Hello, everyone. Thank you for joining us and welcome to Four Corners Property Trust's first quarter 2026 Financial Results Conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Patrick Wernig. CFO. Patrick, please go ahead.

Thank you. During the course of this call, we will make forward-looking statements which are 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 will 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, April 30, 2026. In addition, reconciliation to non-GAAP financial measures presented on this call, such as FFO and AFFO, can be found in the company's supplemental report. Please note that if you are a research analyst, you have been emailed a meeting ID, which is 865-913-566.

We'll repeat that at the end of our prepared remarks.

That PIN will allow you to ask questions during the Q&A session. with that i'll turn the call over to bill good morning following my initial remarks josh will comment on our investment activity and patrick will discuss financial results and capital position q1 marked a continuation of the momentum from 2025 and a strong start to 2026. affo per share grew by 3.4 percent versus the prior year period continuing our focus on steady risk-adjusted growth. During Q1, we acquired $26 million of net lease properties at a 6.8 blended cash cap rate, equivalent to a 7.3 gap cap rate. This is marginally lower volume versus the start of 2025, but I'd emphasize we're seeing a lot of attractive opportunities and feel good about the strength of our pipe one. Seasonally, we tend to see fewer deals close in Q1 versus later in the year, and Q2 is shaping out that way so far. Over the last 12 months, we've acquired 288 million of properties we're also excited to have closed on a new 200 million dollar term loan with seven year tenor earlier this month the term loan all-in rate is 4.9 percent which represents 200 basis points of spread to historical acquisition yields we will be able to invest that money creatively our rent coverage in q1 was 5.1 times for the majority of our portfolio that reports this figure this remains amongst the strongest coverage within the net lease industry The rent coverage figure for our garden properties specifically is 5.8 times. It's been very consistent, remaining above a very lofty five times for the past three years. As a reminder, the first tranche of lease for trees is due to send us extension notices by October of this year. While we can't know the outcome with certainty, barring a material change in the operating performance of these stores, we would expect a very high renewal percentage for the spin-off portfolio in the coming years. To that end, our largest brands, Olive Garden, Longhorn, and Chili's continue to be leaders within the NetLease Tenet universe. Most recently, Brinker reported Chili's same-store growth of 4% for the quarter ended March 2026 after a 31% increase a year ago. Olive Garden and Longhorn reported same-store sales growth of 3% and 7% respectively for the quarter. Remarkable results for the three brands that represent 47% of our portfolio rent combined. To bring that point home, I'll call it a new slide on page 7 of our investor deck that shows the strong outperformance of our publicly traded tenants versus the generic all-restaurant The key takeaway is portfolio construction is extremely important, and by being selected with our tenant partners, we are building what we believe is a portfolio brick by brick. Our lead restaurant tenants appear to be taking market share and have not shown signs of slowing To that end, our portfolio has avoided some of the more problematic leased sectors experiencing long-term macro headwinds. This includes theaters, pharmacies, and experiential retail more generally. We benefit from our strong portfolio construction with low basis, fungible buildings operated by tenants and sectors that are e-commerce and recession resistant. We have had no major tenant credit issues leading to very low bad debt expense and very little vacancy in our portfolio on this topic we would like to provide a brief update on bahama breeze properties as a point of clarification we own 10 bahama breeze properties which is 1.3 percent of our abr that said dart is planning to convert six of these locations to other brands they operate yard house olive garden longhorn chewies etc they'd like to convert more but they're limited by already having nearby existing locations and in some cases co-tenancy restrictions So the remaining four properties are 50 basis points of ABR, and we already have actively negotiating letters of intent with new tenants to backfill these locations. Based on the figures we're negotiating, we expect to recover or possibly even exceed the prior rent paid by Darden, although the timing and final economics will ultimately depend on the outcome of these negotiations. It takes a few months to negotiate a lease, and we should have further updates on timing at the Q2 earnings call. but overall very good shape remarkably i'd like to point out that it's been less than three months since darwin announced the brand closure for us to have potential solutions across the board for all 10 locations so quickly just highlights how our focus strategy of strong underlying real estate and replaceable rent levels will benefit us long term in any case we'll continue to collect rent throughout the backfill process as darwin is still obligated to make rent payments on these instances for all 10 locations for at least one and a half years and in some cases up to four That provides us flexibility as we work through the preferred back-to-tenant options. Shifting gears, we continue to diversify our portfolio. 37% of our rent now comes from tenants outside the casual dining subsector, including automotive service at 13%, medical retail at 11%, and QSR restaurants at 11%. We are actively exploring new retail categories and property types as we look to expand the top of our funnel for investments. As when we developed our automotive service and medical retail property strategies prior to investing in the new sector we evaluate the business resiliency and ai disruption risk availability of credit worthy tenants real estate quality and pricing attractiveness that said for us the limiting factor on new sectors and deals is typically sellers lofty pricing expectation finally and this is a very exciting point i'd like to mention that michael friedland has joined our board michael recently retired from jp morgan and brings 30 years of wall street experience in real estate financing corporate credit fcpt we've known michael a long time and we're really impressed and glad he's doing our work welcome michael over to you josh thanks bill i'll start with a review

of q1 activity and then touch on our investment pipeline in q1 we acquired 10 properties for the weighted average lease term of 10 years for 26 million dollars at a blended 6.8 cash cap rate or a 7.3% gap gap rate. This represents an average basis of $2.6 million per property, extending our strategy of partnering with credit-worthy operators while focusing on fungible, low-cost basis assets to help mitigate downside risk. We are really happy with the asset selection this quarter, and as Bill noted, Q1 is typically a lower-volume period for us, and the ending volume for the period lined up well with our internal expectations. That said, Q2 is shaping up to be consistent with our typical seasonal volume ramp. Our Q1 acquisitions were composed of 46% restaurant, 28% auto service, and 26% medical retail properties. On the credit side, all of our properties acquired in Q1 were at least to corporate operators, with the only exception being our McAllister's Deli in Michigan, which is leased to Southern Rock, the largest McAllister's franchisee with 178 locations across 13 states. our team continues to partner with leading operators in each of our chosen retail sub sectors coupled with our low basis rent filtering we have a proven track record of building a resilient and long-standing portfolio in the meantime our team continues to actively explore all avenues for investment both large portfolios and small granular deals in addition to assets and new sub sectors as evidence in q425 while we are expanding the top of our investment funnel we will continue to maintain our discipline in acquiring low-basis investments based at best-in-class operators at pricing accretive to our cost of capital. Patrick, that's here.

Thanks, Josh. I'll start by talking about the state of our balance sheet and an update on our capital sourcing, including our recently closed term loan. We funded $50 million of the new incremental $200 million term loan in April, and the balance will be used to fund acquisitions in Q2 and Q3. The term loan credit margin is 125 basis points over SOFR, or an all-in rate of approximately 4.9%. We have fully hedged our current outstanding term loan balance of $640 million as of April 30th at a blended SOFR rate of 3.1%, or approximately 4% all-in with that rate steady through November 2027. Our supplemental disclosure includes a detailed pro forma hedge schedule. We also continue to benefit from full capacity under our $350 million dollar revolver. With respect to leverage, at the end of Q1, our net debt to adjusted EBITDA was just five times, as our seventh consecutive quarter of leverage below 5.5 times, and at the bottom end, our stated leverage range of five to six times. Noting that our term loan closed after quarter end, but after fully funding and investing the proceeds, estimated run rate leverage will be 5.4 times. Our fixed-judge coverage ratio remains a very healthy 4.8 times as a quarter end. Turning to debt maturities, once factoring in the extension options for our existing term loan, we have no debt maturities until December when just 50 million dollars of private notes comes out. We plan to address this in due course closer to the maturity date. Our starter maturity schedule will ensure we do not face a significant maturity wall at any point thereafter.

Turning to some of our earnings highlights for Q1, info per share was 45 cents representing 3.4% growth versus prior year. Cash rental income was $70 million, representing 10% growth versus prior year. Annualized cash-based rent for leases in place as a quarter round was $266 million, and our weighted average five-year annual cash rent escalator is 1.5%. Cash G&A expense was $4.9 million for the quarter, representing 7% of cash rental income, compared to 7.7% for the prior year. The 70 basis point improvement in operating leverage and flat cash GNA compared to the prior year illustrates our continued efforts at achieving efficient growth and the benefits of our rising scale. Following our Q1 results, we are reaffirming our guidance range for a 2026 cash GNA of $19.2 to $19.7 million. We've also continued to make progress with 27 of the 42 leases originally expiring in 2026 extended. Recapture rate on these locations is 6% above prior year rent. We're currently negotiating to return to two of those properties, and the remaining 13 now represent just 1% of ABR, down from 2.6% at the beginning of 2025. Our portfolio occupancy remains very strong in 99.6% today, which benefits from releasing some of our very limited number of vacant sites. We collected 99.7% of base rent in Q1. Last quarter did not see any material changes to our collectability or credit reserves. As an aside, during this call, we've referenced two of our new disclosure updates, which I'll highlight again now. First, going forward, we plan to disclose gap cap rates along with the cash cap rate figure we've always done. We have very low default rates historically and our intention is to hold our properties long-term. Therefore, the data related to those expected long-term returns is another helpful metric for our investors. Our presentation includes a new slide on page 8 that has gap cap rates going back to 2023 and shows that historically they have averaged about 70 basis points higher than our initial cash cap rates. Second, we are updating the way we slow the ANFO per share growth by calculating without the impact of two decimal rounding. Based on our share count, rounding can be impactful in this figure, particularly for quarterly comparisons. Our updated approach will allow us to quote a more accurate growth figure. We continue to aim for ways to improve transparency with the investor community, and believe that these changes are aligned with that U.S. With that, we'll turn over to questions for the Q&A session, and just a reminder, the meeting ID is 865-913-566 if you would like to ask a question.

Thank you. We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from Michael Goodsmith from the line of UVS. Michael, go ahead.

Thank you. It's Michael Goodsmith from UVS. Thanks for taking the question. First question is, I know you guys don't provide discrete guidance, but maybe this a $200 million term loan is shadow guidance and that you've talked about fully drawing that down to the second and the third quarter. So is that, you know, as we think about just the acquisition activity, you've got the $200 million there, you know, consensus at $275 million in acquisitions for the year and that's stepping down to $250 million next year. So just trying to get a sense of you know your liquidity the acquisition market and and now um you know you kind of have clear line of sight into acquisitions of let's say 200 million through the third quarter uh you know or should you be able to exceed that and and and continue to acquire healthfully into next year thanks so you michael you know our business well i think the answer might be hidden in your question but yeah we if we you know very are particular about how our press releases are drafted and i think we gave more specific timing um guidance than we have in the past i would say it's always

curious that analysts seem to have declining acquisitions for us which is unusual in the space i don't think there are other companies that's the case i'm not sure why um that's not what has been a historical record.

Got it. And then as a follow-up, I appreciate the new slides in the presentation. I think pages seven and eight. Can you just kind of walk through what you're trying to show here? I think you're indicating that the four quarters portfolio or the tenants that you guys are outperforming, maybe the general overall restaurant industry and then separately, right, like your gap cap rates are exceeding your cash, but maybe you could just provide a little bit more detail about what the point that you're trying to make with both of these things.

Yeah, absolutely. Great question. We had an investor show us our stock price versus some generic index. I think it might have been MSCI or Morgan Stanley, some generic restaurant index. And you had to be a little cute with the start date to get it to line up, but there was a pretty high correlation. And so they were sort of making the point, do you trade like a restaurant index? And we think that that's a silly concept on its face, but if we were going to trade like a restaurant index, At a minimum, you should weight the index by our rent and look at the stock performance of our tenants weighted by our rent. And if you do that, you get the yellow line, which is a, you know, shows how strong Darden and Chili's has been and that we don't have, you know, because we weighted it basically down as far as we could with public companies. We don't have, you know, companies that have fallen into distress. Our tenant roster is really strong. the um the gap cap rate we have a competitor uh agree that we're we admire it's a great company uh they have historically used uh gap cap rates we have gotten questions about where our cap rates are versus theirs there seems to be some investor confusion that they're quoting two different things both numbers are perfectly legitimate ways of looking at it um but sometimes we felt our cash cap rates were being compared against their gap cap rates. And so we just did the math and showed you the data so you can pick and choose the way you want to do it. I'll handle the last new disclosure. You didn't ask about it, Michael, but I'll just handle it now about rounding, which is, you know, we just thought this is a more accurate way of doing it. We went back, you know, not surprisingly, some of the times the rounding would, comparing rounded to rounded versus more closely actual to actual would you know have a higher growth rate some of the time a little growth rate some of the time we just thought this was a better way of showing it there seems to be a lot of focus on growth today and we wanted to give you the most accurate number you can do you have more questions about that it's a pretty technical calculation I'd probably recommend you reach back out to pat after the call on the on the rounding issue thanks so much

guys uh good luck in the second quarter appreciate it thanks michael your next question comes from the line of eric borden from bmo capital markets eric go ahead hey good morning thanks for taking my question uh just given your strong relationship with young yum and brinker you know are there any identical acquisition opportunities as young expands on its taco bell platform and brinker expands on its chili platform just given the strength and same source sales there whether it's you know on the acquisition front or potentially you know a development opportunity thank you thank you yeah we're always working on on those um you know we the one comment i'd make

is taco bells tend to trade for very very tight cap rates uh but we're always working on on things like that, being aligned with strong brands where we can play offense and not have to be licking the wounds of prior investment mistakes is a huge advantage. But I would say that both of the brands you mentioned, they traded very, very competitive cap rates on the secondary market.

Okay, that's helpful. And then just on the bad debt side of things, can you just talk about anything that's been realized year to date? And how are you thinking about bad debt for the remainder of 2026? Thank you.

Yeah. So the number is zero for the year to date. You know, we have over 1,300 leases. So we're always kind of monitoring, you know, something in the portfolio. But we have not had any bad debt this year. And the portfolio continues to perform really strong. Say like, you know, you probably saw Rinker's results yesterday, recent prints by Darden as well. You know, the brands we've aligned with are weathering any sort of macro headwinds very well. There's going to be some brands that don't, but, you know, we've tried to pick our horses very carefully so that we've worked up.

All right. Thank you for the time. I appreciate it.

Yeah, of course. Your next question comes from the line of Wes Galladay with Baird. Wes, please go ahead.

Thank you. Good morning to everyone. Can you go back to that comment on the expirations. I think you said 27 of 42 have been renewed. I believe you said 6%. So I would have thought maybe it would have been a little bit lower with contractual rent extensions. But maybe how should we think about that going forward?

I wouldn't overemphasize it. I think we had a positive quarter. Our typical rent growth is 1.5%. If you're modeling our company, I think that's a good place to go. There'll be a quarter towards better. There might be a quarter where it isn't as good, but one and a half, I think, is a good place to start and finish.

Okay, thanks for that.

I would also just real quick, Wes, I would just like to emphasize that Justin and his team have done just a terrific job on property management and asset management and releasing. And that's a new capability for us, frankly, in the last couple of years. Justin has really aggressively restructured his team and has done a terrific job. We are more on top of that as a company than we've ever been by far.

Okay. Thanks for the additional color there.

When we look at the pipeline going forward, is there a bigger percentage of that in the new categories that you're evaluating, or are you looking to enter those new categories a little bit more methodically yeah we're really score focused so um we're not really um putting emphasis on one category over the other we're trying to find the assets that score the best and make sure that those rise to the top with appropriate pricing okay but we you know we are looking at some new some new sectors as we talked about last quarter uh and and really leading into building relationships finding what tenants we want to emphasize etc so the aperture is bigger than it's ever been okay i appreciate the color your next question comes from the line of john

kilachowski with wells fargo john please go ahead hi good morning thanks for taking my question um first one for me bill thanks for the color on bahama breeze i guess just to expand on that you know you mentioned the positive mark on the the other assets that weren't being converted is Is there going to be downtime there? Will there be rent loss before the mark, or do you think there'll be no net credit loss there?

No, I don't think there'll be downtime. The Darden is responsible for a year and a half, at the minimum, up to four years for the handful that we're converting to other tenants. um you know but to the extent that there's rent growth or capital provided um you know all that's in baked into our comments we we feel really good about being able to release these to strong tenants and dart is taking you know a lot of them too so a good diversification move um i think it shines a light on the bahama breezes that we sold a number of years ago for really really high prices that we did a good job managing our value at risk with any one particular tenant, but it could be a good result.

I would just add to that. I mean, Bill said in his comments, but we're talking about four stores and 50 basis points of ABR. It's a small amount.

Yeah. Understood. And then just quarter to date, if we kind of run the numbers here, it looks like the average blend is about 20 bits higher than what you close in one queue.

I know that's early based on what you've released.

Is there any sort of upward creep in yields that you're seeing, I think, driving that, or is that just, you know, small sample size there that's driving that move?

Small sample size.

Okay, got it. Thank you.

Your next question comes from the line of Mitch Germain from Citizens Bank. Mitch, please go ahead.

Yeah, thank you. Um, Bill, just, you mentioned just a second ago, you know, obviously looking at a couple of new industries. I think it was capital that you allocated to a rental, uh, company and, and, uh, so rental, uh, operator and a, uh, grocer. What, how do you, you know, what sort of education do you and your team take, um, in reviewing the sector? Um, you know, kind of what are the attributes that made those sort of assets or sectors interesting for you and does that really obviously it clearly changes the TAM in terms of how you're allocating capital is that the way we should be thinking about this now?

Yeah I think that's a good way of thinking about it um you you know I guess we use what we call the cripple filter which is is this something that we know enough to buy and i'll talk a little bit more about that in a second do we have our permission from our investors to buy it and would we buy it with our own money uh and so while that those sound very high level um that is a very challenging gauntlet for an asset class to get through so you know i personally wouldn't buy a pickleball facility with my own money so that makes it pretty easy to, you know, not buy pickleball facilities. I wouldn't buy a Carvana with my own money. So that makes it pretty easy. Do we have permission from our investors? That's a harder one. And I think we tend to take it pretty gradually to make sure that we're bringing our investors along with us. But pretty clearly, you know, our investors don't need four corners to by a class a office in new york city they have other ways to get that exposure um do we know enough to know is uh manifest in writing white papers for our board going to conferences meeting and talking with tenants walking the floors um and then i would say humbly that a lot of these sectors are things that i have experienced within in the past it just preceded four corners so when I was at Terrell on when I was at Graham on Graham Rousseau's Investment Committee, you know, and other things I worked on, you know, we bought outdoor industrial storage. We bought grocery. So I have a familiarity with it. It's making sure we bring the team along with me.

Great. And last one for me. I asked this a couple times this quarter, but I'm just curious, are you seeing any real changes in the competitive landscape within the investment sales market you know I mean obviously for quite some time there was a lot of competition that was sitting on the sidelines and some of that appears to be back but is that you know shifting um you know kind of any way that you're approaching um underwriting and bidding on properties you know where we are buying these ones these and twos these you know we obviously look at portfolios um and have closed on several in our existence I think we're really well competitively positioned we can build a portfolio throughout a year that we're proud of doing onesies and twosies but we

have the scale to do bigger things as well you know you read a lot in the news about private credit and the private credit firms um you know creating a discounts to nab questioning of their marks um you know will that cause them to pull back i don't think we have evidence of that yet and certainly there's been recently you know there's been a lot of corporate m&a activity i think there's a lot of shadow corporate activity so there's a lot of things to work on now thank you there are no further questions at this time i will now turn the call over to bill lenihan ceo for closing remarks bill go ahead great terrific and glad to land the plane on the 30 minute mark Ultimately, our existing portfolio strength is compelling for us to focus on offense, where many of our peers are playing defense. Our $200 million term loan gives us a direct line of sight for funding between now and Q3. The attractive pricing we're seeing in the debt markets should give us even more access to low-cost funding later this year at scale. The acquisition market is stable and with a bit larger aperture for our property types, we expect another successful year of building our portfolio brick by brick. Our team will be at ICSC the week of May 18th and ARRI in New York the week of June 1st. As many of you know, we host a cocktail party in conjunction with ICSC. We'd love to meet with you in person at either of these events, so please reach out to Patrick or myself to coordinate schedules. Thank you all and look forward to continuing to see many of you in person this year.

This concludes today's call. Thank you for attending. You may now disconnect.