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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 If you change your mind, please press star followed by 2 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 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 would 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, 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

I'll repeat that.

Today, our balance sheet is overequitized with net leverage near five times. Further, we raise debt when 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 or notes. This is much more attractive given where we're seeing cap rates today. Are proud of the year that we put together from both the capital raising and acquisition funds 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 enter the year with low leverage and ample dry powder for opportunities that may arise. Over to you, Josh.

Thanks, Bill. I'll start with a review of this quarter's activity, 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 107% 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 crack. But we are encouraged our platform can still post significant volume in years but we do not anchor a large portfolio yield sitting in market. 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 way they attract in this 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 asset we regularly purchase in our existing portfolio. For example, both are leased to best in class creditworthy operators in respective subcategories. Sprague's is a publicly traded grocer with more than 400 applications across The US, 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 the branded market. 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 and P. They are the largest equipment rental provider in the nation, and have a demonstrated track record of strong operations. Continue to evaluate similar opportunities in these sectors for only so 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 'twenty six to be another strong year of increased diversification and expanded platform capabilities. Patrick?

Matthew?

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 five 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 letters. As always, we aim to be optimistic to achieve the best cost capital on our funding decision this time, Martha. 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 place endowments would be higher than that but also accretive to current market cap rates while offering longer term incentive. With 95% of our floating rate debt fixed through November 2027, at 3% versus spot rate today at 4%. Overall, 98% of our debt staff is fully fixed, and our blended cash interest rate is 4%. We remain 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 10 basis points to our interest expense on the revolver per month. Our new borrowing rate on term loan for silver was 95 basis points and 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 come due. Our Saturday 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 '26 and '27, 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. Then in other words, we believe we have numerous avenues to address these minor maturities at track 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 and A expense was $18,000,000 for the year. The very bottom of our guidance range, and representing 6.9% cash rental income for the year compared to 7.1% over 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, Now represents 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 billing 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. Do you wanna call out Wendy's slide we introduced the presentation from page 11? We regularly see private market cap rate comps properties similar to the properties 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 to the blended cap rate. Are recently sold on these properties. It demonstrates a sizable gap between the higher value of our underlying asset when the stock is actually trading at. With that, we'll turn it back over to Claire for questions.

Thank you.

To ask a question, If you change your mind, please press 2. 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? You know, it feels like some of some of your net lease peers have been moving into that space. So, like, what would you see for like a competition perspective there? And then if you could talk a little bit about how the cap rates in that space compared to the rest of your portfolio, that'd be helpful. Thanks.

Thanks, Michael. Well, I I'm 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. It's you know, a lot of the value is in the land residual If you're careful, you can get in at a good basis. There's creditworthy tenants.

You know,

it's hard to get new sites entitled

So there's

some entrenchment if you can find existing site very large addressable market,

you know,

very defensive.

And cap rates that that make sense. So we've looked at a lot of them. We'll continue to to pursue that strategy. There are players who focus on it now. One of them was just taking private by Brookfield, but it's a it's an attractive space. As is grocery, by the way. But we found that very often high credit grocers have you know, a much chunkier purchase price than we typically plan. But but we're looking at both of those sectors and and others on a continuous basis. But answer your question on TAM, you know, we can get back to you, but it's, you know, enormous compared to the size of our company.

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

I think that's that's right. There will be a handful that get converted to other garden brands. They'll be 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 plus we have to release. We've been inundated with people interested in these sites. They're very well located. And I think we're being pretty conservative on the rents. But you know, it's 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.

Thank you.

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 in the opening remarks. You talked about the rents there. Are you able to talk about the performance at these assets? I'm just if they're getting converted, would that be at the same rent? 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 like what the total loss is that you're kind of making into internal estimates

Yeah. I don't I don't think we're baking in losses. At all. These brands are Bahamurisa's brand had limited market expansion Simply, I think a lot of The US 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 garden. And so they'll convert some of these. They have existing leases, so there be a change in the rental rate would be my assumption. But we'll have know, brand new stores with higher AUV brands. And then for 1,325.

Again, I this is Patrick. I would just add that, you know, when you look at that press release starting put out, and the list of sites that they wanna convert, there's still some moving pieces there. And you know, you have to factor in some of those stores that have really high quality real estate. Are restricted by covenants, by other tenants nearby, or by the shopping center. Itself. So you know, 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 but the demand in the last week has been I'd say, tremendous from other tenants that wanna backfill these locations.

Okay.

That's helpful. Thanks, Pat. Then maybe one another one for you just on the the balance sheet. You've called the forwards. I think in the opening remarks, said two twenty.

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 five five, 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 you kinda stick to your guns that you'll ride you know, that number up to six? And then if at that point, if the equity is knocked you know, 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 it it 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 the risk spectrum on acquisitions You know, we don't provide guidance for a reason. But that said, we have lots of runway with very accretive acquisitions funded with low leverage, inexpensive financing that's readily available today. A way that it wasn't readily available a couple years ago. So I think we feel like 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

as

Pat mentioned, added some detail in our presentation of how well supported by NAV we feel our stock price is. But I think it offers, you know, 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 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 we feel quite good about that.

Okay.

And then on the diversification, strategy,

can you maybe just talk about anything that that you don't want to get into or other areas of interest that 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

know,

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.

So

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.

K. 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, you know, but but what what's the real

level

with approaching that sort of six times upper limit on leverage if if that's the only option the market gives you. Know, as far as executing the the the sort of plan for '26 on growth.

But

I I think that's a quite a bit of a ways off. So, you know, hard to make predictions that many months in the future you know, So I think we feel very good that we have you know, a couple $100,000,000 of acquisitions before we even have to be thinking about that. And and, honestly, you know, we've had the same

leverage

ceiling for since inception, we've essentially never been close to it. You know? So I think that that track record speaks volumes.

Alright. Fair enough.

And then as far as the, I guess, the that sort of early vintage of Darden leases coming due, '27. And I 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

you know, upon renewal, you know, that sort of thing?

They have multiple five year extension options. At one and a half percent growth, so the continuation of that one and a half percent escalator.

So

I would say that our expectation is the vast majority of those will renew at the at the one and a half percent contractual option.

Got it. Thanks very much, Bill.

Yep. Of course.

Thank you.

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

Just looking at your your know, 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 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, bomber 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 you know, replace. They trade for you know, strong values for a reason. Darden as a company has, you know, $25,000,000,000 market cap. It's credit default swaps.

You know?

Are are like a g seven country. So they're hard to they're hard to let go of, to be honest. It's an option. We we know how that works. You know, I would remind everyone that there are read 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 hasn't the primer.

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

It was a 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 kinda 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 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 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 credit issues in the q and a. And I would would ask listeners to to sort of see the forest for the trees. The the story here is that we have substantial growth in 2026.

That'll 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 know, obviously, ticket for a grocer. I'm I'm curious how you know, do you potentially look to maybe scale up in 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 we're conservative in what we purchase. And then as we

are active in the market,

it helps with with seeing deals, and you get more deal flow. So it's it's no different than what we've done in the past, to be honest. It's just the the attributes of different property types you need to be, you know, sensitive to. And and I think because we've been cautious and you know, you've seen the the positive results on our credit results.

And do you envision doing direct deals with with grocers or maybe leveraging some of your shopping center

contacts to Yeah. Absolutely. Kinda scale it up.

It's all it's all of the above, Mitch. We we take a pretty agnostic view on sourcing. So we we source things directly. You know, in auto 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 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 it's all as long as it continues to meet your underwriting criteria, all systems go?

Yeah. I think it's the latter.

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

Thank you. Good luck this year.

Thanks.

Thank you.

Our next question comes from James Kammert from Evercore ISI.

Thank you very much. Perhaps a derivative of where Mitch was heading

Could you remind me what is the percentage of dollars over the past couple of years that really were direct deals with developers we didn't have a broker involved because I'm presuming that the former gives you a better yield

I'm just curious how that's been playing out. Proportionately.

Yeah. I don't think I wouldn't look at it that way, Jim. I I think that the the returns are pretty similar. You know, sophisticated large brands have access to information They know what their properties paid for. You know, there are some ease of use when you do repeat transactions in the sale leaseback because often you have existing documents that you can replace or you know the people are and and, you know, the sort of cadence of information flow can be better.

But

I don't think that there's a you know, some meaningful advantage of doing originated sale leaseback.

Got it. I appreciate that. Not to work against them in any way.

But I don't think I don't think that there's a big difference.

Marcus triggered it out. Fair enough. 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 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 look forward to seeing many of you in person this year.