UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-37538

Four Corners Property Trust, Inc.

(Exact name of registrant as specified in its charter)

Maryland	47-4456296
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

591 Redwood Highway,	Suite 3215,	Mill Valley,	CA	94941
(Address of principal executive offices)

(415) 965-8030

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of Exchange on Which Registered
Common Stock, $0.0001 par value per share	FCPT	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐
Smaller reporting company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐Yes ☒ No

Number of shares of common stock outstanding as of August 1, 2024: 92,664,568

FOUR CORNERS PROPERTY TRUST, INC.

FORM 10 - Q

THREE AND SIX MONTHS ENDED JUNE 30, 2024

TABLE OF CONTENTS

		Page
Part I	FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Consolidated Balance Sheets at June 30, 2024 (unaudited) and December 31, 2023	1
	Consolidated Statements of Income for the Three and Six Months Ended June 30, 2024 and 2023 (unaudited)	2
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2024 and 2023 (unaudited)	3
	Consolidated Statements of Changes in Equity for the Three and Six Months Ended June 30, 2024 and 2023 (unaudited)	4
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023 (unaudited)	6
	Notes to Consolidated Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34
Part II	OTHER INFORMATION
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosure	35
Item 5.	Other Information	35
Item 6.	Exhibits	36
	Index to Exhibits	36
	Signatures	37

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

FOUR CORNERS PROPERTY TRUST, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	June 30, 2024			December 31, 2023
	(Unaudited)
ASSETS
Real estate investments:
Land	$	1,264,216		$	1,240,865
Buildings, equipment and improvements		1,744,544			1,708,556
Total real estate investments		3,008,760			2,949,421
Less: Accumulated depreciation		(757,054	)		(738,946	)
Total real estate investments, net		2,251,706			2,210,475
Intangible lease assets, net		114,087			118,027
Total real estate investments and intangible lease assets, net		2,365,793			2,328,502
Cash and cash equivalents		17,167			16,322
Straight-line rent adjustment		67,041			64,752
Derivative assets		24,293			20,952
Deferred tax assets		1,340			1,248
Other assets		10,280			19,858
Total Assets	$	2,485,914		$	2,451,634
LIABILITIES AND EQUITY
Liabilities:
Term loan and revolving credit facility, net of deferred financing costs	$	537,270		$	441,745
Senior unsecured notes, net of deferred financing costs		621,313			670,944
Dividends payable		31,695			31,539
Rent received in advance		12,394			14,309
Derivative liabilities		348			2,968
Other liabilities		21,482			30,266
Total liabilities		1,224,502			1,191,771
Equity:
Preferred stock, par value 0.0001 per share; 25,000,000 authorized, zero shares issued and outstanding		—			—
Common stock, par value 0.0001 per share; 500,000,000 shares authorized, 92,102,202 and 91,617,477 shares issued and outstanding, respectively		9			9
Additional paid-in capital		1,272,477			1,261,940
Accumulated deficit		(40,911	)		(26,276	)
Accumulated other comprehensive income		27,636			21,977
Noncontrolling interest		2,201			2,213
Total equity		1,261,412			1,259,863
Total Liabilities and Equity	$	2,485,914		$	2,451,634

The accompanying notes are an integral part of this financial statement.

1

FOUR CORNERS PROPERTY TRUST, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Revenues:
Rental revenue	$	58,539		$	52,843		$	117,112		$	105,040
Restaurant revenue		7,940			7,845			15,834			15,600
Total revenues		66,479			60,688			132,946			120,640
Operating expenses:
General and administrative		6,004			5,600			12,217			11,655
Depreciation and amortization		13,345			11,817			26,812			23,993
Property expenses		2,836			2,676			5,917			5,843
Restaurant expenses		7,332			7,197			14,896			14,492
Total operating expenses		29,517			27,290			59,842			55,983
Interest expense		(12,324	)		(10,051	)		(24,605	)		(19,969	)
Other income		150			226			390			526
Realized gain on sale, net		—			173			—			1,735
Income tax expense		(86	)		(91	)		(113	)		(139	)
Net income		24,702			23,655			48,776			46,810
Net income attributable to noncontrolling interest		(30	)		(30	)		(60	)		(61	)
Net Income Available to Common Shareholders	$	24,672		$	23,625		$	48,716		$	46,749
Basic net income per share:	$	0.27		$	0.27		$	0.53		$	0.54
Diluted net income per share:	$	0.27		$	0.27		$	0.53		$	0.54
Weighted average number of common shares outstanding:
Basic		91,807,764			87,366,335			91,763,619			86,604,202
Diluted		91,994,062			87,556,011			91,976,282			86,825,150
Dividends declared per common share	$	0.3450		$	0.3400		$	0.6900		$	0.6800

The accompanying notes are an integral part of this financial statement.

2

FOUR CORNERS PROPERTY TRUST, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, except for share and per share data)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Net income	$	24,702		$	23,655		$	48,776		$	46,810
Other comprehensive income:
Effective portion of change in fair value of derivative instruments		3,486			11,005			12,156			5,412
Reclassification adjustment of derivative instruments included in net income		(3,388	)		(2,562	)		(6,490	)		(4,639	)
Other comprehensive income		98			8,443			5,666			773
Comprehensive income		24,800			32,098			54,442			47,583
Less: comprehensive income attributable to noncontrolling interest
Net income attributable to noncontrolling interest		30			30			60			61
Other comprehensive income attributable to noncontrolling interest		—			(29	)		7			(40	)
Comprehensive income attributable to noncontrolling interest		30			1			67			21
Comprehensive Income Attributable to Common Shareholders	$	24,770		$	32,097		$	54,375		$	47,562

The accompanying notes are an integral part of this financial statement.

3

FOUR CORNERS PROPERTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In thousands, except share data)

(Unaudited)

For the Three Months Ended June 30, 2024

	Common Stock				Additional		Retained Earnings			Accumulated Other Comprehensive
	Shares		Par Value		Paid-in Capital		(Accumulated Deficit)			Income (Loss)		Noncontrolling Interest			Total
Balance at March 31, 2024		91,989,203	$	9	$	1,268,361	$	(33,888	)	$	27,538	$	2,210		$	1,264,230
Net income		—		—		—		24,672			—		30			24,702
Other comprehensive income		—		—		—		—			98		—			98
ATM proceeds, net of issuance costs		99,656		—		2,385		—			—		—			2,385
Dividends and distributions to equity holders		—		—		—		(31,695	)		—		(39	)		(31,734	)
Stock-based compensation, net		13,343		—		1,731		—			—		—			1,731
Balance at June 30, 2024		92,102,202	$	9	$	1,272,477	$	(40,911	)	$	27,636	$	2,201		$	1,261,412

For the Six Months Ended June 30, 2024

	Common Stock				Additional		Retained Earnings			Accumulated Other Comprehensive
	Shares		Par Value		Paid-in Capital		(Accumulated Deficit)			Income (Loss)		Noncontrolling Interest			Total
Balance at December 31, 2023		91,617,477	$	9	$	1,261,940	$	(26,276	)	$	21,977	$	2,213		$	1,259,863
Net income		—		—		—		48,716			—		60			48,776
Other comprehensive income		—		—		—		—			5,659		7			5,666
ATM proceeds, net of issuance costs		380,570		—		9,283		—			—		—			9,283
Dividends and distributions to equity holders		—		—		—		(63,351	)		—		(79	)		(63,430	)
Stock-based compensation, net		104,155		—		1,254		—			—		—			1,254
Balance at June 30, 2024		92,102,202	$	9	$	1,272,477	$	(40,911	)	$	27,636	$	2,201		$	1,261,412

The accompanying notes are an integral part of this financial statement.

4

For the Three Months Ended June 30, 2023

	Common Stock				Additional		Retained Earnings			Accumulated Other Comprehensive
	Shares		Par Value		Paid-in Capital		(Accumulated Deficit)			Income (Loss)		Noncontrolling Interest			Total
Balance at March 31, 2023		86,088,900	$	9	$	1,112,936	$	(5,503	)	$	23,285	$	2,240		$	1,132,967
Net income		—		—		—		23,625			—		30			23,655
Other comprehensive income		—		—		—		—			8,472		(29	)		8,443
ATM proceeds, net of issuance costs		4,463,788		—		119,279		—			—		—			119,279
Dividends and distributions to equity holders		—		—		—		(30,724	)		—		(39	)		(30,763	)
Stock-based compensation, net		13,158		—		1,560		—			—		—			1,560
Balance at June 30, 2023		90,565,846	$	9	$	1,233,775	$	(12,602	)	$	31,757	$	2,202		$	1,255,141

For the Six Months Ended June 30, 2023

	Common Stock				Additional		Retained Earnings			Accumulated Other Comprehensive
	Shares		Par Value		Paid-in Capital		(Accumulated Deficit)			Income (Loss)		Noncontrolling Interest			Total
Balance at December 31, 2022		85,637,293	$	9	$	1,104,522	$	576		$	30,944	$	2,259		$	1,138,310
Net income		—		—		—		46,749			—		61			46,810
Other comprehensive income		—		—		—		—			813		(40	)		773
ATM proceeds, net of issuance costs		4,787,970		—		128,184		—			—		—			128,184
Dividends and distributions to equity holders		—		—		—		(59,927	)		—		(78	)		(60,005	)
Stock-based compensation, net		140,583		—		1,069		—			—		—			1,069
Balance at June 30, 2023		90,565,846	$	9	$	1,233,775	$	(12,602	)	$	31,757	$	2,202		$	1,255,141

The accompanying notes are an integral part of this financial statement.

5

FOUR CORNERS PROPERTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended June 30,
	2024			2023
Cash flows - operating activities
Net income	$	48,776		$	46,810
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		26,812			23,993
Realized gain on sale, net		—			(1,735	)
Non-cash revenue adjustments		1,052			984
Amortization of financing costs		1,291			1,128
Stock-based compensation expense		3,371			3,326
Deferred income taxes		(92	)		(48	)
Changes in assets and liabilities:
Derivative assets and liabilities		(295	)		8,372
Straight-line rent adjustment		(2,287	)		(2,639	)
Rent received in advance		(1,915	)		1,530
Intangible assets (lease incentive payments)		(1,119	)		—
Other assets and liabilities		(8,295	)		3,853
Net cash provided by operating activities		67,299			85,574
Cash flows - investing activities
Purchases of real estate investments		(63,810	)		(194,970	)
Proceeds from sale of real estate investments		—			13,464
Change in advance deposits in acquisition of real estate investments		400			(1,750	)
Net cash used in investing activities		(63,410	)		(183,256	)
Cash flows - financing activities
Net proceeds from ATM equity issuance		9,283			128,184
Payment of deferred financing costs		(1,397	)		—
Repayment of senior notes		(50,000	)		—
Proceeds from term loan borrowing		85,000			—
Proceeds from revolving credit facility		73,000			15,000
Repayment of revolving credit facility		(62,000	)		—
Payment of dividends to shareholders		(63,195	)		(58,266	)
Distributions to non-controlling interests		(79	)		(78	)
Employee shares withheld for taxes		(2,117	)		(2,257	)
Net cash (used in) provided by financing activities		(11,505	)		82,583
Net decrease in cash and cash equivalents, including restricted cash		(7,616	)		(15,099	)
Cash and cash equivalents, including restricted cash, at beginning of period		24,783			26,296
Cash and cash equivalents, including restricted cash, at end of period	$	17,167		$	11,197
Supplemental disclosures:
Interest paid	$	29,509		$	23,261
Income taxes paid	$	375		$	343
Operating lease payments received (lessor)	$	110,433		$	98,764
Operating lease payments remitted (lessee)	$	460		$	452
Non-cash activities:
Dividends declared but not paid	$	31,695		$	30,724
Change in fair value of derivative instruments	$	5,961		$	(7,599	)

The accompanying notes are an integral part of this financial statement.

6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – ORGANIZATION

Four Corners Property Trust, Inc. (together with its consolidated subsidiaries, “FCPT”) is an independent, publicly traded, self-administered company, primarily engaged in the ownership, acquisition and leasing of restaurant and retail properties. Substantially all of our business is conducted through Four Corners Operating Partnership, LP (“FCPT OP”), a Delaware limited partnership of which we are the initial and substantial limited partner. Our wholly owned subsidiary, Four Corners GP, LLC (“FCPT GP”), is its sole general partner.

Any references to “the Company,” “we,” “us,” or “our” refer to FCPT as an independent, publicly traded, self-administered company.

FCPT was incorporated as a Maryland corporation on July 2, 2015 as a wholly owned indirect subsidiary of Darden Restaurants, Inc., (together with its consolidated subsidiaries “Darden”), for the purpose of owning, acquiring and leasing properties on a triple-net basis, for use in the restaurant and other retail industries. On November 9, 2015, Darden completed a spin-off of FCPT whereby Darden contributed to us 100% of the equity interest in entities that owned 418 properties in which Darden operates restaurants, representing five of their brands, and six LongHorn Steakhouse restaurants located in the San Antonio, Texas area (the “Kerrow Restaurant Operating Business”) along with the underlying properties or interests therein associated with the Kerrow Restaurant Operating Business. In exchange, we issued to Darden all of our common stock and paid to Darden $315.0 million in cash. Subsequently, Darden distributed all of our outstanding shares of common stock pro rata to holders of Darden common stock whereby each Darden shareholder received one share of our common stock for every three shares of Darden common stock held at the close of business on the record date, which was November 2, 2015, as well as cash in lieu of any fractional shares of our common stock which they would have otherwise received.

We believe that we have been organized and have operated in conformity with the requirements for qualification and taxation as a real estate investment trust (a “REIT”) for federal income tax purposes commencing with our taxable year ended December 31, 2016, and we intend to continue to operate in a manner that will enable us to maintain our qualification as a REIT. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute at least 90% of our REIT taxable income to our shareholders, subject to certain adjustments and excluding any net capital gain. As a REIT, we will not be subject to federal corporate income tax on that portion of net income that is distributed to our shareholders. However, FCPT’s taxable REIT subsidiaries (“TRS”) will generally be subject to federal, state, and local income taxes. We made our REIT election upon the filing of our 2016 tax return.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

The accompanying consolidated financial statements (the “Consolidated Financial Statements”) include the accounts of Four Corners Property Trust, Inc. and its consolidated subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

The Consolidated Financial Statements reflect all adjustments which are, in the opinion of management, necessary to a fair presentation of the results for the interim periods presented. These adjustments are considered to be of a normal, recurring nature.

Use of Estimates

The preparation of these Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The estimates and assumptions used in the accompanying Consolidated Financial Statements are based on management’s evaluation of the relevant facts and circumstances. Actual results may differ from the estimates and assumptions used in preparing the accompanying Consolidated Financial Statements, and such differences could be material.

Real Estate Investments, Net

Real estate investments, net are recorded at cost less accumulated depreciation. Building components are depreciated over estimated useful lives ranging from seven to fifty-five years using the straight-line method. Leasehold improvements, which are reflected on our Consolidated Balance Sheets as a component of buildings, equipment, and improvements, net are amortized over the lesser of the non-cancelable lease term or the estimated useful lives of the related assets using the straight-line method. Equipment is depreciated over estimated useful lives ranging from two to fifteen years also using the straight-line method. Real estate development and construction costs for newly constructed restaurant and retail locations are capitalized in the period in which they are incurred. Gains and losses on the disposal of land, buildings, and equipment are included in realized gain on sale, net, in our accompanying Consolidated Statements of Income (“Income Statements”).

Our accounting policies regarding land, buildings, equipment, and improvements, include our judgments regarding the estimated useful lives of these assets, the residual values to which the assets are depreciated or amortized, the determination of what constitutes a reasonably assured lease term, and the determination as to what constitutes enhancing the value of or increasing the life of existing assets. These judgments and estimates may produce materially different amounts of reported depreciation and amortization expense if

7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

different assumptions were used. As discussed further below, these judgments may also impact our need to recognize an impairment charge on the carrying amount of these assets as the cash flows associated with the assets are realized, or as our expectations of estimated future cash flows change.

Acquisition of Real Estate

The Company evaluates acquisitions to determine whether transactions should be accounted for as asset acquisitions or business combinations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2017-01. The Company has determined the land, building, site improvements, and in-places leases (if any) of assets acquired were each single assets as the building and property improvements are attached to the land and cannot be physically removed and used separately from the land without incurring significant costs or reducing their fair value. Additionally, the Company has not acquired a substantive process used to generate outputs. As substantially all of the fair value of the gross assets acquired are concentrated in a single identifiable asset and there were no processes acquired, the acquisitions do not qualify as a business and are accounted for as asset acquisitions. Related transaction costs are generally capitalized and amortized over the useful life of the acquired assets.

The Company allocates the purchase price (including acquisition and closing costs) of real estate acquisitions to land, building, and improvements based on their relative fair values. The determination of the building fair value is on an ‘as-if-vacant’ basis. Value is allocated to acquired lease intangibles (if any) based on the costs avoided and revenue recognized by acquiring the property subject to lease and avoiding an otherwise ‘dark period’. In making estimates of fair values for this purpose, the Company uses a third-party specialist that obtains various information about each property, as well as the pre-acquisition due diligence of the Company and prior leasing activities at the site.

Lease Intangibles

Lease intangibles, if any, acquired in conjunction with the purchase of real estate represent the value of in-place leases and above- or below-market leases. For real estate acquired subject to existing lease agreements, acquired lease intangibles are valued based on the Company’s estimates of costs related to tenant acquisition and the asset carrying costs, including lost revenue, that would be incurred during the time it would take to locate a tenant if the property were vacant, considering current market conditions and costs to execute similar leases at the time of the acquisition. Above-market and below-market lease intangibles are recorded based on the present value of the difference between the contractual amounts to be paid pursuant to the leases at the time of acquisition of the real estate and the Company’s estimate of current market lease rates for the property, measured over a period equal to the remaining initial term of the lease.

In-place lease intangibles are amortized on a straight-line basis over the remaining initial term of the related lease and included in depreciation and amortization expense. Above-market lease intangibles are amortized over the remaining initial terms of the respective leases as a decrease in rental revenue. Below-market lease intangibles are generally amortized as an increase to rental revenue over the remaining initial term of the respective leases, but may be amortized over the renewal periods if the Company believes it is likely the tenant will exercise the renewal option. Should a lease terminate early, the unamortized portion of any related lease intangible is immediately recognized as an impairment loss included in depreciation and amortization expense. To date, the Company has not had significant early terminations.

Finance ground lease assets are also included in lease intangible assets, net on the Consolidated Balance Sheets. See Leases below for additional information.

Impairment of Long-Lived Assets

Land, buildings and equipment and certain other assets, including definite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Such events and changes may include macroeconomic conditions, including those caused by global pandemics, which may result in property operational disruption and indicate that the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted net cash flows expected to be generated by the assets. Identifiable cash flows are measured at the lowest level for which they are largely independent of the cash flows of other groups of assets and liabilities, generally at the restaurant and retail level. If these assets are determined to be impaired, the amount of impairment recognized is measured by the amount by which the carrying amount of the assets exceeds their fair value. Fair value is generally determined by appraisals or sales prices of comparable assets.

The judgments we make related to the expected useful lives of long-lived assets and our ability to realize undiscounted cash flows in excess of the carrying amounts of these assets are affected by factors such as the ongoing maintenance and improvements of the assets, changes in economic conditions, changes in usage or operating performance, desirability of the restaurant and retail sites and other factors, such as our ability to sell our assets held for sale. As we assess the ongoing expected cash flows and carrying amounts of our long-lived assets, significant adverse changes in these factors could cause us to realize a material impairment loss.

Exit or disposal activities include the cost of disposing of the assets and are generally expensed as incurred. Upon disposal of the assets, any gain or loss is recorded in the same caption within our Income Statements as the original impairment. Provisions for

8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

impairment are included in depreciation and amortization expense in the accompanying Income Statements. We did not record impairment expense during the six months ended June 30, 2024 or 2023.

Real Estate Held for Sale

Real estate is classified as held for sale when the sale is probable, will be completed within one year, purchase agreements are executed, the buyer has a significant deposit at risk, and no financing contingencies exist which could prevent the transaction from being completed in a timely manner. Restaurant and retail sites and certain other assets to be disposed of are included in assets held for sale when the likelihood of disposing of these assets within one year is probable. Assets whose disposal is not probable within one year remain in land, buildings, equipment and improvements until their disposal within one year is probable. Disposals of assets that have a major effect on our operations and financial results or that represent a strategic shift in our operating businesses meet the requirements to be reported as discontinued operations. Real estate held for sale is reported at the lower of carrying amount or fair value, less estimated costs to sell. No properties were held for sale at June 30, 2024 or December 31, 2023.

Cash, Cash Equivalents, and Restricted Cash

We consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents can consist of cash and money market accounts. Restricted cash consists of 1031 tax deferred real estate exchange proceeds and is included in Other assets in our Consolidated Balance Sheets.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash in our Consolidated Balance Sheets to the total amount shown in our Consolidated Statements of Cash Flows:

(In thousands)	June 30, 2024		December 31, 2023
Cash and cash equivalents	$	17,167	$	16,322
Restricted cash (included in Other assets)		—		8,461
Total Cash, Cash Equivalents, and Restricted Cash	$	17,167	$	24,783

Debt

The Company’s debt consists of non-amortizing term loans, a revolving credit facility and senior, unsecured, fixed rate notes (collectively referred to as “Debt”). Debt is carried at unpaid principal balance, net of deferred financing costs. All of our debt is currently unsecured and interest is paid monthly on our non-amortizing term loans and revolving credit facility and semi-annually on our senior fixed rate notes.

Deferred Financing Costs

Financing costs related to debt are deferred and amortized over the remaining life of the debt using the effective interest method. These costs are presented as a direct deduction from their related liabilities in the Consolidated Balance Sheets.

See Note 6 - Debt, Net of Deferred Financing Costs for additional information.

Derivative Instruments and Hedging Activities

We enter into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments as required by FASB ASC Topic 815, Derivatives and Hedging, and those utilized as economic hedges. Our use of derivative instruments is currently limited to interest rate hedges. These instruments are generally structured as hedges of the variability of cash flows related to forecasted transactions (cash flow hedges). We do not enter into derivative instruments for trading or speculative purposes, where changes in the cash flows of the derivative are not expected to offset changes in cash flows of the hedged item. All derivatives are recognized on the balance sheet at fair value. For those derivative instruments for which we intend to elect hedge accounting, at the time the derivative contract is entered into, we document all relationships between hedging instruments and hedged items, as well as our risk-management objective and strategy for undertaking the various hedge transactions. This process includes linking all derivatives designated as cash flow hedges to specific assets and liabilities on the consolidated balance sheet or to specific forecasted transactions. We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the derivatives used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items.

9

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

To the extent our derivatives are effective in offsetting the variability of the hedged cash flows, and otherwise meet the cash flow hedge accounting criteria in accordance with United States generally accepted accounting principles (“U.S. GAAP”), changes in the derivatives’ fair value are not included in current earnings but are included in accumulated other comprehensive income, net of tax. These changes in fair value will be reclassified into earnings at the time of the forecasted transaction. Ineffectiveness measured in the hedging relationship is recorded in earnings in the period in which it occurs.

See Note 7 - Derivative Financial Instruments for additional information.

Other Assets and Liabilities

Other assets primarily consist of right of use operating lease assets, pre-acquisition costs, restricted cash, prepaid assets, food and beverage inventories for use by our Kerrow operating subsidiary, escrow deposits, and accounts receivable. Other liabilities primarily consist of accrued compensation, accrued interest expense, accrued operating expenses, intangible lease liabilities, and operating lease liabilities.

See Note 8 - Supplemental Detail for Certain Components of Consolidated Balance Sheets for additional information.

Leases

Effective January 1, 2019, the Company adopted FASB Accounting Standards Codification 842, Leases, including effective amendments (“ASC 842”). All significant lease arrangements are generally recognized at lease commencement. For leases where the Company is the lessee upon adoption of ASC 842, operating or finance lease right-of-use (“ROU”) assets and lease liabilities are recognized at commencement based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset during the reasonably certain lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term.

As part of certain real estate investment transactions, the Company may enter into long-term ground leases as a lessee. The Company recognizes a ground lease (or right-of-use) asset and related lease liability for each of these ground leases. Ground lease assets and lease liabilities are recognized based on the present value of the lease payments. The Company uses its estimated incremental borrowing rate, which is the estimated rate at which the Company could borrow on a collateralized basis with similar payments over a similar term, in determining the present value of the lease payments.

For leases where the Company is the lessor, we determine the classification upon commencement. At June 30, 2024, all such leases are classified as operating leases. These operating leases may contain both lease and non-lease components. The Company accounts for lease and non-lease components as a single component.

See Note 5 - Leases for additional information.

Revenue Recognition

Rental Revenue

For those net leases that provide for periodic and determinable increases in base rent, base rental revenue is recognized on a straight-line basis over the applicable lease term when collectability is probable. Recognizing rental revenue on a straight-line basis generally results in recognized revenues during the first half of a lease term exceeding the cash amounts contractually due from our tenants, creating a deferred rent receivable.

In certain circumstances, the Company may offer tenant allowance funds in exchange for increasing rent, extending the term, and including annual sales reporting among other items. These tenant allowance funds are classified as lease incentives upon payment and are amortized as a reduction to revenue over the lease term. Lease incentives are included in intangible lease assets, net, on our Consolidated Balance Sheets. During the three months ended June 30, 2024, the Company did not pay lease incentives to tenants. During the six months ended June 30, 2024, the Company paid lease incentives of $1.1 million. The Company did not pay lease incentives to tenants during the six months ended June 30, 2023.

We assess the collectability of our lease receivables, including deferred rents receivable, on several factors, including payment history, the financial strength of the tenant and any guarantors, historical operations and operating trends of the property, and current economic conditions. If our evaluation of these factors indicates it is not probable that we will be able to recover substantially all of the receivable, we derecognize the deferred rent receivable asset and record that revenue as a reduction in rental revenue. If we determine the lease receivable will not be collected due to a credit concern, we reduce the recorded revenue for the period and related accounts receivable.

10

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

For those leases that provide for periodic increases in base rent only if certain revenue parameters or other substantive contingencies are met, the increased rental revenue is recognized as the related parameters or contingencies are met, rather than on a straight-line basis over the applicable lease term. Costs paid by the lessor and reimbursed by the lessees are included in variable lease payments and presented on a gross basis within rental revenue. Sales taxes collected from lessees and remitted to governmental authorities are presented on a net basis within rental revenue.

Restaurant Revenue

Restaurant revenue represents food, beverage, and other products sold and is presented net of the following discounts: coupons, employee meals, complimentary meals and gift cards. Revenue from restaurant sales, whether received in cash or by credit card, is recognized when food and beverage products are sold. At June 30, 2024 and December 31, 2023, credit card receivables, included in other assets, totaled $257 thousand and $293 thousand, respectively. We recognize sales from our gift cards when the gift card is redeemed by the customer. Sales taxes collected from customers and remitted to governmental authorities are presented on a net basis within restaurant revenue on our Consolidated Income Statements.

Restaurant Expenses

Restaurant expenses include restaurant labor, general and administrative expenses, rent expense, and food and beverage costs. Food and beverage costs include inventory, warehousing, related purchasing and distribution costs. Vendor allowances received in connection with the purchase of a vendor’s products are recognized as a reduction of the related food and beverage costs as earned.

Realized Gain on Sale, Net

The Company recognizes gain on sale of real estate in accordance with FASB ASU No. 2017-05, “Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” The Company evaluates each transaction to determine if control of the asset, as well as other specified criteria, has been transferred to the buyer to determine proper timing of revenue recognition, as well as transaction price allocation. During the six months ended June 30, 2024, the Company did not sell any properties. During the three months ended June 30, 2023, the Company sold one property, which resulted in a realized gain of $173 thousand. During the six months ended June 30, 2023, the Company sold four properties, which resulted in a realized gain of $1.7 million.

Income Taxes

We believe that we have been organized and have operated in conformity with the requirements for qualification and taxation as a REIT commencing with our taxable year ended December 31, 2016, and we intend to continue to operate in a manner that will enable us to maintain our qualification as a REIT. So long as we qualify as a REIT, we generally will not be subject to federal income tax on our net income that we distribute currently to our shareholders. To maintain our qualification as a REIT, we are required under the Code to distribute at least 90% of our REIT taxable income (without regard to the deduction for dividends paid and excluding net capital gains) to our shareholders and meet certain other requirements. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate rates. Even if we qualify as a REIT, we may also be subject to certain state, local and franchise taxes. Under certain circumstances, federal income and excise taxes may be due on our undistributed taxable income.

The Kerrow Restaurant Operating Business is a TRS and is taxed as a C corporation.

See Note 9 - Income Taxes for additional information.

Earnings Per Share

Basic earnings per share (“EPS”) are computed by dividing net income allocated to common shareholders by the weighted-average number of common shares outstanding for the reporting period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. No effect is shown for any securities that are anti-dilutive. Net income allocated to common shareholders represents net income less income allocated to participating securities and non-controlling interests. None of the Company’s equity awards are participating securities.

See Note 10 - Equity for additional information.

Noncontrolling Interest

Noncontrolling interest represents the aggregate limited partnership interests in FCPT OP held by third parties. In accordance with GAAP, the noncontrolling interest of FCPT OP is shown as a component of equity on our Consolidated Balance Sheets, and the portion of income allocable to third parties is shown as net income attributable to noncontrolling interests in our Income Statements and Consolidated Statements of Comprehensive Income (Loss) (“Comprehensive Income Statement”). The Company follows the guidance issued by the FASB regarding the classification and measurement of redeemable securities. At FCPT OP’s option, it may satisfy this redemption with cash or by exchanging non-registered shares of FCPT common stock on a one-for-one basis. Accordingly, the Company

11

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

has determined that the common OP units meet the requirements to be classified as permanent equity. A reconciliation of equity attributable to noncontrolling interest is disclosed in our Consolidated Statements of Changes in Equity.

See Note 10 - Equity for additional information.

Stock-Based Compensation

The Company’s stock-based compensation plan provides for the grant of restricted stock awards (“RSAs”), deferred stock units (“DSUs”), performance-based awards, including performance stock units (“PSUs”), dividend equivalents (“DEUs”), restricted stock units (“RSUs”), and other types of awards to eligible participants. DEUs are earned during the vesting period and received upon vesting of award. Upon forfeiture of an award, DEUs earned during the vesting period are also forfeited. We classify stock-based payment awards either as equity awards or liability awards based upon cash settlement options. Equity classified awards are measured based on the fair value on the date of grant. Liability classified awards are remeasured to fair value each reporting period. We recognize costs resulting from the Company’s stock-based compensation awards on a straight-line basis over their vesting periods, which range between one and five years. No compensation cost is recognized for awards for which employees do not render the requisite services.

See Note 11 - Stock-Based Compensation for additional information.

Fair Value of Financial Instruments

We use a fair value approach to value certain assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. We use a fair value hierarchy, which distinguishes between assumptions based on market data (observable inputs) and an entity's own assumptions (unobservable inputs). The hierarchy consists of three levels:

•Level 1 - Quoted market prices in active markets for identical assets or liabilities;

•Level 2 - Inputs other than level one inputs that are either directly or indirectly observable; and

•Level 3 - Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.

Application of New Accounting Standards

We consider the applicability and impact of all ASUs issued by the FASB. ASUs not yet adopted were assessed and determined to be either not applicable or are expected to have minimal impact to our consolidated result of operations, financial position and cash flows.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”, which expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in the ASU require, among other things, disclosure of significant segment expenses that are regularly provided to an entity's chief operating decision maker (“CODM”) and a description of other segment items (the difference between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss) by reportable segment, as well as disclosure of the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Annual disclosures are required for fiscal years beginning after December 15, 2023 and interim disclosures are required for periods within fiscal years beginning after December 15, 2024. Retrospective application is required, and early adoption is permitted. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign) among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

NOTE 3 – CONCENTRATION OF CREDIT RISK

Our tenant base and the restaurant and retail brands operating our properties are highly concentrated. With respect to our tenant base, Darden leases represent approximately 50.6% of the scheduled base rents from the properties we own. As our revenues predominately consist of rental payments, we are dependent on Darden for a significant portion of our leasing revenues. The audited and unaudited financial statements for Darden are included in its filings with the SEC, which can be found on the SEC’s internet website at www.sec.gov. Reference to Darden’s filings with the SEC is solely for the information of investors. We do not intend this website to

12

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

be an active link or to otherwise incorporate the information contained on such website (including Darden’s filings with the SEC) into this report or our other filings with the SEC.

We also are subject to concentration risk in terms of the restaurant and retail brands that operate our properties. As of June 30, 2024, we had 314 Olive Garden branded locations in our portfolio, which comprise approximately 27.7% of our leased properties and approximately 36.2% of the revenues received under leases. Longhorn Steakhouse branded restaurants comprise approximately 10.2% of our leased properties and approximately 10.2% of the revenues received under leases as of June 30, 2024. Our properties, including the Kerrow Restaurant Operating Business, are located in 47 states. There are no concentrations of 10% or greater of total rental revenue in any one state.

We are exposed to credit risk with respect to cash held at various financial institutions, access to our credit facility, and amounts due or payable under our derivative contracts. At June 30, 2024, our exposure to risk related to amounts due to us on our derivative instruments totaled $23.9 million, and the counterparty to such instruments are investment grade financial institutions. Our credit risk exposure with regard to our cash and the $223.0 million available capacity under the revolver portion of our credit facility is spread among a diversified group of investment grade financial institutions.

NOTE 4 – REAL ESTATE INVESTMENTS, NET AND INTANGIBLE ASSETS AND LIABILITIES, NET

Real Estate Investments, Net

Real estate investments, net, which consist of land, buildings and improvements leased to others subject to net operating leases and those utilized in the operations of Kerrow Restaurant Operating Business are summarized as follows:

(In thousands)	June 30, 2024			December 31, 2023
Land	$	1,264,216		$	1,240,865
Buildings and improvements		1,608,505			1,572,590
Equipment		136,039			135,966
Total gross real estate investments		3,008,760			2,949,421
Less: Accumulated depreciation		(757,054	)		(738,946	)
Total real estate investments, net		2,251,706			2,210,475
Intangible lease assets, net		114,087			118,027
Total Real Estate Investments and Intangible Lease Assets, Net	$	2,365,793		$	2,328,502

During the six months ended June 30, 2024, the Company invested $63.8 million, including transaction costs, in 21 properties located in thirteen states, and allocated the investment as follows: $23.4 million to land, $35.9 million to buildings and improvements, and $4.5 million to intangible assets. There was no contingent consideration associated with these acquisitions. These properties are 100% occupied under net leases, with a weighted average remaining lease term of 12.2 years as of June 30, 2024. During the six months ended June 30, 2024, no properties were sold.

During the six months ended June 30, 2023, the Company invested $195.0 million, including transaction costs, in 59 properties located in twenty-four states, and allocated the investment as follows: $70.7 million to land, $105.1 million to buildings and improvements and $19.2 million to intangible assets. There was no contingent consideration associated with these acquisitions. These properties were 100% occupied under net leases, with a weighted average remaining lease term of 12.1 years as of June 30, 2023. During the six months ended June 30, 2023, the Company sold four properties with a combined net book value of $11.0 million for a realized gain of $1.7 million.

During the six months ended June 30, 2023, the Company exercised its option to purchase one of the properties where the Company was the lessee under the ground lease. This lease was previously accounted for as a finance lease. This purchase resulted in an increase in land and corresponding decrease in finance lease right-of-use assets of $2.3 million.

Intangible Lease Assets and Liabilities, Net

Acquired in-place lease intangibles are amortized over the remaining lease term as depreciation and amortization expense. Above-market and below-market leases are amortized over the initial term of the respective leases as an adjustment to rental revenue. Lease incentives are amortized over the initial term of the respective leases as an adjustment to rental revenue. Intangible lease liabilities are included in Other liabilities in our Consolidated Balance Sheets.

13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The following tables detail intangible lease assets and liabilities.

(In thousands)	June 30, 2024			December 31, 2023
Acquired in-place lease intangibles	$	141,225		$	136,940
Above-market leases		13,821			13,821
Finance leases - right of use asset (1)		14,040			14,040
Lease incentives		9,603			8,224
Tenant improvements intangibles		3,605			3,605
Direct lease costs		547			360
Total		182,841			176,990
Less: Accumulated amortization		(68,754	)		(58,963	)
Intangible Lease Assets, Net	$	114,087		$	118,027

(1)See Note 5 - Leases for additional information on finance leases - right of use assets.

(In thousands)	June 30, 2024			December 31, 2023
Below-market leases	$	2,610		$	2,610
Less: Accumulated amortization		(1,518	)		(1,414	)
Intangible Lease Liabilities, Net	$	1,092		$	1,196

The value of acquired in-place leases amortized and included in depreciation and amortization expense was $4.2 million and $4.0 million for the three months ended June 30, 2024 and 2023, respectively, and $8.6 million and $7.9 million for the six months ended June 30, 2024 and 2023, respectively. The value of above-market and below-market leases amortized as an adjustment to revenue was $292 thousand and $338 thousand for the three months ended June 30, 2024 and 2023, respectively, and $599 thousand and $692 thousand for the six months ended June 30, 2024 and 2023, respectively. For the three months ended June 30, 2024 and 2023, lease incentive amortization was $195 thousand and $146 thousand, respectively, and $431 thousand and $281 thousand for the six months ended June 30, 2024 and 2023, respectively.

At June 30, 2024, the total weighted average amortization period remaining for our intangible lease assets and liabilities was 8.5 years, and the individual weighted average amortization period remaining for acquired in-place lease intangibles, above-market leases, below-market leases, lease incentives, and tenant improvement intangible was 8.1 years, 6.4 years, 10.1 years, 11.3 years, and 14.7 years, respectively.

Amortization of Lease Intangibles

The following table presents the estimated impact during the next five years and thereafter related to the amortization of in-place lease intangibles, and above-market and below-market lease intangibles for properties held for investment.

(In thousands)	June 30,
2024 (Six Months)	$	8,714
2025		15,528
2026		13,753
2027		11,372
2028		8,957
Thereafter		32,953
Total Future Amortization	$	91,277

NOTE 5 – LEASES

Operating Leases as Lessee

As a lessee we record ROU assets and lease liabilities for the two ground leases at our Kerrow Restaurant Operating Business and a corporate office space, both of which qualified as operating leases. In calculating the lease obligations under both the ground leases and office lease, we used discount rates estimated to be equal to what the Company would have to pay to borrow on a collateralized basis over a similar term, for an amount equal to the lease payments, in a similar economic environment.

14

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Operating Lease Liability

Maturities of operating lease liabilities were as follows:

(In thousands)	June 30,
2024 (Six Months)	$	361
2025		470
2026		310
2027		319
2028		319
Thereafter		4,433
Total Payments		6,212
Less: Interest		(1,830	)
Operating Lease Liability	$	4,382

The weighted-average discount rate for operating leases at June 30, 2024 was 4.39%. The weighted-average remaining lease term was 15.8 years.

Rental expense was $232 thousand and $217 thousand for the three months ended June 30, 2024 and 2023, respectively. Rental expense was $459 thousand and $457 thousand for the six months ended June 30, 2024 and 2023, respectively.

Operating Leases as Lessor

Our leases consist primarily of single-tenant, net leases, in which the tenants are responsible for making payments to third parties for operating expenses such as property taxes, insurance, and other costs associated with the properties leased to them. In leases where costs are paid by the Company and reimbursed by lessees, such payments are considered variable lease payments and recognized in rental revenue.

The following table shows the components of rental revenue.

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2024		2023		2024		2023
Lease revenue - operating leases	$	56,223	$	50,593	$	112,111	$	100,267
Variable lease revenue (tenant reimbursements)		2,316		2,250		5,001		4,773
Total Rental Revenue	$	58,539	$	52,843	$	117,112	$	105,040

Future Minimum Lease Payments to be Received

The following table presents the scheduled minimum future contractual rent to be received under the remaining non-cancelable term of the operating leases. The table presents future minimum lease payments due during the initial lease term only as lease renewal periods are exercisable at the option of the lessee.

(In thousands)	June 30,
2024 (Six Months)	$	112,003
2025		223,500
2026		222,070
2027		214,014
2028		187,835
Thereafter		852,160
Total Future Minimum Lease Payments	$	1,811,582

Ground Leases as Lessee

As of June 30, 2024 and December 31, 2023, the Company had finance ground lease assets aggregating $13.9 million and $14.0 million, respectively. These assets are included in intangible lease assets, net in the Consolidated Balance Sheets. The Company did not recognize a lease liability as no payments are due in the future under the leases. The Company’s ground lease assets have remaining lease terms ranging from 59 years to 95 years, with options to extend certain of the lease terms for additional ninety-nine year terms, and the option to purchase the assets. The weighted average remaining non-cancelable lease term for the ground leases was 90 years at June 30, 2024.

NOTE 6 – DEBT, NET OF DEFERRED FINANCING COSTS

At June 30, 2024, our debt consisted of (1) $515 million of non-amortizing term loans and (2) $625 million of senior, unsecured, fixed rate notes. At December 31, 2023, our debt consisted of (1) $430 million of non-amortizing term loans and (2) $675 million of

15

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

senior, unsecured, fixed rate notes. At June 30, 2024 and December 31, 2023, we had outstanding borrowings of $27 million and $16 million, respectively, under the revolving credit facility, and there were no outstanding letters of credit. At June 30, 2024, we had $223 million of borrowing capacity under the revolving credit facility. The revolving credit facility will mature on November 9, 2025 with a six month extension option. The weighted average interest rate on the term loans before consideration of the interest rate hedge described in Note 7 - Derivative Financial Instruments was 6.39% and 6.40% at June 30, 2024 and December 31, 2023, respectively. The weighted average interest rate on the revolving credit facility was 6.46% at June 30, 2024.

Revolving Credit and Term Loan Agreement

On March 14, 2024, FCPT entered into an Incremental Amendment to the Third Amended and Restated Revolving Credit and Term Loan Agreement with a group of existing lenders (the “Credit Agreement”). The Company utilized the accordion feature of the Third Amended and Restated Revolving Credit and Term Loan Agreement to enter into a new $85 million term loan (the “Term Loan”), the proceeds from which were used to repay the $50 million of senior unsecured notes payable due in June 2024. The Term Loan matures in March 2027 with one twelve month extension exercisable at the Company’s option, subject to certain conditions.

The following table presents the Term Loan balances.

						Outstanding Balance
(Dollars in thousands)	Maturity Date	Interest Rate				June 30, 2024		December 31, 2023
Term Loans:
Term loan due 2025	Nov 2025		6.42	%	(a)		150,000		150,000
Term loan due 2026	Nov 2026		6.42	%	(a)		100,000		100,000
Term loan due 2027	Jan 2027		6.37	%	(a)		90,000		90,000
Term loan due 2027	Mar 2027		6.37	%	(a)(b)		85,000		—
Term loan due 2028	Jan 2028		6.37	%	(a)		90,000		90,000
Total Term Loans						$	515,000	$	430,000

(a)Loan is a variable‑rate loan which resets at Daily Simple SOFR + the applicable credit spread of 0.95% to 1.00% at June 30, 2024.

(b)Loan has a 12 month extension exercisable at the Company's option, subject to certain conditions.

Note Purchase Agreement

The following table presents the senior unsecured fixed rate notes balance.

					Outstanding Balance
(Dollars in thousands)	Maturity Date	Interest Rate			June 30, 2024		December 31, 2023
Notes Payable:
Senior unsecured fixed rate note, issued June 2017	Jun 2024		4.68	%	$	—	$	50,000
Senior unsecured fixed rate note, issued December 2018	Dec 2026		4.63	%		50,000		50,000
Senior unsecured fixed rate note, issued June 2017	Jun 2027		4.93	%		75,000		75,000
Senior unsecured fixed rate note, issued December 2018	Dec 2028		4.76	%		50,000		50,000
Senior unsecured fixed rate note, issued April 2021	Apr 2029		2.74	%		50,000		50,000
Senior unsecured fixed rate note, issued March 2020	Jun 2029		3.15	%		50,000		50,000
Senior unsecured fixed rate note, issued March 2020	Apr 2030		3.20	%		75,000		75,000
Senior unsecured fixed rate note, issued March 2022	Mar 2031		3.09	%		50,000		50,000
Senior unsecured fixed rate note, issued April 2021	Apr 2031		2.99	%		50,000		50,000
Senior unsecured fixed rate note, issued March 2022	Mar 2032		3.11	%		75,000		75,000
Senior unsecured fixed rate note, issued July 2023	Jul 2033		6.44	%		100,000		100,000
Total Notes					$	625,000	$	675,000

Debt Maturities

The following presents scheduled principal payments related to the Company’s debt.

(In thousands)	June 30,
Remainder of 2024	$	—
2025		177,000
2026		150,000
2027		250,000
2028		140,000
Thereafter		450,000
Total Scheduled Principal Payments	$	1,167,000

16

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Deferred Financing Costs

At June 30, 2024 and December 31, 2023, term loan and revolving credit facility net unamortized deferred financing costs were approximately $4.7 million and $4.3 million, respectively. During the three months ended June 30, 2024 and 2023, amortization of deferred financing costs was $490 thousand and $403 thousand, respectively. During the six months ended June 30, 2024 and 2023, amortization of deferred financing costs was $922 thousand and $805 thousand, respectively.

At June 30, 2024 and December 31, 2023, senior unsecured notes net unamortized deferred financing costs were approximately $3.7 million and $4.1 million, respectively. During the three months ended June 30, 2024 and 2023, amortization of deferred financing costs was $163 thousand and $161 thousand, respectively. During the six months ended June 30, 2024 and 2023, amortization of deferred financing costs was $369 thousand and $323 thousand, respectively.

The Company was in compliance with all debt covenants at June 30, 2024 and December 31, 2023.

NOTE 7 – DERIVATIVE FINANCIAL INSTRUMENTS

Risk Management Objective of Using Derivatives

We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposures to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of our debt funding and the use of derivative financial instruments. Specifically, we enter into derivative financial instruments to manage exposures that arise from business activities that result in our receipt or payment of future cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash payments principally related to our borrowings.

Cash Flow Hedges of Interest Rate Risk

Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish these objectives, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The change in the fair value of derivatives designated and that qualify as cash flow hedges is recorded on our consolidated balance sheet in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the six months ended June 30, 2024 and 2023, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt.

As of June 30, 2024, $460 million of our variable-rate debt is hedged by swaps with notional values totaling $460 million. As of December 31, 2023, $375 million of our variable-rate debt was hedged by swaps with notional values totaling $375 million.

During the six months ended June 30, 2024, we entered into four interest rate swaps to hedge the interest rate variability associated with the term loan portion of our credit facility.

Product	Fixed Rate			Notional Amount ($ in thousands)		Index	Effective Date	Maturity Date
Swap		1.88	%	$	150,000	Daily Simple SOFR + 10 bps	11/09/2022	11/09/2024
Swap		0.44	%		50,000	Daily Simple SOFR + 10 bps	10/25/2022	11/09/2025
Swap		2.70	%		25,000	Daily Simple SOFR + 10 bps	11/09/2022	11/09/2025
Swap		4.12	%		25,000	Daily Simple SOFR + 10 bps	03/09/2023	11/09/2026
Swap (1)		0.82	%		50,000	Daily Simple SOFR + 10 bps	11/09/2023	11/09/2025
Swap		3.65	%		25,000	Daily Simple SOFR + 10 bps	11/09/2023	11/09/2026
Swap		4.25	%		25,000	Daily Simple SOFR + 10 bps	11/09/2023	11/09/2028
Swap		4.42	%		25,000	Daily Simple SOFR + 10 bps	11/13/2023	11/09/2028
Swap		4.04	%		25,000	Daily Simple SOFR + 10 bps	04/09/2024	04/09/2029
Swap		3.91	%		30,000	Daily Simple SOFR + 10 bps	04/09/2024	04/09/2029
Swap		3.88	%		30,000	Daily Simple SOFR + 10 bps	04/09/2024	04/09/2029
Swap		3.97	%		25,000	Daily Simple SOFR + 10 bps	11/09/2024	11/09/2029
Swap		1.48	%		50,000	Daily Simple SOFR + 10 bps	11/10/2025	11/09/2027
Swap		1.54	%		50,000	Daily Simple SOFR + 10 bps	11/10/2025	11/09/2027
Swap		2.25	%		25,000	1 month Term SOFR	11/10/2025	11/09/2028
Swap		1.49	%		50,000	Daily Simple SOFR + 10 bps	11/10/2025	11/09/2028
Swap		2.02	%		50,000	Daily Simple SOFR + 10 bps	11/10/2025	11/09/2028

(1)In November 2024, the notional amount of the swap will increase to $150 million

The Company enters into forward-starting interest rate swap agreements to hedge against changes in future cash flows resulting from changes in interest rates from the trade date through the forecasted issuance date of debt. During the six months ended June 30,

17

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

2024, the Company terminated one cash flow hedge in connection with the $85 million Term Loan that was entered into on March 11, 2024 and funded on March 14, 2024. This cash flow hedge had a total notional value of $25 million and was entered into in August 2023 to hedge the interest rate on a future offering or term loan. The swap was terminated on February 28, 2024, with the corresponding asset of $211 thousand which will be amortized over the next 10 years as an increase to interest expense.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. We estimate that over the next twelve months an additional $11.4 million will be reclassified to earnings as a reduction to interest expense.

Non-designated Hedges

We do not use derivatives for trading or speculative purposes. During the six months ended June 30, 2024 and 2023, we did not have any derivatives that were not designated as cash flow hedges for accounting purposes.

Tabular Disclosure of Fair Values of Derivative Instruments on the Consolidated Balance Sheets

The table below presents the fair value of our derivative financial instruments as well as their classification on the consolidated balance sheet.

	Derivative Assets					Derivative Liabilities
	Balance	Fair Value at				Balance	Fair Value at
(Dollars in thousands)	Sheet Location	June 30, 2024		December 31, 2023		Sheet Location	June 30, 2024		December 31, 2023
Derivatives designated as hedging instruments:
Interest rate swaps	Derivative assets	$	24,293	$	20,952	Derivative liabilities	$	348	$	2,968
Total		$	24,293	$	20,952		$	348	$	2,968

Tabular Disclosure of the Effect of Derivative Instruments on the Consolidated Statements of Comprehensive Income (Loss)

The table below presents the effect of our interest rate swaps on comprehensive income.

(Dollars in thousands)	Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)		Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)			Total Amount of Interest Expense Presented in the Consolidated Statements of Income
Three months ended June 30, 2024	$	3,486	Interest expense	$	(3,388	)	$	(12,324	)
Three months ended June 30, 2023		11,005	Interest expense		(2,562	)		(10,051	)
Six months ended June 30, 2024		12,156	Interest expense		(6,490	)		(24,605	)
Six months ended June 30, 2023		5,412	Interest expense		(4,639	)		(19,969	)

Tabular Disclosure Offsetting Derivatives

The table below presents a gross presentation, the effects of offsetting, and a net presentation of our derivatives at June 30, 2024 and December 31, 2023. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the consolidated balance sheets.

Offsetting of Derivative Assets

	Gross Amounts of		Gross Amounts Offset in the Consolidated		Net Amounts of Assets Presented in the Consolidated		Gross Amounts Not Offset in the Consolidated Balance Sheet
(In thousands)	Recognized Assets		Balance Sheet		Balance Sheet		Financial Instruments			Cash Collateral Received		Net Amount
June 30, 2024	$	24,293	$	—	$	24,293	$	(348	)	$	—	$	23,945
December 31, 2023		20,952		—		20,952		(920	)		—		20,032

18

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Offsetting of Derivative Liabilities

	Gross Amounts of		Gross Amounts Offset in the Consolidated		Net Amounts of Liabilities Presented in the Consolidated		Gross Amounts Not Offset in the Consolidated Balance Sheet
(In thousands)	Recognized Liabilities		Balance Sheet		Balance Sheet		Financial Instruments			Cash Collateral Posted		Net Amount
June 30, 2024	$	348	$	—	$	348	$	(348	)	$	—	$	—
December 31, 2023		2,968		—		2,968		(920	)		—		2,048

Credit-risk-related Contingent Features

The agreement with our derivative counterparty provides that if we default on any of our indebtedness, including default for which repayment of the indebtedness has not been accelerated by the lender, then we could also be declared in default on our derivative obligations.

At June 30, 2024 and December 31, 2023, the fair value of derivatives in a net asset position related to these agreements was $23.9 million and $18.0 million, respectively. As of June 30, 2024, we have not posted any collateral related to these agreements. If we or our counterparty had breached any of these provisions at June 30, 2024, we would have been entitled to the termination value of approximately $23.9 million.

NOTE 8 – SUPPLEMENTAL DETAIL FOR CERTAIN COMPONENTS OF CONSOLIDATED BALANCE SHEETS

Other Assets

The components of other assets were as follows:

(In thousands)	June 30, 2024		December 31, 2023
Operating lease right-of-use asset	$	3,664	$	3,923
Restricted cash		—		8,461
Prepaid acquisition costs and deposits		919		1,364
Accounts receivable, net		2,521		2,985
Prepaid assets		1,295		1,176
Food and beverage inventories		198		238
Other		1,683		1,711
Total Other Assets	$	10,280	$	19,858

Other Liabilities

The components of other liabilities were as follows:

(In thousands)	June 30, 2024		December 31, 2023
Accrued interest expense	$	7,719	$	7,424
Tenant improvements payable and deposits		1,034		7,835
Operating lease liability		4,382		4,642
Accrued tenant property tax		2,915		2,518
Intangible lease liabilities, net		1,092		1,196
Accrued compensation		1,815		3,020
Accrued operating expenses		313		262
Accounts payable		373		1,263
Other		1,839		2,106
Total Other Liabilities	$	21,482	$	30,266

NOTE 9 – INCOME TAXES

We believe that we have been organized and have operated in conformity with the requirements for qualification and taxation as a REIT commencing with our taxable year ended December 31, 2016, and we intend to continue to operate in a manner that will enable us to maintain our qualification as a REIT. So long as we qualify as a REIT, we generally will not be subject to federal income tax on our net income that we distribute currently to our stockholders. Accordingly, no provision for federal income taxes has been included in the accompanying consolidated financial statements for the six months ended June 30, 2024 related to the REIT.

19

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Income tax expense consists of federal, state, and local income taxes incurred by FCPT’s TRS, and state and local income taxes incurred by FCPT on its lease portfolio. During the three months ended June 30, 2024 and 2023, we recorded income tax expense of $86 thousand and $91 thousand, respectively. During the six months ended June 30, 2024 and 2023, we recorded income tax expense of $113 thousand and $139 thousand, respectively.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts for income tax purposes, as well as operating loss and tax credit carryforwards. The Company evaluates the realizability of its deferred tax assets and recognizes a valuation allowance if, based on the available evidence, both positive and negative, it is more likely than not that some portion or all of its deferred tax assets will not be realized. When evaluating the realizability of its deferred tax assets, the Company considers, among other matters, estimates of expected future taxable income, nature of current and cumulative losses, existing and projected book/tax differences, tax planning strategies available, and the general and industry specific economic outlook. This realizability analysis is inherently subjective, as it requires the Company to forecast its business and general economic environment in future periods. During the three and six months ended June 30, 2024, $20 thousand and $92 thousand, respectively, was recorded as a deferred tax benefit related to routine book-tax differences within income tax expense in the Consolidated Statements of Income. During the three and six months ended June 30, 2023, $4 thousand and $48 thousand, respectively, was recorded as a deferred tax benefit within income tax expense in the Consolidated Statements of Income.

NOTE 10 – EQUITY

Preferred Stock

At June 30, 2024 and December 31, 2023, the Company was authorized to issue 25,000,000 shares, $0.0001 par value per share of preferred stock. There were no shares issued and outstanding at June 30, 2024 and December 31, 2023.

Common Stock

At June 30, 2024 and December 31, 2023, the Company was authorized to issue 500,000,000 shares, $0.0001 par value per share of common stock. At June 30, 2024, there were 92,102,202 shares of the Company's common stock issued and outstanding.

On March 11, 2024, we declared a dividend of $0.3450 per share, which was paid in April 2024 to common stockholders of record as of March 28, 2024.

On June 11, 2024, we declared a dividend of $0.3450 per share, which was paid in July 2024 to common stockholders of record as of June 28, 2024.

Common Stock Issuance Under the At-The-Market Program

In November 2022, the Company entered into its ATM program (the “current ATM program”), pursuant to which shares of the Company’s common stock having an aggregate gross sales price of up to $450.0 million may be offered and sold (1) by the Company to, or through, a consortium of banks acting as its sales agents or (2) by a consortium of banks acting as forward sellers on behalf of any forward purchasers contemplated thereunder, in each case by means of ordinary brokers’ transactions on the NYSE or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices, by privately negotiated transactions (including block sales) or by any other methods permitted by applicable law. In connection with the Company’s current ATM program, the Company may enter into forward sale agreements with certain financial institutions acting as forward purchasers whereby, at the Company's discretion, the forward purchasers may borrow and sell shares of common stock. The use of forward sale agreements allows the Company to lock in a share price on the sale of shares of common stock at the time the respective forward sale agreements are executed but defer settling the forward sale agreements and receiving the proceeds from the sale of shares until a later date.

The Company did not execute or settle forward sale agreements during the six months ended June 30, 2024.

During the three months ended June 30, 2024, the Company issued 99,656 shares under the current ATM program at a weighted average share price of $23.93 for net proceeds of $2.4 million. During the six months ended June 30, 2024, the Company issued 380,570 shares under the current ATM program at a weighted average share price of $24.39 for net proceeds of $9.3 million.

During the six months ended June 30, 2023, the Company executed forward sale agreements with financial institutions acting as forward purchasers under the current ATM program to sell 1,907,946 shares of common stock at a weighted average sales price of $27.73 per share before sales commissions and offering expenses. During the three months ended June 30, 2023, the Company physically settled its forward sale agreements and issued 4,113,788 shares at a weighted average share price of $26.81 for net proceeds of $110.3 million. During the six months ended June 30, 2023, the Company physically settled its forward sale agreements and issued 4,437,970 shares at a weighted average share price of $26.88 for net proceeds of $119.3 million.

During the three months ended June 30, 2023, the Company issued 4,463,788 shares under the current ATM program, including physically settled forward sale agreements, at a weighted average share price of $26.72 for net proceeds of $119.3 million. During the six months ended June 30, 2023, the Company issued 4,787,970 shares under the current ATM program, including physically settled forward sale agreements, at a weighted average share price of $26.79 for net proceeds of $128.3 million.

20

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

At June 30, 2024, there was $235.8 million available for issuance under the current ATM program.

Noncontrolling Interest

At June 30, 2024, there were 114,559 FCPT Operating Partnership Units (“OP units”) outstanding held by third parties. During the six months ended June 30, 2024, FCPT OP did not issue any OP units for consideration in real estate transactions. Generally, OP units participate in net income allocations and distributions and entitle their holder the right, subject to the terms set forth in the partnership agreement, to require FCPT OP to redeem all or a portion of the OP units held by such limited partner. At FCPT OP’s option, it may satisfy this redemption with cash or by exchanging non-registered shares of FCPT common stock on a one-for-one basis. Prior to the redemption of OP units, the limited partners participate in net income allocations and distributions in a manner equivalent to the common stockholders. The redemption value of outstanding non-controlling interest OP units was $2.8 million and $2.9 million as of June 30, 2024 and December 31, 2023, respectively.

At June 30, 2024, FCPT was the owner of approximately 99.88% of FCPT’s OP units. The remaining 0.12%, or 114,559 of FCPT’s OP units were held by unaffiliated limited partners. During the three and six months ended June 30, 2024, FCPT OP distributed $39 thousand and $79 thousand, respectively, to its unaffiliated limited partners.

Earnings Per Share

The following table presents the computation of basic and diluted net earnings per common share.

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands except for shares and per share data)	2024		2023		2024		2023
Average common shares outstanding – basic		91,807,764		87,366,335		91,763,619		86,604,202
Net effect of dilutive equity awards		186,298		189,676		212,663		220,948
Average common shares outstanding – diluted		91,994,062		87,556,011		91,976,282		86,825,150
Net income available to common shareholders	$	24,672	$	23,625	$	48,716	$	46,749
Basic net earnings per share	$	0.27	$	0.27	$	0.53	$	0.54
Diluted net earnings per share	$	0.27	$	0.27	$	0.53	$	0.54

For the three months ended June 30, 2024 and 2023, the number of outstanding equity awards that were anti-dilutive totaled 462,388 and 385,728, respectively. For the six months ended June 30, 2024 and 2023, the number of outstanding equity awards that were anti-dilutive totaled 436,023 and 354,456, respectively.

Exchangeable OP units have been omitted from the denominator for the purpose of computing diluted earnings per share since FCPT OP, at its option, may satisfy a redemption with cash or by exchanging non-registered shares of FCPT common stock. The weighted average exchangeable OP units outstanding for the three and six months ended June 30, 2024 and 2023 was 114,559 and 114,559, respectively.

NOTE 11 – STOCK-BASED COMPENSATION

On June 10, 2022, the Board of Directors of FCPT adopted, and FCPT’s stockholders approved, the Amended and Restated Four Corners Property Trust, Inc. 2015 Omnibus Incentive Plan (the “Amended Plan”) to, among other things, increase the maximum number of shares of our common stock reserved for issuance under the 2015 Plan by 1,500,000 shares to 3,600,000 shares.

At June 30, 2024, 1,445,751 shares of common stock were available for award under the Plan. The unamortized compensation cost of awards issued under the Plan totaled approximately $11.9 million at June 30, 2024 as shown in the following table.

(In thousands)	Restricted Stock Units			Restricted Stock Awards			Performance Stock Awards			Total
Unrecognized compensation cost at January 1, 2024	$	1,672		$	3,142		$	2,648		$	7,462
Equity grants		1,974			3,339			3,064			8,377
Equity grant forfeitures		(322	)		(144	)		(100	)		(566	)
Equity compensation expense		(608	)		(1,595	)		(1,168	)		(3,371	)
Unrecognized Compensation Cost at June 30, 2024	$	2,716		$	4,742		$	4,444		$	11,902

At June 30, 2024, the weighted average amortization period remaining for all of our equity awards was 2.1 years.

Restricted Stock Units

RSUs have been granted at a value equal to the five-day average or day of closing market price of our common stock on the date of grant, and will be settled in stock at the end of their vesting periods, which range between one and five years.

21

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

At June 30, 2024 and December 31, 2023, there were 243,685 and 191,081 RSUs outstanding, respectively. During the three months ended June 30, 2024, 50,472 RSUs were granted, 887 RSUs were forfeited, and 11,382 RSUs vested. During the six months ended June 30, 2024, 80,997 RSUs were granted, 11,772 RSUs were forfeited, and 16,621 RSUs vested. Restrictions on these RSUs lapse through 2028.

Restricted Stock Awards

RSAs have been granted at a value equal to the five-day average closing market price of our common stock on the date of grant and will be settled in stock at the end of their vesting periods, which range between one and three years.

At June 30, 2024 and December 31, 2023, there were 233,212 and 198,636 RSAs outstanding, respectively. During the three months ended June 30, 2024, 5,417 RSAs were granted, 4,125 RSAs were forfeited, and no RSAs vested. During the six months ended June 30, 2024, 137,983 RSAs were granted, 5,495 RSAs were forfeited, and restrictions on 97,912 RSAs lapsed and were distributed, of which 40,896 RSAs were designated for tax withholdings. Restrictions on these RSAs lapse through 2027. The Company expects all RSAs to vest.

Performance-Based Restricted Stock Awards

At June 30, 2024 and December 31, 2023, the target number of PSUs that were unvested was 245,004 and 225,654, respectively. During the three months ended June 30, 2024, PSUs with a target number of 5,045 shares were granted, no PSUs vested, and 767 PSUs were forfeited. During the six months ended June 30, 2024, PSUs with a target number of 95,682 shares were granted and 3,309 PSUs were forfeited. PSUs with a target number of 73,023 shares vested with a total shareholder return of 0.0% of target, resulting in the distribution of no shares.

The performance period of the unvested grants run from January 1, 2024 through December 31, 2026, from January 1, 2023 through December 31, 2025, and from January 1, 2022 through December 31, 2024. Pursuant to the PSU award agreement, each participant is eligible to vest in and receive shares of the Company's common stock based on the initial target number of shares granted multiplied by a percentage range between 0% and 200%. The percentage range is based on the attainment of a combination of relative shareholder return and total shareholder return of the Company compared to certain specified peer groups of companies during the performance period. The grant date fair values of PSUs were determined through Monte-Carlo simulations using the following assumptions: our common stock closing price at the grant date, the average closing price of our common stock price for the 20 trading days prior to the grant date and a range of performance-based vesting based on estimated total stockholder return over a three year performance period. For the 2024 PSU grant, the Company used an implied volatility assumption of 21.9% (based on historical volatility), risk free rate of 4.09%, and a 0% dividend yield (the mathematical equivalent to reinvesting the dividends over the three-year performance period as is consistent with the terms of the PSUs), which resulted in a grant date fair value of $2.9 million.

Based on the grant date fair value, the Company expects to recognize $4.4 million in compensation expense on a straight-line basis over the remaining requisite service period associated with the unvested PSU awards.

NOTE 12 – FAIR VALUE MEASUREMENTS

The carrying amounts of certain of the Company’s financial instruments including cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair value due either to length of maturity or interest rates that approximate prevailing market rates. The carrying value of derivative financial instruments equal fair value in accordance with U.S. GAAP. Determining which category an asset or liability falls within the hierarchy requires significant judgment. We evaluate hierarchy disclosures each reporting period.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the assets and liabilities recorded that are reported at fair value on our Consolidated Balance Sheets on a recurring basis.

June 30, 2024
(In thousands)	Level 1		Level 2		Level 3		Total
Assets
Derivative assets	$	—	$	24,293	$	—	$	24,293
Liabilities
Derivative liabilities	$	—	$	348	$	—	$	348

December 31, 2023
(In thousands)	Level 1		Level 2		Level 3		Total
Assets
Derivative assets	$	—	$	20,952	$	—	$	20,952
Liabilities
Derivative liabilities	$	—	$	2,968	$	—	$	2,968

22

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Derivative Financial Instruments

Currently, we use interest rate swaps to manage our interest rate risk associated with our notes payable. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.

The fair values of interest rate options are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rate of the caps. The variable interest rates used in the calculation of projected receipts on the cap are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities.

To comply with the provisions of ASC 820, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees.

Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by ourselves and our counterparties. We have determined that the significance of the impact of the credit valuation adjustments made to our derivative contracts, which determination was based on the fair value of each individual contract, was not significant to the overall valuation. As a result, all of our derivatives held at June 30, 2024, and December 31, 2023 were classified as Level 2 of the fair value hierarchy.

Fair Value of Certain Financial Liabilities

The following table presents the carrying value and fair value of certain financial liabilities that are recorded on our Consolidated Balance Sheets. The fair value of the debt (Level 2) is determined using the present value of the contractual cash flows, discounted at the current market cost of debt.

	June 30, 2024				December 31, 2023
(In thousands)	Carrying Value(1)		Fair Value		Carrying Value(1)		Fair Value
Term loan due November 2025	$	150,000	$	149,806	$	150,000	$	149,496
Term loan due November 2026		100,000		100,051		100,000		99,799
Term loan due January 2027		90,000		89,806		90,000		89,524
Term loan due March 2027		85,000		86,176		—		—
Term loan due January 2028		90,000		90,741		90,000		89,208
Senior fixed note due June 2024		—		—		50,000		49,641
Senior fixed note due December 2026		50,000		48,761		50,000		49,227
Senior fixed note due June 2027		75,000		73,392		75,000		74,282
Senior fixed note due December 2028		50,000		48,416		50,000		49,195
Senior fixed note due April 2029		50,000		44,341		50,000		44,742
Senior fixed note due June 2029		50,000		44,990		50,000		45,473
Senior fixed note due April 2030		75,000		66,455		75,000		67,262
Senior fixed note due March 2031		50,000		42,526		50,000		43,313
Senior fixed note due April 2031		50,000		42,825		50,000		43,441
Senior fixed note due March 2032		75,000		63,654		75,000		64,818
Senior fixed note due July 2033		100,000		106,168		100,000		109,521
Revolving credit facility due November 2025		27,000		14,965		16,000		15,946

(1)Carrying values exclude deferred financing costs

23

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

NOTE 13 – COMMITMENTS AND CONTINGENCIES

Litigation

We are subject to private lawsuits, administrative proceedings and claims that arise in the ordinary course of our business from time to time. A number of these lawsuits, proceedings and claims may exist at any given time. These matters typically involve claims from guests, employee wage and hour claims and others related to operational issues common to the restaurant industry. We record our best estimate of a loss when the loss is considered probable. When a liability is probable and there is a range of estimated loss with no best estimate in the range, we record the minimum estimated liability related to the lawsuits, proceedings or claims. While the resolution of a lawsuit, proceeding or claim may have an impact on our financial results for the period in which it is resolved, we believe that the maximum liability related to probable lawsuits, proceedings and claims in which we are currently involved, individually and in the aggregate, will not have a material adverse effect on our financial position, results of operations or liquidity.

NOTE 14 – SEGMENTS

During the three and six months ended June 30, 2024 and 2023, we operated in two segments: real estate operations and restaurant operations. Our segments are based on our organizational and management structure, which aligns with how our results are monitored and performance is assessed. Expenses incurred at our corporate office are allocated to real estate operations. The accounting policies of the reportable segments are the same as those described in Note 2 - Summary of Significant Accounting Policies.

The following tables present financial information by segment.

Three Months Ended June 30, 2024

(In thousands)	Real Estate Operations			Restaurant Operations			Intercompany			Total
Revenues:
Rental revenue	$	58,539		$	—		$	—		$	58,539
Intercompany rental revenue		217			—			(217	)		—
Restaurant revenue		—			7,940			—			7,940
Total revenues		58,756			7,940			(217	)		66,479
Operating expenses:
General and administrative		6,004			—			—			6,004
Depreciation and amortization		13,157			188			—			13,345
Property expenses		2,836			—			—			2,836
Restaurant expenses		—			7,549			(217	)		7,332
Total operating expenses		21,997			7,737			(217	)		29,517
Interest expense		(12,324	)		—			—			(12,324	)
Other income		150			—			—			150
Realized gain on sale, net		—			—			—			—
Income tax expense		(62	)		(24	)		—			(86	)
Net Income	$	24,523		$	179		$	—		$	24,702

Three Months Ended June 30, 2023

(In thousands)	Real Estate Operations			Restaurant Operations			Intercompany			Total
Revenues:
Rental revenue	$	52,843		$	—		$	—		$	52,843
Intercompany rental revenue		214			—			(214	)		—
Restaurant revenue		—			7,845			—			7,845
Total revenues		53,057			7,845			(214	)		60,688
Operating expenses:
General and administrative		5,600			—			—			5,600
Depreciation and amortization		11,636			181			—			11,817
Property expenses		2,676			—			—			2,676
Restaurant expenses		—			7,411			(214	)		7,197
Total operating expenses		19,912			7,592			(214	)		27,290
Interest expense		(10,051	)		—			—			(10,051	)
Other income		226			—			—			226
Realized gain on sale, net		173			—			—			173
Income tax expense		(53	)		(38	)		—			(91	)
Net Income	$	23,440		$	215		$	—		$	23,655

24

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Six Months Ended June 30, 2024

(In thousands)	Real Estate Operations			Restaurant Operations		Intercompany			Total
Revenues:
Rental revenue	$	117,112		$	—	$	—		$	117,112
Intercompany rental revenue		433			—		(433	)		—
Restaurant revenue		—			15,834		—			15,834
Total revenues		117,545			15,834		(433	)		132,946
Operating expenses:
General and administrative		12,217			—		—			12,217
Depreciation and amortization		26,443			369		—			26,812
Property expenses		5,917			—		—			5,917
Restaurant expenses		—			15,329		(433	)		14,896
Total operating expenses		44,577			15,698		(433	)		59,842
Interest expense		(24,605	)		—		—			(24,605	)
Other income		390			—		—			390
Realized gain on sale, net		—			—		—			—
Income tax benefit (expense)		(121	)		8		—			(113	)
Net Income	$	48,632		$	144	$	—		$	48,776

Six Months Ended June 30, 2023

(In thousands)	Real Estate Operations			Restaurant Operations			Intercompany			Total
Revenues:
Rental revenue	$	105,040		$	—		$	—		$	105,040
Intercompany rental revenue		428			—			(428	)		—
Restaurant revenue		—			15,600			—			15,600
Total revenues		105,468			15,600			(428	)		120,640
Operating expenses:
General and administrative		11,655			—			—			11,655
Depreciation and amortization		23,630			363			—			23,993
Property expenses		5,843			—			—			5,843
Restaurant expenses		—			14,920			(428	)		14,492
Total operating expenses		41,128			15,283			(428	)		55,983
Interest expense		(19,969	)		—			—			(19,969	)
Other income		526			—			—			526
Realized gain on sale, net		1,735			—			—			1,735
Income tax expense		(105	)		(34	)		—			(139	)
Net Income	$	46,527		$	283		$	—		$	46,810

The following tables present supplemental information by segment.

Supplemental Segment Information at June 30, 2024

(In thousands)	Real Estate Operations			Restaurant Operations			Total
Total real estate investments	$	2,985,691		$	23,069		$	3,008,760
Accumulated depreciation		(749,091	)		(7,963	)		(757,054	)
Total real estate investments, net	$	2,236,600		$	15,106		$	2,251,706
Cash and cash equivalents	$	15,980		$	1,187		$	17,167
Total assets	$	2,463,929		$	21,985		$	2,485,914
Total debt, net of deferred financing costs	$	1,158,583		$	—		$	1,158,583

Supplemental Segment Information at December 31, 2023

(In thousands)	Real Estate Operations			Restaurant Operations			Total
Total real estate investments	$	2,926,425		$	22,996		$	2,949,421
Accumulated depreciation		(731,345	)		(7,601	)		(738,946	)
Total real estate investments, net	$	2,195,080		$	15,395		$	2,210,475
Cash and cash equivalents	$	14,776		$	1,546		$	16,322
Total assets	$	2,429,136		$	22,498		$	2,451,634
Total debt, net of deferred financing costs	$	1,112,689		$	—		$	1,112,689

25

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

NOTE 15 – SUBSEQUENT EVENTS

The Company reviewed its subsequent events and transactions that have occurred after June 30, 2024, the date of the Consolidated Balance Sheet, through August 1, 2024, and noted the following:

Acquisitions & Disposals

The Company invested $4.2 million in the acquisition of two net lease properties with an investment yield of approximately 6.8%, and approximately 4.6 years of lease term remaining. The Company funded the acquisitions with cash on hand. The Company anticipates accounting for the transactions as asset acquisitions in accordance with U.S. GAAP. There was no contingent liability associated with the transactions at June 30, 2024.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

Statements contained in this Quarterly Report on Form 10-Q, including the documents that are incorporated by reference, that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). Also, when Four Corners Property Trust, Inc. (the “Company”) uses any of the words “anticipate,” “assume,” “believe,” “estimate,” “expect,” “intend,” or similar expressions, Four Corners Property Trust, Inc. is making forward-looking statements. Although management believes that the expectations reflected in such forward-looking statements are based upon present expectations and reasonable assumptions, actual results could differ materially from those set forth in the forward-looking statements. Certain factors that could cause actual results or events to differ materially from those anticipated or projected are described in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, as such factors may be updated from time to time in our periodic filings with the Securities and Exchange Commission.

Given these uncertainties, readers are cautioned not to place undue reliance on such statements, which speak only as of the date of this Quarterly Report on Form 10-Q or any document incorporated herein by reference. Four Corners Property Trust, Inc. undertakes no obligation to publicly release any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.

The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included in the Annual Report on Form 10-K of Four Corners Property Trust, Inc. for the year ended December 31, 2023 and in the Quarterly Report on Form 10-Q of Four Corners Property Trust, Inc. for the quarter ended March 31, 2024. Any references to “FCPT,” “the Company,” “we,” “us,” or “our” refer to Four Corners Property Trust, Inc. as an independent, publicly traded, self-administered company.

All filings we make with the Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K, this and other quarterly reports on Form 10-Q, and our current reports on Form 8-K, and any amendments to those reports are available for free on our website, www.fcpt.com, as soon as reasonably practicable after they are filed with, or furnished to, the SEC. We do not intend our website to be an active link or to otherwise incorporate the information contained on our website into this report or other filings with the SEC. However, we use our website as a routine channel of distribution of company information, including press releases, presentations and supplemental information, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor our website in addition to following press releases, SEC filings and public conference calls and webcasts. Our filings can also be obtained for free on the SEC’s Internet website at www.sec.gov. We are providing our website address solely for the information of investors.

Overview

We are a Maryland corporation and a real estate investment trust (“REIT”) which owns, acquires and leases properties for use in the restaurant and retail industries. Substantially all of our business is conducted through Four Corners Operating Partnership, LP (“FCPT OP”), a Delaware limited partnership of which we are a majority limited partner and our wholly owned subsidiary, Four Corners GP, LLC (“FCPT GP”), is its sole general partner. We believe that we have operated in conformity with the requirements for qualification and taxation as a REIT for the taxable year ended December 31, 2023, and we intend to continue to operate in a manner that will enable us to maintain our qualification as a REIT.

Our revenues are primarily generated by leasing properties to tenants through net lease arrangements under which the tenants are primarily responsible for ongoing costs relating to the properties, including utilities, property taxes, insurance, common area maintenance charges, and maintenance and repair costs. We focus on income producing properties leased to high quality tenants in major markets across the United States. We also generate revenues by operating seven LongHorn Steakhouse restaurants located in the San Antonio, Texas area (the “Kerrow Restaurant Operating Business”) pursuant to franchise agreements with Darden.

In addition to managing our existing properties, our strategy includes investing in additional restaurant and retail properties to grow and diversify our existing portfolio. We expect this acquisition strategy will decrease our reliance on Darden and help us gain exposure to non-restaurant retail properties over time. We intend to purchase properties that are well located, occupied by durable concepts, with creditworthy tenants whose operating cash flows are expected to meaningfully exceed their lease payments to us. We seek to improve the probability of successful tenant renewal at the end of initial lease terms by acquiring properties that have high levels of operator profitability compared to rent payments and have absolute rent levels that generally reflect market rates.

During the six months ended June 30, 2024, FCPT acquired 21 properties for a total investment value of $63.8 million, including transaction costs. These properties are 100% occupied under net leases with a weighted average remaining lease term of 12.2 years.

At June 30, 2024, our lease portfolio had the following characteristics:

•1,132 properties located in 47 states and representing an aggregate leasable area of 7.7 million square feet;

•99.6% occupancy (based on leasable square footage);

•An average remaining lease term of 7.4 years (weighted by annualized base rent);

•An average annual rent escalation of 1.4% through December 31, 2029 (weighted by annualized base rent);

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•99.8% of the contractual base rent collected for the three months ended June 30, 2024; and

•58.7% investment-grade tenancy (weighted by annualized base rent).

Results of Operations

During the three and six months ended June 30, 2024 and 2023, we operated in two segments: real estate operations and restaurant operations. The following discussion includes the results of our operations for the three and six months ended June 30, 2024 and 2023 as summarized in the table below:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2024			2023			2024			2023
Revenues:
Rental revenue	$	58,539		$	52,843		$	117,112		$	105,040
Restaurant revenue		7,940			7,845			15,834			15,600
Total revenues		66,479			60,688			132,946			120,640
Operating expenses:
General and administrative		6,004			5,600			12,217			11,655
Depreciation and amortization		13,345			11,817			26,812			23,993
Property expenses		2,836			2,676			5,917			5,843
Restaurant expenses		7,332			7,197			14,896			14,492
Total operating expenses		29,517			27,290			59,842			55,983
Interest expense		(12,324	)		(10,051	)		(24,605	)		(19,969	)
Other income		150			226			390			526
Realized gain on sale, net		—			173			—			1,735
Income tax expense		(86	)		(91	)		(113	)		(139	)
Net income		24,702			23,655			48,776			46,810
Net income attributable to noncontrolling interest		(30	)		(30	)		(60	)		(61	)
Net Income Attributable to Common Shareholders	$	24,672		$	23,625		$	48,716		$	46,749

Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023

Real Estate Operations

Rental Revenue

Rental revenue increased $5.7 million, or 10.8%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This increase was due primarily to the acquisition of 58 leased properties during the year-over-year period from July 1, 2023 through June 30, 2024, which was partially offset by the disposal of three properties during the period. We do not anticipate these dispositions to have a material impact on future revenue. During the three months ended June 30, 2024, we recognized variable lease revenue, including costs paid by the lessor and reimbursed by the lessees within rental revenue of $2.3 million as compared to $2.3 million during the three months ended June 30, 2023. These amounts are also recognized in property expenses.

We recognize rental income on a straight-line basis to include the effect of base rent escalators, and free rent periods, if any.

General and Administrative Expenses

General and administrative expense is comprised of costs associated with staff, office rent, legal, accounting, information technology, and other professional services and other administrative services in association with our real estate operations and our REIT structure and reporting requirements. General and administrative expenses increased $404 thousand, or 7.2%, in the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to an increase in cash compensation-related expenses and increased non-cash stock compensation expense.

Depreciation and Amortization Expense

Depreciation and amortization expense represents the depreciation on real estate investments that have estimated lives ranging from two to fifty-five years. Depreciation and amortization increased by approximately $1.5 million, or 12.9%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, due to the acquisition of 58 properties, during the year-over-year period from July 1, 2023 through June 30, 2024.

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Property Expense

We record all tenant expenses, both reimbursed and non-reimbursed, to property expense. We also record initial direct costs (lease negotiation and other previously capitalizable transaction expenses) as property expenses. Other property expenses consist of expenses incurred on vacant properties, abandoned deal costs, and franchise taxes. During the three months ended June 30, 2024, we recorded property expenses of $2.8 million, of which $2.3 million was reimbursed by tenants. During the three months ended June 30, 2023, we recorded property expenses of $2.7 million, of which $2.3 million was reimbursed by tenants.

Interest Expense

We incur interest expense on our $515 million of term loans, any outstanding borrowings on our revolving credit facility, interest rate swaps, and our $625 million of senior fixed rate notes. Interest expense increased $2.3 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to an issuance of $100 million of senior fixed notes in July 2023 and a higher utilization of the revolving credit facility.

Realized Gain on Sale, Net

During the three months ended June 30, 2024, the Company did not sell any properties. During the three months ended June 30, 2023, the Company sold one property with a net book value of $1.7 million for a realized gain on sale of $173 thousand.

Income Taxes

During the three months ended June 30, 2024 and 2023, our income tax expense was $86 thousand and $91 thousand, respectively. The income tax provision consists of federal, state, and local income taxes incurred by the Kerrow Restaurant Operating Business, and state and local income taxes we incurred on our lease portfolio. During the three months ended June 30, 2024, the net deferred tax asset at the Kerrow Restaurant Operating Business increased by $20 thousand. This deferred tax benefit related to routine book-tax differences and was recorded within income tax expense in the Consolidated Statements of Income.

Restaurant Operations

Restaurant revenues increased by $95 thousand, or 1.2%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023 primarily due to higher net pricing and continued emphasis in customer service.

Total restaurant expenses increased by $135 thousand, or 1.9%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to an increase in cost of goods sold and labor costs.

Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023

Real Estate Operations

Rental Revenue

Rental revenue increased $12.1 million, or 11.5%, during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This increase was due to the acquisition of 58 leased properties during the year-over-year period from July 1, 2023 through June 30, 2024, which was partially offset by the disposal of three properties during the period. We do not anticipate these dispositions to have a material impact on future revenue. During the six months ended June 30, 2024, we recognized variable lease revenue, including costs paid by the lessor and reimbursed by the lessees within rental revenue of $5.0 million as compared to $4.8 million during the six months ended June 30, 2023. These amounts are also recognized in property expenses.

We recognize rental income on a straight-line basis to include the effect of base rent escalators, and free rent periods, if any.

General and Administrative Expenses

General and administrative expense is comprised of costs associated with staff, office rent, legal, accounting, information technology, and other professional services and other administrative services in association with our real estate operations and our REIT structure and reporting requirements. General and administrative expenses increased $562 thousand, or 4.8%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily due to an increase in compensation-related expenses and increased non-cash stock compensation expense.

Depreciation and Amortization Expense

Depreciation and amortization expense represents the depreciation on real estate investments that have estimated lives ranging from two to fifty-five years. Depreciation and amortization increased by approximately $2.8 million, or 11.7%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, due to the acquisition of 58 properties, during the year-over-year period from July 1, 2023 through June 30, 2024.

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Property Expense

We record all tenant expenses, both reimbursed and non-reimbursed, to property expense. We also record initial direct costs (lease negotiation and other previously capitalizable transaction expenses) as property expenses. Other property expenses consist of expenses incurred on vacant properties and franchise taxes. During the six months ended June 30, 2024, we recorded property expenses of $5.9 million, of which $5.0 million was reimbursed by tenants. During the six months ended June 30, 2023, we recorded property expenses of $5.8 million, of which $4.8 million was reimbursed by tenants.

Interest Expense

We incur interest expense on our $515 million of term loans, any outstanding borrowings on our revolving credit facility, interest rate swaps, and our $625 million of senior fixed rate notes. Interest expense increased $4.6 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily due to the issuance of $100 million of senior fixed notes in July 2023 and a higher utilization of the revolving credit facility.

Realized Gain on Sale, Net

During the six months ended June 30, 2024, the Company did not sell any properties. During the six months ended June 30, 2023, the Company sold four properties with a combined net book value of $11.0 million for a realized gain on sale of $1.7 million.

Income Taxes

During the six months ended June 30, 2024 and 2023, our income tax expense was $113 thousand and $139 thousand, respectively. The income tax provision consists of federal, state, and local income taxes incurred by the Kerrow Restaurant Operating Business, and state and local income taxes we incurred on our lease portfolio. During the six months ended June 30, 2024, the net deferred tax asset at the Kerrow Restaurant Operating Business increased by $92 thousand. This deferred tax benefit related to routine book-tax differences and was recorded within income tax expense in the Consolidated Statements of Income.

Restaurant Operations

Restaurant revenues increased by $234 thousand, or 1.5%, during the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily due to higher net pricing and continued emphasis in customer service.

Total restaurant expenses increased by $404 thousand, or 2.8%, during the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily due to an increase in cost of goods sold and labor costs.

Critical Accounting Policies

The preparation of FCPT’s consolidated financial statements in conformance with U.S. GAAP requires management to make estimates on assumptions that affect the reported amounts of assets, liabilities, revenues and expenses as well as other disclosures in the financial statements. On an ongoing basis, management evaluates its estimates and assumptions; however, actual results may differ from these estimates and assumptions, which in turn could have a material impact on our financial statements. A summary of FCPT’s critical accounting policies is included in our Annual Report on Form 10-K for the year ended December 31, 2023 in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates.” Management believes those critical accounting policies, among others, affect our more significant estimates and assumptions used in the preparation of our consolidated financial statements.

New Accounting Standards

A discussion of new accounting standards and the possible effects of these standards on our consolidated financial statements is included in Note 2 - Summary of Significant Accounting Policies of our consolidated financial statements, included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Liquidity and Financial Condition

At June 30, 2024, we had $17.2 million of cash and cash equivalents and $223 million of borrowing capacity under our revolving credit facility, which expires on November 9, 2025, subject to our ability to extend the term for one additional six-month period to May 9, 2026. The revolving credit facility provides for a letter of credit sub-limit of $25 million. See Note 6 - Debt, Net of Deferred Financing Costs included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information. As of June 30, 2024, we had outstanding borrowings of $27.0 million under the revolving credit facility. At June 30, 2024, the weighted average interest rate on the term loans, after consideration of the interest rate hedges, was 3.92%.

On March 14, 2024, FCPT entered into an Incremental Amendment to the Third Amended and Restated Revolving Credit and Term Loan Agreement with a group of existing lenders (the “Credit Agreement”). The Company utilized the accordion feature of the Third Amended and Restated Revolving Credit and Term Loan Agreement to enter into a new $85 million term loan (the “Term Loan”), the proceeds from which were used to repay the $50 million of senior unsecured notes payable due in June 2024. The Term Loan matures in March 2027 with one twelve month extension exercisable at the Company’s option, subject to certain conditions.

30

We have entered into the following interest rate swaps to hedge the interest rate variability associated with the term loan portion of our credit facility. These hedging agreements were entered into to mitigate the interest rate risk inherent in FCPT OP’s variable rate debt and not for trading purposes. These swaps are accounted for as cash flow hedges with all interest income and expense recorded as a component of net income and other valuation changes recorded as a component of other comprehensive income.

Product	Notional Amount ($ in thousands)		Effective Date	Maturity Date	Fixed Rate to Pay	Variable Rate to Receive
Swap	$	150,000	11/09/2022	11/09/2024	1.88%	Daily Simple SOFR + 10 bps
Swap		50,000	10/25/2022	11/09/2025	0.44%	Daily Simple SOFR + 10 bps
Swap		25,000	11/09/2022	11/09/2025	2.70%	Daily Simple SOFR + 10 bps
Swap		25,000	03/09/2023	11/09/2026	4.12%	Daily Simple SOFR + 10 bps
Swap (1)		50,000	11/09/2023	11/09/2025	0.82%	Daily Simple SOFR + 10 bps
Swap		25,000	11/09/2023	11/09/2026	3.65%	Daily Simple SOFR + 10 bps
Swap		25,000	11/09/2023	11/09/2028	4.25%	Daily Simple SOFR + 10 bps
Swap		25,000	11/13/2023	11/09/2028	4.42%	Daily Simple SOFR + 10 bps
Swap		25,000	04/09/2024	04/09/2029	4.04%	Daily Simple SOFR + 10 bps
Swap		30,000	04/09/2024	04/09/2029	3.91%	Daily Simple SOFR + 10 bps
Swap		30,000	04/09/2024	04/09/2029	3.88%	Daily Simple SOFR + 10 bps
Swap		25,000	11/09/2024	11/09/2029	3.97%	Daily Simple SOFR + 10 bps
Swap		50,000	11/10/2025	11/09/2027	1.48%	Daily Simple SOFR + 10 bps
Swap		50,000	11/10/2025	11/09/2027	1.54%	Daily Simple SOFR + 10 bps
Swap		25,000	11/10/2025	11/09/2028	2.25%	1 month Term SOFR
Swap		50,000	11/10/2025	11/09/2028	1.49%	Daily Simple SOFR + 10 bps
Swap		50,000	11/10/2025	11/09/2028	2.02%	Daily Simple SOFR + 10 bps

(1)In November 2024, the notional amount of the swap will increase to $150 million

During the first six months of 2024, we entered into four interest rate swaps to hedge the interest rate variability associated with the term loan portion of our credit facility.

The Company enters into forward-starting interest rate swap agreements to hedge against changes in future cash flows resulting from changes in interest rates from the trade date through the forecasted issuance date of debt. During the six months ended June 30, 2024, the Company terminated one cash flow hedge in connection with the $85 million Term Loan that was entered into on March 11, 2024 and funded on March 14, 2024. This cash flow hedge had a total notional value of $25 million and was entered into in August 2023 to hedge the interest rate on a future offering or term loan. The swap was terminated on February 28, 2024, with the corresponding asset of $211 thousand which will be amortized over the next 10 years as an increase to interest expense.

The Company has issued the following $625 million of senior unsecured fixed rate notes in private placements pursuant to note purchase agreements with the various purchasers.

	Maturity	Interest			Outstanding Balance
($ in thousands)	Date	Rate			June 30, 2024
Notes Payable:
Senior unsecured fixed rate note, issued December 2018	Dec 2026		4.63	%	$	50,000
Senior unsecured fixed rate note, issued June 2017	Jun 2027		4.93	%		75,000
Senior unsecured fixed rate note, issued December 2018	Dec 2028		4.76	%		50,000
Senior unsecured fixed rate note, issued April 2021	Apr 2029		2.74	%		50,000
Senior unsecured fixed rate note, issued March 2020	Jun 2029		3.15	%		50,000
Senior unsecured fixed rate note, issued March 2020	Apr 2030		3.20	%		75,000
Senior unsecured fixed rate note, issued March 2022	Mar 2031		3.09	%		50,000
Senior unsecured fixed rate note, issued April 2021	Apr 2031		2.99	%		50,000
Senior unsecured fixed rate note, issued March 2022	Mar 2032		3.11	%		75,000
Senior unsecured fixed rate note, issued July 2023	Jul 2033		6.44	%		100,000
Total Senior Unsecured Fixed Rate Notes					$	625,000

In November 2022, the Company entered into its ATM program (the “current ATM program”), pursuant to which shares of the Company’s common stock having an aggregate gross sales price of up to $450.0 million may be offered and sold (1) by the Company to, or through, a consortium of banks acting as its sales agents or (2) by a consortium of banks acting as forward sellers on behalf of any forward purchasers contemplated thereunder, in each case by means of ordinary brokers’ transactions on the NYSE or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices, by privately negotiated transactions (including block sales) or by any other methods permitted by applicable law. In connection with the Company’s current ATM program, the Company may enter into forward sale agreements with certain financial institutions acting as forward purchasers whereby, at the Company's discretion, the forward purchasers may borrow and sell shares of common stock. The use of forward sale

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agreements allows the Company to lock in a share price on the sale of shares of common stock at the time the respective forward sale agreements are executed but defer settling the forward sale agreements and receiving the proceeds from the sale of shares until a later date.

The Company did not execute or settle forward sale agreements during the six months ended June 30, 2024.

During the three months ended June 30, 2024, the Company issued 99,656 shares under the current ATM program at a gross weighted average share price of $25.14 and a net weighted average share price of $23.93, for net proceeds of $2.4 million. During the six months ended June 30, 2024, the Company issued 380,570 shares under the current ATM program at a gross weighted average share price of $25.33 and a net weighted average share price of $24.39, for net proceeds of $9.3 million.

During the six months ended June 30, 2023, the Company executed forward sale agreements with financial institutions acting as forward purchasers under the current ATM program to sell 1,907,946 shares of common stock at a weighted average sales price of $27.73 per share before sales commissions and offering expenses. During the three months ended June 30, 2023, the Company physically settled its forward sale agreements and issued 4,113,788 shares at a weighted average share price of $26.81 for net proceeds of $110.3 million. During the six months ended June 30, 2023, the Company physically settled its forward sale agreements and issued 4,437,970 shares at a weighted average share price of $26.88 for net proceeds of $119.3 million.

During the three months ended June 30, 2023, the Company issued 4,463,788 shares under the current ATM program, including physically settled forward sale agreements, at a gross weighted average share price of $27.16 and a net weighted average share price of $26.72 for net proceeds of $119.3 million. During the six months ended June 30, 2023, the Company issued 4,787,970 shares under the current ATM program, including physically settled forward sale agreements, at a gross weighted average share price of $27.23 and a net weighted average share price of $26.79 for net proceeds of $128.3 million.

At June 30, 2024, there was $235.8 million available for issuance under the current ATM program.

On a short-term basis, our principal demands for funds will be for operating expenses, distributions to stockholders and interest and principal on current and any future debt financings. We expect to fund our operating expenses and other short-term liquidity requirements, capital expenditures, payment of principal and interest on our outstanding indebtedness, property improvements, re-leasing costs and cash distributions to common stockholders, primarily through cash provided by operating activities, and, for acquisitions, investments, and other capital expenditures, from borrowings under our $250 million revolving credit facility.

On a long-term basis, our principal demands for funds include payment of dividends, financing of property acquisitions, and scheduled debt maturities. We plan to meet our long-term capital needs by issuing debt or equity securities or by obtaining asset-level financing, subject to market conditions. In addition, we may issue common stock to permanently finance properties that were financed on an intermediate basis by our revolving credit facility or other indebtedness. In the future, we may also acquire properties by issuing partnership interests of FCPT OP in exchange for property owned by third parties. Our common partnership interests would be redeemable for cash or shares of our common stock, at FCPT’s election.

We continually evaluate alternative financing and believe that we can obtain financing on reasonable terms. However, we cannot be assured that we will have access to the capital markets at times and at terms that are acceptable to us. We expect that our primary uses of capital will be for property and other asset acquisitions and the funding of tenant improvements and other capital expenditures, and debt refinancing.

Because the properties in our portfolio are generally leased to tenants under net leases, where the tenant is responsible for property operating costs and expenses, our exposure to rising property operating costs due to inflation is mitigated. Interest rates and other factors, such as occupancy, rental rate and the financial condition of our tenants, influence our performance more so than does inflation. Changes in interest rates do not necessarily correlate with inflation rates or changes in inflation rates. As described above, we currently offer leases that provide for payments of base rent with scheduled annual fixed increases.

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Supplemental Financial Measures

The following tables presents a reconciliation of U.S. GAAP net income to National Association of Real Estate Investment Trusts (“NAREIT”) funds from operations (“FFO”) and adjusted funds from operations (“AFFO”).

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands, except share and per share data)	2024			2023			2024			2023
Net income	$	24,702		$	23,655		$	48,776		$	46,810
Depreciation and amortization on real estate investments		13,309			11,782			26,740			23,927
Realized gain on sales of real estate		—			(173	)		—			(1,735	)
FFO (as defined by NAREIT)	$	38,011		$	35,264		$	75,516		$	69,002
Straight-line rent		(1,113	)		(1,335	)		(2,287	)		(2,639	)
Deferred income tax benefit (1)		(20	)		(4	)		(92	)		(48	)
Stock-based compensation		1,731			1,560			3,371			3,326
Non-cash amortization of deferred financing costs		653			564			1,291			1,128
Non-real estate investment depreciation		36			35			72			66
Other non-cash revenue adjustments		497			490			1,052			984
Adjusted Funds from Operations (AFFO)	$	39,795		$	36,574		$	78,923		$	71,819
Fully diluted shares outstanding (2)		92,108,621			87,670,570			92,090,841			86,939,709
FFO per diluted share	$	0.41		$	0.40		$	0.82		$	0.79
AFFO per diluted share	$	0.43		$	0.42		$	0.86		$	0.83

(1)Amount represents non-cash deferred income tax benefit recognized in the three and six months ended June 30, 2024 and 2023 for income tax benefit at the Kerrow Restaurant Business.

(2)Assumes the issuance of common shares for OP units held by non-controlling partners.

Non-GAAP Definitions

The certain non-GAAP financial measures included above management believes are helpful in understanding our business, as further described below. Our definition and calculation of non-GAAP financial measures may differ from those of other REITs and therefore may not be comparable. The non-GAAP measures should not be considered an alternative to net income as an indicator of our performance and should be considered only a supplement to net income, and to cash flows from operating, investing or financing activities as a measure of profitability and/or liquidity, computed in accordance with U.S. GAAP.

FFO is a supplemental measure of our performance which should be considered along with, but not as an alternative to, net income and cash provided by operating activities as a measure of operating performance and liquidity. We calculate FFO in accordance with the standards established by the NAREIT. FFO represents net income (loss) computed in accordance with U.S. GAAP, excluding gains (or losses) from sales of property and undepreciated land and impairment write-downs of depreciable real estate, plus real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and joint ventures. We also omit the tax impact of non-FFO producing activities from FFO determined in accordance with the NAREIT definition.

Our management uses FFO as a supplemental performance measure because, in excluding real estate related depreciation and amortization and gains and losses from property dispositions, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. We offer this measure because we recognize that FFO will be used by investors as a basis to compare our operating performance with that of other REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our financial condition and results from operations, the utility of FFO as a measure of our performance is limited. FFO is a non-GAAP measure and should not be considered a measure of liquidity including our ability to pay dividends or make distributions. In addition, our calculations of FFO are not necessarily comparable to FFO as calculated by other REITs that do not use the same definition or implementation guidelines or interpret the standards differently from us. Investors in our securities should not rely on these measures as a substitute for any U.S. GAAP measure, including net income.

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Adjusted Funds from Operations is a non-U.S. GAAP measure that is used as a supplemental operating measure specifically for comparing year-over-year ability to fund dividend distribution from operating activities. AFFO is used by us as a basis to address our ability to fund our dividend payments. We calculate AFFO by adding to or subtracting from FFO:

1.Transaction costs incurred in connection with business combinations

2.Straight-line rent revenue adjustment

3.Stock-based compensation expense

4.Non-cash amortization of deferred financing costs

5.Other non-cash interest expense (income)

6.Non-real estate investment depreciation

7.Merger, restructuring and other related costs

8.Impairment charges

9.Other non-cash revenue adjustments, including amortization of above and below market leases and lease incentives

10.Amortization of capitalized leasing costs

11.Debt extinguishment gains and losses

12.Non-cash expense (income) adjustments related to deferred tax benefits

AFFO is not intended to represent cash flow from operations for the period, and is only intended to provide an additional measure of performance by adjusting the effect of certain items noted above included in FFO. AFFO is a widely reported measure by other REITs; however, other REITs may use different methodologies for calculating AFFO and, accordingly, our AFFO may not be comparable to other REITs.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Information concerning market risk is incorporated herein by reference to Part II, Item 7A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as supplemented by the information under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part I, Item 1A titled “Risk Factors.” Other than the developments described thereunder, including changes in the fair values of our assets, there have been no other material changes in our quantitative or qualitative exposure to market risk since December 31, 2023.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures were effective and were operating at a reasonable assurance level.

Changes in Internal Control over Financial Reporting

During the second quarter of 2024, there have been no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

In the ordinary course of our business, we are party to various claims and legal actions that management believes are routine in nature and incidental to the operation of our business. Management believes that the outcome of these proceedings will not have a material adverse effect upon our operations, financial condition or liquidity.

Item 1A. Risk Factors.

There have been no material changes to the risk factors as disclosed in Part I, Item 1A. “Risk Factors” beginning on page 12 of our Annual Report on Form 10-K for the year ended December 31, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

a.None.

b.None.

c.During the three months ended June 30, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each such term is defined in Item 408(a) of Regulation S-K.

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Item 6. Exhibits.

The exhibits issued in the accompanying Index to Exhibits are filed as part of this Form 10-Q and incorporated herein by reference.

INDEX TO EXHIBITS

Exhibit Number	Description
3.1	Articles of Amendment and Restatement of Four Corners Property Trust, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on October 27, 2015).
3.2.1	Four Corners Property Trust, Inc. Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed on March 10, 2023).
3.2.2	Four Corners Property Trust, Inc. First Amendment to the Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on May 31, 2023).
10.1	Employment Agreement, dated April 24, 2024, by and between Four Corners Property Trust, Inc. and Patrick L. Wernig (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on May 6, 2024).
31 (a)*	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31 (b)*	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32 (a)*	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32 (b)*	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	The following materials from Four Corners Property Trust, Inc.’s Quarterly Report on Form 10-Q for the three months ended June 30, 2024 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statement of Equity, (v) the Consolidated Statements of Cash Flows, and (vi) related notes to these consolidated financial statements.
104*	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, formatted in iXBRL and contained in Exhibit 101.

* Filed herewith

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		FOUR CORNERS PROPERTY TRUST, INC.
Dated:	August 1, 2024	By:	/s/ William H. Lenehan
			William H. Lenehan
			President and Chief Executive Officer
			(Principal Executive Officer)
Dated:	August 1, 2024	By:	/s/ Patrick L. Wernig
			Patrick L. Wernig
			Chief Financial Officer
			(Principal Financial Officer)
Dated:	August 1, 2024	By:	/s/ Niccole M. Stewart
			Niccole M. Stewart
			Chief Accounting Officer
			(Principal Accounting Officer)

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