- Invested $97.4 million in acquisitions -
- Disposed of nine properties for $31.6 million
in gross proceeds including five properties leased to Shopko for
$23.1 million -
Spirit MTA REIT (NYSE:SMTA) ("SMTA" or the "Company"), a
net-lease real estate investment trust ("REIT") headquartered in
Dallas, Texas, today reported its financial and operating results
for the third quarter ended September 30, 2018.
Unless otherwise specified, financial and operating information
prior to May 31, 2018 reflects the financial and operating
information of SMTA's legal predecessor entities.
THIRD QUARTER HIGHLIGHTS
- Invested $97.4 million in acquisitions
comprising five properties, with a weighted average lease term of
15.8 years, a weighted-average initial cash yield of approximately
6.44% and an economic yield of 7.60%.
- Disposed of nine properties for $31.6
million in gross proceeds. Among the sales were five properties
leased to Shopko for gross proceeds of $23.1 million.
- Generated Net Loss of $0.18 per share,
FFO of $0.43 per share and AFFO of $0.52 per share.
CEO COMMENTS
“In our first quarter as a standalone public Company, we
continued to make progress as we seek to maximize shareholder value
through the monetization of a portfolio of non-core assets and the
growth of our seasoned master funding vehicle. Our diverse
portfolio of predominantly triple-net leased properties continues
to steadily perform. During the quarter, we utilized our Master
Trust 2014 release account cash, along with proceeds from the
monetization of non-core assets, to complete the acquisition of
five high quality assets for a total of $97.4 million with a
weighted-average initial cash yield of 6.44% and an economic yield
of 7.60%. We also disposed of a total of $31.6 million of
properties, including five properties leased to Shopko. Further, we
are pleased to announce that SMTA secured two key financings post
quarter-end. First, we have closed on a $165 million non-recourse
financing secured by our remaining 85 Shopko assets held in the
Other Properties portfolio, which we believe has substantially
reduced our Shopko risk exposure and provided immediate incremental
capital, while allowing for continued disposition activity.
Additionally, SMTA further augmented its liquidity position by
raising a $50 million variable funding note that will allow the
Company more flexibility with respect to capital for acquisitions
as well as liability management. With these financings, we believe
we have fortified SMTA’s foundation from a capital perspective
while allowing for continued execution of the Company’s strategy,”
stated SMTA Chief Executive Officer, Chief Financial Officer and
Treasurer Ricardo Rodriguez.
FINANCIAL RESULTS
- Total revenues for the Master Trust
2014 and Other Properties segments were $46.2 million and $16.2
million, respectively, for the three months ended September 30,
2018, compared to $43.5 million and $15.7 million for the same
period last year. Total revenues for the Master Trust 2014 and
Other Properties segments were $136.2 million and $47.2 million,
respectively, for the nine months ended September 30, 2018,
compared to $126.3 million and $48.0 million for the same period
last year.
- Net loss attributable to common
stockholders was $7.5 million, or $0.18 per share, for the three
months ended September 30, 2018, compared to net loss of $6.5
million, or $0.15 per share, for the same period last year. Net
loss attributable to common stockholders was $15.5 million, or
$0.36 per share, for the nine months ended September 30, 2018,
compared to net income of $16.8 million, or $0.39 per share, for
the same period last year.
- FFO per diluted share was $0.43 and
$0.70 for the three months ended September 30, 2018 and 2017,
respectively. FFO per diluted share was $1.29 and $2.02 for the
nine months ended September 30, 2018 and 2017, respectively.
- AFFO for the three months ended
September 30, 2018 was $22.6 million, compared to $34.4 million for
the same period last year. AFFO per diluted share was $0.52 and
$0.80 for the three months ended September 30, 2018 and 2017,
respectively. AFFO for the nine months ended September 30, 2018 was
$75.3 million, compared to $97.8 million for the same period last
year. AFFO per diluted share was $1.75 and $2.28 for the nine
months ended September 30, 2018 and 2017, respectively.
- On August 9, 2018, the Board of
Trustees of SMTA declared a total cash dividend of $0.33 per common
share, comprising $0.08 for the month ended June 30, 2018 and $0.25
for the quarter ended September 30, 2018, that was paid on
October 15, 2018 to holders of record as of September 28,
2018, and a cash dividend of $0.625 per share of SMTA Preferred
Stock that was paid on September 28, 2018 to holders of record
as of September 14, 2018.
- The amount and timing of dividends for
2018 and beyond will be at the discretion of the Board of Trustees.
The Board of Trustees' decisions regarding the payment of dividends
will depend on many factors, including, but not limited to,
maintaining the Company's REIT tax status, timing and magnitude of
disposition activities, investment opportunities and working
capital needs.
THIRD QUARTER PORTFOLIO HIGHLIGHTS
- During the three months ended September
30, 2018, SMTA invested $97.5 million in acquisitions comprising
five properties and revenue producing capital expenditures, all
related to assets within the Master Trust 2014 portfolio. The newly
acquired properties have a weighted average lease term of 15.8
years, a weighted-average initial cash yield of approximately 6.44%
and an economic yield of 7.60%.
- During the three months ended September
30, 2018, SMTA disposed of nine properties for $31.6 million in
gross proceeds. The disposals consisted of six revenue producing
properties for gross proceeds of $28.6 million and three vacant
properties for gross proceeds of $3.0 million. Among the disposals
were four properties within Master Trust 2014 for gross proceeds of
$8.5 million and five properties leased to Shopko for gross
proceeds of $23.1 million.
- As of September 30, 2018, SMTA's
diversified real estate portfolio, comprised of 884 owned
properties, with 784 and 100 in the Master Trust 2014 and Other
Properties segments, respectively, was 97.3% occupied with a
weighted average remaining lease term of 10.0 years.
YEAR-TO-DATE PORTFOLIO HIGHLIGHTS
- During the nine months ended September
30, 2018, SMTA invested $114.4 million in nine properties and
revenue producing capital expenditures, all related to the Master
Trust 2014 portfolio. The newly acquired properties have a weighted
average lease term of 15.5 years, a weighted-average initial cash
yield of approximately 6.52% and an economic yield of 7.49%.
- During the nine months ended September
30, 2018, SMTA disposed of 39 properties for $75.8 million in gross
proceeds, including the sale of 29 income producing properties for
$62.1 million. Among the disposals were 29 properties within Master
Trust 2014 for gross proceeds of $31.8 million, eight properties
leased to Shopko for gross proceeds of $38.6 million and two
additional properties for $5.4 million in gross proceeds.
BALANCE SHEET, LIQUIDITY & CAPITAL MARKETS
- As of September 30, 2018, net
investments for the Master Trust 2014 and Other Properties segments
were $1.8 billion and $0.5 billion, respectively.
- As of September 30, 2018, total
cash was $16.2 million and restricted cash for the Master Trust
2014 and Other Properties segments was $19.0 million and $2.1
million, respectively.
- As of September 30, 2018, debt for
the Master Trust 2014 and Other Properties segments was $1.9
billion and $0.1 billion, respectively.
- Adjusted Debt to Annualized Adjusted
EBITDAre was 9.6x as of September 30, 2018, based on the three
months ended September 30, 2018 (please note the definition of
Adjusted EBITDAre has been revised this quarter and going forward
to reflect adjustments made for income producing acquisitions and
dispositions made during the quarter).
SUBSEQUENT EVENTS
- On November 1, 2018, SMTA closed on a
$165.0 million non-recourse financing loan secured by our remaining
85 Shopko assets in our Other Properties portfolio.
- On November 1, 2018, SMTA closed on a
$50.0 million variable funding note ("VFN") within Master Trust
2014.
- As of November 7, 2018, SMTA had
approximately $156.2 million in cash and cash equivalents.
- As of November 7, 2018, SMTA had
additional liquidity available for acquisitions of approximately
$13.2 million in its Master Trust 2014 Release Account.
- As of November 7, 2018, our
outstanding common share count is 43,000,862.
EARNINGS WEBCAST
The Company has provided pre-recorded comments from management.
Interested parties can listen to the presentation via the
following:
Internet:
The webcast link can be located on the
investor relations page of the Company's website at
www.spiritmastertrust.com
Telephone: (844) 512-2921 (Domestic) / (412) 317-6671
(International) Access code 1109018
ABOUT SPIRIT MTA REIT
Spirit MTA REIT (NYSE: SMTA) is a net-lease REIT headquartered
in Dallas, Texas. SMTA owns one of the largest, most
diversified and seasoned commercial real estate backed master
funding vehicles. Our strategy relies on the disposition of
non-core properties, disciplined acquisitions, and proactive
portfolio management. SMTA is managed by Spirit Realty
Capital, L.P, a wholly-owned subsidiary of Spirit (NYSE: SRC), one
of the largest publicly traded triple net-lease REITs.
As of September 30, 2018, our diversified portfolio was
comprised of 884 properties, including properties securing mortgage
loans made by the Company. Our properties, with an aggregate gross
leasable area of approximately 20.0 million square feet, are leased
to approximately 205 tenants across 45 states and 23 industries.
More information about Spirit MTA REIT can be found on the investor
relations page of the Company's website at
www.spiritmastertrust.com.
FORWARD-LOOKING AND CAUTIONARY STATEMENTS
This press release may contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
and other federal securities laws. These forward-looking statements
can be identified by the use of words such as "expect," "plan,"
"will," "estimate," "project," "intend," "believe," "guidance,"
“approximately,” “anticipate,” “may,” “should,” “seek” 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 to historical matters. You can also identify
forward-looking statements by discussions of strategy, plans or
intentions of management. These forward-looking statements are
subject to known and unknown risks and uncertainties that you
should not rely on as predictions of future events. Forward-looking
statements depend on assumptions, data and/or methods which may be
incorrect or imprecise and we may not be able to realize them. The
following risks and uncertainties, among others, could cause actual
results to differ materially from those currently anticipated due
to a number of factors, which include, but are not limited to:
industry and economic conditions; SMTA’s ability to realize its
asset disposition plan by selling down assets leased to Shopko;
SMTA’s significant leverage which may expose it to the risk of
default under its debt obligations; risks associated with using
debt to fund SMTA’s business activities (including its ability to
use Master Trust 2014, an asset-backed securitization trust, as its
main financing vehicle, changes in interest rates and conditions of
the debt capital markets, generally); SMTA’s dependence on its
external manager, Spirit Realty, L.P., to conduct its business and
achieve its investment objectives; SMTA’s continued ability to
source new investments; unknown liabilities acquired in connection
with acquired properties or interests in real-estate related
entities; general risks affecting the real estate industry and
local real estate markets (including, without limitation, the
market value of SMTA’s properties, the inability to enter into or
renew leases at favorable rates, portfolio occupancy varying from
SMTA’s expectations, dependence on tenants’ financial condition and
operating performance, competition from other developers, owners
and operators of real estate tenant defaults, potential liability
relating to environmental matters, potential illiquidity of real
estate investments, condemnations, and potential damage from
natural disasters); the financial performance of SMTA’s tenants and
the demand for traditional retail and restaurant space particularly
with respect to challenges being experienced by general merchandise
retailers; SMTA’s ability to pay down, refinance, restructure
and/or extend its indebtedness as it becomes due; SMTA’s or its
manager’s ability to identify, underwrite, finance, consummate,
integrate and manage diversifying acquisitions or investments;
SMTA’s ability to diversify its tenant base; the impact of any
financial, accounting, legal or regulatory issues or litigation
that may affect SMTA or its major tenants; volatility and
uncertainty in the financial markets, including potential
fluctuations in the consumer price index; risks associated with its
failure or unwillingness to maintain SMTA’s status as a REIT under
the Internal Revenue Code of 1986, as amended, and other additional
risks discussed in its most recent filings with the SEC, including
its registration statement on Form 10, as amended and subsequent
Quarterly Reports on Form 10-Q. SMTA expressly disclaims any
responsibility to update or revise forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by law.
NOTICE REGARDING NON-GAAP FINANCIAL MEASURES
In addition to U.S. GAAP financial measures, this press release
may refer to certain non-GAAP financial measures. These non-GAAP
financial measures are in addition to, not a substitute for or
superior to, measures of financial performance prepared in
accordance with GAAP. These non-GAAP financial measures should not
be considered replacements for, and should be read together with,
the most comparable GAAP financial measures. Definitions of
non-GAAP financial measures, reconciliations to the most directly
comparable GAAP financial measures and statements of why management
believes these measures are useful to investors are included
below.
REPORTING DEFINITIONS AND EXPLANATIONS
Adjusted Funds from Operations (AFFO) AFFO is a non-GAAP
financial measure of operating performance used by many companies
in the REIT industry. We adjust FFO to eliminate the impact of
certain items that we believe are not indicative of our core
operating performance, including restructuring and divestiture
costs, other G&A costs associated with relocation of the
Company's headquarters, transactions costs associated with our
Spin-Off, default interest and fees on non-recourse mortgage
indebtedness, debt extinguishment gains (losses), transaction costs
incurred in connection with the acquisition of real estate
investments subject to existing leases, amortization of the promote
fee and certain non-cash items. These certain non-cash items
include non-cash revenues (comprised of straight-line rents,
amortization of above and below market rent on our leases,
amortization of lease incentives, amortization of net premium
(discount) on loans receivable, provision for bad debts and
amortization of capitalized lease transaction costs), non-cash
interest expense (comprised of amortization of deferred financing
costs and amortization of net debt discount/premium) and non-cash
compensation expense (stock-based compensation expense). In
addition, other equity REITs may not calculate AFFO as we do, and,
accordingly, our AFFO may not be comparable to such other equity
REITs’ AFFO. AFFO does not represent cash generated from Operating
activities determined in accordance with GAAP, is not necessarily
indicative of cash available to fund cash needs and should not be
considered as an alternative to net income (loss) (determined in
accordance with GAAP) as a performance measure.
Adjusted EBITDAre represents EBITDAre, or earnings before
interest, taxes, depreciation and amortization for real estate,
modified to include other adjustments to GAAP net income (loss) for
transaction costs, adjustments to revenue producing acquisitions
and dispositions for the quarter as if such acquisitions and
dispositions had occurred as of the beginning of the quarter,
severance charges, real estate acquisition costs, and debt
extinguishment gains (losses), amortization of the promote fee and
other items that we do not consider to be indicative of our
on-going operating performance. We focus our business plans to
enable us to sustain increasing shareholder value. Accordingly, we
believe that excluding these items, which are not key drivers of
our investment decisions and may cause short-term fluctuations in
net income, provides a useful supplemental measure to investors and
analysts in assessing the net earnings contribution of our real
estate portfolio. Because these measures do not represent net
income (loss) that is computed in accordance with GAAP, they should
not be considered alternatives to net income (loss) or as an
indicator of financial performance. A reconciliation of net income
(loss) attributable to common stockholders (computed in accordance
with GAAP) to EBITDAre and Adjusted EBITDAre is included in this
release.
Annualized Adjusted EBITDAre is calculated by multiplying
Adjusted EBITDAre of a quarter by four. Our computation of Adjusted
EBITDAre and Annualized Adjusted EBITDAre may differ from the
methodology used by other equity REITs to calculate these measures
and, therefore, may not be comparable to such other REITs. A
reconciliation of Annualized Adjusted EBITDAre is included at the
end of this release.
Adjusted Debt represents interest bearing debt (reported
in accordance with GAAP) adjusted to exclude unamortized debt
discount/premium, deferred financing costs, and reduced by cash and
cash equivalents and cash reserves on deposit with lenders as
additional security. By excluding these amounts, the result
provides an estimate of the contractual amount of borrowed capital
to be repaid, net of cash available to repay it. We believe this
calculation constitutes a beneficial supplemental non-GAAP
financial disclosure to investors in understanding our financial
condition. A reconciliation of interest bearing debt (reported in
accordance with GAAP) to Adjusted Debt is included at the end of
this release.
Adjusted Debt to Annualized Adjusted EBITDAre is a
supplemental non-GAAP financial measure we use to evaluate the
level of borrowed capital being used to increase the potential
return of our real estate investments and a proxy for a measure we
believe is used by many lenders and ratings agencies to evaluate
our ability to repay and service our debt obligations over time. We
believe this ratio is a beneficial disclosure to investors as a
supplemental means of evaluating our ability to meet obligations
senior to those of our equity holders. Our computation of this
ratio may differ from the methodology used by other equity REITs
and, therefore, may not be comparable to such other REITs.
Contractual Rent represents monthly contractual cash
rent, excluding percentage rents, from properties owned fee-simple
or ground leased, recognized during the final month of the
reporting period, adjusted to exclude amounts received from
properties sold during that period and adjusted to include a full
month of contractual rent for properties acquired during that
period. We use Contractual Rent when calculating certain metrics
that are useful to evaluate portfolio credit, asset type, industry
and geographic diversity and to manage risk.
EBITDAre is a non-GAAP financial measure and is computed
in accordance with standards established by NAREIT. EBITDAre is
defined as net income (loss) (computed in accordance with GAAP),
plus interest expense, plus income tax expense (if any), plus
depreciation and amortization, plus (minus) losses and gains on the
disposition of depreciated property, plus impairment write-downs of
depreciated property and investments in unconsolidated real estate
ventures, plus adjustments to reflect the Company's share of
EBITDAre of unconsolidated real estate ventures.
Economic Yield is calculated by dividing the contractual
cash rent, including fixed rent escalations and/or cash increases
determined by CPI (increases calculated using a month to month
historical CPI index) by the initial lease term, expressed as a
percentage of the Gross Investment.
Encumbered Assets represent the assets in our portfolio
that are subject to mortgage indebtedness, through Master Trust
2014 or CMBS debt. The asset value attributed to these assets is
the Real Estate Investment.
Funds from Operations (FFO) We calculate FFO in
accordance with the standards established by the National
Association of Real Estate Investment Trusts (NAREIT). FFO
represents net income (loss) attributable to common stockholders
(computed in accordance with GAAP) excluding real estate-related
depreciation and amortization, impairment charges and net (gains)
losses from property dispositions. FFO is a supplemental non-GAAP
financial measure. We use FFO as a supplemental performance measure
because we believe that FFO is beneficial to investors as a
starting point in measuring our operational performance.
Specifically, in excluding real estate-related depreciation and
amortization, gains and losses from property dispositions and
impairment charges, which do not relate to or are not indicative of
operating performance, FFO provides a performance measure that,
when compared year over year, captures trends in occupancy rates,
rental rates and operating costs. We also believe that, as a widely
recognized measure of the performance of equity REITs, FFO will be
used by investors as a basis to compare our operating performance
with that of other equity REITs. However, because FFO excludes
depreciation and amortization and does not capture the changes in
the value of our properties that result from use or market
conditions, all of which have real economic effects and could
materially impact our results from operations, the utility of FFO
as a measure of our performance is limited. In addition, other
equity REITs may not calculate FFO as we do, and, accordingly, our
FFO may not be comparable to such other equity REITs’ FFO.
Accordingly, FFO should be considered only as a supplement to net
income (loss) attributable to common stockholders as a measure of
our performance.
Initial Cash Yield from properties is calculated by
dividing the first twelve months of contractual cash rent
(excluding any future rent escalations provided subsequently in the
lease and percentage rent) by the Gross Investment in the related
properties. Initial Cash Yield is a measure (expressed as a
percentage) of the contractual cash rent expected to be earned on
an acquired property in the first year. Because it excludes any
future rent increases or additional rent that my be contractually
provided for in the lease, as well as any other income or fees that
may be earned from lease modifications or asset dispositions,
Initial Cash Yield does not represent the annualized investment
rate of return of our acquired properties. Additionally, actual
contractual cash rent earned from the properties acquired may
differ from the Initial Cash Yield based on other factors,
including difficulties collecting anticipated rental revenues and
unanticipated expenses at these properties that we cannot pass on
to tenants.
Master Trust 2014 is an asset-backed securitization trust
established in 2005, and amended and restated in 2014, which issues
non-recourse notes collateralized by commercial real estate,
net-leases and mortgage loans from time to time. Indirect special
purpose entity subsidiaries of the Company are the borrowers. This
liability is discussed in greater detail in our financial
statements and the notes thereto included in our periodic reports
filed with the SEC.
Occupancy is calculated by dividing the number of
economically yielding Owned Properties in the portfolio as of the
measurement date by the number of total Owned Properties on said
date.
Other Properties are all properties not included in the
Master Trust 2014.
Owned Properties refers to properties owned fee-simple or
ground leased by Company subsidiaries as lessee.
Real Estate Investment represents the Gross Investment
plus improvements less impairment charges.
SMTA Preferred Stock refers to the 10% Series A
Cumulative Redeemable Preferred Stock.
Unencumbered Assets represent the assets in our portfolio
that are not subject to mortgage indebtedness, which we use to
evaluate our potential access to capital and in our management of
financial risk. The asset value attributed to these assets is the
Real Estate Investment.
Weighted Average Remaining Lease Term is calculated by
dividing the sum product of (a) a stated revenue or sales price
component and (b) the lease term for each lease by (c) the sum of
the total revenue or sales price components for all leases within
the sample.
Spirit MTA REIT
Consolidated Balance Sheets
(In Thousands, Except Share and Per Share
Data)
(Unaudited)
September 30, 2018 December 31, 2017
Assets Investments: Real estate investments: Land and
improvements $ 971,444 $ 973,231 Buildings and improvements
1,707,970 1,658,023 Total real estate investments
2,679,414 2,631,254 Less: accumulated depreciation (588,194 )
(557,948 ) 2,091,220 2,073,306 Loans receivable, net 66,950 32,307
Intangible lease assets, net 104,937 102,262 Real estate assets
held for sale, net 22,106 28,460 Net investments
2,285,213 2,236,335 Cash and cash equivalents 16,188 6 Deferred
costs and other assets, net 69,766 107,770 Goodwill 13,549
13,549 Total assets $ 2,384,716 $ 2,357,660
Liabilities and equity Liabilities: Mortgages and notes
payable, net $ 1,993,572 $ 1,926,835 Intangible lease liabilities,
net 22,222 23,847 Accounts payable, accrued expenses and other
liabilities 32,885 16,060 Total liabilities 2,048,679
1,966,742 Redeemable preferred equity: SMTA Preferred Stock, $0.01
par value, $25 per share liquidation preference, 20,000,000 shares
authorized: 6,000,000 and 0 shares issued and outstanding at
September 30, 2018 and December 31, 2017, respectively 150,000 —
SubREIT Preferred Stock, $0.01 par value, $1,000 per share
liquidation preference, 50,000,000 shares authorized: 5,000 and 0
shares issued and outstanding at September 30, 2018 and December
31, 2017, respectively 5,000 — Total redeemable
preferred equity 155,000 — Stockholders' equity and parent company
equity: Net parent investment — 390,918 Common stock, $0.01 par
value, 750,000,000 shares authorized; 43,000,862 and 10,000 shares
issued and outstanding at September 30, 2018 and December 31, 2017,
respectively 430 — Capital in excess of common stock par value
200,448 — Accumulated deficit (19,841 ) — Total
stockholders' equity and parent company equity 181,037
390,918
Total liabilities and equity $ 2,384,716
$ 2,357,660
Spirit MTA REIT
Consolidated Statements of Operations and Comprehensive Income
(Loss)
(In Thousands, Except Share and Per Share
Data)
(Unaudited)
Three Months Ended September 30, Nine
Months Ended September 30, 2018 2017
2018 2017 Revenues: Rentals $ 59,769 $
55,257 $ 178,040 $ 167,645 Interest income on loans receivable
1,131 217 1,964 622 Tenant reimbursement income 518 691 1,499 1,841
Other income 993 2,994 1,934 4,144
Total revenues 62,411 59,159 183,437 174,252
Expenses:
General and administrative 1,795 4,862 11,221 18,593 Related party
fees 8,369 1,411 13,450 4,150 Transaction costs 78 1,733 8,620
2,100 Property costs (including reimbursable) 1,909 2,189 5,369
6,210 Interest 27,672 18,733 83,427 56,324 Depreciation and
amortization 20,969 19,891 63,071 60,776 Impairments 9,343
15,436 15,415 27,348 Total expenses 70,135
64,255 200,573 175,501 Loss before
other income (loss) and income tax expense (7,724 ) (5,096 )
(17,136 ) (1,249 )
Other income (loss): (Loss) gain on debt
extinguishment — — (363 ) 1 Gain (loss) on disposition of real
estate assets 4,210 (1,382 ) 7,464 18,196
Total other income (loss) 4,210 (1,382 ) 7,101 18,197
(Loss) income before income tax expense (3,514 ) (6,478 )
(10,035 ) 16,948 Income tax expense (60 ) (45 ) (139 ) (135 )
Net (loss) income and total comprehensive (loss) income
(3,574 ) (6,523 ) (10,174 ) 16,813 Preferred dividends (3,975 ) —
(5,300 ) —
Net (loss) income attributable to
common stockholders $ (7,549 ) $ (6,523 ) $ (15,474 ) $ 16,813
Net (loss) income per share attributable to common
stockholders Basic $ (0.18 ) $ (0.15 ) $ (0.36 ) $ 0.39 Diluted
$ (0.18 ) $ (0.15 ) $ (0.36 ) $ 0.39
Weighted average shares of
common stock outstanding: Basic 42,851,010 42,851,010
42,851,010 42,851,010 Diluted 42,851,010 42,851,010 42,851,010
42,851,010
Spirit MTA REIT
Reconciliation of Non-GAAP Financial Measures
(In Thousands, Except Share and Per Share
Data)
(Unaudited)
FFO and AFFO
Three Months Ended September 30,
Nine Months Ended September 30, 2018
2017 (1) 2018 (2)
2017 (1) Net (loss) income attributable to common
stockholders $ (7,549 ) $ (6,523 ) $ (15,474 )
$ 16,813 Add/(less): Portfolio depreciation and amortization
20,969 19,891 63,071 60,776 Portfolio impairments 9,343 15,436
15,415 27,348 (Gain) loss on disposition of real estate assets
(4,210 ) 1,382 (7,464 ) (18,196 ) Total adjustments to net
(loss) income 26,102 36,709
71,022 69,928
FFO $ 18,553
$ 30,186 $ 55,548 $
86,741 Add/(less): Loss (gain) on debt extinguishment — —
363 (1 ) Transaction costs 78 1,733 8,620 2,100 Real Estate
Acquisition Costs 54 16 273 26 Non-cash interest expense 2,511
1,408 7,872 4,191 Straight-line rent, net of related bad debt
expense (844 ) (35 ) (2,278 ) (894 ) Other amortization and
non-cash charges 148 186 371 510 Non-cash compensation expense 451
866 2,875 5,101 Amortization of the promote fee 1,619 —
1,619 — Total adjustments to FFO 4,017
4,174 19,715 11,033
AFFO $ 22,570 $ 34,360
$ 75,263 $ 97,774 Dividends
declared to common stockholders $ 14,190 N/A $ 14,190 N/A
Net income (loss) per share of common stock Basic $ (0.18 )
$ (0.15 ) $ (0.36 ) $ 0.39 Diluted $ (0.18 ) $ (0.15 ) $ (0.36 ) $
0.39
FFO per share of common stock Diluted (3) $ 0.43 $ 0.70
$ 1.29 $ 2.02
AFFO per share of common stock Diluted (3) $
0.52 $ 0.80 $ 1.75 $ 2.28
Weighted average shares of
common stock outstanding: Basic 42,851,010 42,851,010
42,851,010 42,851,010 Diluted 42,851,010 42,851,010 42,851,010
42,851,010 (1) Amounts for the three and nine months ended
September 30, 2017 are based entirely on results of SMTA's legal
predecessor entities. (2) Amounts for the nine months ended
September 30, 2018 include five months of income and expense items
based on SMTA's legal predecessor entities and four months of
actual results from SMTA operations as a stand-alone compan y. (3)
For both the three and nine months ended September 30, 2017, there
were dividends declared to unvested restricted stockholders of
$49.5 thousand.
Spirit MTA REIT
Reconciliation of Non-GAAP Financial Measures
(In Thousands, Except Share and Per Share
Data)
(Unaudited)
Adjusted Debt, Adjusted EBITDAre,
Annualized Adjusted EBITDAre
September 30, (Unaudited, In Thousands)
2018 2017 Master Trust 2014, net $ 1,911,321 $
1,331,847 CMBS, net 82,251 —
Total debt, net
1,993,572 1,331,847 Add/(less): Unamortized debt
discount 22,834 15,778 Unamortized deferred financing costs 16,823
7,573 Cash and cash equivalents (16,188) (6) Cash reserves on
deposit with lenders as additional security classified as other
assets (21,156) (49,868) Total adjustments 2,313 (26,523)
Adjusted Debt $ 1,995,885 $
1,305,324 Preferred Stock at liquidation value
155,000 —
Adjusted Debt + Preferred Stock
$ 2,150,885 $ 1,305,324
Three Months Ended September 30, 2018 2017
(1) Net (loss) income $ (3,574) $ (6,523) Add/(less):
Interest 27,672 18,733 Depreciation and amortization 20,969 19,891
Income tax expense 60 45 (Gain) loss on disposition of real estate
assets (4,210) 1,382 Impairments on real estate assets 9,343 15,436
Total adjustments 53,834 55,487
EBITDAre
$ 50,260 $ 48,964
Add/(less): Adjustments to revenue producing acquisitions and
dispositions (2) 220 — Transaction costs 78 1,733 Real estate
acquisition costs 54 16 Amortization of the promote fee 1,619 —
Total adjustments 1,971 1,749
Adjusted
EBITDAre $ 52,231 $
50,713 Annualized Adjusted EBITDAre (3) $
208,924 $ 202,852
Adjusted Debt / Annualized Adjusted
EBITDAre 9.6x 6.4x
Adjusted Debt + Preferred / Adjusted
EBITDAre 10.3x N/A (1) Amounts for 2017 are based on the
SMTA's allocated portion of Spirit’s expense. (2) Revenue producing
acquisitions and dispositions were adjusted as if such acquisitions
and dispositions had occurred at the beginning of the quarter. (3)
Adjusted EBITDAre for the quarter multiplied by four.
Spirit MTA REIT
Portfolio Overview
(Square Feet In Thousands)
Properties
Annualized Contractual
Rent
Occupied Square Feet
Vacant Properties
Vacant Square Feet
Master Trust 2014 784 $178.6 M 11,854 18 159 Other
Properties 100 $57.6 M 7,785
6 197 SMTA 884 $236.2 M 19,639 24 356
Top Ten Tenants at September 30,
2018:
Master Trust 2014 Other Properties
Tenant (1) Properties
Total Square Feet
Percent of MTAContractual
Rent
Tenant (1) Properties
Total Square Feet
Percent of Other
PropertiesContractual Rent
AMC Entertainment, Inc. 14 696 6.1% Shopko 85 5,940 72.7% Universal
Pool Co., Inc. 14 543 4.0% Academy, LTD. 1 1,501 16.2% Crème De La
Crème, Inc. 9 190 3.1% PricewaterhouseCoopers LLP 1 135 3.7%
Goodrich Quality Theaters, Inc. 4 245 3.0% Children's Learning
Adventure USA, LLC 3 72 3.7% Life Time Fitness, Inc. 3 420 2.9%
Crown Distributing LLC 1 94 2.0% Destination XL Group, Inc. 1 756
2.9% Neighbors Health System, Inc. 2 15 1.1% Buehler Food Markets
Inc. 5 503 2.9% Pleasanton Fitness, LLC 1 28 0.6% Carmax Auto
Superstores, Inc. 4 201 2.7% Professional Resource Development,
Inc. 59 234 2.4% Regal Cinemas, Inc. 6 267 2.0%
119 4,055 32.0% 94 7,785 100.0% (1) Tenants represent
legal entities ultimately responsible for obligations under the
lease agreements or affiliated entities. Other tenants may operate
the same or similar business concepts or brands as those set forth
above.
Industry Diversification at
September 30, 2018:
Master Trust 2014 Other Properties
Industry Properties
Total Square Feet
Percent of MTAContractual
Rent
Industry Properties
Total Square Feet
Percent of Other
PropertiesContractual Rent
Restaurants-Quick Service 312 854 14.5% General Merchandise
85 5,940 72.7% Movie Theaters 29 1,519 13.4% Sporting Goods
1 1,501 16.2% Restaurants-Casual Dining 89 640 11.4% Multi-Tenant 1
135 3.7% Health and Fitness 18 1,021 7.7% Education 3 73 3.7%
Medical / Other Office 77 503 6.9% Distribution 1 94 2.0% Specialty
Retail 22 857 5.9% Medical / Other Office 2 14 1.1% Home
Furnishings 17 907 5.0% Health and Fitness 1 28 0.6% Grocery 19
1,011 4.9% Vacant 6 197 —% Automotive Parts and Services 79 362
4.8% Automotive Dealers 12 323 4.5% Education 15 358 4.4% Apparel 3
1,019 3.5% Other 3 183 2.7% Entertainment 4 200 2.2% Sporting Goods
3 331 1.9% Manufacturing 7 763 1.3% Car Washes 6 49 1.3% Building
Materials 28 458 1.2% General Merchandise 8 317 1.1% Drug Stores /
Pharmacies 8 83 0.9% Multi-Tenant 2 41 0.3% Dollar Stores 5 55 0.2%
Vacant 18 159 —% 784 12,013
100.0% 100 7,982 100.0%
Asset Type Diversification at
September 30, 2018:
Master Trust 2014 Other Properties Asset
Type Properties
Total Square Feet
Percent of MTAContractual
Rent
Properties
Total Square Feet
Percent of Other
PropertiesContractual Rent
Retail 666 9,312 84.8% Retail 97 6,223 78.0% Industrial 38 2,022
6.2% Industrial 2 1,595 18.3% Office 80 679 9.0% Office 1 164 3.7%
784 12,013 100.0% 100 7,982 100.0%
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version on businesswire.com: https://www.businesswire.com/news/home/20181109005122/en/
Spirit MTA REITInvestor
Relations972-476-1409SMTAInvestorRelations@SpiritRealty.com
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