Agree Realty Corporation (NYSE:ADC) Q3 2024 Earnings Conference Call October 23, 2024 9:00 AM ET

Company Participants

Joey Agree - President & CEO
Peter Coughenour - CFO
Reuben Treatman - Senior Director of Corporate Finance

Conference Call Participants

Nick Joseph - Citi
Brad Heffern - RBC Capital Markets
Ronald Kamdem - Morgan Stanley
Eric Borden - BMO Capital Markets
John Kilichowski - Wells Fargo
Linda Tsai - Jefferies
RJ Milligan - Raymond James
Joshua Dennerlein - Bank of America
Michael Goldsmith - UBS
Rob Stevenson - Janney Capital Markets
Ravi Vaidya - Mizuho Securities
Spenser Allaway - Green Street
Upal Rana - KeyBanc Capital Markets

Operator

Good morning and welcome to the Agree Realty Third Quarter 2024 Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note that this event is being recorded.

I'd now like to turn the conference over to Reuben Treatman, Senior Director of Corporate Finance. Please go ahead, Reuben.

Reuben Treatman

Thank you. Good morning, everyone, and thank you for joining us for Agree Realty's third quarter 2024 earnings call. Before turning the call over to Joey and Peter to discuss our results for the quarter, let me first run through the cautionary language.

Please note that during this call, we’ll make certain statements that may be considered forward-looking under federal securities law, including statements related to our updated 2024 guidance. Our actual results may differ significantly from the matters discussed in any forward-looking statements for a number of reasons. Please see yesterday's earnings release and our SEC filings, including our latest annual report on Form 10-K for discussion of various risks and uncertainties underlying our forward-looking statements. In addition, we discuss non-GAAP financial measures, including core funds from operations, or core FFO, adjusted funds from operations, or AFFO, and net debt to recurring EBITDA. Reconciliations of our historical non-GAAP financial measures to the most directly comparable GAAP measures can be found in our earnings release, website and SEC filings.

I'll now turn the call over to Joey.

Joey Agree

Thanks, Reuben, and thank you all for joining us this morning. Before running through our standard update, I'd like to take a step back to provide our perspective on the current state of the market and how we have taken steps to proactively fortify our balance sheet and portfolio in this dynamic environment. As the markets readjusted to changing expectations around inflation and employment, our cost of capital has improved significantly. We've been able to capitalize on this shift, bolstering our fortress balance sheet during the quarter with nearly $470 million of forward equity raised via our ATM program. This brings our total outstanding forward equity to approximately $725 million, with total liquidity approaching $2 billion. We now enjoy significant runway to execute on our growing pipeline into 2025 without any equity capital needs. At quarter-end, leverage stood at just 3.6x pro forma net debt to recurring EBITDA. During the quarter, S&P upgraded our credit rating to BBB+, while recognizing the strength of our balance sheet and high-quality nature of our portfolio. We continue to maintain a high level of discipline in our underwriting process. This patient approach has paid off, as we've been able to capitalize on distressed sellers while leveraging our asymmetric data sets and relationships to identify unique opportunities.