Four Corners Property Trust, Inc.

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 scpt.com. All the information presented on this call is current as of today, April 30th, 2026. In addition, reconciliation and 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 decisions. Q1 marked a continuation of the momentum from 2025 and a strong start to 2026. AFFO per share grew by 3.4% 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 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 term loan with seven-year tenor earlier this month. The term loan all-in rate is 4.9%, which represents 200 basis points of spread to historical acquisition yields. We will be able to invest that money accretively. 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 maturity 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 the source, 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 tenant 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've called a new slide on page seven of our investor deck that shows the strong outperformance of our publicly traded tenants versus the generic all restaurant index. The key takeaway is portfolio construction is extremely important. And by being selective with our tenant partners, we're building what we believe is a forecast portfolio brick by brick. Our lead restaurant tenants appear to be taking market share and have not shown signs of slowing down. To that end, our portfolio has avoided some of the more problematic lease 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 our Bahama Breeze properties. As a point of clarification, we own 10 Bahama Breeze properties, which is 1.3% of our ABR. That said, DART is planning to convert six of these locations to other brands they operate, Yardhouse, Olive Garden, Longhorn, Chewy's, et cetera. 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 AVR, 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 Darden announced the brand closure. For us to have potential solutions across the board for all ten locations so quickly just highlights how our focus strategy and 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 Darden is still obligated to make rent payments on these units for all ten 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 backfill 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 expectations. Finally, and this is a very exciting point, I'd like to mention that Michael Friedland has joined our board. Michael recently retired from J.P. Morgan and brings 30 years of Wall Street experience in real estate finance and corporate credit to FCPT. We've known Michael a long time. and we're really impressed and glad he's joined our board. Welcome, Michael. Over to you, Josh.