SEGMENTS

3 Months Ended

Mar. 31, 2025

Segment Reporting [Abstract]

SEGMENTS

NOTE 14 – SEGMENTS

During the three months ended March 31, 2025 and 2024, we operated in two segments: real estate operations and restaurant operations. In our real estate operations, we lease properties to tenants through net lease arrangements under which the tenants are primarily responsible for ongoing costs relating to the properties, including utilities, property taxes, insurance, common area maintenance charges, and maintenance and repair costs. In our restaurant operations, we operate seven LongHorn Steakhouse restaurants located in the San Antonio, Texas area.

Our chief operating decision maker evaluates performance of the real estate operations based on Adjusted Funds from Operations (“AFFO”) and evaluates performance of the restaurant operations based on Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA") in order to determine how to allocate resources to these segments. We define AFFO as total real estate operations segment revenues, less total segment operating expenses. We define EBITDA as total restaurant operations segment revenues less total segment operating expenses. We consider these respective measures useful because they allow investors, analysts and our management to measure our year-over-year ability to fund dividend distribution from operating activities. In order to facilitate a clear understanding of our historical consolidated operating results, AFFO and EBITDA should be examined in conjunction with net income as presented in our Consolidated Financial Statements and other financial data included elsewhere in this Report.

Our segments are based on our organizational and management structure, which aligns with how our results are monitored and performance is assessed. The accounting policies of the reportable segments are the same as those described in Note 2 - Summary of Significant Accounting Policies.

The following table presents financial information for the real estate operations segment.

	Three Months Ended March 31,
(In thousands)	2025			2024
Revenues:
Real estate operations revenue	$	63,461		$	58,171
Segment revenue		63,461			58,171
Operating expenses:
Interest expense		11,949			11,643
Other segment items, net (1)		7,829			7,473
AFFO	$	43,683		$	39,055
Reconciliation to Segment net income:
Depreciation and amortization		(14,222	)		(13,279	)
Stock-based compensation		(2,760	)		(1,640	)
Straight-line rent		726			1,174
Non-cash amortization of deferred financing costs		(782	)		(638	)
Other non-cash revenue adjustments		(486	)		(555	)
Segment Net Income	$	26,159		$	24,117

(1)Other segment items, net includes: compensation and related expenses, external services, other operating costs, property expenses, other income, net, and income tax expense

The following table presents financial information for the restaurant operations segment.

	Three Months Ended March 31,
(In thousands)	2025			2024
Revenues:
Restaurant operations revenue	$	7,994		$	7,894
Segment revenue		7,994			7,894
Operating expenses:
Cost of goods sold		6,237			6,297
Other segment items, net (1)		1,537			1,484
EBITDA	$	220		$	113
Reconciliation to Segment net income (loss):
Depreciation and amortization		(207	)		(188	)
Income tax benefit		14			32
Segment Net Income (Loss)	$	27		$	(43	)

(1)Other segment items, net includes: franchise fees, rent and property tax expense, and administrative expense

The following table reconciles the segment revenues to our total revenues.

	Three Months Ended March 31,
(In thousands)	2025		2024
Revenues:
Real estate operations revenue	$	63,461	$	58,171
Restaurant operations revenue		7,994		7,894
Other		21		402
Total Revenues	$	71,476	$	66,467

The following table reconciles the segment revenues to our net income.

	Three Months Ended March 31,
(In thousands)	2025		2024
Segment net income:
Real estate operations	$	26,159	$	24,117
Restaurant operations		27		(43	)
Net Income	$	26,186	$	24,074

The following table presents supplemental information by segment.

Supplemental Segment Information at March 31, 2025

(In thousands)	Real Estate Operations			Restaurant Operations			Total
Total real estate investments	$	3,232,450		$	22,230		$	3,254,680
Accumulated depreciation		(777,601	)		(7,342	)		(784,943	)
Total real estate investments, net	$	2,454,849		$	14,888		$	2,469,737
Cash and cash equivalents	$	20,983		$	1,280		$	22,263
Total assets	$	2,689,185		$	21,967		$	2,711,152
Total debt, net of deferred financing costs	$	1,201,959		$	—		$	1,201,959

Supplemental Segment Information at December 31, 2024

(In thousands)	Real Estate Operations			Restaurant Operations			Total
Total real estate investments	$	3,175,813		$	22,831		$	3,198,644
Accumulated depreciation		(767,716	)		(7,789	)		(775,505	)
Total real estate investments, net	$	2,408,097		$	15,042		$	2,423,139
Cash and cash equivalents	$	2,985		$	1,096		$	4,081
Total assets	$	2,631,171		$	21,855		$	2,653,026
Total debt, net of deferred financing costs	$	1,137,889		$	—		$	1,137,889

Capital expenditures in our Consolidated Statements of Cash Flows relate to the real estate operations segment.