Essential Properties Announces Second Quarter 2026 Results

About this update from Essential Properties Realty Trust, Inc.

Essential Properties Realty Trust, Inc. (NYSE: EPRT; “Essential Properties” or the “Company”) today announced operating results for the three and six months ended June 30, 2026. Second Quarter 2026 Financial and Operating Highlights: Operating Results (compared to Second Quarter 2025):     • Investments (103 properties) $ Invested $332.4 million   Weighted Avg Cash Cap Rate 7.8% • Dispositions (17 properties) Net Proceeds $54.3 million   Weighted Avg Cash Cap Rate 7.3% • Net Income per Share Increased by 6% $0.34 • Funds from Operations (“FFO”) per Share (1) Increased by 6% $0.53 • Core Funds from Operations (“Core FFO”) per Share (1) Increased by 6% $0.53 • Adjusted Funds from Operations (“AFFO”) per Share (1) Increased by 9% $0.50 Debt, Equity & Leverage:     • Public Debt Issuance (June 4, 2026) 10 years; 5.38% coupon $400.0 million • Equity Raised (Gross) - ATM Program (2) $30.70/share $36.6 million • Equity Raised (Gross) - Common OP Units $30.39/unit $36.6 million • Pro Forma Net Debt to Annualized Adjusted EBITDA re (1) As of Quarter End 3.5x Full Year 2026 Financial and Operating Highlights: Operating Results (compared to YTD Second Quarter 2025):     • Investments (229 properties) $ Invested $721.1 million   Weighted Avg Cash Cap Rate 7.7% • Dispositions (23 properties) Net Proceeds $64.4 million   Weighted Avg Cash Cap Rate 7.2% • Net Income per share Increased by 2% $0.62 • FFO per share (1) Increased by 9% $1.07 • Core FFO per share (1) Increased by 9% $1.07 • AFFO per share (1) Increased by 10% $1.00 Debt, Equity & Leverage:     • Public Debt Issuance (June 4, 2026) 10 years; 5.38% coupon $400.0 million • Equity Raised (Gross) - Follow-On Offering & ATM Program (2) $32.06/share $455.8 million _______________ 1.   See page 8 for reconciliations of non-GAAP financial measures to corresponding GAAP metrics. 2.   All shares were sold on a forward basis and a total of 18,887,181 shares remain unsettled for estimated net proceeds of $574.7 million. CEO Comments Commenting on the second quarter 2026 results, the Company's Chief Executive Officer, Pete Mavoides, said, “The second quarter was highlighted by strong execution across our investment activity, reflecting the strength of our sourcing platform and deep operator relationships across the middle market industries in which we invest. With continued strong portfolio performance and our debt and equity capital needs largely addressed for the remainder of the year and well into 2027, we are able to increase our AFFO per share guidance for the year.” Portfolio Highlights The Company’s investment portfolio as of June 30, 2026 is summarized as follows:     June 30, 2026 Number of properties   2,493 Weighted average lease term (WALT)   14.3 years Weighted average rent coverage ratio   3.5x Top 10 tenant concentration (% of cash ABR)   15.2% Top 20 tenant concentration (% of cash ABR)   25.4% Weighted average occupancy (9 vacant properties)   99.6% Total square feet of rentable space   28.5 million Service-oriented or experience-based (% of cash ABR)   91.6% Properties subject to master lease (% of cash ABR)   64.6% Portfolio Update Investments During the three months ended June 30, 2026, the Company's $332.4 million of investment activity had a weighted average closing date of June 11, 2026. Additional details about the Company’s investment activity during the three and six months ended June 30, 2026 are summarized as follows:     Quarter Ended June 30, 2026   Year to Date June 30, 2026 Investments:         Investment volume   $332.4 million   $721.1 million Number of transactions   36   58 Property count   103   229 Weighted average cash / GAAP cap rate   7.8%/9.1%   7.7%/8.9% Weighted average lease escalation   1.9%   1.9% % Subject to master lease   50%   49% % Sale-leaseback transactions   84%   92% % Existing relationship   72%   64% % Required financial reporting (tenant/guarantor)   100%   100% WALT   16.0 years   16.9 years Dispositions The Company’s disposition activity during the three and six months ended June 30, 2026 is summarized as follows:     Quarter Ended June 30, 2026   Year to Date June 30, 2026 Dispositions:         Net proceeds   $54.3 million   $64.4 million Number of properties sold   17   23 Net gain / (loss)   $4.7 million   $10.0 million Weighted average cash cap rate (excluding vacant properties and sales subject to a tenant purchase option)   7.3%   7.2% Loan Repayments Loan repayments received by the Company during the three and six months ended June 30, 2026 are summarized as follows:     Quarter Ended June 30, 2026   Year to Date June 30, 2026 Loan Repayments:         Proceeds—Principal   $27.9 million   $34.1 million Number of properties   10   13 Weighted average interest rate   9.3%   9.3% Leverage and Liquidity The Company's leverage and liquidity as of June 30, 2026 are summarized in the following table.     June 30, 2026   Pro Forma (1) June 30, 2026 Leverage:         Net debt to Annualized Adjusted EBITDA re   4.5x   3.5x           Liquidity:         Cash and cash equivalents and restricted cash   $134.2 million   $708.9 million Unused revolving credit facility capacity   $1.0 billion   $1.0 billion Forward equity sales - unsettled   $574.7 million   — Total available liquidity   $1.7 billion   $1.7 billion           ATM Program:         October 2024 ATM Program initial availability   $750.0 million     Aggregate gross sales under the October 2024 ATM Program   $455.9 million     Availability remaining under the October 2024 ATM Program   $294.1 million     _______________ 1.   Pro forma adjustments have been made to reflect 18,887,181 unsettled shares sold on a forward basis as if they had been physically settled for cash on June 30, 2026. Equity Activity The Company's equity activity during the three months ended June 30, 2026 is summarized in the following table.     Shares   Price (Net) (1)   Net Proceeds (000s) Forward Shares Unsettled - March 31, 2026   17,695,008   $30.44   $538,686 Shares Sold - Current Quarter   1,192,173   30.24   36,051 Shares Settled - Current Quarter   —   —   — Forward Shares Unsettled - June 30, 2026   18,887,181   $30.43   $574,737 _______________ 1.   Prices are inclusive of forward price adjustments as of June 30, 2026. Guidance 2026 Guidance The Company is increasing its previously issued 2026 AFFO per share estimate from $2.00 to $2.05 to a new range of $2.01 to $2.05. The Company is also increasing its guidance range for 2026 investment volume from $1.1 billion to $1.5 billion to an updated range of $1.2 billion to $1.5 billion, and is reiterating its prior guidance range for 2026 Cash G&A of $30.0 million to $34.0 million. Note: The Company does not provide guidance for the most comparable GAAP financial measures, net income and general and administrative expense, or a reconciliation of the forward-looking non-GAAP financial measures of AFFO to net income computed in accordance with GAAP and Cash G&A expense to general and administrative expense computed in accordance with GAAP, because it is unable to reasonably predict, without unreasonable efforts, certain items that would be contained in the GAAP measures, including items that are not indicative of the Company's ongoing operations, such as, without limitation, potential impairments of real estate assets, net gain/loss on dispositions of real estate assets, changes in allowance for credit losses and non-cash compensation expense. These items are uncertain, depend on various factors, and could have a material impact on the Company's GAAP results for the guidance period. Dividend Information As previously announced, on May 29, 2026, Essential Properties' board of directors declared a cash dividend of $0.32 per share of common stock for the quarter ended June 30, 2026. The second quarter 2026 dividend represents an annualized dividend of $1.28 per share of common stock. The dividend was paid on July 14, 2026 to stockholders of record as of the close of business on June 30, 2026. Conference Call Information In conjunction with the release of Essential Properties’ operating results, the Company will host a conference call on Thursday, July 23, 2026 at 10:00 a.m. ET to discuss the results. To access the conference, dial 800-579-2543 (International: 785-424-1789) and use the conference ID: EPRT. A live webcast will also be available in listen-only mode by clicking on the webcast link in the Investor Relations section at www.essentialproperties.com . A telephone replay of the conference call can also be accessed by calling 844-512-2921 (International: 412-317-6671) and entering the access code: 11162070. The telephone replay will be available through August 6, 2026. A replay of the conference call webcast will be available on our website approximately three hours after the conclusion of the live broadcast. The webcast replay will be available for 90 days. No access code is required for this replay. Supplemental Materials The Company’s Investor Presentation and Supplemental Information—Second Quarter 2026 is available on Essential Properties’ website at investors.essentialproperties.com . About Essential Properties Realty Trust, Inc. Essential Properties Realty Trust, Inc. is an internally managed REIT that acquires, owns and manages primarily single- tenant properties that are net leased on a long-term basis to companies operating service-oriented or experience-based businesses. As of June 30, 2026, the Company’s portfolio consisted of 2,493 freestanding net lease properties with a weighted average lease term of 14.3 years and a weighted average rent coverage ratio of 3.5x. In addition, as of June 30, 2026, the Company’s portfolio was 99.6% leased to tenants operating 715 different concepts across 48 states. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the federal securities laws. When used in this press release, the words “estimate,” “anticipate,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “seek,” “approximately” or “plan,” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters, are intended to identify forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans or intentions of management. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and the Company may not be able to realize them. The Company does not guarantee that the transactions and events described will happen as described (or that they will happen at all). You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this press release. While forward-looking statements reflect the Company’s good faith beliefs, they are not guarantees of future performance. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events, except as required by law. In light of these risks and uncertainties, the forward-looking events discussed in this press release might not occur as described, or at all. Additional information concerning factors that could cause actual results to differ materially from these forward-looking statements is contained in the company’s Securities and Exchange Commission (the “Commission”) filings, including, but not limited to, the Company’s most recent Annual Report on Form 10-K. Copies of each filing may be obtained from the Company or the Commission. Such forward-looking statements should be regarded solely as reflections of the Company’s current operating plans and estimates. Actual operating results may differ materially from what is expressed or forecast in this press release. The results reported in this press release are preliminary and not final. There can be no assurance that these results will not vary from the final results reported in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 that it will file with the Commission. Essential Properties Realty Trust, Inc. Consolidated Statements of Operations       Three months ended June 30,   Six months ended June 30, (unaudited, in thousands, except share and per share data)     2026       2025       2026       2025   Revenues:                 Rental revenue (1)(2)   $ 151,113     $ 129,108     $ 300,505     $ 250,900   Interest on loans and direct financing lease receivables     9,805       7,573       18,432       15,098   Other revenue     970       381       1,749       418   Total revenues     161,888       137,062       320,686       266,416                     Expenses:                 General and administrative     10,913       10,670       23,240       22,213   Property expenses (2)     1,081       1,497       2,575       3,754   Depreciation and amortization     46,130       38,590       89,319       73,583   Provision for impairment of real estate     1,365       612       18,195       6,495   Change in provision for credit losses     2,635       (44 )     3,257       —   Total expenses     62,124       51,325       136,586       106,045   Other operating income:                 Gain on dispositions of real estate, net     4,654       2,076       9,966       7,060   Income from operations     104,418       87,813       194,066       167,431   Other (expense)/income:                 Interest expense     (30,269 )     (24,998 )     (60,215 )     (48,791 ) Interest income     580       711       990       1,325   Other income, net     387       —       387       —   Income before income tax expense     75,116       63,526       135,228       119,965   Income tax expense     635       156       795       314   Net income     74,481       63,370       134,433       119,651   Net income attributable to non-controlling interests     (194 )     (158 )     (353 )     (331 ) Net income attributable to stockholders   $ 74,287     $ 63,212     $ 134,080     $ 119,320                     Basic weighted-average shares outstanding     216,260,528       197,551,003       213,235,988       193,030,913   Basic net income per share   $ 0.34     $ 0.32     $ 0.63     $ 0.62                     Diluted weighted-average shares outstanding     217,918,955       199,632,311       215,008,074       195,317,678   Diluted net income per share   $ 0.34     $ 0.32     $ 0.62     $ 0.61   _______________ 1.   Includes contingent rent (based on a percentage of the tenant's gross sales at the leased property) of $276, $236, $370 and $442 for the three and six months ended June 30, 2026 and 2025, respectively. 2.   Includes reimbursable income or reimbursable expenses from the Company’s tenants of $502, $954, $1,305 and $2,483 for the three and six months ended June 30, 2026 and 2025, respectively. Essential Properties Realty Trust, Inc. Consolidated Balance Sheets   (in thousands, except share and per share data)   June 30, 2026   December 31, 2025     (Unaudited)   (Audited) ASSETS         Investments:         Real estate investments, at cost:         Land and improvements   $ 2,401,926     $ 2,200,829   Building and improvements     4,723,454       4,388,959   Lease incentives     23,192       24,154   Construction in progress     39,075       49,881   Intangible lease assets     116,423       99,217   Total real estate investments, at cost     7,304,070       6,763,040   Less: accumulated depreciation and amortization     (688,346 )     (612,674 ) Total real estate investments, net     6,615,724       6,150,366   Loans and direct financing lease receivables, net     457,107       401,323   Real estate investments held for sale, net     3,918       2,635   Net investments     7,076,749       6,554,324   Cash and cash equivalents     126,165       60,181   Restricted cash     8,064       10,184   Straight-line rent receivable, net     225,831       191,008   Derivative assets     7,535       7,861   Rent receivables, prepaid expenses and other assets, net     45,969       39,465   Total assets   $ 7,490,313     $ 6,863,023             LIABILITIES AND EQUITY         Unsecured term loans, net of deferred financing costs   $ 1,726,971     $ 1,725,010   Senior unsecured notes, net     1,176,075       786,708   Revolving credit facility     —       —   Intangible lease liabilities, net     14,196       10,766   Intangible lease liabilities held for sale, net     76       —   Dividends and distributions payable     70,152       65,391   Derivative liabilities     6,784       26,226   Accrued liabilities and other payables     44,088       41,028   Total liabilities     3,038,342       2,655,129   Commitments and contingencies     —       —   Stockholders' equity:         Preferred stock, $0.01 par value; 150,000,000 authorized; none issued and outstanding as of June 30, 2026 and December 31, 2025     —       —   Common stock, $0.01 par value; 500,000,000 authorized; 216,271,958 and 209,702,433 issued and outstanding as of June 30, 2026 and December 31, 2025, respectively     2,163       2,097   Additional paid-in capital     4,527,700       4,328,137   Distributions in excess of cumulative earnings     (119,778 )     (109,261 ) Accumulated other comprehensive loss     (1,674 )     (20,979 ) Total stockholders' equity     4,408,411       4,199,994   Non-controlling interests     43,560       7,900   Total equity     4,451,971       4,207,894   Total liabilities and equity   $ 7,490,313     $ 6,863,023   Essential Properties Realty Trust, Inc. Reconciliation of Non-GAAP Financial Measures       Three months ended June 30,   Six months ended June 30, (unaudited, in thousands except per share data)     2026       2025       2026       2025   Net income   $ 74,481     $ 63,370     $ 134,433     $ 119,651   Depreciation and amortization of real estate     45,755       38,549       88,884       73,499   Provision for impairment of real estate     1,365       612       18,195       6,495   Gain on dispositions of real estate, net     (4,654 )     (2,076 )     (9,966 )     (7,060 ) Funds from Operations     116,947       100,455       231,546       192,585   Non-core (income) expense, net (1)     (266 )     —       (218 )     —   Core Funds from Operations     116,681       100,455       231,328       192,585   Adjustments:                 Straight-line rental revenue, net     (15,133 )     (12,105 )     (30,498 )     (23,078 ) Non-cash interest     1,452       1,357       2,894       2,635   Non-cash compensation expense     3,461       3,496       7,626       7,464   Other amortization expense     946       268       1,233       520   Change in provision for credit losses     2,635       (44 )     3,257       —   Other non-cash adjustments     625       505       1,194       733   Capitalized interest expense     (550 )     (911 )     (1,111 )     (2,137 ) Adjusted Funds from Operations   $ 110,117     $ 93,021     $ 215,923     $ 178,722                     Net income per share: (2)                 Basic   $ 0.34     $ 0.32     $ 0.63     $ 0.62   Diluted   $ 0.34     $ 0.32     $ 0.62     $ 0.61   FFO per share: (2)                 Basic   $ 0.54     $ 0.51     $ 1.08     $ 0.99   Diluted   $ 0.53     $ 0.50     $ 1.07     $ 0.98   Core FFO per share: (2)                 Basic   $ 0.54     $ 0.51     $ 1.08     $ 0.99   Diluted   $ 0.53     $ 0.50     $ 1.07     $ 0.98   AFFO per share: (2)                 Basic   $ 0.51     $ 0.47     $ 1.01     $ 0.92   Diluted   $ 0.50     $ 0.46     $ 1.00     $ 0.91   _______________ 1.   Includes net insurance recovery income during the three months ended June 30, 2026 and non-core technology expenses during the three and six months ended June 30, 2026. 2.   Calculations exclude $377, $229, $739 and $455 from the numerator for the three and six months ended June 30, 2026 and 2025, respectively, related to dividend equivalents and distributions paid on unvested restricted stock units and LTIP units.     Three months ended June 30,   Six months ended June 30, (unaudited, in thousands)     2026       2025       2026       2025   General and administrative expense   $ 10,913     $ 10,670     $ 23,240     $ 22,213   Non-core general and administrative expense (1)     (121 )     —       (169 )     —   Non-cash compensation expense     (3,461 )     (3,496 )     (7,626 )     (7,464 ) Straight-line rent expense, net     (151 )     10       (250 )     21   Cash G&A   $ 7,180     $ 7,184     $ 15,195     $ 14,770   _______________ 1.   Includes non-core technology expenses during the three and six months ended June 30, 2026. Essential Properties Realty Trust, Inc. Reconciliation of Non-GAAP Financial Measures   (unaudited, in thousands)   Three months ended June 30, 2026 Net income   $ 74,481   Depreciation and amortization     46,130   Interest expense     30,269   Interest income     (580 ) Income tax expense     635   EBITDA     150,935   Provision for impairment of real estate     1,365   Gain on dispositions of real estate, net     (4,654 ) EBITDA re     147,646   Adjustment for current quarter re-leasing, acquisition and disposition activity (1)     5,623   Adjustment for other non-core or non-recurring activity (2)     4,406   Adjustment to exclude termination/prepayment fees and certain percentage rent (3)     (856 ) Adjusted EBITDA re - Current Estimated Run Rate     156,819   General and administrative expense     11,115   Adjusted net operating income ("NOI")     167,934   Straight-line rental revenue, net (1)     (18,172 ) Other amortization expense     946   Adjusted Cash NOI   $ 150,708         Annualized EBITDA re   $ 590,584   Annualized Adjusted EBITDA re   $ 627,276   Annualized Adjusted NOI   $ 671,736   Annualized Adjusted Cash NOI   $ 602,832   _______________ 1.   Adjustment is made to reflect EBITDA re , NOI and Cash NOI as if all re-leasing activity, investments in and dispositions of real estate and loan repayments completed during the three months ended June 30, 2026 had occurred on April 1, 2026. 2.   Adjustment is made to i) exclude non-core adjustments made in computing Core FFO, if any, ii) exclude changes in the Company's provision for credit losses and iii) eliminate the impact of seasonal fluctuation in certain non-cash compensation expense recorded in the period. 3.   Adjustment excludes lease termination or loan prepayment fees and contingent rent (based on a percentage of the tenant's gross sales at the leased property) where payment is subject to exceeding a sales threshold specified in the lease, if any. Essential Properties Realty Trust, Inc. Reconciliation of Non-GAAP Financial Measures   (unaudited, dollars in thousands, except share and per share data)   June 30, 2026   Rate   Wtd. Avg. Maturity               Unsecured debt:             February 2027 term loan (1)   $ 430,000     2.26 %   0.6 years January 2028 term loan (1)     400,000     4.51 %   1.6 years February 2029 term loan (1)(2)     450,000     5.25 %   2.7 years January 2030 term loan (1)(2)     450,000     4.67 %   3.5 years Senior unsecured notes due July 2031     400,000     3.12 %   5.0 years Senior unsecured notes due December 2035     400,000     5.40 %   9.4 years Senior unsecured notes due July 2036     400,000     5.38 %   10.0 years Revolving credit facility (2)(3)     —     — %   3.6 years Total unsecured debt     2,930,000     4.37 %   4.6 years Gross debt     2,930,000           Less: cash & cash equivalents     (126,165 )         Less: restricted cash available for future investment     (8,064 )         Net debt     2,795,771                         Equity:             Preferred stock     —           Common stock, OP Units & vested LTIP Units (218,048,119 shares @ $29.85/share as of 6/30/26) (4)     6,508,736           Total equity     6,508,736           Total enterprise value ("TEV")   $ 9,304,507                         Pro forma adjustments to Net debt and TEV: (5)             Net debt   $ 2,795,771           Less: Unsettled forward equity (18,887,181 shares @ $30.43/share as of 6/30/26)     (574,737 )         Pro forma net debt     2,221,034           Total equity     6,508,736           Common stock — unsettled forward equity (18,887,181 shares @ $29.85/share as of 6/30/26)     563,782           Pro forma TEV   $ 9,293,552                         Gross Debt / Undepreciated Gross Assets     35.8 %         Net Debt / TEV     30.0 %         Net Debt / Annualized Adjusted EBITDA re   4.5x                       Pro Forma Gross Debt / Undepreciated Gross Assets     33.5 %         Pro Forma Net Debt / Pro Forma TEV     23.9 %         Pro Forma Net Debt / Annualized Adjusted EBITDA re   3.5x         _______________ 1.   Rates presented for the Company's term loans are fixed at the stated rates after giving effect to its interest rate swaps plus applicable margin of 85bps. 2.   Weighted average maturity calculation is made after giving effect to extension options exercisable at the Company's election. 3.   The Company's revolving credit facility provides a maximum aggregate initial original principal amount of up to $1.0 billion and includes an accordion feature to increase, subject to certain conditions, the maximum availability of the facility by up to $1.0 billion. Borrowings bear interest at Term SOFR plus applicable margin of 77.5bps. 4.   Includes 216,271,958 shares of common stock outstanding and 1,776,161 OP Units and vested LTIP Units held by non-controlling interests. 5.   Pro forma adjustments have been made to reflect the unsettled portion of shares sold on a forward basis as if they had been physically settled for cash on June 30, 2026. Non-GAAP Financial Measures and Certain Definitions The Company’s reported results are presented in accordance with GAAP. The Company also discloses the following non-GAAP financial measures: FFO, Core FFO, AFFO, earnings before interest, taxes, depreciation and amortization (“EBITDA”), EBITDA further adjusted to exclude gains (or losses) on sales of depreciable property and real estate impairment losses (“EBITDA re ”), net debt, net operating income (“NOI”), cash NOI (“Cash NOI”), adjusted EBITDA re , adjusted NOI, adjusted Cash NOI and cash general and administrative expense (“Cash G&A”). The Company believes these non-GAAP financial measures are industry measures used by analysts and investors to compare the operating performance of REITs. FFO, Core FFO and AFFO The Company computes FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as GAAP net income or loss adjusted to exclude extraordinary items (as defined by GAAP), net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and real estate-related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets), including the pro rata share of such adjustments of unconsolidated subsidiaries. FFO is used by management, and may be useful to investors and analysts, to facilitate meaningful comparisons of operating performance between periods and among the Company’s peers primarily because it excludes the effect of real estate depreciation and amortization and net gains and losses on sales (which are dependent on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions). The Company computes Core FFO by adjusting FFO, as defined by NAREIT, to exclude certain GAAP income and expense amounts that it believes are infrequent and unusual in nature and/or not related to its core real estate operations. Exclusion of these items from similar FFO-type metrics is common within the equity REIT industry, and management believes that presentation of Core FFO provides investors with a metric to assist in their evaluation of our operating performance across multiple periods and in comparison to the operating performance of our peers, because it removes the effect of unusual items that are not expected to impact our operating performance on an ongoing basis. Core FFO is used by management in evaluating the performance of our core business operations. Items included in calculating FFO that may be excluded in calculating Core FFO include certain transaction related gains, losses, income or expenses or other non-core amounts as they occur. To derive AFFO, the Company modifies its computation of Core FFO to include other adjustments to GAAP net income related to certain items that it believes are not indicative of the Company’s operating performance, including straight-line rental revenue, non-cash interest, non-cash compensation expense, other amortization expense, the change in our provision for credit losses, other non-cash adjustments and capitalized interest expense. Such items may cause short-term fluctuations in net income but have no impact on operating cash flows or long-term operating performance. The Company believes that AFFO is an additional useful supplemental measure for investors to consider when assessing the Company’s operating performance without the distortions created by non-cash items and certain other revenues and expenses. FFO, Core FFO and AFFO do not include all items of revenue and expense included in net income, they do not represent cash generated from operating activities and they are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operations as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures. Additionally, our computation of FFO, Core FFO and AFFO may differ from the methodology for calculating these metrics used by other equity REITs and, therefore, may not be comparable to similarly titled measures reported by other equity REITs. EBITDA and EBITDAre The Company computes EBITDA as earnings before interest, income taxes and depreciation and amortization. In 2017, NAREIT issued a white paper recommending that companies that report EBITDA also report EBITDA re . The Company computes EBITDA re in accordance with the definition adopted by NAREIT. NAREIT defines EBITDA re as EBITDA (as defined above) excluding gains (or losses) from the sales of depreciable property and real estate impairment losses. The Company presents EBITDA and EBITDA re as they are measures commonly used in its industry and the Company believes that these measures are useful to investors and analysts because they provide supplemental information concerning its operating performance, exclusive of certain non-cash items and other costs. The Company uses EBITDA and EBITDAre as measures of its operating performance and not as measures of liquidity. EBITDA and EBITDA re do not include all items of revenue and expense included in net income, they do not represent cash generated from operating activities and they are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operations as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures. Additionally, the Company’s computation of EBITDA and EBITDA re may differ from the methodology for calculating these metrics used by other equity REITs and, therefore, may not be comparable to similarly titled measures reported by other equity REITs. Net Debt The Company calculates its net debt as its gross debt (defined as total debt plus net deferred financing costs on its secured borrowings) less cash and cash equivalents and restricted cash available for future investment. The Company believes excluding cash and cash equivalents and restricted cash available for future investment from gross debt, all of which could be used to repay debt, provides an estimate of the net contractual amount of borrowed capital to be repaid, which it believes is a beneficial disclosure to investors and analysts. NOI and Cash NOI The Company computes NOI as total revenues less property expenses. NOI excludes all other items of expense and income included in the financial statements in calculating net income or loss. Cash NOI further excludes non-cash items included in total revenues and property expenses, such as straight-line rental revenue and other amortization and non-cash adjustments. The Company believes NOI and Cash NOI provide useful information because they reflect only those revenue and expense items that are incurred at the property level and present such items on an unlevered basis. NOI and Cash NOI are not measures of financial performance under GAAP. You should not consider the Company’s NOI and Cash NOI as alternatives to net income or cash flows from operating activities determined in accordance with GAAP. Additionally, the Company’s computation of NOI and Cash NOI may differ from the methodology for calculating these metrics used by other equity REITs and, therefore, may not be comparable to similarly titled measures reported by other equity REITs. Adjusted EBITDAre / Adjusted NOI / Adjusted Cash NOI The Company further adjusts EBITDA re , NOI and Cash NOI i) based on an estimate calculated as if all investment and disposition activity that took place during the quarter had occurred on the first day of the quarter, ii) to exclude certain GAAP income and expense amounts that the Company believes are infrequent and unusual in nature and iii) to eliminate the impact of lease termination or loan prepayment fees and contingent rental revenue from its tenants which is subject to sales thresholds specified in the lease. The Company then annualizes these estimates for the current quarter by multiplying them by four, which it believes provides a meaningful estimate of the Company’s current run rate for all investments as of the end of the current quarter. You should not unduly rely on these measures, as they are based on assumptions and estimates that may prove to be inaccurate. The Company’s actual reported EBITDA re , NOI and Cash NOI for future periods may be significantly less than these estimates of current run rates. Cash G&A The Company computes Cash G&A as general and administrative expense, as determined in accordance with GAAP, less non-core general and administrative expense, non-cash compensation expense and straight-line rent expense on leases where it is the lessee. The Company excludes non-core general and administrative expense, non-cash compensation expense and straight-line rent expense because they may cause short-term fluctuations in general and administrative expense but have no impact on operating cash flows or long-term operating performance. The Company believes that Cash G&A is a useful supplemental measure for investors to consider when assessing its operating performance without the distortion created by non-cash and non-core items. Cash G&A is not a measure of financial performance under GAAP. You should not consider the Company's Cash G&A as an alternative to general and administrative expense determined in accordance with GAAP. Additionally, the Company's computation of Cash G&A may differ from the methodology for calculating this metric used by other equity REITs, and, therefore, may not be comparable to similarly titled measures reported by other equity REITs. Cash ABR Cash ABR means annualized contractually specified cash base rent in effect as of the end of the current quarter for all of the Company’s leases (including those accounted for as direct financing leases) commenced as of that date and annualized cash interest on its mortgage loans receivable as of that date. Cash Cap Rate Cash Cap Rate means expected annual contractually specified cash rent and interest at the time of investment or disposition divided by the gross investment or sale price, as applicable, for the property, including transaction costs. GAAP Cap Rate GAAP Cap Rate means expected annual rental and interest income computed in accordance with GAAP at the time of investments divided by the gross investment in the property, including transactions costs. Rent Coverage Ratio Rent coverage ratio means the ratio of tenant-reported or, when unavailable, management’s estimate based on tenant-reported financial information, annual EBITDA and cash rent attributable to the leased property (or properties, in the case of a master lease) to the annualized base rental obligation as of a specified date. Weighted Average Annual Escalation Weighted average annual escalation rate means the entire portfolio reflects as if all escalations occur annually. For leases in which rent escalates by the greater of a stated fixed percentage or CPI, we have assumed an escalation equal to the stated fixed percentage in the lease. As any future increase in CPI is unknowable at this time, we have not included an increase in the rent pursuant to these leases in the weighted average annual escalation rate presented. View source version on businesswire.com: https://www.businesswire.com/news/home/20260722631449/en/

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