v3.26.1
SEGMENTS
 6 Months Ended
Jun. 30, 2026
Segment Reporting [Abstract]  
SEGMENTS

NOTE 13 – SEGMENTS

During the three and six months ended June 30, 2026 and 2025, 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
June 30,

 

 

Six Months Ended
 June 30,

 

(In thousands)

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Real estate operations revenue

 

$

70,255

 

 

$

64,674

 

 

$

140,057

 

 

$

128,135

 

Segment revenue

 

 

70,255

 

 

 

64,674

 

 

 

140,057

 

 

 

128,135

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

12,925

 

 

 

12,295

 

 

 

25,246

 

 

 

24,244

 

Other segment items, net (1)

 

 

7,780

 

 

 

7,790

 

 

 

15,779

 

 

 

15,619

 

AFFO

 

$

49,550

 

 

$

44,589

 

 

$

99,032

 

 

$

88,272

 

Reconciliation to Segment net income:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

(16,357

)

 

 

(14,413

)

 

 

(32,336

)

 

 

(28,663

)

Stock-based compensation

 

 

(2,455

)

 

 

(2,001

)

 

 

(5,068

)

 

 

(4,761

)

Straight-line rent

 

 

470

 

 

 

837

 

 

 

1,248

 

 

 

1,563

 

Non-cash amortization of deferred financing costs

 

 

(888

)

 

 

(786

)

 

 

(1,688

)

 

 

(1,568

)

Other non-cash revenue adjustments

 

 

(467

)

 

 

(478

)

 

 

(1,011

)

 

 

(964

)

Segment Net Income

 

$

29,853

 

 

$

27,748

 

 

$

60,177

 

 

$

53,879

 
(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
June 30,

 

 

Six Months Ended
 June 30,

 

(In thousands)

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant operations revenue

 

$

8,383

 

 

$

8,028

 

 

$

16,736

 

 

$

16,022

 

Segment revenue

 

 

8,383

 

 

 

8,028

 

 

 

16,736

 

 

 

16,022

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

6,584

 

 

 

6,176

 

 

 

13,151

 

 

 

12,413

 

Other segment items, net (1)

 

 

1,438

 

 

 

1,404

 

 

 

2,971

 

 

 

2,941

 

EBITDA

 

$

361

 

 

$

448

 

 

$

614

 

 

$

668

 

Reconciliation to Segment net income:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

(207

)

 

 

(207

)

 

 

(414

)

 

 

(386

)

Income tax expense

 

 

(12

)

 

 

(34

)

 

 

(16

)

 

 

(20

)

Segment Net Income

 

$

142

 

 

$

207

 

 

$

184

 

 

$

262

 
(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
June 30,

 

 

Six Months Ended
 June 30,

 

(In thousands)

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Real estate operations revenue

 

$

70,255

 

 

$

64,674

 

 

$

140,057

 

 

$

128,135

 

Restaurant operations revenue

 

 

8,383

 

 

 

8,028

 

 

 

16,736

 

 

 

16,022

 

Other

 

 

(220

)

 

 

140

 

 

 

(209

)

 

 

161

 

Total Revenues

 

$

78,418

 

 

$

72,842

 

 

$

156,584

 

 

$

144,318

 

 

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

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
 June 30,

 

(In thousands)

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Segment net income:

 

 

 

 

 

 

 

 

 

 

 

 

Real estate operations

 

$

29,853

 

 

$

27,748

 

 

$

60,177

 

 

$

53,879

 

Restaurant operations

 

 

142

 

 

 

207

 

 

 

184

 

 

 

262

 

Net Income

 

$

29,995

 

 

$

27,955

 

 

$

60,361

 

 

$

54,141

 

The following table presents supplemental information by segment.

Supplemental Segment Information at June 30, 2026

(In thousands)

 

Real Estate
Operations

 

 

Restaurant
Operations

 

 

Total

 

Total real estate investments

 

$

3,551,053

 

 

$

22,361

 

 

$

3,573,414

 

Accumulated depreciation

 

 

(831,617

)

 

 

(7,937

)

 

 

(839,554

)

Total real estate investments, net

 

$

2,719,436

 

 

$

14,424

 

 

$

2,733,860

 

Cash and cash equivalents

 

$

23,293

 

 

$

1,497

 

 

$

24,790

 

Total assets

 

$

2,974,403

 

 

$

21,960

 

 

$

2,996,363

 

Total debt, net of deferred financing costs

 

$

1,253,360

 

 

$

—

 

 

$

1,253,360

 

 

Supplemental Segment Information at December 31, 2025

(In thousands)

 

Real Estate
Operations

 

 

Restaurant
Operations

 

 

Total

 

Total real estate investments

 

$

3,475,271

 

 

$

22,361

 

 

$

3,497,632

 

Accumulated depreciation

 

 

(809,161

)

 

 

(7,831

)

 

 

(816,992

)

Total real estate investments, net

 

$

2,666,110

 

 

$

14,530

 

 

$

2,680,640

 

Cash and cash equivalents

 

$

10,933

 

 

$

1,211

 

 

$

12,144

 

Total assets

 

$

2,898,869

 

 

$

21,857

 

 

$

2,920,726

 

Total debt, net of deferred financing costs

 

$

1,204,171

 

 

$

—

 

 

$

1,204,171

 

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