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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 March 31, 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 classTrading SymbolName of Exchange on Which Registered
Common Stock, $0.0001 par value per shareFCPTNew 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. x 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). x 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 May 2, 2024: 91,986,471



FOUR CORNERS PROPERTY TRUST, INC.
FORM 10 - Q
THREE MONTHS ENDED MARCH 31, 2024
TABLE OF CONTENTS
Page
Part IFINANCIAL INFORMATION
Item 1.Financial Statements:
Consolidated Balance Sheets at March 31, 2024 (unaudited) and December 31, 2023
Item 2.
Item 3.
Item 4.
Part IIOTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.





PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
FOUR CORNERS PROPERTY TRUST, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
March 31, 2024
(Unaudited)
December 31, 2023
ASSETS
Real estate investments:
Land$1,244,659 $1,240,865 
Buildings, equipment and improvements1,719,745 1,708,556 
Total real estate investments2,964,404 2,949,421 
Less: Accumulated depreciation(747,958)(738,946)
Total real estate investments, net2,216,446 2,210,475 
Intangible lease assets, net115,812 118,027 
Total real estate investments and intangible lease assets, net2,332,258 2,328,502 
Cash and cash equivalents26,079 16,322 
Straight-line rent adjustment65,926 64,752 
Derivative assets24,414 20,952 
Deferred tax assets1,320 1,248 
Other assets12,613 19,858 
Total Assets$2,462,610 $2,451,634 
LIABILITIES AND EQUITY
Liabilities:
Term loan and revolving credit facility, net of deferred financing costs$509,780 $441,745 
Senior unsecured notes, net of deferred financing costs621,150 670,944 
Dividends payable31,656 31,539 
Rent received in advance12,300 14,309 
Derivative liabilities607 2,968 
Other liabilities22,887 30,266 
Total liabilities1,198,380 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, 91,989,203 and 91,617,477 shares issued and outstanding, respectively
9 9 
Additional paid-in capital1,268,361 1,261,940 
Accumulated deficit
(33,888)(26,276)
Accumulated other comprehensive income27,538 21,977 
Noncontrolling interest2,210 2,213 
Total equity1,264,230 1,259,863 
Total Liabilities and Equity$2,462,610 $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 March 31,
2024
2023
Revenues:
Rental revenue$58,573 $52,197 
Restaurant revenue7,894 7,755 
Total revenues66,467 59,952 
Operating expenses:
General and administrative6,213 6,055 
Depreciation and amortization 13,467 12,176 
Property expenses3,081 3,167 
Restaurant expenses7,564 7,295 
Total operating expenses30,325 28,693 
Interest expense(12,281)(9,918)
Other income240 300 
Realized gain on sale, net
 1,562 
Income tax expense(27)(48)
Net income24,074 23,155 
Net income attributable to noncontrolling interest(30)(31)
Net Income Available to Common Shareholders$24,044 $23,124 
Basic net income per share:$0.26 $0.27 
Diluted net income per share:$0.26 $0.27 
Weighted average number of common shares outstanding:
Basic91,719,475 85,833,602 
Diluted91,929,760 86,095,554 
Dividends declared per common share$0.3450 $0.3400 

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 March 31,
2024
2023
Net income$24,074 $23,155 
Other comprehensive income:
Effective portion of change in fair value of derivative instruments8,670 (5,592)
Reclassification adjustment of derivative instruments included in net income(3,102)(2,078)
Other comprehensive income5,568 (7,670)
Comprehensive income29,642 15,485 
Less: comprehensive income attributable to noncontrolling interest
Net income attributable to noncontrolling interest30 31 
Other comprehensive income (loss) attributable to noncontrolling interest
7 (11)
Comprehensive income attributable to noncontrolling interest37 20 
Comprehensive Income Attributable to Common Shareholders$29,605 $15,465 

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 March 31, 2024
Common StockAdditional Paid-in CapitalRetained Earnings (Accumulated Deficit)Accumulated Other Comprehensive Income (Loss)Noncontrolling InterestTotal
SharesPar Value
Balance at
December 31, 2023
91,617,477 $9 $1,261,940 $(26,276)$21,977 $2,213 $1,259,863 
Net income— — — 24,044 — 30 24,074 
Other comprehensive income— — — — 5,561 7 5,568 
ATM proceeds, net of issuance costs280,914 — 6,898 — — — 6,898 
Dividends and distributions to equity holders— — — (31,656)— (40)(31,696)
Stock-based compensation, net90,812 — (477)— — — (477)
Balance at
March 31, 2024
91,989,203 $9 $1,268,361 $(33,888)$27,538 $2,210 $1,264,230 

For the Three Months Ended March 31, 2023
Common StockAdditional Paid-in CapitalRetained Earnings (Accumulated Deficit)Accumulated Other Comprehensive Income (Loss)Noncontrolling InterestTotal
SharesPar Value
Balance at
December 31, 2022
85,637,293 $9 $1,104,522 $576 $30,944 $2,259 $1,138,310 
Net income— — — 23,124 — 31 23,155 
Other comprehensive income— — — — (7,659)(11)(7,670)
ATM proceeds, net of issuance costs324,182 — 8,905 — — — 8,905 
Dividends and distributions to equity holders— — — (29,203)— (39)(29,242)
Stock-based compensation, net127,425 — (491)— — — (491)
Balance at
March 31, 2023
86,088,900 $9 $1,112,936 $(5,503)$23,285 $2,240 $1,132,967 




The accompanying notes are an integral part of this financial statement.
4


FOUR CORNERS PROPERTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended March 31,
2024
2023
Cash flows - operating activities
Net income$24,074 $23,155 
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization13,467 12,176 
Realized gain on sale, net
 (1,562)
Non-cash revenue adjustments555 494 
Amortization of financing costs638 564 
Stock-based compensation expense1,640 1,767 
Deferred income taxes(72)(44)
Changes in assets and liabilities:
Derivative assets and liabilities(255)367 
Straight-line rent adjustment(1,174)(1,304)
Rent received in advance(2,009)1,166 
Intangible assets (lease incentive payments)(1,119) 
Other assets and liabilities(8,120)1,152 
Net cash provided by operating activities27,625 37,931 
Cash flows - investing activities
Purchases of real estate investments(16,674)(20,860)
Proceeds from sale of real estate investments 11,463 
Change in advance deposits used in acquisition of real estate investments
225 (975)
Net cash used in investing activities(16,449)(10,372)
Cash flows - financing activities
Net proceeds from ATM equity issuance6,898 8,905 
Payment of deferred financing costs(1,397) 
Repayment of senior notes(50,000) 
Proceeds from term loan borrowing85,000  
Proceeds from revolving credit facility34,000  
Repayment of revolving credit facility(50,000) 
Payment of dividends to shareholders(31,539)(29,064)
Distributions to non-controlling interests(40)(39)
Employee shares withheld for taxes(2,117)(2,258)
Net cash used in financing activities
(9,195)(22,456)
Net increase in cash and cash equivalents, including restricted cash
1,981 5,103 
Cash and cash equivalents, including restricted cash, at beginning of period24,783 26,296 
Cash and cash equivalents, including restricted cash, at end of period$26,764 $31,399 
Supplemental disclosures:
Interest paid $13,277 $7,856 
Income taxes paid$ $2 
Operating lease payments received (lessor)$54,298 $48,617 
Operating lease payments remitted (lessee)$227 $237 
Non-cash activities:
Dividends declared but not paid$31,656 $29,203 
Change in fair value of derivative instruments$5,823 $(8,037)

The accompanying notes are an integral part of this financial statement.
5

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.
6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
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 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 historically 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
7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
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 impairment are included in depreciation and amortization expense in the accompanying Income Statements. We did not record impairment expense during the three months ended March 31, 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 March 31, 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:
March 31,
December 31,
(In thousands)
2024
2023
Cash and cash equivalents$26,079 $16,322 
Restricted cash (included in Other assets)685 8,461 
Total Cash, Cash Equivalents, and Restricted Cash$26,764 $24,783 
8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
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.
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.
9

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
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 March 31, 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. The Company paid lease incentives of $1.1 million to tenants during the three months ended March 31, 2024. During the year ended December 31, 2023, the Company paid lease incentives of $1.2 million to tenants.
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.
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 March 31, 2024 and December 31, 2023, credit card receivables, included in other assets, totaled $234 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.
10

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
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 three months ended March 31, 2023, the Company sold three properties, which resulted in a realized gain of $1.6 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 operates through 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 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
11

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
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 51.4% 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 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.
12

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
We also are subject to concentration risk in terms of the restaurant and retail brands that operate our properties. As of March 31, 2024, we had 314 Olive Garden branded locations in our portfolio, which comprise approximately 28.2% of our leased properties and approximately 36.8% of the revenues received under leases. Longhorn Steakhouse branded restaurants comprise approximately 10.3% of our leased properties and approximately 10.4% of the revenues received under leases as of March 31, 2024. Our properties, including the Kerrow Restaurant Operating Business, are located in 47 states, with concentrations of 10% or greater of total rental revenue in one state: Texas (approximately 10.0%).
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 March 31, 2024, our exposure to risk related to amounts due to us on our derivative instruments totaled $23.8 million, and the counterparty to such instruments are investment grade financial institutions. Our credit risk exposure with regard to our cash and the $250.0 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:
March 31,
December 31,
(In thousands)
2024
2023
Land$1,244,659 $1,240,865 
Buildings and improvements1,583,758 1,572,590 
Equipment135,987 135,966 
Total gross real estate investments2,964,404 2,949,421 
Less: Accumulated depreciation(747,958)(738,946)
Total real estate investments, net2,216,446 2,210,475 
Intangible lease assets, net115,812 118,027 
Total Real Estate Investments and Intangible Lease Assets, Net$2,332,258 $2,328,502 
During the three months ended March 31, 2024, the Company invested $16.7 million, including transaction costs, in four properties located in four states, and allocated the investment as follows: $3.8 million to land, $11.2 million to buildings and improvements, and $1.7 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 9.9 years as of March 31, 2024. During the three months ended March 31, 2024, no properties were sold.
During the three months ended March 31, 2023, the Company invested $20.9 million, including transaction costs, in 10 properties located in six states, and allocated the investment as follows: $7.3 million to land, $11.1 million to buildings and improvements, and $2.5 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 6.5 years as of March 31, 2023. During the three months ended March 31, 2023, the Company sold three properties with a combined net book value of $9.3 million for a realized gain of $1.6 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.
March 31,
December 31,
(In thousands)
2024
2023
Acquired in-place lease intangibles$138,548 $136,940 
Above-market leases13,821 13,821 
Finance leases - right of use asset (1)
14,040 14,040 
Lease incentives9,343 8,224 
Tenant improvements intangibles3,605 3,605 
Direct lease costs445 360 
Total179,802 176,990 
Less: Accumulated amortization(63,990)(58,963)
Intangible Lease Assets, Net$115,812 $118,027 
(1)    See Note 5 - Leases for additional information on finance leases - right of use assets.
March 31,
December 31,
(In thousands)
2024
2023
Below-market leases$2,610 $2,610 
Less: Accumulated amortization(1,468)(1,414)
Intangible Lease Liabilities, Net$1,142 $1,196 
The value of acquired in-place leases amortized and included in depreciation and amortization expense was $4.4 million and $3.9 million for the three months ended March 31, 2024 and 2023, respectively. The value of above-market and below-market leases amortized as an adjustment to revenue was $308 thousand and $354 thousand for the three months ended March 31, 2024 and 2023, respectively. For the three months ended March 31, 2024 and 2023, lease incentive amortization was $236 thousand and $135 thousand, respectively.
At March 31, 2024, the total weighted average amortization period remaining for our intangible lease assets and liabilities was 8.6 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 8.2 years, 6.5 years, 10.1 years, 11.6 years, and 14.9 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)March 31,
2024 (nine months)$12,973 
202515,146 
202613,372 
202710,990 
20288,592 
Thereafter32,038 
Total Future Amortization$93,111 
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, all of which qualified as operating leases. In calculating the lease obligations under the
14

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
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.
Operating Lease Liability
Maturities of operating lease liabilities were as follows:
(In thousands)
March 31,
2024 (nine months)$540 
2025470 
2026310 
2027319 
2028319 
Thereafter4,435 
Total Payments6,393 
Less: Interest(1,880)
Operating Lease Liability$4,513 
The weighted-average discount rate for operating leases at March 31, 2024 was 4.36%. The weighted-average remaining lease term was 15.8 years.
Rental expense was $227 thousand and $240 thousand for the three months ended March 31, 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 for the three months ended March 31, 2024 and 2023.
Three Months Ended March 31,
(In thousands)
2024
2023
Lease revenue - operating leases$55,888 $49,674 
Variable lease revenue (tenant reimbursements)2,685 2,523 
Total Rental Revenue$58,573 $52,197 
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)
March 31,
2024 (nine months)$165,233 
2025219,450 
2026217,890 
2027209,856 
2028183,627 
Thereafter816,766 
Total Future Minimum Lease Payments$1,812,822 
15

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
Ground Leases as Lessee
As of March 31, 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 60 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 89.8 years at March 31, 2024.
NOTE 6 – DEBT, NET OF DEFERRED FINANCING COSTS
At March 31, 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 senior, unsecured, fixed rate notes. At March 31, 2024 and December 31, 2023, we had outstanding borrowings of $0 million and $16 million, respectively, under the revolving credit facility, and there were no outstanding letters of credit. At March 31, 2024, we had $250 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 6.38% and 6.40% at March 31, 2024 and December 31, 2023, respectively.
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 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 as of March 31, 2024 and December 31, 2023.
Outstanding Balance
Maturity
Interest
March 31,
December 31,
(Dollars in thousands)
Date
Rate
2024
2023
Term Loans:
Term loan due 2025
Nov 20256.41%(a)$150,000 $150,000 
Term loan due 2026
Nov 20266.41%(a)100,000 100,000 
Term loan due 2027
Jan 20276.36%(a)90,000 90,000 
Term loan due 2027
Mar 20276.36%
(a)(b)
85,000  
Term loan due 2028
Jan 20286.36%(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 March 31, 2024.
(b) Loan has a 12 month extension exercisable at the Company’s option, subject to certain conditions.
16

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
Note Purchase Agreements
The following table presents the senior unsecured fixed rate notes balance as of March 31, 2024 and December 31, 2023.
Outstanding Balance
Maturity
Interest
March 31,
December 31,
(Dollars in thousands)
Date
Rate
2024
2023
Notes Payable:
Senior unsecured fixed rate note, issued June 2017
Jun 20244.68 %$ $50,000 
Senior unsecured fixed rate note, issued December 2018
Dec 20264.63 %50,000 50,000 
Senior unsecured fixed rate note, issued June 2017
Jun 20274.93 %75,000 75,000 
Senior unsecured fixed rate note, issued December 2018
Dec 20284.76 %50,000 50,000 
Senior unsecured fixed rate note, issued April 2021
Apr 20292.74 %50,000 50,000 
Senior unsecured fixed rate note, issued March 2020
Jun 20293.15 %50,000 50,000 
Senior unsecured fixed rate note, issued March 2020
Apr 20303.20 %75,000 75,000 
Senior unsecured fixed rate note, issued March 2022
Mar 20313.09 %50,000 50,000 
Senior unsecured fixed rate note, issued April 2021
Apr 20312.99 %50,000 50,000 
Senior unsecured fixed rate note, issued March 2022
Mar 20323.11 %75,000 75,000 
Senior unsecured fixed rate note, issued July 2023
Jul 20336.44 %100,000 100,000 
Total Notes
$625,000 $675,000 
Debt Maturities
The following presents scheduled principal payments related to the Company’s debt.
(In thousands)March 31,
Remainder of 2024$ 
2025150,000 
2026150,000 
2027250,000 
2028140,000 
Thereafter450,000 
Total Scheduled Principal Payments$1,140,000 
Deferred Financing Costs
At March 31, 2024 and December 31, 2023, term loan and revolving credit facility net unamortized deferred financing costs were approximately $5.2 million and $4.3 million, respectively. During the three months ended March 31, 2024 and 2023, amortization of deferred financing costs was $432 thousand and $403 thousand, respectively.
At March 31, 2024 and December 31, 2023, senior unsecured notes net unamortized deferred financing costs were approximately $3.9 million and $4.1 million, respectively. During the three months ended March 31, 2024 and 2023, amortization of deferred financing costs was $206 thousand and $161 thousand, respectively.
The Company was in compliance with all debt covenants at March 31, 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
17

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
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 three months ended March 31, 2024 and 2023, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt.
As of March 31, 2024, $375 million of our variable-rate debt is hedged by swaps with notional values totaling $375 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 three months ended March 31, 2024, we entered into three interest rate swaps to hedge the interest rate variability associated with the term loan portion of our credit facility.
ProductFixed Rate
Notional Amount
(in thousands)

IndexEffective DateMaturity Date
Swap1.88 %$150,000
Daily Simple SOFR + 10 bps
11/09/202211/09/2024
Swap0.44 %50,000
Daily Simple SOFR + 10 bps
10/25/202211/09/2025
Swap2.70 %25,000
Daily Simple SOFR + 10 bps
11/09/202211/09/2025
Swap4.12 %25,000
Daily Simple SOFR + 10 bps
03/09/202311/09/2026
Swap (1)
0.82 %50,000
Daily Simple SOFR + 10 bps
11/09/202311/09/2025
Swap3.65 %25,000
Daily Simple SOFR + 10 bps
11/09/202311/09/2026
Swap4.25 %25,000
Daily Simple SOFR + 10 bps
11/09/202311/09/2028
Swap4.42 %25,000
Daily Simple SOFR + 10 bps
11/13/202311/09/2028
Swap4.04 %25,000
Daily Simple SOFR + 10 bps
04/09/202404/09/2029
Swap3.91 %30,000
Daily Simple SOFR + 10 bps
04/09/202404/09/2029
Swap3.88 %30,000
Daily Simple SOFR + 10 bps
04/09/202404/09/2029
Swap1.48 %50,000
Daily Simple SOFR + 10 bps
11/10/202511/09/2027
Swap1.54 %50,000
Daily Simple SOFR + 10 bps
11/10/202511/09/2027
Swap2.25 %25,0001m Term SOFR11/10/202511/09/2028
Swap1.49 %50,000
Daily Simple SOFR + 10 bps
11/10/202511/09/2028
Swap2.02 %50,000
Daily Simple SOFR + 10 bps
11/10/202511/09/2028
(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 three months ended March 31, 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.
18

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
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 three months ended March 31, 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 as of March 31, 2024 and December 31, 2023.
Derivative AssetsDerivative Liabilities
Balance Sheet LocationFair Value atBalance Sheet LocationFair Value at
(Dollars in thousands)
March 31, 2024
December 31, 2023
March 31, 2024
December 31, 2023
Derivatives designated as hedging instruments:
Interest rate swapsDerivative assets$24,414 $20,952 Derivative liabilities$607 $2,968 
Total$24,414 $20,952 $607 $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 for the three months ended March 31, 2024 and 2023.
(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 March 31, 2024
$8,670 Interest expense$(3,102)$(12,281)
Three months ended March 31, 2023
(5,592)Interest expense(2,078)(9,918)
Tabular Disclosure Offsetting Derivatives
The table below presents a gross presentation, the effects of offsetting, and a net presentation of our derivatives at March 31, 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 Recognized AssetsGross Amounts Offset in the Consolidated Balance SheetNet Amounts of Assets Presented in the Consolidated Balance SheetGross Amounts Not Offset in the Consolidated Balance Sheet
(In thousands)Financial InstrumentsCash Collateral ReceivedNet Amount
March 31, 2024
$24,414 $ $24,414 $(352)$ $24,062 
December 31, 202320,952  20,952 (920) 20,032 
19

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
Offsetting of Derivative Liabilities
Gross Amounts of Recognized LiabilitiesGross Amounts Offset in the Consolidated Balance SheetNet Amounts of Liabilities Presented in the Consolidated Balance SheetGross Amounts Not Offset in the Consolidated Balance Sheet
(In thousands)Financial InstrumentsCash Collateral PostedNet Amount
March 31, 2024
$607 $ $607 $(352)$ $255 
December 31, 20232,968  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 March 31, 2024 and December 31, 2023, the fair value of derivatives in a net asset position related to these agreements was $23.8 million and $18.0 million, respectively. As of March 31, 2024, we have not posted any collateral related to these agreements. If we or our counterparty had breached any of these provisions at March 31, 2024, we would have been entitled to the termination value of approximately $23.8 million.
NOTE 8 – SUPPLEMENTAL DETAIL FOR CERTAIN COMPONENTS OF CONSOLIDATED BALANCE SHEETS
Other Assets
The components of other assets were as follows:
March 31,
December 31,
(In thousands)
2024
2023
Operating lease right-of-use asset$3,794 $3,923 
Restricted cash685 8,461 
Prepaid acquisition costs and deposits1,100 1,364 
Accounts receivable, net
3,169 2,985 
Prepaid assets1,953 1,176 
Food and beverage inventories266 238 
Other1,646 1,711 
Total Other Assets$12,613 $19,858 
Other Liabilities
The components of other liabilities were as follows:
March 31,
December 31,
(In thousands)
2024
2023
Accrued interest expense
$8,892 $7,424 
Tenant improvements payable and deposits1,203 7,835 
Operating lease liability
4,513 4,642 
Accrued tenant property tax2,303 2,518 
Intangible lease liabilities, net
1,143 1,196 
Accrued compensation
1,329 3,020 
Accrued operating expenses
327 262 
Accounts payable
955 1,263 
Other
2,222 2,106 
Total Other Liabilities
$22,887 $30,266 
20

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
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 three months ended March 31, 2024 related to the REIT.
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 March 31, 2024 and 2023, we recorded income tax expense of $27 thousand and $48 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 months ended March 31, 2024, $72 thousand was recorded as a deferred tax benefit related to net operating losses and routine book-tax differences within income tax expense in the Consolidated Statements of Income. During the three months ended March 31, 2023, $44 thousand was recorded as a deferred tax benefit within income tax expense in the Consolidated Statements of Income.
NOTE 10 – EQUITY
Preferred Stock
At March 31, 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 March 31, 2024 and December 31, 2023.
Common Stock
At March 31, 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 March 31, 2024, there were 91,989,203 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.
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.
21

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
The Company did not execute or settle forward sale agreements during the three months ended March 31, 2024.
During the three months ended March 31, 2024, the Company issued 280,914 shares under the current ATM program at a weighted average share price of $24.56 for net proceeds of $6.9 million.
During the three months ended March 31, 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 March 31, 2023, the Company physically settled a portion of these forward sale agreements and issued 324,182 shares under the current ATM program at a weighted average share price of $27.76 for net proceeds of $8.9 million.
At March 31, 2024, there was $237.7 million available for issuance under the current ATM program.
Noncontrolling Interest
At March 31, 2024, there were 114,559 FCPT Operating Partnership Units (“OP units”) outstanding held by third parties. During the three months ended March 31, 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 March 31, 2024 and December 31, 2023, respectively.
At March 31, 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 months ended March 31, 2024, FCPT OP distributed $40 thousand to its unaffiliated limited partners.
Earnings Per Share
The following table presents the computation of basic and diluted net earnings per common share for the three months ended March 31, 2024 and 2023.
(In thousands except for shares and per share data)
Three Months Ended March 31,
2024
2023
Average common shares outstanding – basic91,719,475 85,833,602 
Net effect of dilutive ATM forward sale agreements 27,922 
Net effect of dilutive equity awards210,285 234,030 
Average common shares outstanding – diluted91,929,760 86,095,554 
Net income available to common shareholders$24,044 $23,124 
Basic net earnings per share$0.26 $0.27 
Diluted net earnings per share$0.26 $0.27 
For the three months ended March 31, 2024 and 2023, the number of outstanding equity awards that were anti-dilutive totaled 402,825 and 357,798, 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 months ended March 31, 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
22

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
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 March 31, 2024, 1,511,374 shares of common stock were available for award under the Plan. The unamortized compensation cost of awards issued under the Plan totaled approximately $12.3 million at March 31, 2024 as shown in the following table.
(In thousands)Restricted Stock UnitsRestricted Stock AwardsPerformance Stock AwardsTotal
Unrecognized compensation cost at January 1, 2024$1,672 $3,142 $2,648 $7,462 
Equity grants736 3,208 2,939 6,883 
Equity grant forfeitures(297)(38)(73)(408)
Equity compensation expense(209)(884)(547)(1,640)
Unrecognized Compensation Cost at March 31, 2024
$1,902 $5,428 $4,967 $12,297 
At March 31, 2024, the weighted average amortization period remaining for all of our equity awards was 2.3 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.
At March 31, 2024 and December 31, 2023, there were 205,482 and 191,081 RSUs outstanding, respectively. During the three months ended March 31, 2024, 30,525 RSUs were granted, 10,885 RSUs were forfeited, and 5,239 RSUs vested. Restrictions on these RSUs lapse through 2029.
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 March 31, 2024 and December 31, 2023, there were 231,920 and 198,636 RSAs outstanding, respectively. During the three months ended March 31, 2024, 132,566 RSAs were granted, 1,370 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 March 31, 2024 and December 31, 2023, the target number of PSUs that were unvested was 240,726 and 225,654, respectively. During the three months ended March 31, 2024, PSUs with a target number of 90,637 shares were granted and 2,542 shares 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.
23

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
Based on the grant date fair value, the Company expects to recognize $2.7 million in compensation expense on a straight-line basis over the remaining requisite service period associated with the unvested PSU awards.
NOTE 12 – FAIR VALUE MEASUREMENTS
The carrying amounts of certain of the Company’s financial instruments including cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair value due either to length of maturity or interest rates that approximate prevailing market rates. The carrying value of derivative financial instruments equal fair value in accordance with U.S. GAAP. Determining which category an asset or liability falls within the hierarchy requires significant judgment. We evaluate hierarchy disclosures each reporting period.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table presents the assets and liabilities recorded that are reported at fair value on our Consolidated Balance Sheets on a recurring basis.
March 31, 2024
(In thousands)Level 1Level 2Level 3Total
Assets
Derivative assets$ $24,414 $ $24,414 
Liabilities
Derivative liabilities$ $607 $ $607 
December 31, 2023
(In thousands)Level 1Level 2Level 3Total
Assets
Derivative assets$ $20,952 $ $20,952 
Liabilities
Derivative liabilities$ $2,968 $ $2,968 
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
24

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
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 March 31, 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.
March 31, 2024
(In thousands)
Carrying Value(1)
Fair Value
Term loan due November 2025$150,000 $149,798 
Term loan due November 2026100,000 100,085 
Term loan due January 202790,000 89,814 
Term loan due March 202785,000 86,293 
Term loan due January 202890,000 90,827 
Senior fixed note due December 202650,000 48,869 
Senior fixed note due June 202775,000 73,632 
Senior fixed note due December 202850,000 48,676 
Senior fixed note due April 202950,000 44,437 
Senior fixed note due June 202950,000 45,121 
Senior fixed note due April 203075,000 66,699 
Senior fixed note due March 203150,000 42,837 
Senior fixed note due April 203150,000 43,035 
Senior fixed note due March 203275,000 64,107 
Senior fixed note due July 2033100,000 107,670 
December 31, 2023
(In thousands)
Carrying Value(1)
Fair Value
Term loan due November 2025$150,000 $149,496 
Term loan due November 2026100,000 99,799 
Term loan due January 202790,000 89,524 
Term loan due January 202890,000 89,208 
Senior fixed note due June 202450,000 49,641 
Senior fixed note due December 202650,000 49,227 
Senior fixed note due June 202775,000 74,282 
Senior fixed note due December 202850,000 49,195 
Senior fixed note due April 202950,000 44,742 
Senior fixed note due June 202950,000 45,473 
Senior fixed note due April 203075,000 67,262 
Senior fixed note due March 203150,000 43,313 
Senior fixed note due April 203150,000 43,441 
Senior fixed note due March 203275,000 64,818 
Senior fixed note due July 2033100,000 109,521 
Revolving credit facility due November 202516,000 15,946 
(1)    Carrying values exclude deferred financing costs
25

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 months ended March 31, 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 for the three months ended March 31, 2024 and 2023.
Three Months Ended March 31, 2024
(In thousands)Real Estate OperationsRestaurant OperationsIntercompanyTotal
Revenues:
Rental revenue$58,573 $ $— $58,573 
Intercompany rental revenue217 — (217)— 
Restaurant revenue 7,894