incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of the general incorporation language in such filing, except to the extent the Company specifically incorporates it by reference.

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2022	May 03, 2022
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2022
Document Transition Report	false
Entity File Number	001-36739
Entity Registrant Name	STORE CAPITAL CORPORATION
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	45-2280254
Entity Address, Address Line One	8377 East Hartford Drive
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Scottsdale
Entity Address, State or Province	AZ
Entity Address, Postal Zip Code	85255
City Area Code	480
Local Phone Number	256-1100
Title of 12(b) Security	Common Stock
Trading Symbol	STOR
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		280,567,570
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Central Index Key	0001538990

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Real estate investments:
Land and improvements	$ 3,239,050	$ 3,133,402
Buildings and improvements	7,096,841	6,802,918
Intangible lease assets	59,216	54,971
Total real estate investments	10,395,107	9,991,291
Less accumulated depreciation and amortization	(1,224,223)	(1,159,292)
Real estate investments, net	9,170,884	8,831,999
Real estate investments held for sale, net	33,234	25,154
Operating ground lease assets	32,960	33,318
Loans and financing receivables, net	736,410	697,269
Net investments	9,973,488	9,587,740
Cash and cash equivalents	39,340	64,269
Other assets, net	118,320	121,073
Total assets	10,131,148	9,773,082
Liabilities:
Credit facility	359,000	130,000
Unsecured notes payable, net	1,783,440	1,782,813
Non-recourse debt obligations of consolidated special purpose entities, net	2,410,834	2,425,708
Dividends payable	107,644	105,415
Operating lease liabilities	37,330	37,637
Accrued expenses, deferred revenue and other liabilities	145,909	147,380
Total liabilities	4,844,157	4,628,953
Stockholders' equity:
Common stock, $0.01 par value per share, 375,000,000 shares authorized, 279,595,851 and 273,806,225 shares issued and outstanding, respectively	2,796	2,738
Capital in excess of par value	5,910,856	5,745,692
Distributions in excess of retained earnings	(624,558)	(602,137)
Accumulated other comprehensive loss	(2,103)	(2,164)
Total stockholders' equity	5,286,991	5,144,129
Total liabilities and stockholders' equity	$ 10,131,148	$ 9,773,082

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2022	Dec. 31, 2021
Condensed Consolidated Balance Sheets
Common stock, par value per share	$ 0.01	$ 0.01
Common shares, authorized shares	375,000,000	375,000,000
Common shares, issued shares	279,595,851	273,806,225
Common shares, outstanding shares	279,595,851	273,806,225

XML

Condensed Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenues:
Rental revenues	$ 202,061	$ 169,328
Interest income on loans and financing receivables	14,930	12,563
Other income	5,125	370
Total revenues	222,116	182,261
Expenses:
Interest	43,999	41,828
Property costs	4,241	4,663
General and administrative	17,016	25,006
Depreciation and amortization	72,639	63,567
Provisions for impairment	912	7,350
Total expenses	138,807	142,414
Other income:
Net gain on dispositions of real estate	6,076	15,670
Loss from non-real estate, equity method investment	(2,157)	(363)
Income before income taxes	87,228	55,154
Income tax expense	206	194
Net income	$ 87,022	$ 54,960
Net income per share of common stock-basic	$ 0.32	$ 0.21
Net income per share of common stock-diluted	$ 0.32	$ 0.21
Weighted average common shares outstanding:
Basic (in shares)	275,003,273	266,366,698
Diluted (in shares)	275,003,273	266,366,698

XML

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Condensed Consolidated Statements of Comprehensive Income
Net income	$ 87,022	$ 54,960
Other comprehensive income (loss):
Unrealized losses on cash flow hedges		(3)
Cash flow hedge losses reclassified to interest expense	61	365
Total other comprehensive income	61	362
Total comprehensive income	$ 87,083	$ 55,322

XML

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Capital in Excess of Par Value	Distributions in Excess of Retained Earnings	Accumulated Other Comprehensive Loss	Total
Balance at Dec. 31, 2020	$ 2,661	$ 5,475,889	$ (459,977)	$ (2,795)	$ 5,015,778
Balance (in shares) at Dec. 31, 2020	266,112,676
Increase (Decrease) in Stockholders' Equity
Net income			54,960		54,960
Other comprehensive income (loss)				362	362
Issuance of common stock, net of costs	$ 35	114,068			114,103
Issuance of common stock, net of costs (shares)	3,483,051
Equity-based compensation	$ 4	12,901			12,905
Equity-based compensation (shares)	679,586
Shares repurchased under stock compensation plan		(5,579)	(3,227)		(8,806)
Shares repurchased under stock compensation plan (in shares)	(267,242)
Common dividends declared			(97,897)		(97,897)
Balance at Mar. 31, 2021	$ 2,700	5,597,279	(506,141)	(2,433)	5,091,405
Balance (in shares) at Mar. 31, 2021	270,008,071
Balance at Dec. 31, 2021	$ 2,738	5,745,692	(602,137)	(2,164)	5,144,129
Balance (in shares) at Dec. 31, 2021	273,806,225
Increase (Decrease) in Stockholders' Equity
Net income			87,022		87,022
Other comprehensive income (loss)				61	61
Issuance of common stock, net of costs	$ 55	166,107			166,162
Issuance of common stock, net of costs (shares)	5,539,138
Equity-based compensation	$ 3	3,065	81		3,149
Equity-based compensation (shares)	439,314
Shares repurchased under stock compensation plan		(4,008)	(1,880)		(5,888)
Shares repurchased under stock compensation plan (in shares)	(188,826)
Common dividends declared			(107,644)		(107,644)
Balance at Mar. 31, 2022	$ 2,796	$ 5,910,856	$ (624,558)	$ (2,103)	$ 5,286,991
Balance (in shares) at Mar. 31, 2022	279,595,851

XML

Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Condensed Consolidated Statements of Stockholders' Equity
Stock issuance costs	$ 2,269	$ 1,961
Common dividends declared per common share (in dollars per share)	$ 0.385	$ 0.36

XML

Condensed Consolidated Statements of Cash Flows $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)
Operating activities
Net income	$ 87,022	$ 54,960
Adjustments to net income:
Depreciation and amortization	72,639	63,567
Amortization of deferred financing costs and other noncash interest expense	2,161	2,100
Amortization of equity-based compensation	3,068	12,905
Provisions for impairment	912	7,350
Net gain on dispositions of real estate	(6,076)	(15,670)
Loss from non-real estate, equity method investment	2,157	363
Noncash revenue and other	(1,945)	(2,108)
Changes in operating assets and liabilities:
Other assets	1,798	5,350
Accrued expenses, deferred revenue and other liabilities	(849)	(4,928)
Net cash provided by operating activities	160,887	123,889
Investing activities
Acquisition of and additions to real estate	(467,495)	(246,195)
Investment in loans and financing receivables	(45,721)	(24,914)
Collections of principal on loans and financing receivables	5,090	2,460
Proceeds from dispositions of real estate	52,109	137,471
Net cash used in investing activities	(456,017)	(131,178)
Financing activities
Borrowings under credit facility	266,000
Repayments under credit facility	(37,000)
Repayments under non-recourse debt obligations of consolidated special purpose entities	(16,075)	(21,686)
Financing costs paid	(45)	(14)
Proceeds from the issuance of common stock	168,431	116,063
Stock issuance costs paid	(2,252)	(2,034)
Shares repurchased under stock compensation plans	(5,888)	(8,806)
Dividends paid	(106,686)	(98,193)
Net cash provided by (used in) financing activities	266,485	(14,670)
Net decrease in cash, cash equivalents and restricted cash	(28,645)	(21,959)
Cash, cash equivalents and restricted cash, beginning of period	70,049	176,576
Cash, cash equivalents and restricted cash, end of period	41,404	154,617
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	39,340	145,565
Restricted cash included in other assets	2,064	9,052
Total cash, cash equivalents and restricted cash	41,404	154,617
Supplemental disclosure of noncash investing and financing activities:
Accrued tenant improvements included in real estate investments	14,951	14,515
Accrued financing and stock issuance costs	17	17
Supplemental disclosure of cash flow information:
Cash paid during the period for interest, net of amounts capitalized	40,084	40,765
Cash paid during the period for income and franchise taxes	$ 100	$ 60

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Organization

3 Months Ended

Mar. 31, 2022

Organization

Organization

1. Organization

STORE Capital Corporation (STORE Capital or the Company) was incorporated under the laws of Maryland on May 17, 2011 to acquire single-tenant operational real estate to be leased on a long-term, net basis to companies that operate across a wide variety of industries within the service, retail and manufacturing sectors of the United States economy. From time to time, it also provides mortgage financing to its customers.

On November 21, 2014, the Company completed the initial public offering of its common stock. The shares began trading on the New York Stock Exchange on November 18, 2014 under the ticker symbol “STOR”.

STORE Capital has made an election to qualify, and believes it is operating in a manner to continue to qualify, as a real estate investment trust (REIT) for federal income tax purposes beginning with its initial taxable year ended December 31, 2011. As a REIT, it will generally not be subject to federal income taxes to the extent that it distributes all of its taxable income to its stockholders and meets other specific requirements.

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Summary of Significant Accounting Principles

3 Months Ended

Mar. 31, 2022

Summary of Significant Accounting Principles

Summary of Significant Accounting Principles

2. Summary of Significant Accounting Principles

Basis of Accounting and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the rules and regulations of the U.S. Securities and Exchange Commission (SEC). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of interim periods are not necessarily indicative of the results for the entire year. Certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted from these statements and, accordingly, these statements should be read in conjunction with the Company’s audited consolidated financial statements as filed with the SEC in its Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

These condensed consolidated statements include the accounts of STORE Capital and its subsidiaries, which are wholly owned and controlled by the Company through its voting interest. One of the Company’s wholly owned subsidiaries, STORE Capital Advisors, LLC, provides all of the general and administrative services for the day-to-day operations of the consolidated group, including property acquisition and lease origination, real estate portfolio management and marketing, accounting and treasury services. The remaining subsidiaries were formed to acquire and hold real estate investments or to facilitate non-recourse secured borrowing activities. Generally, the initial operations of the real estate subsidiaries are funded by an interest-bearing intercompany loan from STORE Capital, and such intercompany loan is repaid when the subsidiary issues long-term debt secured by its properties. All intercompany account balances and transactions have been eliminated in consolidation.

Certain of the Company’s wholly owned consolidated subsidiaries were formed as special purpose entities. Each special purpose entity is a separate legal entity and is the sole owner of its assets and liabilities. The assets of the special purpose entities are not available to pay or otherwise satisfy obligations to the creditors of any owner or affiliate of the special purpose entity. At March 31, 2022 and December 31, 2021, these special purpose entities held assets totaling $8.9 billion and $8.5 billion, respectively, and had third-party liabilities totaling $2.6 billion and $2.6 billion, respectively. These assets and liabilities are included in the accompanying condensed consolidated balance sheets.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Although management believes its estimates are reasonable, actual results could differ from those estimates.

Segment Reporting

The Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) Topic 280, Segment Reporting, established standards for the manner in which enterprises report information about operating segments. The Company views its operations as one reportable segment.

Investment Portfolio

STORE Capital invests in real estate assets through three primary transaction types as summarized below. At the beginning of 2019, the Company adopted Accounting Standards Update (ASU) 2016-02, Leases (Topic 842) (ASC Topic 842) which had an impact on certain accounting related to the Company’s investment portfolio.

● Real Estate Investments – investments are generally made through sale-leaseback transactions in which the Company acquires the real estate from the owner-operators and then leases the real estate back to them through long-term leases which are generally classified as operating leases; the operators become the Company’s long-term tenants (its customers). Certain of the lease contracts that are associated with a sale-leaseback transaction may contain terms, such as a tenant purchase option, which results in the transaction being accounted for as a financing arrangement, due to the adoption of ASC Topic 842, rather than as an investment in real estate subject to an operating lease.

● Mortgage Loans Receivable – investments are made by issuing mortgage loans to the owner-operators of the real estate that serve as the collateral for the loans and the operators become long-term borrowers and customers of the Company. On occasion, the Company may also make other types of loans to its customers, such as equipment loans.

● Hybrid Real Estate Investments – investments are made through modified sale-leaseback transactions, where the Company acquires land from the owner-operators, leases the land back through long-term leases and simultaneously issues mortgage loans to the operators secured by the buildings and improvements on the land. Prior to 2019, these hybrid real estate investment transactions were generally accounted for as direct financing leases. Subsequent to the adoption of ASC Topic 842, new or modified hybrid real estate investment transactions are generally accounted for as operating leases of the land and mortgage loans on the buildings and improvements.

Impact of the COVID-19 Pandemic

Since the beginning of the novel coronavirus (COVID-19) pandemic in early 2020, the Company has provided to certain tenants rent deferral arrangements in the form of both short-term notes and lease modifications. The FASB provided accounting relief under which concessions provided to tenants in direct response to the COVID-19 pandemic are not required to be evaluated or accounted for as lease modifications in accordance with ASC Topic 842. The Company elected to apply this accounting relief to the rent deferral arrangements it has entered into with its tenants, which primarily affected the timing (but not the amount) of lease and loan payments due to the Company under its contracts; net revenue recognized under these deferral arrangements results in a corresponding increase in receivables that are included in other assets, net on the condensed consolidated balance sheets. For the three months ended March 31, 2022, the Company recognized an additional $0.7 million of net revenue and collected $3.4 million of the receivables associated with these deferral arrangements. During the three months ended March 31, 2021, the Company recognized $2.0 million and collected $5.9 million in repayments of amounts deferred.

Accounting for Real Estate Investments

Classification and Cost

STORE Capital records the acquisition of real estate properties at cost, including acquisition and closing costs. The Company allocates the cost of real estate properties to the tangible and intangible assets and liabilities acquired based on their estimated relative fair values. Intangible assets and liabilities acquired may include the value of existing in-place leases, above-market or below-market lease value of in-place leases and ground lease-related intangibles, as applicable. Management uses multiple sources to estimate fair value, including independent appraisals and information obtained about each property as a result of its pre-acquisition due diligence and its marketing and leasing activities. Certain of the Company’s lease contracts allow its tenants the option, at their election, to purchase the leased property from the Company at a specified time or times (generally at the greater of the then-fair market value or the Company’s cost, as defined in the lease contracts). Subsequent to the adoption of ASC Topic 842, for real estate assets acquired through a sale-leaseback transaction and subject to a lease contract which contains a purchase option, the Company accounts for such an acquisition as a financing arrangement and records the investment in loans and financing receivables on the condensed consolidated balance sheet; should the purchase option later expire or be removed from the lease contract, the Company would derecognize the asset accounted for as a financing arrangement and recognize the transferred leased asset in real estate investments.

In-place lease intangibles are valued based on management’s estimates of lost rent and carrying costs during the time it would take to locate a tenant if the property were vacant, considering current market conditions and costs to execute similar leases. In estimating lost rent and carrying costs, management considers market rents, real estate taxes, insurance, costs to execute similar leases (including leasing commissions) and other related costs. The value assigned to in-place leases is amortized on a straight-line basis as a component of depreciation and amortization expense typically over the remaining term of the related leases.

The fair value of any above-market or below-market lease is estimated based on the present value of the difference between the contractual amounts to be paid pursuant to the in-place lease and management’s estimate of current market lease rates for the property, measured over a period equal to the remaining term of the lease. Capitalized above-market lease intangibles are amortized over the remaining term of the respective leases as a decrease to rental revenue. Below-market lease intangibles are amortized as an increase in rental revenue over the remaining term of the respective leases plus the fixed-rate renewal periods on those leases, if any. Should a lease terminate early, the unamortized portion of any related lease intangible is immediately recognized in operations.

The Company’s real estate portfolio is depreciated using the straight-line method over the estimated remaining useful life of the properties, which generally ranges from 30 to 40 years for buildings and is generally 15 years for land improvements. Properties classified as held for sale are recorded at the lower of their carrying value or their fair value, less anticipated selling costs. Any properties classified as held for sale are not depreciated.

Revenue Recognition

STORE Capital leases real estate to its tenants under long-term net leases that are predominantly classified as operating leases. The Company’s leases generally provide for rent escalations throughout the lease terms. For leases that provide for specific contractual escalations, rental revenue is recognized on a straight-line basis so as to produce a constant periodic rent over the term of the lease. Accordingly, straight-line operating lease receivables, calculated as the aggregate difference between the rental revenue recognized on a straight-line basis and scheduled rents, represent unbilled rent receivables that the Company will receive only if the tenants make all rent payments required through the expiration of the leases; these receivables are included in other assets, net on the condensed consolidated balance sheets. The Company reviews its straight-line operating lease receivables for collectibility on a contract by contract basis and any amounts not considered substantially collectible are written off against rental revenues. As of March 31, 2022 and December 31, 2021, the Company had $40.9 million and $39.4 million, respectively, of straight-line operating lease receivables. Leases that have contingent rent escalators indexed to future increases in the Consumer Price Index (CPI) may adjust over a one-year period or over multiple-year periods. Generally, these escalators increase rent at the lesser of (a) 1 to 1.25 times the increase in the CPI over a specified period or (b) a fixed percentage. Because of the volatility and uncertainty with respect to future changes in the CPI, the Company’s inability to determine the extent to which any

specific future change in the CPI is probable at each rent adjustment date during the entire term of these leases and the Company’s view that the multiplier does not represent a significant leverage factor, increases in rental revenue from leases with this type of escalator are recognized only after the changes in the rental rates have actually occurred.

In addition to base rental revenue, certain leases also have contingent rentals that are based on a percentage of the tenant’s gross sales; the Company recognizes contingent rental revenue when the threshold upon which the contingent lease payment is based is actually reached. Approximately 3.8% of the Company’s investment portfolio is subject to leases that provide for contingent rent based on a percentage of the tenant’s gross sales (for most of these leases, the contingent rent payment is for a temporary period); historically, contingent rent recognized has been less than 2.0% of rental revenues.

The Company reviews its operating lease receivables for collectibility on a regular basis, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area where the property is located. In the event that the collectibility of lease payments with respect to any tenant is not probable, a direct write-off of the receivable is made and any future rental revenue is recognized only when the tenant makes a rental payment or when collectibility is again deemed probable.

Direct costs incremental to successful lease origination, offset by any lease origination fees received, are deferred and amortized over the related lease term as an adjustment to rental revenue. The Company periodically commits to fund the construction of new properties for its customers; rental revenue collected during the construction period is deferred and amortized over the remaining lease term when the construction project is complete. Substantially all of the Company’s leases are triple net, which means that the lessees are directly responsible for the payment of all property operating expenses, including property taxes, maintenance and insurance. For a few lease contracts, the Company collects property taxes from its customers and remits those taxes to governmental authorities. Subsequent to the adoption of ASC Topic 842, these property tax payments are presented on a gross basis as part of both rental revenues and property costs in the condensed consolidated statements of income.

Impairment

STORE Capital reviews its real estate investments and related lease intangibles periodically for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through operations. Such events or changes in circumstances may include an expectation to sell certain assets in accordance with the Company’s long-term strategic plans. Management considers factors such as expected future undiscounted cash flows, capitalization and discount rates, terminal value, tenant improvements, market trends (such as the effects of leasing demand and competition) and other factors including bona fide purchase offers received from third parties in making this assessment. These factors are classified as Level 3 inputs within the fair value hierarchy, discussed in Fair Value Measurement below. If an asset is determined to be impaired, the impairment is calculated as the amount by which the carrying value of the asset exceeds its estimated fair value. Estimating future cash flows is highly subjective and such estimates could differ materially from actual results.

During the three months ended March 31, 2022, the Company recognized aggregate provisions for the impairment of real estate of $1.2 million. The estimated fair value of the impaired real estate assets at March 31, 2022 was $8.4 million. The Company recognized an aggregate provision for the impairment of real estate of $5.4 million during the three months ended March 31, 2021.

Accounting for Loans and Financing Receivables

Loans Receivable – Classification, Cost and Revenue Recognition

STORE Capital holds its loans receivable, which are primarily mortgage loans secured by real estate, for long-term investment. Loans receivable are carried at amortized cost including related unamortized discounts or premiums, if any.

The Company recognizes interest income on loans receivable using the effective-interest method applied on a loan-by-loan basis. Direct costs associated with originating loans are offset against any related fees received and the balance, along with any premium or discount, is deferred and amortized as an adjustment to interest income over the term of the related loan receivable using the effective-interest method. A loan receivable is placed on nonaccrual status when the loan has become more than 60 days past due, or earlier if management determines that full recovery of the contractually specified payments of principal and interest is doubtful. While on nonaccrual status, interest income is recognized only when received. As of March 31, 2022 and December 31, 2021, the Company had loans receivable with an aggregate outstanding principal balance of $26.4 million and $28.8 million, respectively, on nonaccrual status.

Direct Financing Receivables – Classification, Cost and Revenue Recognition

Direct financing receivables include hybrid real estate investment transactions completed prior to 2019. The Company recorded the direct financing receivables at their net investment, determined as the aggregate minimum lease payments and the estimated residual value of the leased property less unearned income. The unearned income is recognized over the life of the related contracts so as to produce a constant rate of return on the net investment in the asset. Subsequent to the adoption of ASC Topic 842, existing direct financing receivables will continue to be accounted for in the same manner, unless the underlying contracts are modified.

Impairment and Provision for Credit Losses

The Company accounts for provision of credit losses in accordance with ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASC Topic 326). In accordance with ASC Topic 326, the Company evaluates the collectibility of its loans and financing receivables at the time each financing receivable is issued and subsequently on a quarterly basis utilizing an expected credit loss model based on credit quality indicators. The primary credit quality indicator is the implied credit rating associated with each borrower, utilizing two categories, investment grade and non-investment grade. The Company computes implied credit ratings based on regularly received borrower financial statements using Moody’s Analytics RiskCalc. The Company considers the implied credit ratings, loan and financing receivable term to maturity and underlying collateral value and quality, if any, to calculate the expected credit loss over the remaining life of the receivable. For the three months ended March 31, 2022, the Company recognized an estimated $0.3 million net reduction of prior provisions for credit losses related to its loans and financing receivables; the reduction of the provision for credit losses is included in provisions for impairment on the condensed consolidated statements of income. The Company recognized an estimated $2.0 million of provisions for credit losses for the three months ended March 31, 2021.

Accounting for Operating Ground Lease Assets

As part of certain real estate investment transactions, the Company may enter into long-term operating ground leases as a lessee. The Company is required to recognize an operating ground lease (or right-of-use) asset and related operating lease liability for each of these operating ground leases. Operating ground lease assets and operating lease liabilities are recognized based on the present value of the lease payments. The Company uses its estimated incremental borrowing rate, which is the estimated rate at which the Company could borrow on a collateralized basis with similar payments over a similar term, in determining the present value of the lease payments.

Many of these operating lease contracts include options for the Company to extend the lease; the option periods are included in the minimum lease term only if it is reasonably likely the Company will exercise the option(s). Rental expense for the operating ground lease contracts is recognized in property costs on a straight-line basis over the lease term. Some of the contracts have contingent rent escalators indexed to future increases in the CPI and a few contracts have contingent rentals that are based on a percentage of the gross sales of the property; these payments are recognized in expense as incurred. The payment obligations under these contracts are typically the responsibility of the tenants operating on the properties, in accordance with the Company’s leases with the respective tenants. As a result, the Company also recognizes sublease rental revenue on a straight-line basis over the term of the Company’s sublease with the tenant; the sublease income is included in rental revenues.

Cash and Cash Equivalents

Cash and cash equivalents include cash and highly liquid investment securities with maturities at acquisition of three months or less. The Company invests cash primarily in money-market funds of a major financial institution, consisting predominantly of U.S. Government obligations.

Restricted Cash

Restricted cash may include reserve account deposits held by lenders, including deposits required to be used for future investment in real estate assets, escrow deposits and cash proceeds from the sale of assets held by a qualified intermediary to facilitate tax-deferred exchange transactions under Section 1031 of the Internal Revenue Code. The Company had $2.1 million and $5.8 million of restricted cash at March 31, 2022 and December 31, 2021, respectively, which are included in other assets, net, on the condensed consolidated balance sheets.

Deferred Costs

Financing costs related to the issuance of the Company’s long-term debt are deferred and amortized as an increase to interest expense over the term of the related debt instrument using the effective-interest method and are reported as a reduction of the related debt balance on the condensed consolidated balance sheets. Deferred financing costs related to the establishment of the Company's credit facility are deferred and amortized to interest expense over the term of the credit facility and are included in other assets, net, on the condensed consolidated balance sheets.

Derivative Instruments and Hedging Activities

The Company may enter into derivative contracts as part of its overall financing strategy to manage the Company’s exposure to changes in interest rates associated with current and/or future debt issuances. The Company does not use derivatives for trading or speculative purposes. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company enters into derivative financial instruments only with counterparties with high credit ratings and with major financial institutions with which the Company may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations.

The Company records its derivatives on the balance sheet at fair value. All derivatives subject to a master netting arrangement in accordance with the associated master International Swap and Derivatives Association agreement have been presented on a net basis by counterparty portfolio for purposes of balance sheet presentation and related disclosures.  The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the earnings effect of the hedged forecasted transactions in a cash flow hedge. The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss). Amounts reported in accumulated other comprehensive income (loss) related to cash flow hedges are reclassified to operations as an adjustment to interest expense as interest payments are made on the hedged debt transaction. As of March 31, 2022, the Company had no derivative instruments in place.

In April 2022, the Company entered into several interest rate swap agreements. One of the interest rate swap agreements has a notional amount of $200 million and was designated as a cash flow hedge of the Company's $200 million floating-rate bank term loan issued in April 2022 and due in May 2029. The remaining interest rate swap agreements have an aggregate notional amount of $400 million and were designated as cash flow hedges of the Company's $400 million floating-rate bank term loan issued in April 2022 and due in May 2027 (Note 4).

Fair Value Measurement

The Company estimates the fair value of financial and non-financial assets and liabilities based on the framework established in fair value accounting guidance. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The hierarchy described below prioritizes inputs to the valuation techniques used in measuring the fair value of assets and liabilities. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs to be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows:

● Level 1—Quoted market prices in active markets for identical assets and liabilities that the Company has the ability to access.

● Level 2—Significant inputs that are observable, either directly or indirectly. These types of inputs would include quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets in inactive markets and market-corroborated inputs.

● Level 3—Inputs that are unobservable and significant to the overall fair value measurement of the assets or liabilities. These types of inputs include the Company’s own assumptions.

Share-based Compensation

Directors and key employees of the Company have been granted long-term incentive awards, including restricted stock awards (RSAs) and restricted stock unit awards (RSUs), which provide such directors and employees with equity interests as an incentive to remain in the Company’s service and to align their interests with those of the Company’s stockholders.

The Company estimates the fair value of RSAs based on the closing price per share of the common stock on the date of grant and recognizes that amount in general and administrative expense ratably over the vesting period at the greater of the amount amortized on a straight-line basis or the amount vested. During the three months ended March 31, 2022, the Company granted RSAs representing 177,311 shares of restricted common stock to its directors and employees. During the same period, RSAs representing 102,496 shares of restricted stock vested and RSAs representing 35,602 shares were forfeited. In connection with the vesting of RSAs, the Company repurchased 68,351 shares as a result of participant elections to surrender common shares to the Company to satisfy statutory tax withholding obligations under the Company’s equity-based compensation plans. As of March 31, 2022, the Company had 476,637 shares of restricted common stock outstanding.

The Company’s RSUs granted in 2019 through 2022 contain both a market condition and a performance condition as well as a service condition. The Company values the RSUs with a market condition using a Monte Carlo simulation model and values the RSUs with a performance condition based on the fair value of the awards expected to be earned and recognizes those amounts in general and administrative expense on a tranche-by-tranche basis ratably over the vesting periods. During the three months ended March 31, 2022, the Company awarded 629,307 RSUs to its executive officers. In connection with the vesting of 297,605 RSUs, the Company repurchased 120,475 shares during the three months ended March 31, 2022 as a result of participant elections to surrender common shares to the Company to satisfy statutory tax withholding obligations under the Company’s equity-based compensation plan. As of March 31, 2022, there were 1,635,061 RSUs outstanding.

Income Taxes

As a REIT, the Company generally will not be subject to federal income tax. It is still subject, however, to state and local income taxes and to federal income and excise tax on its undistributed income. STORE Investment Corporation is the Company’s wholly owned taxable REIT subsidiary (TRS) created to engage in non-qualifying REIT activities. The TRS is subject to federal, state and local income taxes.

Management of the Company determines whether any tax positions taken or expected to be taken meet the “more-likely-than-not” threshold of being sustained by the applicable federal, state or local tax authority. Certain state tax returns filed for 2017 and tax returns filed for 2018 through 2021 are subject to examination by these jurisdictions. As of March 31, 2022, management concluded that there is no tax liability relating to uncertain income tax positions. The Company’s policy is to recognize interest related to any underpayment of income taxes as interest expense and to recognize any penalties as general and administrative expense. There was no accrual for interest or penalties at March 31, 2022 or December 31, 2021.

Net Income Per Common Share

Net income per common share has been computed pursuant to the guidance in the FASB ASC Topic 260, Earnings Per Share. The guidance requires the classification of the Company’s unvested restricted common shares, which contain rights to receive non-forfeitable dividends, as participating securities requiring the two-class method of computing net income per common share. The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted net income per common share (dollars in thousands):

	Three Months Ended March 31,
	2022		2021
Numerator:
Net income	$	87,022	$	54,960
Less: earnings attributable to unvested restricted shares		(102)		(227)
Net income used in basic and diluted income per share	$	86,920	$	54,733
Denominator:
Weighted average common shares outstanding		275,463,866		266,991,452
Less: Weighted average number of shares of unvested restricted stock		(460,593)		(624,754)
Weighted average shares outstanding used in basic income per share		275,003,273		266,366,698
Effects of dilutive securities:
Add: Treasury stock method impact of potentially dilutive securities (a)		—		—
Weighted average shares outstanding used in diluted income per share		275,003,273		266,366,698

(a) For the three months ended March 31, 2022 and 2021, excludes 144,661 shares and 244,602 shares, respectively, related to unvested restricted shares as the effect would have been antidilutive.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or the SEC. The Company adopts the new pronouncements as of the specified effective date. When permitted, the Company may elect to early adopt the new pronouncements. Unless otherwise discussed, these new accounting pronouncements include technical corrections to existing guidance or introduce new guidance related to specialized industries or entities and, therefore, will have minimal, if any, impact on the Company’s financial position, results of operations or cash flows upon adoption.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-

indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

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Investments

3 Months Ended

Mar. 31, 2022

Investments.

Investments

3. Investments

At March 31, 2022, STORE Capital had investments in 2,965 property locations representing 2,911 owned properties (of which 86 are accounted for as financing arrangements and 23 are accounted for as direct financing receivables), 24 properties where all the related land is subject to an operating ground lease and 30 properties which secure mortgage loans. The gross investment portfolio totaled $11.2 billion at March 31, 2022 and consisted of the gross acquisition cost of the real estate investments totaling $10.4 billion, loans and financing receivables with an aggregate carrying amount of $736.4 million and operating ground lease assets totaling $33.0 million. As of March 31, 2022, approximately 35% of these investments are assets of consolidated special purpose entity subsidiaries and are pledged as collateral under the non-recourse obligations of these special purpose entities (Note 4).

The gross dollar amount of the Company’s investments includes the investment in land, buildings, improvements and lease intangibles related to real estate investments as well as the carrying amount of the loans and financing receivables and operating ground lease assets. During the three months ended March 31, 2022, the Company had the following gross real estate and other investment activity (dollars in thousands):

	Number of	Dollar
	Investment	Amount of
	Locations	Investments
Gross investments, December 31, 2021	2,866	$	10,748,937
Acquisition of and additions to real estate (a)	97		466,817
Investment in loans and financing receivables	14		45,721
Sales of real estate	(11)		(52,490)
Principal collections on loans and financing receivables	(1)		(5,090)
Net change in operating ground lease assets (b)			(358)
Provisions for impairment			(912)
Other			(4,607)
Gross investments, March 31, 2022 (c)			11,198,018
Less accumulated depreciation and amortization (c)			(1,224,530)
Net investments, March 31, 2022	2,965	$	9,973,488

(a) Excludes $15.6 million of tenant improvement advances disbursed in 2022 which were accrued as of December 31, 2021.

(b) Represents amortization recognized on operating ground lease assets during the three months ended March 31, 2022.

(c) Includes the dollar amount of investments ($33.5 million) and the accumulated depreciation ($0.3 million) related to real estate investments held for sale at March 31, 2022.

The following table summarizes the revenues the Company recognized from its investment portfolio (in thousands):

	Three Months Ended March 31,
	2022		2021
Rental revenues:
Operating leases (a)(c)	$	201,892	$	169,316
Sublease income - operating ground leases (b)		703		703
Amortization of lease related intangibles and costs		(534)		(691)
Total rental revenues	$	202,061	$	169,328
Interest income on loans and financing receivables:
Mortgage and other loans receivable (c)	$	7,879	$	5,929
Sale-leaseback transactions accounted for as financing arrangements		5,327		4,096
Direct financing receivables		1,724		2,538
Total interest income on loans and financing receivables	$	14,930	$	12,563

(a) For the three months ended March 31, 2022 and 2021, includes $654,000 and $621,000, respectively, of property tax tenant reimbursement revenue and includes $0.4 million and $3.1 million, respectively, of variable lease revenue.

(b) Represents total revenue recognized for the sublease of properties subject to operating ground leases to the related tenants; includes both payments made by the tenants to the ground lessors and straight-line revenue recognized for scheduled increases in the sublease rental payments.

(c) For the three months ended March 31, 2022 and 2021, includes $0.7 million and $2.0 million, respectively, of revenue that has been recognized related to rent and financing relief arrangements granted as a result of the COVID-19 pandemic with a corresponding increase in receivables which are included in other assets, net on the condensed consolidated balance sheets.

The Company has elected to account for the lease and nonlease components in its lease contracts as a single component if the timing and pattern of transfer for the separate components are the same and, if accounted for separately, the lease component would classify as an operating lease.

Significant Credit and Revenue Concentration

STORE Capital’s real estate investments are leased or financed to 573 customers geographically dispersed throughout 49 states. Only one state, Texas (11%), accounted for 10% or more of the total dollar amount of STORE Capital’s investment portfolio at March 31, 2022. None of the Company’s customers represented more than 10% of the Company’s real estate investment portfolio at March 31, 2022, with the largest customer representing 2.9% of the total investment portfolio. On an annualized basis, as of March 31, 2022, the largest customer also represented 3.0% of the Company’s total investment portfolio revenues and the Company’s customers operated their businesses across approximately 895 concepts; the largest of these concepts represented 2.2% of the Company’s total investment portfolio revenues.

The following table shows information regarding the diversification of the Company’s total investment portfolio among the different industries in which its tenants and borrowers operate as of March 31, 2022 (dollars in thousands):

				Percentage of
	Number of	Dollar		Total Dollar
	Investment	Amount of		Amount of
	Locations	Investments		Investments
Restaurants	763	$	1,350,702	12	%
Early childhood education centers	277		650,023	6
Metal fabrication	112		642,473	6
Automotive repair and maintenance	241		626,362	6
Health clubs	91		570,156	5
Furniture stores	64		413,447	4
Farm and ranch supply stores	41		377,293	3
All other service industries	1,019		3,906,607	35
All other retail industries	155		1,138,141	10
All other manufacturing industries	202		1,522,814	13
Total (a)	2,965	$	11,198,018	100	%

(a) Includes the dollar amount of investments ($33.5 million) related to real estate investments held for sale at March 31, 2022.

Real Estate Investments

The weighted average remaining noncancelable lease term of the Company’s operating leases with its tenants at March 31, 2022 was approximately 13.3 years. Substantially all the leases are triple net, which means that the lessees are responsible for the payment of all property operating expenses, including property taxes, maintenance and insurance; therefore, the Company is generally not responsible for repairs or other capital expenditures related to the properties while the triple-net leases are in effect. At March 31, 2022, 16 of the Company’s properties were vacant and not subject to a lease.

Scheduled future minimum rentals to be received under the remaining noncancelable term of the operating leases in place as of March 31, 2022, are as follows (in thousands):

Remainder of 2022	$	628,535
2023		838,444
2024		830,643
2025		827,634
2026		821,328
2027		809,939
Thereafter		6,444,417
Total future minimum rentals (a)	$	11,200,940

(a) Excludes future minimum rentals to be received under lease contracts associated with sale-leaseback transactions accounted for as financing arrangements. See Loans and Financing Receivables section below.

Substantially all the Company’s leases include one or more renewal options (generally two to four five-year options). Since lease renewal periods are exercisable at the option of the lessee, the preceding table presents future minimum lease payments due during the initial lease term only. In addition, the future minimum lease payments presented above do not include any contingent rentals such as lease escalations based on future changes in CPI.

Intangible Lease Assets

The following details intangible lease assets and related accumulated amortization (in thousands):

	March 31,		December 31,
	2022		2021
In-place leases	$	39,767	$	35,522
Ground lease-related intangibles		19,449		19,449
Above-market leases		—		—
Total intangible lease assets		59,216		54,971
Accumulated amortization		(24,643)		(25,285)
Net intangible lease assets	$	34,573	$	29,686

Aggregate lease intangible amortization included in expense was $0.9 million during both the three months ended March 31, 2022 and 2021. The amount amortized as a decrease to rental revenue for capitalized above-market lease intangibles was $0.2 million during the three months ended March 31, 2021.

Based on the balance of the intangible assets at March 31, 2022, the aggregate amortization expense is expected to be $2.7 million for the remainder of 2022, $3.2 million in 2023, $2.7 million in 2024, $2.2 million in 2025, $2.1 million in 2026 and $1.9 million in 2027. The weighted average remaining amortization period is approximately 10 years for the in-place lease intangibles and approximately 42 years for the amortizing ground lease-related intangibles.

Operating Ground Lease Assets

As of March 31, 2022, STORE Capital had operating ground lease assets aggregating $33.0 million. Typically, the lease payment obligations for these leases are the responsibility of the tenants operating on the properties, in accordance with the Company’s leases with those respective tenants. The Company recognized total lease cost for these operating ground lease assets of $755,000 and $794,000 during the three months ended March 31, 2022 and 2021, respectively. The Company also recognized, in rental revenues, sublease revenue associated with its operating ground leases of $703,000 for both the three months ended March 31, 2022 and 2021, respectively.

The future minimum lease payments to be paid under the operating ground leases as of March 31, 2022 were as follows (in thousands):

			Ground
	Ground		Leases
	Leases		Paid by
	Paid by		STORE Capital's
	STORE Capital		Tenants (a)		Total
Remainder of 2022	$	300	$	2,081	$	2,381
2023		4,149		2,629		6,778
2024		55		2,711		2,766
2025		57		2,395		2,452
2026		57		2,233		2,290
2027		57		2,227		2,284
Thereafter		3,014		42,282		45,296
Total lease payments		7,689		56,558		64,247
Less imputed interest		(2,855)		(27,897)		(30,752)
Total operating lease liabilities - ground leases	$	4,834	$	28,661	$	33,495

(a) STORE Capital’s tenants, who are generally sub-tenants under the ground leases, are responsible for paying the rent under these ground leases. In the event the tenant fails to make the required ground lease payments, the Company would be primarily responsible for the payment, assuming the Company does not re-tenant the property or sell the leasehold interest. Of the total $56.6 million commitment, $19.0 million is due for periods beyond the current term of the Company’s leases with the tenants. Amounts exclude contingent rent due under three leases where the ground lease payment, or a portion thereof, is based on the level of the tenant’s sales.

Loans and Financing Receivables

The Company’s loans and financing receivables are summarized below (dollars in thousands):

	Interest		Maturity	March 31,		December 31,
Type	Rate (a)		Date	2022		2021
Six mortgage loans receivable	7.98	%	2022 - 2026	$	114,896	$	114,911
Three mortgage loans receivable	8.75	%	2032 - 2036		11,689		14,444
Fifteen mortgage loans receivable (b)	8.72	%	2051 - 2060		217,991		216,547
Total mortgage loans receivable					344,576		345,902
Equipment and other loans receivable	7.95	%	2022 - 2036		21,744		25,409
Total principal amount outstanding—loans receivable					366,320		371,311
Unamortized loan origination costs					1,025		1,046
Sale-leaseback transactions accounted for as financing arrangements (c)	7.55	%	2034 - 2043		298,772		255,483
Direct financing receivables					78,559		78,637
Allowance for credit and loan losses (d)					(8,266)		(9,208)
Total loans and financing receivables				$	736,410	$	697,269

(a) Represents the weighted average interest rate as of the balance sheet date.

(b) Four of these mortgage loans allow for prepayment in whole, but not in part, with penalties ranging from 20% to 70% depending on the timing of the prepayment.

(c) In accordance with ASC Topic 842, represents sale-leaseback transactions accounted for as financing arrangements rather than as investments in real estate subject to operating leases. Interest rate shown is the weighted average initial rental or capitalization rate on the leases; the leases mature between 2034 and 2043 and the purchase options expire between 2024 and 2042.

(d) Balance includes $2.5 million of loan loss reserves recognized prior to December 31, 2019, $2.5 million credit loss reserves recognized upon the adoption of ASC Topic 326 on January 1, 2020 and an aggregate $3.3 million of credit losses recognized since the adoption of ASC Topic 326.

Loans Receivable

At March 31, 2022, the Company held 42 loans receivable with an aggregate carrying amount of $360.6 million. Twenty-four of the loans are mortgage loans secured by land and/or buildings and improvements on the mortgaged property; the interest rates on 11 of the mortgage loans are subject to increases over the term of the loans. Six of the mortgage loans are shorter-term loans (maturing prior to 2027) that generally require monthly interest-only payments with a balloon payment at maturity. The remaining mortgage loans receivable generally require the borrowers to make monthly principal and interest payments based on a 40-year amortization period with balloon payments, if any, at maturity or earlier upon the occurrence of certain other events. The equipment and other loans generally require the borrower to make monthly interest-only payments with a balloon payment at maturity.

The long-term mortgage loans receivable generally allow for prepayments in whole, but not in part, without penalty or with penalties ranging from 1% to 20%, depending on the timing of the prepayment, except as noted in the table above. All other loans receivable allow for prepayments in whole or in part without penalty. Absent prepayments, scheduled maturities are expected to be as follows (in thousands):

	Scheduled
	Principal		Balloon		Total
	Payments		Payments		Payments
Remainder of 2022	$	2,230	$	28,930	$	31,160
2023		3,099		80,698		83,797
2024		1,964		—		1,964
2025		1,902		—		1,902
2026		1,977		20,371		22,348
2027		1,687		548		2,235
Thereafter		172,616		50,298		222,914
Total principal payments	$	185,475	$	180,845	$	366,320

Sale-Leaseback Transactions Accounted for as Financing Arrangements

As of March 31, 2022 and December 31, 2021, the Company had $298.8 million and $255.5 million, respectively, of investments acquired through sale-leaseback transactions accounted for as financing arrangements rather than as investments in real estate subject to an operating lease; revenue from these arrangements is recognized in interest income rather than as rental revenue. The scheduled future minimum rentals to be received under these agreements (which will be reflected in interest income) as of March 31, 2022, were as follows (in thousands):

Remainder of 2022	$	17,210
2023		23,016
2024		23,151
2025		23,291
2026		23,385
2027		23,485
Thereafter		280,926
Total future scheduled payments	$	414,464

Direct Financing Receivables

As of both March 31, 2022 and December 31, 2021, the Company had $78.6 million of investments accounted for as direct financing leases under previous accounting guidance; the components of these investments were as follows (in thousands):

	March 31,		December 31,
	2022		2021
Minimum lease payments receivable	$	157,409	$	159,371
Estimated residual value of leased assets		8,938		8,938
Unearned income		(87,788)		(89,672)
Net investment	$	78,559	$	78,637

As of March 31, 2022, the future minimum lease payments to be received under the direct financing lease receivables are expected to be $5.9 million for the remainder of 2022, average approximately $8.0 million for each of the next five years and $111.7 million thereafter.

Provision for Credit Losses

In accordance with ASC Topic 326, the Company evaluates the collectibility of its loans and financing receivables at the time each financing receivable is issued and subsequently on a quarterly basis utilizing an expected credit loss model based on credit quality indicators. The Company groups individual loans and financing receivables based on the implied credit rating associated with each borrower. Based on credit quality indicators as of March 31, 2022, $161.9 million of loans and financing receivables were categorized as investment grade and $581.8 million were categorized as non-investment grade. During the three months ended March 31, 2022, there were $0.3 million of reductions of prior provisions for credit losses recognized, no write-offs charged against the allowance and no recoveries of amounts previously written off.

As of March 31, 2022, the year of origination for loans and financing receivables with a credit quality indicator of investment grade was $26.5 million in 2022, $17.0 million in 2021, none in 2020, $88.9 million in 2019, none in 2018, and $29.5 million prior to 2018. The year of origination for loans and financing receivables with a credit quality indicator of non-investment grade was $14.5 million in 2022, $103.3 million in 2021, $136.2 million in 2020, $146.5 million in 2019, $27.4 million in 2018 and $153.9 million prior to 2018.

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Debt

3 Months Ended

Mar. 31, 2022

Debt

Debt

4. Debt

Credit Facility

The Company has an unsecured revolving credit facility with a group of lenders that is used to partially fund real estate acquisitions pending the issuance of long-term, fixed-rate debt. The credit facility has immediate availability of $600 million and an accordion feature of $1.0 billion, which allows the size of the facility to be increased up to $1.6 billion. The facility matures in June 2025 and includes two six-month extension options, subject to certain conditions and the payment of a 0.0625% extension fee. At March 31, 2022, the Company had $359 million of borrowings outstanding on the facility.

Borrowings under the facility require monthly payments of interest at a rate selected by the Company of either (1) LIBOR plus a credit spread ranging from 0.70% to 1.40%, or (2) the Base Rate, as defined in the credit agreement, plus a credit spread ranging from 0.00% to 0.40%. The credit spread used is based on the Company’s credit rating as defined in the credit agreement. The Company is required to pay a facility fee on the total commitment amount ranging from 0.10% to 0.30%. Currently, the applicable credit spread for LIBOR-based borrowings is 0.85% and the facility fee is 0.20%.

Under the terms of the facility, the Company is subject to various restrictive financial and nonfinancial covenants which, among other things, require the Company to maintain certain leverage ratios, cash flow and debt service coverage ratios and secured borrowing ratios. Certain of these ratios are based on the Company’s pool of unencumbered assets, which aggregated approximately $7.3 billion at March 31, 2022.

The facility is recourse to the Company and, as of March 31, 2022, the Company was in compliance with the covenants under the facility.

At March 31, 2022 and December 31, 2021, unamortized financing costs related to the Company’s credit facility totaled $3.5 million and $3.7 million, respectively, and are included in other assets, net, on the condensed consolidated balance sheets.

Unsecured Notes Payable, net

The Company has completed four public offerings of ten-year unsecured notes (Public Notes). In March 2018, February 2019 and November 2020, the Company completed public offerings of $350 million each in aggregate principal amount. In November 2021, the Company completed a public offering of $375 million in aggregate principal amount. The Public Notes have coupon rates of 4.50%, 4.625%, 2.75% and 2.70%, respectively, and interest is payable semi-annually in arrears in March and September of each year for the 2018 and 2019 Public Notes, May and November of each year for the 2020 Public Notes, and June and December of each year for the 2021 Public Notes. The notes were issued at 99.515%, 99.260%, 99.558% and 99.877%, respectively, of their principal amounts.

The supplemental indentures governing the Public Notes contain various restrictive covenants, including limitations on the Company’s ability to incur additional secured and unsecured indebtedness. As of March 31, 2022, the Company was in compliance with these covenants. The Public Notes can be redeemed, in whole or in part, at par within three months of their maturity date or at a redemption price equal to the sum of (i) the principal amount of the notes being redeemed plus accrued and unpaid interest and (ii) the make-whole premium, as defined in the supplemental indentures governing these notes.

In April 2022, the Company entered into an aggregate $600 million of floating-rate, unsecured term loans with a group of lenders; the loans consist of a $400 million five-year loan and a $200 million seven-year loan. In conjunction with entering into these floating-rate term loans, the Company also entered into interest rate swap agreements that effectively convert the floating rates to a weighted average fixed rate of 3.68%. The financial covenants of the term loans match the covenants of the unsecured revolving credit facility. The term loans are senior unsecured obligations of the Company and may be prepaid at any time; the seven-year loan has a prepayment premium of 2% if repaid in year one and 1% if repaid in year two.

The Company has entered into Note Purchase Agreements (NPAs) with institutional purchasers that provided for the private placement of three series of senior unsecured notes aggregating $375 million (the Notes). Interest on the Notes is payable semi-annually in arrears in May and November of each year. On each interest payment date, the interest rate on each series of Notes may be increased by 1.0% should the Company’s Applicable Credit Rating (as defined in the NPAs) fail to be an investment-grade credit rating; the increased interest rate would remain in effect until the next interest payment date on which the Company obtains an investment grade credit rating. The Company may prepay at any time all, or any part, of any series of Notes, in an amount not less than 5% of the aggregate principal amount of the series then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid plus a Make-Whole Amount (as defined in the NPAs). The Notes are senior unsecured obligations of the Company.

The NPAs contain a number of financial covenants that are similar to the Company’s unsecured credit facility as summarized above. Subject to the terms of the NPAs and the Notes, upon certain events of default, including, but not limited to, (i) a payment default under the Notes, and (ii) a default in the payment of certain other indebtedness by the Company or its subsidiaries, all amounts outstanding under the Notes will become due and payable at the option of the purchasers. As of March 31, 2022, the Company was in compliance with its covenants under the NPAs.

The Company’s senior unsecured notes payable are summarized below (dollars in thousands):

	Maturity	Interest		March 31,		December 31,
	Date	Rate		2022		2021
Notes Payable:
Series A issued November 2015	Nov. 2022	4.95	%	$	75,000	$	75,000
Series B issued November 2015	Nov. 2024	5.24	%		100,000		100,000
Series C issued April 2016	Apr. 2026	4.73	%		200,000		200,000
Public Notes issued March 2018	Mar. 2028	4.50	%		350,000		350,000
Public Notes issued February 2019	Mar. 2029	4.625	%		350,000		350,000
Public Notes issued November 2020	Nov. 2030	2.75	%		350,000		350,000
Public Notes issued November 2021	Dec. 2031	2.70	%		375,000		375,000
Total notes payable					1,800,000		1,800,000
Unamortized discount					(4,584)		(4,740)
Unamortized deferred financing costs					(11,976)		(12,447)
Total unsecured notes payable, net				$	1,783,440	$	1,782,813

Non-recourse Debt Obligations of Consolidated Special Purpose Entities, net

During 2012, the Company implemented its STORE Master Funding debt program pursuant to which certain of its consolidated special purpose entities issue multiple series of non-recourse net-lease mortgage notes from time to time that are collateralized by the assets and related leases (collateral) owned by these entities. One of the principal features of the program is that, as additional series of notes are issued, new collateral is contributed to the collateral pool, thereby increasing the size and diversity of the collateral pool for the benefit of all noteholders, including those who invested in prior series. Another feature of the program is the ability to substitute collateral from time to time subject to meeting certain prescribed conditions and criteria. The notes issued under this program are generally segregated into Class A amortizing notes and Class B non-amortizing notes. The Company has retained the Class B notes which aggregate $190.0 million at March 31, 2022.

The Class A notes require monthly principal and interest payments with a balloon payment due at maturity and these notes may be prepaid at any time, subject to a yield maintenance prepayment premium if prepaid more than 24 or 36 months prior to maturity. As of March 31, 2022, the aggregate collateral pool securing the net-lease mortgage notes was comprised primarily of single-tenant commercial real estate properties with an aggregate investment amount of approximately $3.6 billion.

A number of additional consolidated special purpose entity subsidiaries of the Company have financed their real estate properties with traditional first mortgage debt. The notes generally require monthly principal and interest payments with balloon payments due at maturity. In general, these mortgage notes payable can be prepaid in whole or in part upon payment of a yield maintenance premium. The mortgage notes payable are collateralized by real estate properties owned by these consolidated special purpose entity subsidiaries with an aggregate investment amount of approximately $301.4 million at March 31, 2022.

The mortgage notes payable, which are obligations of the consolidated special purpose entities described in Note 2, contain various covenants customarily found in mortgage notes, including a limitation on the issuing entity’s ability to incur additional indebtedness on the underlying real estate. Although this mortgage debt generally is non-recourse, there are customary limited exceptions to recourse for matters such as fraud, misrepresentation, gross negligence or willful misconduct, misapplication of payments, bankruptcy and environmental liabilities. Certain of the mortgage notes payable also require the posting of cash reserves with the lender or trustee if specified coverage ratios are not maintained by the Company or one of its tenants.

The Company’s non-recourse debt obligations of consolidated special purpose entity subsidiaries are summarized below (dollars in thousands):

	Maturity	Interest		March 31,		December 31,
	Date	Rate		2022		2021
Non-recourse net-lease mortgage notes:
$140,000 Series 2014-1, Class A-2	Apr. 2024 (a)	5.00	%	$	134,517	$	134,692
$150,000 Series 2018-1, Class A-1	Oct. 2024 (b)	3.96	%		141,677		142,051
$50,000 Series 2018-1, Class A-3	Oct. 2024 (b)	4.40	%		48,792		48,917
$270,000 Series 2015-1, Class A-2	Apr. 2025 (b)	4.17	%		260,663		260,999
$200,000 Series 2016-1, Class A-1 (2016)	Oct. 2026 (b)	3.96	%		179,124		180,190
$82,000 Series 2019-1, Class A-1	Nov. 2026 (b)	2.82	%		78,488		78,590
$46,000 Series 2019-1, Class A-3	Nov. 2026 (b)	3.32	%		45,463		45,521
$135,000 Series 2016-1, Class A-2 (2017)	Apr. 2027 (b)	4.32	%		122,341		123,046
$228,000 Series 2018-1, Class A-2	Oct. 2027 (c)	4.29	%		215,348		215,918
$164,000 Series 2018-1, Class A-4	Oct. 2027 (c)	4.74	%		160,037		160,447
$168,500 Series 2021-1, Class A-1	Jun. 2028 (b)	2.12	%		167,868		168,079
$89,000 Series 2021-1, Class A-3	Jun. 2028 (b)	2.86	%		88,666		88,778
$168,500 Series 2021-1, Class A-2	Jun. 2033 (c)	2.96	%		167,868		168,079
$89,000 Series 2021-1, Class A-4	Jun. 2033 (c)	3.70	%		88,666		88,778
$244,000 Series 2019-1, Class A-2	Nov. 2034 (c)	3.65	%		233,549		233,854
$136,000 Series 2019-1, Class A-4	Nov. 2034 (c)	4.49	%		134,413		134,583
Total non-recourse net-lease mortgage notes					2,267,480		2,272,522
Non-recourse mortgage notes:
$13,000 note issued May 2012		5.195	%		—		9,961
$26,000 note issued August 2012	Sept. 2022	5.05	%		19,879		20,085
$6,400 note issued November 2012	Dec. 2022	4.707	%		4,887		4,938
$11,895 note issued March 2013	Apr. 2023	4.7315	%		9,216		9,309
$17,500 note issued August 2013	Sept. 2023	5.46	%		14,084		14,212
$10,075 note issued March 2014	Apr. 2024	5.10	%		8,756		8,808
$65,000 note issued June 2016	Jul. 2026	4.75	%		58,908		59,223
$41,690 note issued March 2019	Mar. 2029	4.80	%		41,130		41,291
$6,944 notes issued March 2013	Apr. 2038	4.50	% (d)		5,294		5,332
$6,350 notes issued March 2019 (assumed in December 2020)	Apr. 2049	4.64	%		6,079		6,106
Total non-recourse mortgage notes					168,233		179,265
Unamortized discount					(473)		(496)
Unamortized deferred financing costs					(24,406)		(25,583)
Total non-recourse debt obligations of consolidated special purpose entities, net				$	2,410,834	$	2,425,708

(a) Notes were repaid, without penalty, in April 2022 using a portion of the proceeds from the aggregate $600 million of term loans the Company entered into in April 2022.

(b) Prepayable, without penalty, 24 months prior to maturity.

(c) Prepayable, without penalty, 36 months prior to maturity.

(d) Interest rate is effective until March 2023 and will reset to the lender’s then prevailing interest rate.

Long-term Debt Maturity Schedule

As of March 31, 2022, the scheduled maturities, including balloon payments, on the Company’s aggregate long-term debt obligations are as follows (in thousands):

	Scheduled
	Principal		Balloon
	Payments		Payments		Total
Remainder of 2022	$	18,184	$	99,290	$	117,474
2023		23,565		22,182		45,747
2024		22,331		426,914		449,245
2025		20,037		256,612		276,649
2026		17,926		532,142		550,068
2027		9,506		460,472		469,978
Thereafter		30,702		2,295,850		2,326,552
	$	142,251	$	4,093,462	$	4,235,713

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Stockholders' Equity

3 Months Ended

Mar. 31, 2022

Stockholders' Equity

Stockholders' Equity

5. Stockholders’ Equity

In November 2020, the Company established its fifth “at the market” equity distribution program, or ATM program, pursuant to which, from time to time, it may offer and sell up to $900 million of registered shares of common stock through a group of banks acting as its sales agents (the 2020 ATM Program).

The following tables outline the common stock issuances under the 2020 ATM Program (in millions except share and per share information):

Three Months Ended March 31, 2022
Shares Sold	Weighted Average Price per Share		Gross Proceeds		Sales Agents' Commissions		Other Offering Expenses		Net Proceeds
5,539,138	$	30.41	$	168.4	$	(2.1)	$	(0.1)	$	166.2
Inception of Program Through March 31, 2022
Shares Sold	Weighted Average Price per Share		Gross Proceeds		Sales Agents' Commissions		Other Offering Expenses		Net Proceeds
16,380,669	$	32.31	$	529.2	$	(7.6)	$	(0.7)	$	520.9

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2022

Commitments and Contingencies

Commitments and Contingencies

6. Commitments and Contingencies

The Company is subject to various legal proceedings and claims that arise in the ordinary course of its business. Management believes that the final outcome of such matters will not have a material adverse effect on the Company’s financial position or results of operations.

In the normal course of business, the Company enters into various types of commitments to purchase real estate properties. These commitments are generally subject to the Company’s customary due diligence process and, accordingly, a number of specific conditions must be met before the Company is obligated to purchase the properties. As of March 31, 2022, the Company had commitments to its customers to fund improvements to owned or mortgaged real estate properties totaling approximately $156.6 million, of which $136.7 million is expected to be funded in the next twelve months. These additional investments will generally result in increases to the rental revenue or interest income due under the related contracts.

The Company has employment agreements with each of its executive officers that provide for minimum annual

base salaries, and annual cash and equity incentive compensation based on the satisfactory achievement of reasonable performance criteria and objectives to be adopted by the Company’s Board of Directors each year. In the event an executive officer’s employment terminates under certain circumstances, the Company would be liable for cash severance, continuation of healthcare benefits and, in some instances, accelerated vesting of equity awards that he or she has been awarded as part of the Company’s incentive compensation program.

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2022

Fair Value of Financial Instruments

Fair Value of Financial Instruments

7. Fair Value of Financial Instruments

The Company’s derivatives are required to be measured at fair value in the Company’s consolidated financial statements on a recurring basis. Derivatives are measured under a market approach, using prices obtained from a nationally recognized pricing service and pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy. The Company had no derivatives outstanding at either March 31, 2022 or December 31, 2021.

In addition to the disclosures for assets and liabilities required to be measured at fair value at the balance sheet date, companies are required to disclose the estimated fair values of all financial instruments, even if they are not carried at their fair value. The fair values of financial instruments are estimates based on market conditions and perceived risks at March 31, 2022 and December 31, 2021. These estimates require management’s judgment and may not be indicative of the future fair values of the assets and liabilities.

Financial assets and liabilities for which the carrying values approximate their fair values include cash and cash equivalents, restricted cash, accounts receivable, accounts payable and tenant deposits. Generally these assets and liabilities are short-term in duration and are recorded at fair value on the consolidated balance sheets. The Company believes the carrying value of the borrowings on its credit facility approximate fair value based on their nature, terms and variable interest rate. Additionally, the Company believes the carrying values of its fixed-rate loans receivable approximate fair values based on market quotes for comparable instruments or discounted cash flow analyses using estimates of the amount and timing of future cash flows, market rates and credit spreads.

The estimated fair values of the Company’s aggregate long-term debt obligations have been derived based on market observable inputs such as interest rates and discounted cash flow analyses using estimates of the amount and timing of future cash flows, market rates and credit spreads. These measurements are classified as Level 2 within the fair value hierarchy. At March 31, 2022, these debt obligations had an aggregate carrying value of $4,194.3 million and an estimated fair value of $4,147.3 million. At December 31, 2021, these debt obligations had an aggregate carrying value of $4,208.5 million and an estimated fair value of $4,478.4 million.

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Summary of Significant Accounting Principles (Policies)

3 Months Ended

Mar. 31, 2022

Summary of Significant Accounting Principles

Basis of Accounting and Principles of Consolidation

Basis of Accounting and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the rules and regulations of the U.S. Securities and Exchange Commission (SEC). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of interim periods are not necessarily indicative of the results for the entire year. Certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted from these statements and, accordingly, these statements should be read in conjunction with the Company’s audited consolidated financial statements as filed with the SEC in its Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

These condensed consolidated statements include the accounts of STORE Capital and its subsidiaries, which are wholly owned and controlled by the Company through its voting interest. One of the Company’s wholly owned subsidiaries, STORE Capital Advisors, LLC, provides all of the general and administrative services for the day-to-day operations of the consolidated group, including property acquisition and lease origination, real estate portfolio management and marketing, accounting and treasury services. The remaining subsidiaries were formed to acquire and hold real estate investments or to facilitate non-recourse secured borrowing activities. Generally, the initial operations of the real estate subsidiaries are funded by an interest-bearing intercompany loan from STORE Capital, and such intercompany loan is repaid when the subsidiary issues long-term debt secured by its properties. All intercompany account balances and transactions have been eliminated in consolidation.

Certain of the Company’s wholly owned consolidated subsidiaries were formed as special purpose entities. Each special purpose entity is a separate legal entity and is the sole owner of its assets and liabilities. The assets of the special purpose entities are not available to pay or otherwise satisfy obligations to the creditors of any owner or affiliate of the special purpose entity. At March 31, 2022 and December 31, 2021, these special purpose entities held assets totaling $8.9 billion and $8.5 billion, respectively, and had third-party liabilities totaling $2.6 billion and $2.6 billion, respectively. These assets and liabilities are included in the accompanying condensed consolidated balance sheets.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Although management believes its estimates are reasonable, actual results could differ from those estimates.

Segment Reporting

Segment Reporting

The Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) Topic 280, Segment Reporting, established standards for the manner in which enterprises report information about operating segments. The Company views its operations as one reportable segment.

Investment Portfolio

Investment Portfolio

STORE Capital invests in real estate assets through three primary transaction types as summarized below. At the beginning of 2019, the Company adopted Accounting Standards Update (ASU) 2016-02, Leases (Topic 842) (ASC Topic 842) which had an impact on certain accounting related to the Company’s investment portfolio.

● Real Estate Investments – investments are generally made through sale-leaseback transactions in which the Company acquires the real estate from the owner-operators and then leases the real estate back to them through long-term leases which are generally classified as operating leases; the operators become the Company’s long-term tenants (its customers). Certain of the lease contracts that are associated with a sale-leaseback transaction may contain terms, such as a tenant purchase option, which results in the transaction being accounted for as a financing arrangement, due to the adoption of ASC Topic 842, rather than as an investment in real estate subject to an operating lease.

● Mortgage Loans Receivable – investments are made by issuing mortgage loans to the owner-operators of the real estate that serve as the collateral for the loans and the operators become long-term borrowers and customers of the Company. On occasion, the Company may also make other types of loans to its customers, such as equipment loans.

● Hybrid Real Estate Investments – investments are made through modified sale-leaseback transactions, where the Company acquires land from the owner-operators, leases the land back through long-term leases and simultaneously issues mortgage loans to the operators secured by the buildings and improvements on the land. Prior to 2019, these hybrid real estate investment transactions were generally accounted for as direct financing leases. Subsequent to the adoption of ASC Topic 842, new or modified hybrid real estate investment transactions are generally accounted for as operating leases of the land and mortgage loans on the buildings and improvements.

Impact of the COVID-19 Pandemic

Impact of the COVID-19 Pandemic

Since the beginning of the novel coronavirus (COVID-19) pandemic in early 2020, the Company has provided to certain tenants rent deferral arrangements in the form of both short-term notes and lease modifications. The FASB provided accounting relief under which concessions provided to tenants in direct response to the COVID-19 pandemic are not required to be evaluated or accounted for as lease modifications in accordance with ASC Topic 842. The Company elected to apply this accounting relief to the rent deferral arrangements it has entered into with its tenants, which primarily affected the timing (but not the amount) of lease and loan payments due to the Company under its contracts; net revenue recognized under these deferral arrangements results in a corresponding increase in receivables that are included in other assets, net on the condensed consolidated balance sheets. For the three months ended March 31, 2022, the Company recognized an additional $0.7 million of net revenue and collected $3.4 million of the receivables associated with these deferral arrangements. During the three months ended March 31, 2021, the Company recognized $2.0 million and collected $5.9 million in repayments of amounts deferred.

Accounting for Real Estate Investments

Accounting for Real Estate Investments

Classification and Cost

STORE Capital records the acquisition of real estate properties at cost, including acquisition and closing costs. The Company allocates the cost of real estate properties to the tangible and intangible assets and liabilities acquired based on their estimated relative fair values. Intangible assets and liabilities acquired may include the value of existing in-place leases, above-market or below-market lease value of in-place leases and ground lease-related intangibles, as applicable. Management uses multiple sources to estimate fair value, including independent appraisals and information obtained about each property as a result of its pre-acquisition due diligence and its marketing and leasing activities. Certain of the Company’s lease contracts allow its tenants the option, at their election, to purchase the leased property from the Company at a specified time or times (generally at the greater of the then-fair market value or the Company’s cost, as defined in the lease contracts). Subsequent to the adoption of ASC Topic 842, for real estate assets acquired through a sale-leaseback transaction and subject to a lease contract which contains a purchase option, the Company accounts for such an acquisition as a financing arrangement and records the investment in loans and financing receivables on the condensed consolidated balance sheet; should the purchase option later expire or be removed from the lease contract, the Company would derecognize the asset accounted for as a financing arrangement and recognize the transferred leased asset in real estate investments.

In-place lease intangibles are valued based on management’s estimates of lost rent and carrying costs during the time it would take to locate a tenant if the property were vacant, considering current market conditions and costs to execute similar leases. In estimating lost rent and carrying costs, management considers market rents, real estate taxes, insurance, costs to execute similar leases (including leasing commissions) and other related costs. The value assigned to in-place leases is amortized on a straight-line basis as a component of depreciation and amortization expense typically over the remaining term of the related leases.

The fair value of any above-market or below-market lease is estimated based on the present value of the difference between the contractual amounts to be paid pursuant to the in-place lease and management’s estimate of current market lease rates for the property, measured over a period equal to the remaining term of the lease. Capitalized above-market lease intangibles are amortized over the remaining term of the respective leases as a decrease to rental revenue. Below-market lease intangibles are amortized as an increase in rental revenue over the remaining term of the respective leases plus the fixed-rate renewal periods on those leases, if any. Should a lease terminate early, the unamortized portion of any related lease intangible is immediately recognized in operations.

The Company’s real estate portfolio is depreciated using the straight-line method over the estimated remaining useful life of the properties, which generally ranges from 30 to 40 years for buildings and is generally 15 years for land improvements. Properties classified as held for sale are recorded at the lower of their carrying value or their fair value, less anticipated selling costs. Any properties classified as held for sale are not depreciated.

Revenue Recognition

Revenue Recognition

STORE Capital leases real estate to its tenants under long-term net leases that are predominantly classified as operating leases. The Company’s leases generally provide for rent escalations throughout the lease terms. For leases that provide for specific contractual escalations, rental revenue is recognized on a straight-line basis so as to produce a constant periodic rent over the term of the lease. Accordingly, straight-line operating lease receivables, calculated as the aggregate difference between the rental revenue recognized on a straight-line basis and scheduled rents, represent unbilled rent receivables that the Company will receive only if the tenants make all rent payments required through the expiration of the leases; these receivables are included in other assets, net on the condensed consolidated balance sheets. The Company reviews its straight-line operating lease receivables for collectibility on a contract by contract basis and any amounts not considered substantially collectible are written off against rental revenues. As of March 31, 2022 and December 31, 2021, the Company had $40.9 million and $39.4 million, respectively, of straight-line operating lease receivables. Leases that have contingent rent escalators indexed to future increases in the Consumer Price Index (CPI) may adjust over a one-year period or over multiple-year periods. Generally, these escalators increase rent at the lesser of (a) 1 to 1.25 times the increase in the CPI over a specified period or (b) a fixed percentage. Because of the volatility and uncertainty with respect to future changes in the CPI, the Company’s inability to determine the extent to which any

specific future change in the CPI is probable at each rent adjustment date during the entire term of these leases and the Company’s view that the multiplier does not represent a significant leverage factor, increases in rental revenue from leases with this type of escalator are recognized only after the changes in the rental rates have actually occurred.

In addition to base rental revenue, certain leases also have contingent rentals that are based on a percentage of the tenant’s gross sales; the Company recognizes contingent rental revenue when the threshold upon which the contingent lease payment is based is actually reached. Approximately 3.8% of the Company’s investment portfolio is subject to leases that provide for contingent rent based on a percentage of the tenant’s gross sales (for most of these leases, the contingent rent payment is for a temporary period); historically, contingent rent recognized has been less than 2.0% of rental revenues.

The Company reviews its operating lease receivables for collectibility on a regular basis, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area where the property is located. In the event that the collectibility of lease payments with respect to any tenant is not probable, a direct write-off of the receivable is made and any future rental revenue is recognized only when the tenant makes a rental payment or when collectibility is again deemed probable.

Direct costs incremental to successful lease origination, offset by any lease origination fees received, are deferred and amortized over the related lease term as an adjustment to rental revenue. The Company periodically commits to fund the construction of new properties for its customers; rental revenue collected during the construction period is deferred and amortized over the remaining lease term when the construction project is complete. Substantially all of the Company’s leases are triple net, which means that the lessees are directly responsible for the payment of all property operating expenses, including property taxes, maintenance and insurance. For a few lease contracts, the Company collects property taxes from its customers and remits those taxes to governmental authorities. Subsequent to the adoption of ASC Topic 842, these property tax payments are presented on a gross basis as part of both rental revenues and property costs in the condensed consolidated statements of income.

Impairment

Impairment

STORE Capital reviews its real estate investments and related lease intangibles periodically for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through operations. Such events or changes in circumstances may include an expectation to sell certain assets in accordance with the Company’s long-term strategic plans. Management considers factors such as expected future undiscounted cash flows, capitalization and discount rates, terminal value, tenant improvements, market trends (such as the effects of leasing demand and competition) and other factors including bona fide purchase offers received from third parties in making this assessment. These factors are classified as Level 3 inputs within the fair value hierarchy, discussed in Fair Value Measurement below. If an asset is determined to be impaired, the impairment is calculated as the amount by which the carrying value of the asset exceeds its estimated fair value. Estimating future cash flows is highly subjective and such estimates could differ materially from actual results.

During the three months ended March 31, 2022, the Company recognized aggregate provisions for the impairment of real estate of $1.2 million. The estimated fair value of the impaired real estate assets at March 31, 2022 was $8.4 million. The Company recognized an aggregate provision for the impairment of real estate of $5.4 million during the three months ended March 31, 2021.

Accounting for Loans and Financing Receivables

Accounting for Loans and Financing Receivables

Loans Receivable – Classification, Cost and Revenue Recognition

STORE Capital holds its loans receivable, which are primarily mortgage loans secured by real estate, for long-term investment. Loans receivable are carried at amortized cost including related unamortized discounts or premiums, if any.

The Company recognizes interest income on loans receivable using the effective-interest method applied on a loan-by-loan basis. Direct costs associated with originating loans are offset against any related fees received and the balance, along with any premium or discount, is deferred and amortized as an adjustment to interest income over the term of the related loan receivable using the effective-interest method. A loan receivable is placed on nonaccrual status when the loan has become more than 60 days past due, or earlier if management determines that full recovery of the contractually specified payments of principal and interest is doubtful. While on nonaccrual status, interest income is recognized only when received. As of March 31, 2022 and December 31, 2021, the Company had loans receivable with an aggregate outstanding principal balance of $26.4 million and $28.8 million, respectively, on nonaccrual status.

Direct Financing Receivables – Classification, Cost and Revenue Recognition

Direct financing receivables include hybrid real estate investment transactions completed prior to 2019. The Company recorded the direct financing receivables at their net investment, determined as the aggregate minimum lease payments and the estimated residual value of the leased property less unearned income. The unearned income is recognized over the life of the related contracts so as to produce a constant rate of return on the net investment in the asset. Subsequent to the adoption of ASC Topic 842, existing direct financing receivables will continue to be accounted for in the same manner, unless the underlying contracts are modified.

Impairment and Provision for Credit Losses

The Company accounts for provision of credit losses in accordance with ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASC Topic 326). In accordance with ASC Topic 326, the Company evaluates the collectibility of its loans and financing receivables at the time each financing receivable is issued and subsequently on a quarterly basis utilizing an expected credit loss model based on credit quality indicators. The primary credit quality indicator is the implied credit rating associated with each borrower, utilizing two categories, investment grade and non-investment grade. The Company computes implied credit ratings based on regularly received borrower financial statements using Moody’s Analytics RiskCalc. The Company considers the implied credit ratings, loan and financing receivable term to maturity and underlying collateral value and quality, if any, to calculate the expected credit loss over the remaining life of the receivable. For the three months ended March 31, 2022, the Company recognized an estimated $0.3 million net reduction of prior provisions for credit losses related to its loans and financing receivables; the reduction of the provision for credit losses is included in provisions for impairment on the condensed consolidated statements of income. The Company recognized an estimated $2.0 million of provisions for credit losses for the three months ended March 31, 2021.

Direct Financing Receivables - Classification, Cost and Revenue Recognition

Direct Financing Receivables – Classification, Cost and Revenue Recognition

Direct financing receivables include hybrid real estate investment transactions completed prior to 2019. The Company recorded the direct financing receivables at their net investment, determined as the aggregate minimum lease payments and the estimated residual value of the leased property less unearned income. The unearned income is recognized over the life of the related contracts so as to produce a constant rate of return on the net investment in the asset. Subsequent to the adoption of ASC Topic 842, existing direct financing receivables will continue to be accounted for in the same manner, unless the underlying contracts are modified.

Accounting for Operating Ground Lease Assets

Accounting for Operating Ground Lease Assets

As part of certain real estate investment transactions, the Company may enter into long-term operating ground leases as a lessee. The Company is required to recognize an operating ground lease (or right-of-use) asset and related operating lease liability for each of these operating ground leases. Operating ground lease assets and operating lease liabilities are recognized based on the present value of the lease payments. The Company uses its estimated incremental borrowing rate, which is the estimated rate at which the Company could borrow on a collateralized basis with similar payments over a similar term, in determining the present value of the lease payments.

Many of these operating lease contracts include options for the Company to extend the lease; the option periods are included in the minimum lease term only if it is reasonably likely the Company will exercise the option(s). Rental expense for the operating ground lease contracts is recognized in property costs on a straight-line basis over the lease term. Some of the contracts have contingent rent escalators indexed to future increases in the CPI and a few contracts have contingent rentals that are based on a percentage of the gross sales of the property; these payments are recognized in expense as incurred. The payment obligations under these contracts are typically the responsibility of the tenants operating on the properties, in accordance with the Company’s leases with the respective tenants. As a result, the Company also recognizes sublease rental revenue on a straight-line basis over the term of the Company’s sublease with the tenant; the sublease income is included in rental revenues.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents include cash and highly liquid investment securities with maturities at acquisition of three months or less. The Company invests cash primarily in money-market funds of a major financial institution, consisting predominantly of U.S. Government obligations.

Restricted Cash

Restricted Cash

Restricted cash may include reserve account deposits held by lenders, including deposits required to be used for future investment in real estate assets, escrow deposits and cash proceeds from the sale of assets held by a qualified intermediary to facilitate tax-deferred exchange transactions under Section 1031 of the Internal Revenue Code. The Company had $2.1 million and $5.8 million of restricted cash at March 31, 2022 and December 31, 2021, respectively, which are included in other assets, net, on the condensed consolidated balance sheets.

Deferred Costs

Deferred Costs

Financing costs related to the issuance of the Company’s long-term debt are deferred and amortized as an increase to interest expense over the term of the related debt instrument using the effective-interest method and are reported as a reduction of the related debt balance on the condensed consolidated balance sheets. Deferred financing costs related to the establishment of the Company's credit facility are deferred and amortized to interest expense over the term of the credit facility and are included in other assets, net, on the condensed consolidated balance sheets.

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

The Company may enter into derivative contracts as part of its overall financing strategy to manage the Company’s exposure to changes in interest rates associated with current and/or future debt issuances. The Company does not use derivatives for trading or speculative purposes. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company enters into derivative financial instruments only with counterparties with high credit ratings and with major financial institutions with which the Company may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations.

The Company records its derivatives on the balance sheet at fair value. All derivatives subject to a master netting arrangement in accordance with the associated master International Swap and Derivatives Association agreement have been presented on a net basis by counterparty portfolio for purposes of balance sheet presentation and related disclosures.  The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the earnings effect of the hedged forecasted transactions in a cash flow hedge. The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss). Amounts reported in accumulated other comprehensive income (loss) related to cash flow hedges are reclassified to operations as an adjustment to interest expense as interest payments are made on the hedged debt transaction. As of March 31, 2022, the Company had no derivative instruments in place.

In April 2022, the Company entered into several interest rate swap agreements. One of the interest rate swap agreements has a notional amount of $200 million and was designated as a cash flow hedge of the Company's $200 million floating-rate bank term loan issued in April 2022 and due in May 2029. The remaining interest rate swap agreements have an aggregate notional amount of $400 million and were designated as cash flow hedges of the Company's $400 million floating-rate bank term loan issued in April 2022 and due in May 2027 (Note 4).

Fair Value Measurement

Fair Value Measurement

The Company estimates the fair value of financial and non-financial assets and liabilities based on the framework established in fair value accounting guidance. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The hierarchy described below prioritizes inputs to the valuation techniques used in measuring the fair value of assets and liabilities. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs to be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows:

● Level 1—Quoted market prices in active markets for identical assets and liabilities that the Company has the ability to access.

● Level 2—Significant inputs that are observable, either directly or indirectly. These types of inputs would include quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets in inactive markets and market-corroborated inputs.

● Level 3—Inputs that are unobservable and significant to the overall fair value measurement of the assets or liabilities. These types of inputs include the Company’s own assumptions.

Share-based Compensation

Share-based Compensation

Directors and key employees of the Company have been granted long-term incentive awards, including restricted stock awards (RSAs) and restricted stock unit awards (RSUs), which provide such directors and employees with equity interests as an incentive to remain in the Company’s service and to align their interests with those of the Company’s stockholders.

The Company estimates the fair value of RSAs based on the closing price per share of the common stock on the date of grant and recognizes that amount in general and administrative expense ratably over the vesting period at the greater of the amount amortized on a straight-line basis or the amount vested. During the three months ended March 31, 2022, the Company granted RSAs representing 177,311 shares of restricted common stock to its directors and employees. During the same period, RSAs representing 102,496 shares of restricted stock vested and RSAs representing 35,602 shares were forfeited. In connection with the vesting of RSAs, the Company repurchased 68,351 shares as a result of participant elections to surrender common shares to the Company to satisfy statutory tax withholding obligations under the Company’s equity-based compensation plans. As of March 31, 2022, the Company had 476,637 shares of restricted common stock outstanding.

The Company’s RSUs granted in 2019 through 2022 contain both a market condition and a performance condition as well as a service condition. The Company values the RSUs with a market condition using a Monte Carlo simulation model and values the RSUs with a performance condition based on the fair value of the awards expected to be earned and recognizes those amounts in general and administrative expense on a tranche-by-tranche basis ratably over the vesting periods. During the three months ended March 31, 2022, the Company awarded 629,307 RSUs to its executive officers. In connection with the vesting of 297,605 RSUs, the Company repurchased 120,475 shares during the three months ended March 31, 2022 as a result of participant elections to surrender common shares to the Company to satisfy statutory tax withholding obligations under the Company’s equity-based compensation plan. As of March 31, 2022, there were 1,635,061 RSUs outstanding.

Income Taxes

Income Taxes

As a REIT, the Company generally will not be subject to federal income tax. It is still subject, however, to state and local income taxes and to federal income and excise tax on its undistributed income. STORE Investment Corporation is the Company’s wholly owned taxable REIT subsidiary (TRS) created to engage in non-qualifying REIT activities. The TRS is subject to federal, state and local income taxes.

Management of the Company determines whether any tax positions taken or expected to be taken meet the “more-likely-than-not” threshold of being sustained by the applicable federal, state or local tax authority. Certain state tax returns filed for 2017 and tax returns filed for 2018 through 2021 are subject to examination by these jurisdictions. As of March 31, 2022, management concluded that there is no tax liability relating to uncertain income tax positions. The Company’s policy is to recognize interest related to any underpayment of income taxes as interest expense and to recognize any penalties as general and administrative expense. There was no accrual for interest or penalties at March 31, 2022 or December 31, 2021.

Net Income Per Common Share

Net Income Per Common Share

Net income per common share has been computed pursuant to the guidance in the FASB ASC Topic 260, Earnings Per Share. The guidance requires the classification of the Company’s unvested restricted common shares, which contain rights to receive non-forfeitable dividends, as participating securities requiring the two-class method of computing net income per common share. The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted net income per common share (dollars in thousands):

	Three Months Ended March 31,
	2022		2021
Numerator:
Net income	$	87,022	$	54,960
Less: earnings attributable to unvested restricted shares		(102)		(227)
Net income used in basic and diluted income per share	$	86,920	$	54,733
Denominator:
Weighted average common shares outstanding		275,463,866		266,991,452
Less: Weighted average number of shares of unvested restricted stock		(460,593)		(624,754)
Weighted average shares outstanding used in basic income per share		275,003,273		266,366,698
Effects of dilutive securities:
Add: Treasury stock method impact of potentially dilutive securities (a)		—		—
Weighted average shares outstanding used in diluted income per share		275,003,273		266,366,698

(a) For the three months ended March 31, 2022 and 2021, excludes 144,661 shares and 244,602 shares, respectively, related to unvested restricted shares as the effect would have been antidilutive.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or the SEC. The Company adopts the new pronouncements as of the specified effective date. When permitted, the Company may elect to early adopt the new pronouncements. Unless otherwise discussed, these new accounting pronouncements include technical corrections to existing guidance or introduce new guidance related to specialized industries or entities and, therefore, will have minimal, if any, impact on the Company’s financial position, results of operations or cash flows upon adoption.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-

indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

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Summary of Significant Accounting Principles (Tables)

3 Months Ended

Mar. 31, 2022

Summary of Significant Accounting Principles

Reconciliation of the numerator and denominator used in the computation of basic and diluted income per common share

	Three Months Ended March 31,
	2022		2021
Numerator:
Net income	$	87,022	$	54,960
Less: earnings attributable to unvested restricted shares		(102)		(227)
Net income used in basic and diluted income per share	$	86,920	$	54,733
Denominator:
Weighted average common shares outstanding		275,463,866		266,991,452
Less: Weighted average number of shares of unvested restricted stock		(460,593)		(624,754)
Weighted average shares outstanding used in basic income per share		275,003,273		266,366,698
Effects of dilutive securities:
Add: Treasury stock method impact of potentially dilutive securities (a)		—		—
Weighted average shares outstanding used in diluted income per share		275,003,273		266,366,698

(a) For the three months ended March 31, 2022 and 2021, excludes 144,661 shares and 244,602 shares, respectively, related to unvested restricted shares as the effect would have been antidilutive.

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Investments (Tables)

3 Months Ended

Mar. 31, 2022

Investments.

Schedule of gross real estate and loan activity

During the three months ended March 31, 2022, the Company had the following gross real estate and other investment activity (dollars in thousands):

	Number of	Dollar
	Investment	Amount of
	Locations	Investments
Gross investments, December 31, 2021	2,866	$	10,748,937
Acquisition of and additions to real estate (a)	97		466,817
Investment in loans and financing receivables	14		45,721
Sales of real estate	(11)		(52,490)
Principal collections on loans and financing receivables	(1)		(5,090)
Net change in operating ground lease assets (b)			(358)
Provisions for impairment			(912)
Other			(4,607)
Gross investments, March 31, 2022 (c)			11,198,018
Less accumulated depreciation and amortization (c)			(1,224,530)
Net investments, March 31, 2022	2,965	$	9,973,488

(a) Excludes $15.6 million of tenant improvement advances disbursed in 2022 which were accrued as of December 31, 2021.

(b) Represents amortization recognized on operating ground lease assets during the three months ended March 31, 2022.

(c) Includes the dollar amount of investments ($33.5 million) and the accumulated depreciation ($0.3 million) related to real estate investments held for sale at March 31, 2022.

Schedule of revenue recognized from investment portfolio

The following table summarizes the revenues the Company recognized from its investment portfolio (in thousands):

	Three Months Ended March 31,
	2022		2021
Rental revenues:
Operating leases (a)(c)	$	201,892	$	169,316
Sublease income - operating ground leases (b)		703		703
Amortization of lease related intangibles and costs		(534)		(691)
Total rental revenues	$	202,061	$	169,328
Interest income on loans and financing receivables:
Mortgage and other loans receivable (c)	$	7,879	$	5,929
Sale-leaseback transactions accounted for as financing arrangements		5,327		4,096
Direct financing receivables		1,724		2,538
Total interest income on loans and financing receivables	$	14,930	$	12,563

(a) For the three months ended March 31, 2022 and 2021, includes $654,000 and $621,000, respectively, of property tax tenant reimbursement revenue and includes $0.4 million and $3.1 million, respectively, of variable lease revenue.

(b) Represents total revenue recognized for the sublease of properties subject to operating ground leases to the related tenants; includes both payments made by the tenants to the ground lessors and straight-line revenue recognized for scheduled increases in the sublease rental payments.

(c) For the three months ended March 31, 2022 and 2021, includes $0.7 million and $2.0 million, respectively, of revenue that has been recognized related to rent and financing relief arrangements granted as a result of the COVID-19 pandemic with a corresponding increase in receivables which are included in other assets, net on the condensed consolidated balance sheets.

Schedule of investment portfolio diversification by industry

The following table shows information regarding the diversification of the Company’s total investment portfolio among the different industries in which its tenants and borrowers operate as of March 31, 2022 (dollars in thousands):

				Percentage of
	Number of	Dollar		Total Dollar
	Investment	Amount of		Amount of
	Locations	Investments		Investments
Restaurants	763	$	1,350,702	12	%
Early childhood education centers	277		650,023	6
Metal fabrication	112		642,473	6
Automotive repair and maintenance	241		626,362	6
Health clubs	91		570,156	5
Furniture stores	64		413,447	4
Farm and ranch supply stores	41		377,293	3
All other service industries	1,019		3,906,607	35
All other retail industries	155		1,138,141	10
All other manufacturing industries	202		1,522,814	13
Total (a)	2,965	$	11,198,018	100	%

(a) Includes the dollar amount of investments ($33.5 million) related to real estate investments held for sale at March 31, 2022.

Schedule of future minimum rentals to be received under operating leases

Scheduled future minimum rentals to be received under the remaining noncancelable term of the operating leases in place as of March 31, 2022, are as follows (in thousands):

Remainder of 2022	$	628,535
2023		838,444
2024		830,643
2025		827,634
2026		821,328
2027		809,939
Thereafter		6,444,417
Total future minimum rentals (a)	$	11,200,940

(a) Excludes future minimum rentals to be received under lease contracts associated with sale-leaseback transactions accounted for as financing arrangements. See Loans and Financing Receivables section below.

Schedule detailing intangible lease assets and related accumulated amortization

The following details intangible lease assets and related accumulated amortization (in thousands):

	March 31,		December 31,
	2022		2021
In-place leases	$	39,767	$	35,522
Ground lease-related intangibles		19,449		19,449
Above-market leases		—		—
Total intangible lease assets		59,216		54,971
Accumulated amortization		(24,643)		(25,285)
Net intangible lease assets	$	34,573	$	29,686

Summary of future minimum lease payments

The future minimum lease payments to be paid under the operating ground leases as of March 31, 2022 were as follows (in thousands):

			Ground
	Ground		Leases
	Leases		Paid by
	Paid by		STORE Capital's
	STORE Capital		Tenants (a)		Total
Remainder of 2022	$	300	$	2,081	$	2,381
2023		4,149		2,629		6,778
2024		55		2,711		2,766
2025		57		2,395		2,452
2026		57		2,233		2,290
2027		57		2,227		2,284
Thereafter		3,014		42,282		45,296
Total lease payments		7,689		56,558		64,247
Less imputed interest		(2,855)		(27,897)		(30,752)
Total operating lease liabilities - ground leases	$	4,834	$	28,661	$	33,495

(a) STORE Capital’s tenants, who are generally sub-tenants under the ground leases, are responsible for paying the rent under these ground leases. In the event the tenant fails to make the required ground lease payments, the Company would be primarily responsible for the payment, assuming the Company does not re-tenant the property or sell the leasehold interest. Of the total $56.6 million commitment, $19.0 million is due for periods beyond the current term of the Company’s leases with the tenants. Amounts exclude contingent rent due under three leases where the ground lease payment, or a portion thereof, is based on the level of the tenant’s sales.

Schedule summarizing loans and direct financing receivables

The Company’s loans and financing receivables are summarized below (dollars in thousands):

	Interest		Maturity	March 31,		December 31,
Type	Rate (a)		Date	2022		2021
Six mortgage loans receivable	7.98	%	2022 - 2026	$	114,896	$	114,911
Three mortgage loans receivable	8.75	%	2032 - 2036		11,689		14,444
Fifteen mortgage loans receivable (b)	8.72	%	2051 - 2060		217,991		216,547
Total mortgage loans receivable					344,576		345,902
Equipment and other loans receivable	7.95	%	2022 - 2036		21,744		25,409
Total principal amount outstanding—loans receivable					366,320		371,311
Unamortized loan origination costs					1,025		1,046
Sale-leaseback transactions accounted for as financing arrangements (c)	7.55	%	2034 - 2043		298,772		255,483
Direct financing receivables					78,559		78,637
Allowance for credit and loan losses (d)					(8,266)		(9,208)
Total loans and financing receivables				$	736,410	$	697,269

(a) Represents the weighted average interest rate as of the balance sheet date.

(b) Four of these mortgage loans allow for prepayment in whole, but not in part, with penalties ranging from 20% to 70% depending on the timing of the prepayment.

(c) In accordance with ASC Topic 842, represents sale-leaseback transactions accounted for as financing arrangements rather than as investments in real estate subject to operating leases. Interest rate shown is the weighted average initial rental or capitalization rate on the leases; the leases mature between 2034 and 2043 and the purchase options expire between 2024 and 2042.

(d) Balance includes $2.5 million of loan loss reserves recognized prior to December 31, 2019, $2.5 million credit loss reserves recognized upon the adoption of ASC Topic 326 on January 1, 2020 and an aggregate $3.3 million of credit losses recognized since the adoption of ASC Topic 326.

Schedule of maturities of loans receivable

Absent prepayments, scheduled maturities are expected to be as follows (in thousands):

	Scheduled
	Principal		Balloon		Total
	Payments		Payments		Payments
Remainder of 2022	$	2,230	$	28,930	$	31,160
2023		3,099		80,698		83,797
2024		1,964		—		1,964
2025		1,902		—		1,902
2026		1,977		20,371		22,348
2027		1,687		548		2,235
Thereafter		172,616		50,298		222,914
Total principal payments	$	185,475	$	180,845	$	366,320

Schedule of future payments to be received under sale-leaseback transactions accounted for as financing arrangements

The scheduled future minimum rentals to be received under these agreements (which will be reflected in interest income) as of March 31, 2022, were as follows (in thousands):

Remainder of 2022	$	17,210
2023		23,016
2024		23,151
2025		23,291
2026		23,385
2027		23,485
Thereafter		280,926
Total future scheduled payments	$	414,464

Schedule of the components of the investments accounted for as direct financing receivables

As of both March 31, 2022 and December 31, 2021, the Company had $78.6 million of investments accounted for as direct financing leases under previous accounting guidance; the components of these investments were as follows (in thousands):

	March 31,		December 31,
	2022		2021
Minimum lease payments receivable	$	157,409	$	159,371
Estimated residual value of leased assets		8,938		8,938
Unearned income		(87,788)		(89,672)
Net investment	$	78,559	$	78,637

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Debt (Tables)

3 Months Ended

Mar. 31, 2022

Schedule of maturities of long-term debt

As of March 31, 2022, the scheduled maturities, including balloon payments, on the Company’s aggregate long-term debt obligations are as follows (in thousands):

	Scheduled
	Principal		Balloon
	Payments		Payments		Total
Remainder of 2022	$	18,184	$	99,290	$	117,474
2023		23,565		22,182		45,747
2024		22,331		426,914		449,245
2025		20,037		256,612		276,649
2026		17,926		532,142		550,068
2027		9,506		460,472		469,978
Thereafter		30,702		2,295,850		2,326,552
	$	142,251	$	4,093,462	$	4,235,713

Senior Unsecured Notes And Term Loans Payable

Schedule of debt

The Company’s senior unsecured notes payable are summarized below (dollars in thousands):

	Maturity	Interest		March 31,		December 31,
	Date	Rate		2022		2021
Notes Payable:
Series A issued November 2015	Nov. 2022	4.95	%	$	75,000	$	75,000
Series B issued November 2015	Nov. 2024	5.24	%		100,000		100,000
Series C issued April 2016	Apr. 2026	4.73	%		200,000		200,000
Public Notes issued March 2018	Mar. 2028	4.50	%		350,000		350,000
Public Notes issued February 2019	Mar. 2029	4.625	%		350,000		350,000
Public Notes issued November 2020	Nov. 2030	2.75	%		350,000		350,000
Public Notes issued November 2021	Dec. 2031	2.70	%		375,000		375,000
Total notes payable					1,800,000		1,800,000
Unamortized discount					(4,584)		(4,740)
Unamortized deferred financing costs					(11,976)		(12,447)
Total unsecured notes payable, net				$	1,783,440	$	1,782,813

Non-recourse debt obligations

Schedule of debt

The Company’s non-recourse debt obligations of consolidated special purpose entity subsidiaries are summarized below (dollars in thousands):

	Maturity	Interest		March 31,		December 31,
	Date	Rate		2022		2021
Non-recourse net-lease mortgage notes:
$140,000 Series 2014-1, Class A-2	Apr. 2024 (a)	5.00	%	$	134,517	$	134,692
$150,000 Series 2018-1, Class A-1	Oct. 2024 (b)	3.96	%		141,677		142,051
$50,000 Series 2018-1, Class A-3	Oct. 2024 (b)	4.40	%		48,792		48,917
$270,000 Series 2015-1, Class A-2	Apr. 2025 (b)	4.17	%		260,663		260,999
$200,000 Series 2016-1, Class A-1 (2016)	Oct. 2026 (b)	3.96	%		179,124		180,190
$82,000 Series 2019-1, Class A-1	Nov. 2026 (b)	2.82	%		78,488		78,590
$46,000 Series 2019-1, Class A-3	Nov. 2026 (b)	3.32	%		45,463		45,521
$135,000 Series 2016-1, Class A-2 (2017)	Apr. 2027 (b)	4.32	%		122,341		123,046
$228,000 Series 2018-1, Class A-2	Oct. 2027 (c)	4.29	%		215,348		215,918
$164,000 Series 2018-1, Class A-4	Oct. 2027 (c)	4.74	%		160,037		160,447
$168,500 Series 2021-1, Class A-1	Jun. 2028 (b)	2.12	%		167,868		168,079
$89,000 Series 2021-1, Class A-3	Jun. 2028 (b)	2.86	%		88,666		88,778
$168,500 Series 2021-1, Class A-2	Jun. 2033 (c)	2.96	%		167,868		168,079
$89,000 Series 2021-1, Class A-4	Jun. 2033 (c)	3.70	%		88,666		88,778
$244,000 Series 2019-1, Class A-2	Nov. 2034 (c)	3.65	%		233,549		233,854
$136,000 Series 2019-1, Class A-4	Nov. 2034 (c)	4.49	%		134,413		134,583
Total non-recourse net-lease mortgage notes					2,267,480		2,272,522
Non-recourse mortgage notes:
$13,000 note issued May 2012		5.195	%		—		9,961
$26,000 note issued August 2012	Sept. 2022	5.05	%		19,879		20,085
$6,400 note issued November 2012	Dec. 2022	4.707	%		4,887		4,938
$11,895 note issued March 2013	Apr. 2023	4.7315	%		9,216		9,309
$17,500 note issued August 2013	Sept. 2023	5.46	%		14,084		14,212
$10,075 note issued March 2014	Apr. 2024	5.10	%		8,756		8,808
$65,000 note issued June 2016	Jul. 2026	4.75	%		58,908		59,223
$41,690 note issued March 2019	Mar. 2029	4.80	%		41,130		41,291
$6,944 notes issued March 2013	Apr. 2038	4.50	% (d)		5,294		5,332
$6,350 notes issued March 2019 (assumed in December 2020)	Apr. 2049	4.64	%		6,079		6,106
Total non-recourse mortgage notes					168,233		179,265
Unamortized discount					(473)		(496)
Unamortized deferred financing costs					(24,406)		(25,583)
Total non-recourse debt obligations of consolidated special purpose entities, net				$	2,410,834	$	2,425,708

(a) Notes were repaid, without penalty, in April 2022 using a portion of the proceeds from the aggregate $600 million of term loans the Company entered into in April 2022.

(b) Prepayable, without penalty, 24 months prior to maturity.

(c) Prepayable, without penalty, 36 months prior to maturity.

(d) Interest rate is effective until March 2023 and will reset to the lender’s then prevailing interest rate.

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Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2022

Stockholders' Equity

Common stock issuance

The following tables outline the common stock issuances under the 2020 ATM Program (in millions except share and per share information):

Three Months Ended March 31, 2022
Shares Sold	Weighted Average Price per Share		Gross Proceeds		Sales Agents' Commissions		Other Offering Expenses		Net Proceeds
5,539,138	$	30.41	$	168.4	$	(2.1)	$	(0.1)	$	166.2
Inception of Program Through March 31, 2022
Shares Sold	Weighted Average Price per Share		Gross Proceeds		Sales Agents' Commissions		Other Offering Expenses		Net Proceeds
16,380,669	$	32.31	$	529.2	$	(7.6)	$	(0.7)	$	520.9

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Summary of Significant Accounting Principles (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) segment item	Mar. 31, 2021 USD ($)	Apr. 30, 2022 USD ($) instrument	Dec. 31, 2021 USD ($)
Basis of Accounting and Principles of Consolidation
Assets owned	$ 10,131,148			$ 9,773,082
Liabilities owed	$ 4,844,157			4,628,953
Segment Reporting
Number of reportable segments | segment	1
Investment portfolio
Number of transaction types | item	3
Revenue Recognition
Accrued straight-line rental revenue, net of allowance	$ 40,900			39,400
Leases indexed to increases in the CPI, minimum adjustment period	1 year
Leases indexed to increases in the CPI, minimum multiplier increasing rent (in multipliers)	1
Leases indexed to increases in the CPI, maximum multiplier increasing rent (in multipliers)	1.25
Portion of investment portfolio subject to contingent rent based upon tenant sales (as a percent)	3.80%
Contingent rent as a percentage of rental revenue, historical	2.00%
Impairments
Provisions for impairment	$ 1,200	$ 5,400
Estimate fair value of impaired real estate assets	8,400
Loans Receivable
Non accrual status loan receivables	$ 26,400			28,800
Number of classes in portfolio of loans and financing receivables | item	2
Restricted cash
Restricted cash included in other assets	$ 2,064	9,052		5,800
Derivative Instruments and Hedging Activities
Number of agreements | segment	0
Carrying amount	$ 4,235,713
Provision For Impairment
Loans Receivable
Provision for loan losses	(300)	2,000
Payment deferral due to COVID-19
Revenue Recognition
Revenue associated with deferral arrangements	700	2,000
Receivables collections	$ 3,400	$ 5,900
Loans receivable
Loans Receivable
Maximum past due period for loans payments causing nonaccrual status	60 days
Interest rate swap, due in 2029
Derivative Instruments and Hedging Activities
Number of agreements | instrument			1
Interest rate swap, due in 2029 | Designated as hedging instrument
Derivative Instruments and Hedging Activities
Current notional amounts			$ 200,000
Carrying amount			200,000
Interest rate swap, due in 2027 | Designated as hedging instrument
Derivative Instruments and Hedging Activities
Current notional amounts			400,000
Carrying amount			$ 400,000
Buildings | Maximum
Accounting for Real Estate Investments
Estimated useful life	40 years
Buildings | Minimum
Accounting for Real Estate Investments
Estimated useful life	30 years
Land improvements
Accounting for Real Estate Investments
Estimated useful life	15 years
Consolidated special purpose entities
Basis of Accounting and Principles of Consolidation
Assets owned	$ 8,900,000			8,500,000
Liabilities owed	$ 2,600,000			$ 2,600,000

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Summary of Significant Accounting Principles - Share Based Compensation and Other (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Income Tax Examination, Penalties and Interest Accrued
Uncertain income tax positions	$ 0
Accrual for interest or penalties	0		$ 0
Numerator:
Net income	87,022,000	$ 54,960,000
Less: earnings attributable to unvested restricted shares	(102,000)	(227,000)
Net income used in basic and diluted income per share	$ 86,920,000	$ 54,733,000
Denominator:
Weighted average common shares outstanding	275,463,866	266,991,452
Less: Weighted average number of shares of unvested restricted stock (in shares)	(460,593)	(624,754)
Weighted average shares outstanding used in basic income per share (in shares)	275,003,273	266,366,698
Effects of dilutive securities:
Weighted average shares outstanding used in diluted income per share (in shares)	275,003,273	266,366,698
Antidilutive unvested restricted shares (in shares)	144,661	244,602
Restricted Stock
Sharebased Compensation
Granted in period (in shares)	177,311
Shares vested (shares)	102,496
Forfeited in period (in shares)	35,602
Shares repurchased in connection with tax withholding obligations (in shares)	68,351
Outstanding (in shares)	476,637
Restricted stock units
Sharebased Compensation
Shares vested (shares)	297,605
Shares repurchased in connection with tax withholding obligations (in shares)	120,475
Restricted stock units | Executive Officer | Vesting Based On Service And Market Conditions
Sharebased Compensation
Granted in period (in shares)	629,307
Outstanding (in shares)	1,635,061

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Investments - Locations (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) property	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($) property
Number of property locations of investments (in locations) | property	2,965		2,866
Number of owned properties (in properties) | property	2,911
Number of properties accounted as financing arrangements | property	86
Number of properties owned as direct financing receivables | property	23
Number of ground lease interests (in properties) | property	24
Number of properties which secure certain mortgage loans (in properties) | property	30
Gross acquisition cost of real estate investments	$ 10,400,000
Loans and financing receivables, net	736,410		$ 697,269
Operating ground lease assets	$ 32,960		33,318
Investments assets of consolidated special purpose entity subsidiaries and are pledged as collateral under the non-recourse obligations of these special purpose entities	35.00%
Number of Investment Locations
Gross investments | property	2,866
Acquisition of and additions to real estate | property	97
Investment in loans and financing receivables | property	14
Sales of real estate | property	(11)
Principal collections on loans and direct financing receivables | property	(1)
Gross investments | property	2,965
Dollar Amount of Investments
Gross investments	$ 10,748,937
Acquisition of and additions to real estate	466,817
Investment in loans and financing receivables	45,721
Sales of real estate	(52,490)
Principal collections on loans and direct financing receivables	5,090
Operating ground lease assets, net	32,960		33,318
Provisions for impairment	(912)	$ (7,350)
Other	(4,607)
Gross investments	11,198,018
Less accumulated depreciation and amortization	(1,224,530)
Net investments	9,973,488		9,587,740
Tenant improvement advances disbursed	15,600
Sale-leaseback transactions accounted for as financing arrangements	298,800		$ 255,500
Investment in real estate held for sale	33,500
Accumulated depreciation of real estate investments held for sale	300
Ground leases
Operating ground lease assets	33,000
Dollar Amount of Investments
Operating ground lease assets, net	33,000
Net change in operating ground lease assets	$ (358)

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Investments - Revenue Recognized from Investment Portfolio (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Rental revenues:
Operating leases	$ 201,892,000	$ 169,316,000
Sublease income - operating ground lease assets	703,000	703,000
Amortization of lease related intangibles and costs	(534,000)	(691,000)
Total rental revenues	202,061,000	169,328,000
Interest income on loans and financing receivables:
Mortgage and other loans receivable	7,879,000	5,929,000
Sale-leaseback transactions accounted for as financing arrangements	5,327,000	4,096,000
Direct financing receivables	1,724,000	2,538,000
Total interest income on loans and financing receivables	14,930,000	12,563,000
Property tax tenant reimbursement revenue	654,000	621,000
Variable lease revenue	400,000	3,100,000
Payment deferral due to COVID-19
Rental revenues:
Total rental revenues	$ 700,000	$ 2,000,000.0

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Investments - Significant Credit and Revenue Concentration (Details)	3 Months Ended
	Mar. 31, 2022 item state
Real estate investment portfolio | Geographic concentration
Significant Credit and Revenue Concentration
Number of states over which real estate investments are dispersed (in states) | state	49
Concentration Percentage for threshold	10.00%
Real estate investment portfolio | Geographic concentration | Minimum
Significant Credit and Revenue Concentration
Number of customers	573
Real estate investment portfolio | Geographic concentration | Texas
Significant Credit and Revenue Concentration
Concentration Percentage	11.00%
Number of states accounting for 10% or more | state	1
Real estate investment portfolio | Customer concentration
Significant Credit and Revenue Concentration
Concentration Percentage for threshold	10.00%
Number of customers representing more than 10%	0
Real estate investment portfolio | Customer concentration | Largest customer, investment portfolio
Significant Credit and Revenue Concentration
Concentration Percentage	2.90%
Real estate investment portfolio | Concept concentration
Significant Credit and Revenue Concentration
Number of concepts (in categories)	895
Investment portfolio revenues | Customer concentration | Largest customer, investment portfolio revenues
Significant Credit and Revenue Concentration
Concentration Percentage	3.00%
Investment portfolio revenues | Concept concentration | Maximum
Significant Credit and Revenue Concentration
Concentration Percentage	2.20%

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Investments - Portfolio Diversification (Details) $ in Thousands	Mar. 31, 2022 USD ($) property	Dec. 31, 2021 USD ($) property
Information regarding the diversification of Company's investment portfolio among different industries [Line items]
Number of Investment Locations | property	2,965	2,866
Dollar Amount of Investments	$ 11,198,018	$ 10,748,937
Percentage of Total Dollar Amount of Investments	100.00%
Investment in real estate held for sale	$ 33,500
Restaurants
Information regarding the diversification of Company's investment portfolio among different industries [Line items]
Number of Investment Locations | property	763
Dollar Amount of Investments	$ 1,350,702
Percentage of Total Dollar Amount of Investments	12.00%
Early childhood education centers
Information regarding the diversification of Company's investment portfolio among different industries [Line items]
Number of Investment Locations | property	277
Dollar Amount of Investments	$ 650,023
Percentage of Total Dollar Amount of Investments	6.00%
Metal fabrication
Information regarding the diversification of Company's investment portfolio among different industries [Line items]
Number of Investment Locations | property	112
Dollar Amount of Investments	$ 642,473
Percentage of Total Dollar Amount of Investments	6.00%
Automotive Repair and Maintenance
Information regarding the diversification of Company's investment portfolio among different industries [Line items]
Number of Investment Locations | property	241
Dollar Amount of Investments	$ 626,362
Percentage of Total Dollar Amount of Investments	6.00%
Health Clubs
Information regarding the diversification of Company's investment portfolio among different industries [Line items]
Number of Investment Locations | property	91
Dollar Amount of Investments	$ 570,156
Percentage of Total Dollar Amount of Investments	5.00%
Furniture Stores
Information regarding the diversification of Company's investment portfolio among different industries [Line items]
Number of Investment Locations | property	64
Dollar Amount of Investments	$ 413,447
Percentage of Total Dollar Amount of Investments	4.00%
Farm and Ranch Supply Stores
Information regarding the diversification of Company's investment portfolio among different industries [Line items]
Number of Investment Locations | property	41
Dollar Amount of Investments	$ 377,293
Percentage of Total Dollar Amount of Investments	3.00%
All other service industries
Information regarding the diversification of Company's investment portfolio among different industries [Line items]
Number of Investment Locations | property	1,019
Dollar Amount of Investments	$ 3,906,607
Percentage of Total Dollar Amount of Investments	35.00%
All other retail industries
Information regarding the diversification of Company's investment portfolio among different industries [Line items]
Number of Investment Locations | property	155
Dollar Amount of Investments	$ 1,138,141
Percentage of Total Dollar Amount of Investments	10.00%
All other manufacturing industries
Information regarding the diversification of Company's investment portfolio among different industries [Line items]
Number of Investment Locations | property	202
Dollar Amount of Investments	$ 1,522,814
Percentage of Total Dollar Amount of Investments	13.00%

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Investments - Intangible Lease Assets and Real Estate Investments (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) Options property item	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($)
Accounting for Real Estate Investments
Remaining noncancelable lease term	13 years 3 months 18 days
Number of real estate properties vacant not subject to lease | property	16
Future minimum rentals to be received under the remaining noncancelable term of the operating leases
Remainder of 2022	$ 628,535
2023	838,444
2024	830,643
2025	827,634
2026	821,328
2027	809,939
Thereafter	6,444,417
Total future minimum rentals	$ 11,200,940
Term of renewal options	5 years
Intangible lease assets	$ 59,216		$ 54,971
Accumulated amortization	(24,643)		(25,285)
Net intangible lease assets	34,573		29,686
Amortization in the next five years
Remainder of 2022	2,700
2023	3,200
2024	2,700
2025	2,200
2026	2,100
2027	$ 1,900
Minimum
Future minimum rentals to be received under the remaining noncancelable term of the operating leases
Typical number of renewal options | item	1
Number of renewal periods at the option of the Company | Options	2
Maximum
Future minimum rentals to be received under the remaining noncancelable term of the operating leases
Number of renewal periods at the option of the Company | Options	4
Amortization expense
Future minimum rentals to be received under the remaining noncancelable term of the operating leases
Amount amortized	$ 900	$ 900
In -place leases
Future minimum rentals to be received under the remaining noncancelable term of the operating leases
Intangible lease assets	$ 39,767		35,522
Amortization in the next five years
Weighted average remaining amortization period	10 years
Ground lease interests
Future minimum rentals to be received under the remaining noncancelable term of the operating leases
Intangible lease assets	$ 19,449		$ 19,449
Amortization in the next five years
Weighted average remaining amortization period	42 years
Above-market leases | Decrease to rental revenue
Future minimum rentals to be received under the remaining noncancelable term of the operating leases
Amount amortized		$ 200

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Investments - Operating Lease Asset (Details)	3 Months Ended
	Mar. 31, 2022 USD ($) lease	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($)
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Operating ground lease assets	$ 32,960,000		$ 33,318,000
Rental revenue	703,000	$ 703,000
Future minimum lease payments
Total operating lease liabilities - ground leases	37,330,000		$ 37,637,000
Ground lease by STORE capital
Future minimum lease payments
Long-term lease commitment	$ 19,000,000.0
Ground lease by STORE capital tenants
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of ground lease payments based on level of tenant's sales | lease	3
Ground leases
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Operating ground lease assets	$ 33,000,000.0
Lease costs	755,000	794,000
Rental revenue	703,000	$ 703,000
Future minimum lease payments
Remainder of 2022	2,381,000
2023	6,778,000
2024	2,766,000
2025	2,452,000
2026	2,290,000
2027	2,284,000
Thereafter	45,296,000
Total lease payments	64,247,000
Less imputed interest	(30,752,000)
Total operating lease liabilities - ground leases	33,495,000
Ground leases | Ground lease by STORE capital
Future minimum lease payments
Remainder of 2022	300,000
2023	4,149,000
2024	55,000
2025	57,000
2026	57,000
2027	57,000
Thereafter	3,014,000
Total lease payments	7,689,000
Less imputed interest	(2,855,000)
Total operating lease liabilities - ground leases	4,834,000
Ground leases | Ground lease by STORE capital tenants
Future minimum lease payments
Remainder of 2022	2,081,000
2023	2,629,000
2024	2,711,000
2025	2,395,000
2026	2,233,000
2027	2,227,000
Thereafter	42,282,000
Total lease payments	56,558,000
Less imputed interest	(27,897,000)
Total operating lease liabilities - ground leases	$ 28,661,000

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Investments - Loans and Financing Receivables (Details) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2022 USD ($) loan	Dec. 31, 2021 USD ($) loan	Sep. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)	Jan. 01, 2020 USD ($)
Loans and direct financing receivables
Number of mortgage loans | loan	24
Total principal payments	$ 366,320
Unamortized loan origination costs	1,025	$ 1,046
Sale-leaseback transactions accounted for as financing arrangements	298,800	255,500
Direct financing receivables	78,559	78,637
Allowance for credit and loan losses	(8,266)	(9,208)
Total loans and direct financing receivables	$ 736,410	$ 697,269
Credit loss reserves recognized			$ 3,300	$ 2,500
ASU 2016-13
Loans and direct financing receivables
Credit loss reserve					$ 2,500
Mortgage loans receivable with maturity range 2022 to 2026
Loans and direct financing receivables
Number of mortgage loans | loan	6	6
Mortgage loans receivable with maturity range 2032 to 2036
Loans and direct financing receivables
Number of mortgage loans | loan	3	3
Mortgage loans receivable with maturity range 2051 to 2060
Loans and direct financing receivables
Number of mortgage loans | loan	15	15
Number of mortgage loans allowing for prepayment in whole | loan	4
Mortgage loans receivable with maturity range 2051 to 2060 | Minimum
Loans and direct financing receivables
Prepayment penalties (as a percent)	20.00%
Mortgage loans receivable with maturity range 2051 to 2060 | Maximum
Loans and direct financing receivables
Prepayment penalties (as a percent)	70.00%
Loans receivable
Loans and direct financing receivables
Total principal payments	$ 366,320	$ 371,311
Mortgage Loans Receivable [Member]
Loans and direct financing receivables
Mortgage loans receivable	$ 344,576	345,902
Mortgage Loans Receivable [Member] | Mortgage loans receivable with maturity range 2022 to 2026
Loans and direct financing receivables
Stated Interest Rate (as a percent)	7.98%
Mortgage loans receivable	$ 114,896	114,911
Mortgage Loans Receivable [Member] | Mortgage loans receivable with maturity range 2032 to 2036
Loans and direct financing receivables
Stated Interest Rate (as a percent)	8.75%
Mortgage loans receivable	$ 11,689	14,444
Mortgage Loans Receivable [Member] | Mortgage loans receivable with maturity range 2051 to 2060
Loans and direct financing receivables
Stated Interest Rate (as a percent)	8.72%
Mortgage loans receivable	$ 217,991	216,547
Equipment And Other Loans Receivable [Member] | Equipment and other loans receivable maturity range 2022 to 2029
Loans and direct financing receivables
Equipment and other loans receivable	$ 21,744	25,409
Interest rate of equipment and other loans	7.95
Sale Leaseback Financing Arrangements [Member] | Sale-leaseback transactions accounted for financing arrangements with maturities ranging from 2034 - 2043
Loans and direct financing receivables
Stated Interest Rate (as a percent)	7.55%
Sale-leaseback transactions accounted for as financing arrangements	$ 298,772	255,483
Direct Financing Receivables [Member]
Loans and direct financing receivables
Direct financing receivables	$ 78,559	$ 78,637

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Investments - Loans Receivable (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) loan	Dec. 31, 2021 USD ($)
Scheduled loan receivable maturities
Number of loans receivable | loan	42
Gross carrying amount of loans receivable	$ 360,600
Number of mortgage loans | loan	24
Number of mortgage loans subject to interest rate increases | loan	11
Number of short-term mortgage loans | loan	6
Amortization period of long-term mortgage loans	40 years
Remainder of 2022	$ 31,160
2023	83,797
2024	1,964
2025	1,902
2026	22,348
2027	2,235
Thereafter	222,914
Total principal payments	366,320
Sale-Leaseback Transactions Accounted for as Financing Arrangements
Sale-leaseback transactions accounted for as financing arrangements	298,800	$ 255,500
Remainder of 2022	17,210
2023	23,016
2024	23,151
2025	23,291
2026	23,385
2027	23,485
Thereafter	280,926
Total future scheduled payments	414,464
Components of investments accounted for as direct financing receivables
Minimum lease payments receivable	157,409	159,371
Estimated residual value of leased assets	8,938	8,938
Unearned income	(87,788)	(89,672)
Net investment	78,559	$ 78,637
Future minimum lease payments to be received under the direct financing lease receivables
Remainder of 2022	5,900
2023	8,000
2024	8,000
2025	8,000
2026	8,000
2027	8,000
Thereafter	111,700
Scheduled Principal Payments
Scheduled loan receivable maturities
Remainder of 2022	2,230
2023	3,099
2024	1,964
2025	1,902
2026	1,977
2027	1,687
Thereafter	172,616
Total principal payments	185,475
Balloon Payments
Scheduled loan receivable maturities
Remainder of 2022	28,930
2023	80,698
2026	20,371
2027	548
Thereafter	50,298
Total principal payments	$ 180,845
Minimum
Scheduled loan receivable maturities
Long-term mortgage loans receivable prepayment penalty rate (as a percent)	1.00%
Maximum
Scheduled loan receivable maturities
Long-term mortgage loans receivable prepayment penalty rate (as a percent)	20.00%

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Investments - Provision for Credit Losses (Details) $ in Millions	3 Months Ended
	Mar. 31, 2022 USD ($)
Investment Grade
Financing Receivable, Allowance for Credit Loss [Line Items]
Origination for gross loan and financing receivables in 2022	$ 26.5
Origination for gross loan and financing receivables in 2021	17.0
Origination for gross loan and financing receivables in 2020	0.0
Origination for gross loan and financing receivables in 2019	88.9
Origination for gross loan and financing receivables in 2018	0.0
Origination for gross loan and financing receivables in prior to 2018	29.5
Non Investment Grade
Financing Receivable, Allowance for Credit Loss [Line Items]
Origination for gross loan and financing receivables in 2022	14.5
Origination for gross loan and financing receivables in 2021	103.3
Origination for gross loan and financing receivables in 2020	136.2
Origination for gross loan and financing receivables in 2019	146.5
Origination for gross loan and financing receivables in 2018	27.4
Origination for gross loan and financing receivables in prior to 2018	153.9
ASU 2016-13
Financing Receivable, Allowance for Credit Loss [Line Items]
Provision for credit losses	0.3
Write-offs charged against allowance	0.0
Recoveries of amounts previously written off	0.0
ASU 2016-13 | Investment Grade
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans and financing receivables	161.9
ASU 2016-13 | Non Investment Grade
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans and financing receivables	$ 581.8

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Debt - Credit Facility (Details) $ in Thousands	1 Months Ended		3 Months Ended
	Apr. 30, 2022 USD ($)	Jun. 30, 2021 USD ($) Options	Mar. 31, 2022 USD ($) loan	Dec. 31, 2021 USD ($)
Credit facilities
Borrowings outstanding (in dollars)			$ 359,000	$ 130,000
Unamortized financing costs related to all debt			11,976	12,447
Consolidated special purpose entities
Credit facilities
Unamortized financing costs related to all debt			24,406	25,583
Revolving credit facility
Credit facilities
Unamortized financing costs related to all debt			$ 3,500	$ 3,700
Senior Unsecured Notes
Unsecured Term Notes Payable
Contingent periodic interest rate increase for failure to maintain investment grade credit rating			1.00%
Prepayment applied to principal plus make-whole amount (as a percent)			100.00%
Principal amount			$ 375,000
Number of loans | loan			3
Senior Unsecured Notes | Minimum
Unsecured Term Notes Payable
Prepayment threshold (as a percent)			5.00%
New unsecured credit facility | Revolving credit facility
Credit facilities
Eligible unencumbered assets (in dollars)			$ 7,300,000
Amended unsecured revolving credit facility | Revolving credit facility
Credit facilities
Unsecured loan facility		$ 600,000
Size of the facility with the accordion feature (in dollars)		$ 1,600,000
Number of extension options | Options		2
Maturity date		Jun. 01, 2025
Extension option term		6 months
Extension fee (as a percent)		0.0625%
Borrowings outstanding (in dollars)			$ 359,000
Amended unsecured revolving credit facility | Revolving credit facility | Minimum
Credit facilities
Facility fee (as a percent)			0.10%
Amended unsecured revolving credit facility | Revolving credit facility | Maximum
Credit facilities
Facility fee (as a percent)			0.30%
Amended unsecured revolving credit facility | Revolving credit facility | LIBOR
Credit facilities
Debt Instrument interest rate description		LIBOR
Credit spread (as a percent)		0.85%
Facility fee (as a percent)		0.20%
Amended unsecured revolving credit facility | Revolving credit facility | LIBOR | Minimum
Credit facilities
Credit spread (as a percent)		0.70%
Amended unsecured revolving credit facility | Revolving credit facility | LIBOR | Maximum
Credit facilities
Credit spread (as a percent)		1.40%
Amended unsecured revolving credit facility | Revolving credit facility | Base rate
Credit facilities
Debt Instrument interest rate description		Base Rate
Amended unsecured revolving credit facility | Revolving credit facility | Base rate | Minimum
Credit facilities
Credit spread (as a percent)		0.00%
Amended unsecured revolving credit facility | Revolving credit facility | Base rate | Maximum
Credit facilities
Credit spread (as a percent)		0.40%
Amended unsecured revolving credit facility | Senior Unsecured Notes
Credit facilities
Accordion feature		$ 1,000,000
Unsecured Term Loan | Subsequent Event
Unsecured Term Notes Payable
Principal amount	$ 600,000
Fixed rate	3.68%
Unsecured Five Year Term Loan | Subsequent Event
Unsecured Term Notes Payable
Principal amount	$ 400,000
Initial term	5 years
Unsecured Seven Year Term Loan | Subsequent Event
Unsecured Term Notes Payable
Principal amount	$ 200,000
Initial term	7 years
Prepayment premium, percentage, year one	2.00%
Payment premium, percentage, year two	1.00%

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Debt - Carrying Amount (Details) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2022 USD ($) loan	Dec. 31, 2021 USD ($)	Apr. 30, 2022 USD ($)	Nov. 30, 2021 USD ($)	Nov. 30, 2020 USD ($)	Feb. 28, 2019 USD ($)	Mar. 31, 2018 USD ($)
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Unamortized discount	$ (4,584)	$ (4,740)
Unamortized deferred financing costs	(11,976)	(12,447)
Total unsecured notes payable, net	1,783,440	$ 1,782,813
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Remainder of 2022	117,474
2023	45,747
2024	449,245
2025	276,649
2026	550,068
2027	469,978
Thereafter	2,326,552
Long-term Debt	$ 4,235,713
Various Debt, Prepayable Twenty-Four Months Prior to Maturity [Member]
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Debt prepayment period without penalty	24 months	24 months
Various Debt, Prepayable Thirty-Six Months Prior to Maturity [Member]
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Debt prepayment period without penalty	36 months	36 months
Unsecured Term Loan | Subsequent Event
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount			$ 600,000
Fixed rate			3.68%
Consolidated special purpose entities
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Aggregate investment amount	$ 3,600,000
Unamortized discount	(473)	$ (496)
Unamortized deferred financing costs	(24,406)	(25,583)
Total unsecured notes payable, net	2,410,834	2,425,708
Scheduled Principal Payments
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Remainder of 2022	18,184
2023	23,565
2024	22,331
2025	20,037
2026	17,926
2027	9,506
Thereafter	30,702
Long-term Debt	142,251
Balloon Payments
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Remainder of 2022	99,290
2023	22,182
2024	426,914
2025	256,612
2026	532,142
2027	460,472
Thereafter	2,295,850
Long-term Debt	4,093,462
Senior Unsecured Notes
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	375,000
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 1,800,000	1,800,000
Senior Unsecured Notes | Series A issued November 2015
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Stated interest rate (as a percent)	4.95%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 75,000	75,000
Senior Unsecured Notes | Series B issued November 2015
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Stated interest rate (as a percent)	5.24%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 100,000	100,000
Senior Unsecured Notes | Series C issued April 2016
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Stated interest rate (as a percent)	4.73%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 200,000	200,000
Senior Unsecured Notes | Public Notes issued March 2018
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Stated interest rate (as a percent)	4.50%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 350,000	350,000
Senior Unsecured Notes | Public Notes Issued February 2019
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Stated interest rate (as a percent)	4.625%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 350,000	350,000
Senior Unsecured Notes | Public Notes Issued November 2020
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Stated interest rate (as a percent)	2.75%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 350,000	350,000
Senior Unsecured Notes | Public Notes Issued November 2021
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Stated interest rate (as a percent)	2.70%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 375,000	375,000
Senior Unsecured Notes | Notes Issued March 2018 99.515 Percent Of Par
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Stated interest rate (as a percent)							4.50%
Note issue price (as a percent)							99.515%
Senior Unsecured Notes | Notes Issued February 2019 99.260 Percent Of Par
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Stated interest rate (as a percent)						4.625%
Note issue price (as a percent)						99.26%
Senior Unsecured Notes | Notes Issued November 2020 99.558 Percent Of Par
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Stated interest rate (as a percent)					2.75%
Note issue price (as a percent)					99.558%
Senior Unsecured Notes | Notes Issued November 2021 99.877 Percent Of Par
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Stated interest rate (as a percent)				2.70%
Note issue price (as a percent)				99.877%
Public notes
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Number of facilities | loan	4
Expected repayment term of receivables	10 years
Principal amount				$ 375,000	$ 350,000	$ 350,000	$ 350,000
Non-recourse net-lease mortgage notes:
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Retained non-amortizing notes	$ 190,000
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	2,267,480	2,272,522
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 20141, Class A2 Due April 2024
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 140,000
Interest Rate	5.00%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 134,517	134,692
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2018-1 Class A-1 Due October 2024
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 150,000
Interest Rate	3.96%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 141,677	142,051
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2018-1 Class A-3 Due October 2024
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 50,000
Interest Rate	4.40%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 48,792	48,917
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2015-1, Class A-2 Due April 2025
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 270,000
Interest Rate	4.17%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 260,663	260,999
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2016-1, Class A-1 (2016) Due Oct 2026
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 200,000
Interest Rate	3.96%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 179,124	180,190
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2019-1, Class A-1 Due Nov 2026 [Member]
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 82,000
Interest Rate	2.82%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 78,488	78,590
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2019-1, Class A-3 Due Nov 2026 [Member]
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 46,000
Interest Rate	3.32%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 45,463	45,521
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2016-1, Class A-2 (2017) Due April 2027
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 135,000
Interest Rate	4.32%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 122,341	123,046
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2018-1 Class A-2 Due October 2027
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 228,000
Interest Rate	4.29%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 215,348	215,918
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2018-1 Class A-4 Due October 2027
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 164,000
Interest Rate	4.74%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 160,037	160,447
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2019-1, Class A-2 Due Nov 2034
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 244,000
Interest Rate	3.65%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 233,549	233,854
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2019-1, Class A-4 Due Nov 2034
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 136,000
Interest Rate	4.49%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 134,413	134,583
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2021.1, Class A.1 Notes Due June 2028
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 168,500
Interest Rate	2.12%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 167,868	168,079
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2021.1, Class A.3 Notes Due June 2028
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 89,000
Interest Rate	2.86%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 88,666	88,778
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2021.1, Class A.2 Notes Due June 2033
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 168,500
Interest Rate	2.96%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 167,868	168,079
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2021.1, Class A.4 Notes Due June 2033
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 89,000
Interest Rate	3.70%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 88,666	88,778
Nonrecourse mortgage notes payable: | Consolidated special purpose entities
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Aggregate investment amount	301,400
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	168,233	179,265
Nonrecourse mortgage notes payable: | Consolidated special purpose entities | $13,000 note issued May 2012
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 13,000
Interest Rate	5.195%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt		9,961
Nonrecourse mortgage notes payable: | Consolidated special purpose entities | $26,000 note issued August 2012
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 26,000
Interest Rate	5.05%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 19,879	20,085
Nonrecourse mortgage notes payable: | Consolidated special purpose entities | $6,400 note issued November 2012
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 6,400
Interest Rate	4.707%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 4,887	4,938
Nonrecourse mortgage notes payable: | Consolidated special purpose entities | $11,895 note issued March 2013
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 11,895
Interest Rate	4.7315%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 9,216	9,309
Nonrecourse mortgage notes payable: | Consolidated special purpose entities | $17,500 note issued August 2013
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 17,500
Interest Rate	5.46%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 14,084	14,212
Nonrecourse mortgage notes payable: | Consolidated special purpose entities | $10,075 note issued March 2014
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 10,075
Interest Rate	5.10%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 8,756	8,808
Nonrecourse mortgage notes payable: | Consolidated special purpose entities | $65,000 note issued June 2016
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 65,000
Interest Rate	4.75%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 58,908	59,223
Nonrecourse mortgage notes payable: | Consolidated special purpose entities | $41,690 note issued March 2019
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 41,690
Interest Rate	4.80%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 41,130	41,291
Nonrecourse mortgage notes payable: | Consolidated special purpose entities | $6,944 notes issued March 2013
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 6,944
Interest Rate	4.50%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 5,294	5,332
Nonrecourse mortgage notes payable: | Consolidated special purpose entities | $6,350 notes issued March 2019 (assumed in December 2020)
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Interest Rate	4.64%
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations
Long-term Debt	$ 6,079	$ 6,106
Non-recourse debt obligations | Consolidated special purpose entities | $6,350 notes issued March 2019 (assumed in December 2020)
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Principal amount	$ 6,350
Minimum
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Maximum number of months	24 months
Maximum
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries
Maximum number of months	36 months

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Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		17 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2022	Nov. 30, 2020
Common stock.
Gross Proceeds	$ 168,431	$ 116,063
2020 ATM Program
Common stock.
Shares Sold	5,539,138		16,380,669
Weighted Average Price per Share	$ 30.41		$ 32.31
Gross Proceeds	$ 168,400		$ 529,200
Sales Agents' Commissions	(2,100)		(7,600)
Other Offering Expenses	(100)		(700)
Net Proceeds	$ 166,200		$ 520,900
Maximum value of shares that can be offered and sold				$ 900,000

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Commitments and Contingencies (Details) - Commitments to fund improvements to real estate properties $ in Millions	Mar. 31, 2022 USD ($)
Commitments and Contingencies
Real estate property improvement commitments	$ 156.6
Real estate property improvement commitments, in Next Twelve Months	$ 136.7

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Fair Value of Financial Instruments (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Derivatives [Line items]
Fair value of derivative assets	$ 0.0	$ 0.0
Fair value of derivative liability	0.0	0.0
Level 2 Fair Value | Carrying value
Derivatives [Line items]
Long-term debt obligations	4,194.3	4,208.5
Level 2 Fair Value | Fair value
Derivatives [Line items]
Long-term debt obligations	$ 4,147.3	$ 4,478.4