Executive Summary

Q2 2024 was steady and clean: AFFO per diluted share rose 2.4% YoY to $0.43; rental revenue grew 10.8% YoY to $58.5M; total revenue was $66.5M; rent collections were 99.8% and occupancy 99.6% .
External growth remained disciplined but accretive: FCPT acquired 17 properties for $45.5M at a 7.2% cash yield (roughly 30 bps better than last quarter); management expects to “add to the pipeline in a meaningful way in the second half” while maintaining quality thresholds .
Balance sheet is conservative and flexible: $240M liquidity (cash $17M + $223M undrawn revolver), net debt/Adj EBITDAre 5.7x, no maturities until Nov 2025; fixed charge coverage 4.3x .
Credit watch: Management reiterated confidence in Red Lobster exposure (18 stores) through its restructuring—expects “very minimal or no disruption from a rent perspective” and all sites to remain open; portfolio franchise exposure remains small and specific Pizza Hut franchisee issues are contained and current on rent .
Near-term catalyst: If equity multiples and debt costs remain favorable, FCPT intends to lean into higher-yielding (>7%) acquisition opportunities without sacrificing credit/real estate quality—potential for accelerated accretive deployment in 2H .

What Went Well and What Went Wrong

What Went Well
- Durable internal/portfolio performance: 99.8% rent collections; 99.6% occupancy; run-rate ABR $223.6M; WALT ~7.4 years .
- High-quality, accretive acquisitions: 17 assets at 7.2% initial cash yield; management: “we will continue to look to add to the pipeline in a meaningful way in the second half of the year while maintaining our quality standards” .
- Leasing/retention: Of 2024 expirations, ~95% renewed or swapped; minimal near-term lease roll (0.7% of ABR in 2024, ~2% in 2025) .
What Went Wrong
- Higher operating and interest costs: G&A rose to $6.0M (vs $5.6M YoY) and interest expense to $12.3M (vs $10.1M YoY), modestly damping earnings leverage despite rent growth .
- Mixed tenant comps backdrop: Darden same-store sales were +4% at LongHorn but -1.5% at Olive Garden for its latest quarter; industry casual dining trends remained slightly soft off strong comps, albeit with improving margins .
- External market friction persists: Although narrowing, bid-ask remains in parts of net lease; some sellers previously held out for lower cap rates; FCPT stayed patient to protect per-share accretion .

Financial Results

YoY comparison – Q2 2024 vs Q2 2023

Metric	Q2 2023	Q2 2024
Rental revenue ($M)	$52.843	$58.539
Restaurant revenue ($M)	$7.845	$7.940
Total revenue ($M)	$60.688	$66.479
Net income attributable to common ($M)	$23.625	$24.672
Diluted EPS ($)	$0.27	$0.27
FFO/share (diluted) ($)	$0.40	$0.41
AFFO/share (diluted) ($)	$0.42	$0.43
G&A expense ($M)	$5.600	$6.004
Interest expense ($M)	$10.051	$12.324
Rent collection (%)	N/A	99.8%

Sequential comparison – Q2 2024 vs Q1 2024

Metric	Q1 2024	Q2 2024
Rental revenue ($M)	$58.573	$58.539
Restaurant revenue ($M)	$7.894	$7.940
Total revenue ($M)	$66.467	$66.479
Net income attributable to common ($M)	$24.044	$24.672
Diluted EPS ($)	$0.26	$0.27
FFO/share (diluted) ($)	$0.41	$0.41
AFFO/share (diluted) ($)	$0.43	$0.43
Rent collection (%)	99.7%	99.8%

Segment revenue breakdown

Segment	Q2 2023	Q1 2024	Q2 2024
Rental revenue ($M)	$52.843	$58.573	$58.539
Restaurant revenue ($M)	$7.845	$7.894	$7.940

Key KPIs and balance sheet

KPI	Q4 2023	Q1 2024	Q2 2024
Occupancy (%)	99.8%	99.6%	99.6%
Rent collections (%)	99.8%	99.7%	99.8%
Run-rate ABR ($M)	$218.2	$219.6	$223.6
WALT (years)	N/A	~7.6	~7.4
Acquisitions (count/$/cap rate)	N/A	4 / $15.9M / 6.9%	17 / $45.5M / 7.2%
Liquidity ($M)	$259	$277	$240
Net debt / Adj EBITDAre (x)	5.5x	5.6x	5.7x
Fixed charge coverage (x)	4.4x	4.3x	4.3x

Estimates vs. Actuals (S&P Global)

S&P Global consensus EPS/Revenue/FFO/AFFO estimates were unavailable at the time of analysis due to API limits; therefore, we cannot present vs. estimates this quarter [GetEstimates error].

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Cash G&A expense (annual)	FY 2024	≈$17M (Q1 commentary)	≈$17M (Q2 commentary)	Maintained
Dividend per share	Q2 2024	$0.345 (Q1 declared)	$0.345 (Q2 declared)	Maintained
AFFO/FFO/Revenue guidance	FY 2024	None provided	None provided	N/A

Management does not issue acquisition volume or earnings guidance; strategy remains to deploy only when accretive to per-share metrics .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’23, Q1’24)	Current Period (Q2’24)	Trend
Cost of capital & deployment	Cautious on accretion; pricing in low 7s begins to work; patient pipeline	Equity multiples improved; debt cost eased; plan to add pipeline in 2H while maintaining quality	Improving backdrop; more optionality
Acquisition market & cap rates	Bid-ask friction; higher availability of large portfolios; focus on >7% cap	17 deals at 7.2% cap; all investment-grade/large corporate tenants; pipeline building	Pricing moving in FCPT’s favor
Tenant health & coverage	4.9x EBITDAR coverage; diversified beyond Restaurants to Auto/Medical	4.9x coverage; Darden margins improved; Chili’s comps +3.5%	Stable-to-strong portfolio metrics
Red Lobster exposure	Proactively sold weaker sites; strong coverage on remaining	Expect minimal/no rent disruption; all sites expected to remain open through restructuring	Risk moderated; monitoring
Lease maturities	High renewal rates; low near-term roll	~95% of 2024 expirations resolved; 0.7%/2.0% ABR in 2024/2025	Positive leasing outcomes
Macro/industry	Casual dining slightly soft off strong comps; margins improving	Baird shows sector improvement; Darden mixed SSS but margin tailwinds	Mixed SSS, better margins

Management Commentary

“We reported second quarter AFFO of $0.43 per share… Our existing portfolio continues to perform very well with higher rent collections and occupancy.”
“We will continue to look to add to the pipeline in a meaningful way in the second half of the year while maintaining our quality standards.”
Red Lobster: “We expect all of our Red Lobster locations to remain open [with] very minimal or no disruption from a rent perspective.”
Portfolio metrics: “We collected 99.8% of base rent… cash G&A was $4.3M (7.4% of cash rental income)… net debt to adjusted EBITDAre was 5.7x… $240M of liquidity.”
Discipline/value: “Increasingly, we are finding attractive opportunities over a 7% cap rate with quality tenants and real estate.”

Q&A Highlights

Red Lobster closures: None of FCPT’s stores were on recent closure lists; discussions are “productive” and stores are performing .
Pizza Hut franchisee (EYM) bankruptcy: FCPT has “a couple of stores,” they are paying, and a personal guarantee supports the leases .
Cap rates outlook: Cap rates lifted with a lag and remain in low 7s for quality; uncertainty persists, focus is on high-grading pipeline .
Capital deployment cadence: Improved cost of capital and greater seller willingness should support more activity in 2H .
Portfolio execution: ~75 bps portfolio discount evidenced in Mavis sale-leaseback; more value in established buyers amid market uncertainty .

Estimates Context

Wall Street consensus estimates (S&P Global) for Q2 2024 EPS/Revenue/FFO/AFFO were unavailable at the time of analysis due to data access limits. As a result, we cannot characterize beats/misses this quarter relative to S&P consensus [GetEstimates error].
Given stable internal metrics and higher-yielding acquisitions, sell-side AFFO estimates may drift modestly higher if management accelerates deployment in 2H and maintains 7%+ cap rates without incremental leverage .

Key Takeaways for Investors

Defensive quarter: Strong collections and occupancy, incremental YoY AFFO/share growth, and no change to dividend underscore portfolio durability .
External growth runway: With cost of capital improving and cap rates ≥7%, FCPT is positioned to step up accretive acquisitions in Auto Service/Medical Retail and select restaurant assets in 2H .
Credit risk contained: Red Lobster outlook improved; franchisee issues (e.g., Pizza Hut EYM) are small and secured by guarantees; portfolio composition remains heavily corporate/investment-grade .
Balance sheet optionality: 5.7x net debt/Adj EBITDAre, 4.3x FCCR, $240M liquidity, and no maturities until Nov 2025 provide nimbleness without equity dependence .
Leasing momentum intact: 95% renewal/swap on 2024 maturities and minimal near-term lease roll lower cash flow risk into 2025 .
Focus for near-term trading: Watch acquisition announcements and cap rates; evidence of higher deployment at similar yields should be AFFO-accretive and a potential stock catalyst .
Medium-term thesis: Data-driven underwriting, disciplined capital allocation, and continued diversification beyond restaurants support steady per-share growth and defensive dividends through cycles .

Sources:

Q2 2024 8-K and Exhibits (press release, financials, supplemental, investor presentation) .
Q2 2024 press release (standalone) .
Q2 2024 earnings call transcript –.
Q1 2024 8-K and Exhibits (press release, supplemental, investor presentation) –.
Q1 2024 and Q4 2023 earnings call transcripts – –.
Dividend declaration PR (Q2) .
Q2 2024-period acquisitions PRs (e.g., MercyOne, Taco Bell) .

Estimates note: S&P Global consensus data were unavailable at the time of analysis due to API limits; thus, no vs-consensus table is provided this quarter.

Four Corners Property Trust, Inc. (FCPT)·Q2 2024 Earnings Summary