Welcome, everyone. The Four Corners Property Trust, Inc. Fourth Quarter 2025 Financial Results Conference Call will begin shortly. In the meantime, if you would like to preregister to ask a question, please press star followed by one on your telephone keypad. If you change your mind, please press star followed by two. Thank you. Hello, everyone, and thank you for joining the Four Corners Property Trust, Inc. Fourth Quarter 2025 Financial Results Conference Call. My name is Claire, and I will be coordinating your call today. During the presentation, you can register a question by pressing star followed by one. If you change your mind, please press star followed by two on your telephone keypad. I will now hand over to Patrick L. Wernig, Chief Financial Officer, to begin. Please go ahead.

Thank you, Claire. During the course of this call, we will make forward-looking statements based on our beliefs and assumptions. Actual results will be affected by known and unknown factors that are beyond our control or ability to predict. Our assumptions are not a guarantee of future performance, and some may prove to be incorrect. For a more detailed description of some potential risks, please refer to our SEC filings, which can be found at fcpt.com. All the information presented on this call is current, as of today, 02/12/2026. In addition, a reconciliation to non-GAAP financial measures presented on this call, such as FFO and AFFO, can be found in the company's supplemental report. That, I will turn the call over to William Howard Lenehan.

Good morning. Following my initial remarks, Joshua Zhang will comment on our investment activity, and Patrick will discuss financial results and capital position. This past November marked our ten-year anniversary as a public company. Over the past decade, we have grown from just four employees with 418 properties leased to a single tenant into a platform with 44 team members and 1,325 leases. We've acquired $2,300,000,000 worth of properties and paid out over a billion in dividends to our shareholders. We are proud of the portfolio and company we've built and look forward to continuing our mission to drive shareholder value via conservative and thoughtful capital allocation. During Q4, we acquired $95,000,000 worth of net lease properties at a 7% blend cap rate. In total, during 2025, we acquired $318,000,000 worth of net lease properties. We largely funded these acquisitions with equity we raised on the ATM via forward issuance. One important note on our acquisition volume is we accomplished this without the benefit of any large portfolio transactions. Most of the deals in 2025 were midsized transactions between $5,000,000 and $20,000,000, furthering our extremely granular and selective portfolio construction via high-quality acquisition. We did this by staying the course of what has become core to FCPT's brand: a focus on attractive real estate occupied by creditworthy tenants without sacrificing quality for volume or padding investment spread. Even in an era of increased competition for larger net lease portfolios, we believe that we have a business model that can scale and score attractive opportunities for growth. Our in-place portfolio retains its workers' quality with zero exposure to problematic retail sectors such as theaters, pharmacies, high-end car washes, and experiential retail. We have sidestepped major tenant credit issues including zero bad debt expense in 2025, and we have very little vacancy in the portfolio. Our rent coverage in Q4 was 5.1 times for the majority of our portfolio that reports this figure. This remains amongst the strongest coverage in the net lease industry. To that end, our core anchor tenants of Olive Garden, Longhorn, and Chili's continue to be leaders within the net lease tenant universe. Most recently, Brinker reported Chili's same store sales growth of 9% for the quarter ended December 2025, which represents a two-year sales growth comp of plus 43%. Olive Garden and Longhorn reported same store sales growth of nearly 56%, respectively, for the quarter ended November 2025. Truly amazing results from our largest tenants who represent over 51% of our portfolio rent on a combined basis. This improves our portfolio metrics and further demonstrates the benefits of thoughtful asset selection and alignment with best-in-class tenants. On the topic of our Garden assets, Darden announced last week that they are shutting down the Bahama Breeze brand and are converting many of these locations to other Garden brands. Our current Bahama Breeze exposure is just 1.3% of base rent across 10 properties, which equates to an average rent of $341,000 per property, which is very reasonable. While it is early, we are in discussions with Darden about these properties. As of now, we do expect several of these stores to be converted to other Darden concepts. Further, these properties are all subject to leases with a minimum of 1.7 years of term remaining. During this period, Darden will continue paying rent, taxes, insurance, and all other costs at these locations while we seek new tenants. In the event that they do become permanent closures, we have already received significant inbound inquiries about backfilling the locations over the past week. We have lots of confidence in the quality of the real estate of these properties and expect they could be re-tenanted at similar rents. It's worth noting the impact of our proactive approach to portfolio management here. We sold two high-rent Bahama Breeze locations back in 2016 and 2018 in the 4.75% to 5% cap rate range. This reduced our exposure to the brand by $2,000,000 in rent, roughly 35% of where it would otherwise be today. We continue to make meaningful progress in the area of diversification. Today, Olive Garden and Longhorn constitute 39% of our rent, versus a combined 94% spin-off prior. 37% of our rents come from outside of casual dining. This includes automotive service at 13%, quick service restaurants at 11%, and medical retail at 10%. Our deal sourcing remains focused on central retail and services. In our view, creating a prudently positioned portfolio with limited exposure to terror-sensitive sectors, and a strategy centered on everyday consumer demand is crucial. We are constantly evaluating new retail care categories to expand the top of our funnel for investments. Similar to our decision to expand into automotive service and medical retail properties, we consider business resilience, availability of creditworthy tenants, real estate quality, and relative pricing attractiveness. Patrick is going to discuss this in more detail, but a key takeaway is that since 03/2024, our last circle was $520,000,000 of acquisitions, essentially all of the 171 buildings purchased over the last eighteen months have been funded 85% with equity only, raised at attractive pricing, and the balance funded with low-rate term loans. So today, our balance sheet is over-equitized.

I'll repeat that. Today, our balance sheet is over-equitized with net leverage near five times. Further, we raised debt when we would have required a 7% plus coupon. Now we can access much more favorable debt capital markets with a coupon rate in the 4.5% to 5.5% range, depending on the structure and term, whether term loans or notes. This is much more attractive given where we're seeing cap rates today. We are proud of the year that we put together from both the capital raising and acquisition fronts. The team has shown great growth over the last ten years since inception, and we feel that we are well-positioned heading into 2026. We enter the year with low leverage and ample dry powder for opportunities that may arise.

Thanks, Bill. I'll start with a review of this quarter's activity and more details on 2025 investments. In Q4, we acquired 30 properties with a weighted average lease term of ten years for $95,000,000 at a 7% cap rate. This was a 20-basis point expansion over the previous quarter, our highest blended cap rate in 2025. We finished the year with 105 properties acquired for $318,000,000 at a 6.8% blended cap rate. This represents an average basis of $3,000,000 per property and continues our strategy of partnering with creditworthy operators in selecting fungible low basis properties to further protect against any downside. Looking back, 2025 was one of our busiest years to date. Our total investment volume increased 20% from 2024, and we had 53 unique transactions. Said another way, our team was able to post stellar results without reliance on large portfolio transactions. This is important to note because, one, these large deals often command pricing premiums for the ease of putting a greater amount of capital to work. And two, they often require buyers to accept all or nothing, where a good chunk of properties may not fit our underwriting thresholds. That said, our team remains capable and ready to execute on these larger opportunities when the right deal comes to market. But we are encouraged that our platform can still post significant volume in years where we do not anchor a large portfolio yield. In Q4, we also expanded the team's capabilities outside of our main three categories: restaurants, automotive service, and medical retail, with our acquisition of a Sprouts grocery store and our first equipment rental acquisition of United Rentals property. As Bill mentioned, our team is constantly evaluating new opportunities in adjacent sectors to understand the resilience of the business and the impact of their credit and real estate locations versus our existing portfolio. We feel that both the grocery and equipment rental sectors fit our existing underwriting approach of focusing on recession-resistant essential service retailers with high quality and fungible real estate. Similar to how we approach our entrance into the automotive service and medical retail sectors, that is, by dipping our toes and building extensive knowledge next before launching an official strategy, we will follow the same pattern here. While grocery and equipment rental are newer categories for us, we chose these specific properties because of their similarities to the assets we regularly purchase in our existing portfolio. For example, both are leased to best-in-class creditworthy operators in respective subcategories. Sprouts is a publicly traded grocer with more than 400 locations across the U.S. and no debt. Our $8,600,000 basis in this location is also much lower than the $10,000,000 to $15,000,000 we typically see for branded markets. United Rentals is also a publicly traded company with over 1,600 locations across the U.S. and is rated double B plus by S&P. They are the largest equipment rental provider in the nation and have a demonstrated track record of strong operations. We continue to evaluate similar opportunities in these sectors as long as they match our existing underwriting thresholds and investment criteria. Now reflecting on our strategy going forward for 2026, 2025 evidenced substantial repeat counterparty transactions. A trend we expect to continue. Coupled with the expanding top of our funnel, we expect 2026 to be another strong year of increased diversification and expanded platform capabilities.

It's Josh. I'll start by talking about capital sourcing and the state of our balance sheet. We have full capacity under our $350,000,000 revolver and feel that we have the liquidity to continue executing our business plan in Q1 and into 2026. With respect to leverage at the end of Q4, our net debt to adjusted EBITDAre was just 4.9x, inclusive of outstanding net equity. Excluding our forward equity balance, our leverage is 5.1 times. This is our sixth consecutive quarter of leverage below 5.5, at the very bottom of our stated leverage range of 5 to 6x. We've now fully settled our forward equity balance in 2025, but with a fully available revolver, we feel we still have ample capacity on the debt side. After including debt capacity and free cash flow, we have over $220,000,000 in liquidity before reaching the five times leverage, and substantially more than that before approaching six times. Said another way, we believe we could utilize low interest rates for all acquisitions in 2026 and still remain under our self-imposed limits. As always, we aim to be optimistic to achieve the best cost of capital on our funding decision this time. We are encouraged by the current state of the term loan market, which was much more constrained just a few years ago. As a reminder, five-year term loans have historically been priced at 95 basis points over SOFR, or an all-in rate today of approximately 4.6% after swaps and before fees. Private placement endowments would be higher than that but also accretive to current market cap rates while offering longer term incentives. With 95% of our floating rate debt fixed through November 2027, at 3% versus the spot rate today at 4%, overall, 98% of our debt staff is fully fixed, and our blended cash interest rate is 4%. We maintain a very healthy fixed charge coverage ratio of 4.8 times. I'd also like to remind everyone that in Q3 of last year, we removed the SOFR credit spread adjustment of 10 basis points to our interest expense on the revolver per month. Our new borrowing rate on term loans for silver was 95 basis points and the revolver is over plus 85 basis points. We've had a positive flow-through to AFFO of approximately $600,000 per year. Turning to debt maturities. Including extension options, we have no debt maturities till December 2026, with $50,000,000 in private notes coming due. Our maturity schedule will ensure we do not face significant maturity loss at any point thereafter. That said, we are focused on the smallest common maturities in 2026 and 2027. We've been very encouraged by the liquidity in the bank market today as well as the very attractive credit spreads being achieved in the private placement and public bond sector. In other words, we believe we have numerous avenues to address these minor maturities at attractive rates. And turning to some of the earnings highlights for Q4, we reported Q4 AFFO per share of $0.45 and our full-year AFFO was $1.78 per share, representing 2.9% growth over 2024. Q4 capital income was $67,500,000, representing growth of 11.1% for the quarter compared to last year. Annualized tax base rent that leases in place at the quarter end is $264,200,000, and our weighted average five-year annual cash rent escalator is 1.5%. Cash G&A expense was $18,000,000 for the year, at the very bottom of our guidance range, representing 6.9% cash rental income for the year compared to 7.1% over the prior year. This improved operating leverage illustrates our continued efforts on efficient growth and the benefits of our improving scale. Our new guidance range for cash generation in 2026 is $19,200,000 to $19,700,000. As for managing our lease maturity profile, 95% of the 41 leases expiring in 2025 remain occupied today. This includes a high renewal rate in two properties that were quickly released to new tenants. Additionally, we've started to make progress on our 42 leases expiring in 2026, which now represent just 1.5% of ABR, down from 2.6% at the start of 2025. Our portfolio occupancy remains very strong today at 99.6%, benefiting from efforts to release our very limited number of back-filling impacts. We collected 99.5% of base rent in Q4, and 99.8% for the year. Last quarter, we did not see any material changes to our flexibility or credit reserves. I want to call out Wendy's slide we introduced in the presentation from page 11. We regularly see private market cap rate comps for properties similar to those owned in our own portfolio. So our public valuation has been lower in recent months. We thought it would be helpful to hear our current implied cap rate in relation to the blended cap rate of recently sold properties. It demonstrates a sizable gap between the higher value of our underlying assets and the current trading value of our stock. With that, we'll turn it back over to Claire for questions. Thank you.

To ask a question, please press star followed by one. If you change your mind, please press two. When preparing to ask your question, please ensure your device is unmuted locally. Our first question comes from Michael Goldsmith from UBS. Michael, your line is now open. Please go ahead.

Good morning. Thanks a lot for taking my question. First question is on the move into United Rentals and industrial outdoor storage. Can you just talk a little bit about the market you see there, maybe the total addressable size? It feels like some of your net lease peers have been moving into that space, so what do you see for competition perspective there? And then, if you could talk a little bit about how the cap rates in that space compare to the rest of your portfolio, that’d be helpful. Thanks.

Thanks, Michael. I’d say I've been following the sector for a long time. I was chair of the investment committee at Gramercy, you know, fifteen years ago when we were doing quite a bit of this. It's attractive. A lot of the value is in the land residual. If you're careful, you can get in at a good basis. There are creditworthy tenants. It's hard to get new sites entitled, so there's some entrenchment if you can find existing sites. There’s a very large addressable market that is very defensive and cap rates that make sense. So we've looked at a lot of them and will continue to pursue that strategy. There are players who focus on it now, and one of them was just taken private by Brookfield, but it's an attractive space, as is grocery, by the way. We found that very often high credit grocers have a much chunkier purchase price than we typically plan. But we're looking at both of those sectors and others on a continuous basis.

Got it. Thanks for that. And then, second question, just following up on the Bahama Breeze. It sounds like you got ahead of this a little bit in the prior year, so you still have a little bit of exposure here. Yeah. I guess the question is, can you just kind of it sounds like rents are about the same, or the level of interest is high, but rents are about the same. Is that the right case? And then also, if you compare the publicized list, I think you've got like four or five locations remaining. So can you just confirm that? Just talk a little more about that. Thanks.

I think that's right. There will be a handful that get converted to other garden brands. There may be one that we swap out with Darden for another property. And there'll be a couple that in a year and a half we have to release. We've been inundated with people interested in these sites. They're very well located. I think we're being pretty conservative on the rents. But we've sort of been working on this for a week, and we're sorting through a lot of people who are interested in taking the sites.

Thank you very much. Good luck in 2026.

Thanks, Michael.

Our next question comes from John Kilichowski from Wells Fargo. Your line is now open.

Maybe just to stay on Bahama Breeze here. Bill, forgive me if I missed this in the opening remarks. You talked about the rents there. Are you able to talk about the performance at these assets? If they're getting converted, would that be at the same rent level? And then for the assets that would need to turn in a year and a half, I mean, if you're getting substantial interest at this point, is there a potential for even a positive mark to market? I'm curious about the total loss you’re kind of making in your internal estimates.

Yeah. I don't think we're baking in losses at all. These brands are Bahama Breeze's brand had limited market expansion. I think a lot of the U.S. has a view on what Bahamian cuisine is, so it worked in the Southeast, and it just wasn't relevant to the total size of the Garden. And so they'll convert some of these. They have existing leases, so there may be a change in the rental rate, would be my assumption. But there will be brand new stores with higher AUV brands.

Again, this is Patrick. I would just add that, when you look at that press release Darden put out, and the list of sites that they want to convert, there are still some moving pieces there. You have to factor in some of those stores that have really high-quality real estate. They are restricted by covenants, by other tenants nearby, or by the shopping center itself. So, Darden's interest in converting a lot of these sites was clear, and it's just a matter of what they can do within the restrictions that are on those properties. But the demand in the last week has been tremendous from other tenants that want to backfill these locations.

Okay.

That's helpful. Thanks, Pat. Then maybe one other one for you just on the balance sheet. You've called the forwards. I think in the opening remarks, you said $220 million of liquidity gets you to 5.5. I'm just curious how you think about managing the balance sheet. I know, Bill, you kept saying over-equitized. At what point, the high end is six, but maybe as you get to 5.5, in an effort to not necessarily reach the high end, do you start to maybe pull on thinner spreads on equity at a certain point or do you kind of stick to your guns that you'll ride that number up to six? And then if at that point, if the equity is not cooperating, then you start to pull back on the acquisition cadence. I'm just curious how you think about all scenarios. And, obviously, if the risk-off trade works, then great. We get a cost of equity, we keep moving. But just trying to think about all scenarios here.

Yeah. I think we've evidenced that we're disciplined in our capital allocation. That we don't go out on the risk spectrum on acquisitions. We don't provide guidance for a reason. But that said, we have lots of runway with very accretive acquisitions funded with low leverage and inexpensive financing that's readily available today. I think we feel that we're in great shape, and we have minimal maturities to address. So, I think we have a long runway of acquisitions.

And our stock has been soft.

And I think we added some detail in our presentation of how well supported by NAV we feel our stock price is. But I think it offers real value today.

Got it. Thank you.

Thank you.

Our next question comes from Anthony Paolone from JPMorgan.

Can you talk about just Red Lobster exposure? Because I think that's another one that's been out there talking about perhaps more store closures.

Yeah. I don't think there's much to say. The brand is doing much, much better than it was under prior ownership. Our stores are predominantly in a master lease. It was affirmed when they restructured at the same rent. I think we feel quite good about that.

Okay.

And then on the diversification strategy, can you maybe just talk about anything that you don't want to get into or other areas of interest that you haven't quite tapped yet?

Yeah. I think, you know, we've been very clear. We have a page in our presentation of sectors that we have avoided. I would double down on what's on that page. We try to focus on a balanced real estate and credit approach and we try to stay within sectors that have been through cycles.

And so, we don't own pickleball facilities that cost $20,000,000. We don't own $9,000,000 car washes. We don't own corporate headquarters in the middle of nowhere where you can get more spread and it works typically for a while. But on lease renewal, you'd have a lot of risk. I think we take a much more balanced approach than our peers, and it's shown in the last decade that our credit performance has been best in class.

Thanks.

Thank you. Our next question comes from Rich Hightower from Barclays. Your line is now open. Please go ahead.

Just wanted to follow-up on one of the earlier questions. What's the real level with approaching that sort of six times upper limit on leverage if that's the only option the market gives you?

But.

I think that's quite a bit of a ways off, so, you know, hard to make predictions that many months in the future. So I think we feel very good that we have, you know, a couple hundred million dollars of acquisitions before we even have to be thinking about that. And, honestly, we've had the same leverage ceiling since inception. We've essentially never been close to it. So I think that track record speaks volumes.

Alright. Fair enough.

And then as far as the, I guess, the early vintage of Darden leases coming due, ’27, and I wonder if I’ve asked this before, but, you know, where do you guys sort of peg the mark to market or the recapture rate potentially on those upon renewal?

They have multiple five-year extension options with one and a half percent growth, so the continuation of that one and a half percent escalator. I would say that our expectation is the vast majority of those will renew at the one and a half percent contractual option.

Got it. Thanks very much, Bill.

Yep. Of course.

Our next question comes from Wes Golladay from Baird. Your line is now open. Please go ahead.

Just looking at your valuation chart you put in the presentation. You have a lot of assets that will trade call it mid, low fives and up to the low sixes.

Would you have any appetite to start disposing of some of those assets and recycling into a little bit higher yield and higher growth assets?

And get the diversification higher.

Yeah. It's always an option. Wes. We've done very little of it, you know, where we have done it, frankly, was a number of years ago in selling, you know, Bahama Breeze assets at extraordinary pricing. The very high rents. We haven't had to do it in the past. We don't have to do it today. The Darden assets are very, very high quality and very hard to replace. They trade for, you know, strong values for a reason. Darden, as a company, has a $25 billion market cap. Its credit default swaps are like a G7 country. So they're hard to let go of, to be honest. It's an option. We know how that works. I would remind everyone that there are REIT rules. You can't just sell properties one by one like some people assume you can.

But it's an option. We haven't had to do it yet.

Nothing wrong with the primer.

Okay. And then you did have a rare impairment in the quarter. What drove that?

It was a quick-service restaurant that we purchased right at the beginning of our life. It was a Hardee's in Gladstone, Alabama. We've had a hard time releasing it. It's a tiny property. It's kind of hard to write down properties, to be honest. We found that the conditions were right to do it, but it's been vacant for a while and had a hard time releasing it. But you know, one property over 1,325.

Yeah. Not bad. And one last one on the Red Lobster. I think you mentioned there were ground leases. Is that for all of them? And can you share the rent level? They're mass-leased. And again, they were just reaffirmed. So I would say there's been a tremendous emphasis on credit issues that aren't actually credit issues in the Q&A. I would ask listeners to see the forest for the trees. The story here is that we have substantial growth in 2026 that will be really accretive. Thanks for the time.

Thank you.

Next question comes from Mitchell Bradley Germain from Citizens Bank. Your line is now open. Please go ahead.

Thank you. I think, Bill, you talked a little bit about, you know, obviously ticket for a grocer. I'm curious how you know, do you potentially look to scale up in that sort of sector?

Yeah. I think it's very similar, Mitch, to how we looked at medical retail and auto service. You know, we spend a lot of time doing research upfront. You know, we're conservative in what we purchase. And then as we are active in the market, it helps with seeing deals, and you get more deal flow. So it's no different than what we've done in the past, to be honest. It's just the attributes of different property types you need to be, you know, sensitive to. And I think, because we've been cautious, you've seen the positive results on our credit results.

And do you envision doing direct deals with grocers or maybe leveraging some of your shopping center contacts to scale it up?

It's all of the above, Mitch. We take a pretty agnostic view on sourcing. So we source things directly. You know, in automotive service, we've had a number of brands that we've had repeat sale-leaseback business. But we will look at, you know, we'll look at everything that we can.

Gotcha. And last one for me is anything not hitting the strike zone today?

In terms of where you've been allocating capital? Like, are you pulling back in any way at all, or is it all as long as it continues to meet your underwriting criteria, all systems go?

Yeah. I think it's the latter.

You know, we've been pretty thoughtful in what we've acquired, and we don't tend to have a view of buy it And if the performance starts declining, we’ll be able to sell it at a great price. That hasn't been the way we've looked at the world. We've proven things in the past, but it's been minimal. I think it reflects what we've purchased. We feel really good about it.

Thank you. Good luck this year.

Thanks.

Thank you.

As a reminder to ask a question, we currently have no further questions. So I'd like to hand back to William Howard Lenehan for any closing remarks.

Thank you, Claire. For 2026, we're in the fortunate position of being able to use very economical long-term debt to fund new investments. We see ample external acquisition opportunities, and based on cap rates today, we expect healthy investment spreads and growth for the year. I'd emphasize that in this environment, we do not anticipate slowing down given our dry powder and where we are seeing our cost of debt capital. Our team will be on the road for some non-deal roadshows in Los Angeles and Chicago the weeks of March 10 and March 17, respectively. We'd love to meet with you in person, so please reach out to Patrick or myself to coordinate. Thank you all, and I look forward to seeing many of you in person this year.

Thank you. This now concludes today's call. Thank you all for joining. You may now disconnect your lines.