Market Overview

Spirit MTA REIT Announces Second Quarter 2018 Financial and Operating Results

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- Completed Spin-Off from Spirit Realty Capital, Inc. -

- Announces Cash Dividends for Common and Preferred Stock -

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 second quarter
ended June 30, 2018.

Unless otherwise specified, the second quarter 2018 highlights and
financial statements that follow include two months of financial and
operating information for the Company's predecessor entities (the
"Predecessor Entities") and one month of financial and operating results
for SMTA as a stand-alone company.

SECOND QUARTER HIGHLIGHTS

  • On May 31, 2018, the Spin-Off from Spirit Capital Realty, Inc.
    ("Spirit") was completed with the distribution of one share of SMTA
    common stock for every ten shares of Spirit common stock held by each
    of Spirit's stockholders as of May 18, 2018, with 42,851,010 total
    shares of SMTA common stock issued in conjunction with the Spin-Off.
  • Invested $16.7 million in acquiring four properties and other revenue
    producing capital expenditures. The newly acquired properties have a
    weighted average lease term of 14.1 years and an initial
    weighted-average cash yield of approximately 7.06%.
  • Disposed of ten properties for $26.3 million in gross proceeds. Among
    the sales were three properties leased to Shopko for gross proceeds of
    $15.6 million, at a weighted average capitalization rate of 7.92%.

CEO COMMENTS

"We are very pleased to report our financial and operating results as a
stand-alone Company, having completed our Spin-Off transaction from
Spirit Realty Capital, Inc. during the quarter. SMTA provides an
attractive and unique opportunity for investors to benefit from the
monetization of a portfolio of non-core assets and the growth of our
seasoned master funding vehicle. During the second quarter, we completed
$26.3 million of dispositions, including three properties leased to
Shopko. Together with our highly incentivized asset manager, Spirit
Realty Capital, Inc., we intend to allocate our capital in accordance
with our proprietary portfolio management tools, which we believe will
enhance shareholder value over the long term," 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 $44.8 million and $16.2 million, respectively, for the three
    months ended June 30, 2018, compared to $41.5 million and $15.7
    million for the same period last year. Total revenues for the Master
    Trust 2014 and Other Properties segments were $90.0 million and $31.0
    million, respectively, for the six months ended June 30, 2018,
    compared to $82.8 million and $32.3 million for the same period last
    year.
  • Net loss attributable to common stockholders was $0.3 million, or
    $0.01 per share, for the three months ended June 30, 2018, compared to
    net income of $9.3 million for the same period a year ago. Net loss
    attributable to common stockholders was $7.9 million or $0.18 per
    share, for the six months ended June 30, 2018, compared to net income
    of $23.3 million for the same period a year ago.
  • FFO per diluted share was $0.40 and $0.62 for the three months ended
    June 30, 2018 and 2017, respectively. FFO per diluted share was $0.86
    and $1.32 for the six months ended June 30, 2018 and 2017,
    respectively.
  • AFFO for the three months ended June 30, 2018 was $25.8 million,
    compared to $31.6 million for the same period a year ago. AFFO per
    diluted share was $0.60 and $0.74 for the three months ended June 30,
    2018 and 2017, respectively. AFFO for the six months ended June 30,
    2018 was $52.7 million, compared to $63.4 million for the same period
    a year ago. AFFO per diluted share was $1.23 and $1.48 for the six
    months ended June 30, 2018 and 2017, respectively.
  • On June 14, 2018, the Board of Directors of Spirit MTA SubREIT, Inc.
    ("SubREIT") declared a quarterly cash dividend of $15.00 per share of
    18% Series A Cumulative Redeemable Preferred Stock (the "SubREIT
    Preferred Stock"), pro rated for the period from June 1, 2018 to June
    30, 2018, which equates to an annualized cash dividend of $180.00 per
    share. The quarterly dividend was paid on June 29, 2018.
  • On June 19, 2018, the Board of Trustees of SMTA declared a quarterly
    cash dividend of $0.21 per share of 10% Series A Cumulative Redeemable
    Preferred Stock (the "SMTA Preferred Stock"), pro rated for the period
    from May 31, 2018 to June 30, 2018, which equates to an annualized
    cash dividend of $2.50 per share. The quarterly dividend was paid on
    June 29, 2018.
  • 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, to be 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 to be paid on September 28, 2018 to holders of record
    as of September 14, 2018.
  • On August 9, 2018, the Board of Directors of SubREIT declared a
    quarterly cash dividend of $45.00 per share of SubREIT Preferred Stock
    to be 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 and made pursuant to the Company's
    Dividend Policy. 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.

SECOND QUARTER PORTFOLIO HIGHLIGHTS

  • During the three months ended June 30, 2018, SMTA invested $16.7
    million in acquiring four properties and other revenue producing
    capital expenditures, all related to the Master Trust 2014 portfolio.
    The newly acquired properties have a weighted average lease term of
    14.1 years and an initial weighted-average cash yield of approximately
    7.06%.
  • During the three months ended June 30, 2018, SMTA disposed of ten
    properties for $26.3 million in gross proceeds, including the sale of
    three income producing properties. Among the disposals were five
    properties within Master Trust 2014 for gross proceeds of $5.3
    million, three properties leased to Shopko for gross proceeds of $15.6
    million and two additional properties for $5.4 million in gross
    proceeds.
  • As of June 30, 2018, SMTA's diversified real estate portfolio,
    comprised of 888 owned properties, with 784 and 104 in the Master
    Trust 2014 and Other Properties segments, respectively, was 98.8%
    occupied with a weighted average remaining lease term of 10.1 years.

FIRST HALF PORTFOLIO HIGHLIGHTS

  • During the six months ended June 30, 2018, SMTA invested $16.9 million
    in four properties and other revenue producing capital expenditures,
    all related to the Master Trust 2014 portfolio. The newly acquired
    properties have a weighted average lease term of 14.1 years and an
    initial weighted-average cash yield of approximately 7.06%.
  • During the six months ended June 30, 2018, SMTA disposed of 30
    properties for $44.2 million in gross proceeds, including the sale of
    23 income producing properties for $33.5 million. Among the disposals
    were 25 properties within Master Trust 2014 for gross proceeds of
    $23.2 million, three properties leased to Shopko for gross proceeds of
    $15.6 million and two additional properties for $5.4 million in gross
    proceeds.

BALANCE SHEET, LIQUIDITY & CAPITAL MARKETS

  • On May 31, 2018, in conjunction with the Spin-Off, 42,851,010 shares
    of SMTA common stock were issued to the holders of Spirit common stock
    at a ratio of one share of SMTA common stock for every ten shares of
    Spirit common stock.
  • In conjunction with the Spin-Off, SMTA issued to Spirit Realty, L.P.
    and one of its affiliates, both wholly-owned subsidiaries of Spirit,
    6.0 million shares of SMTA Preferred Stock, with an aggregate
    liquidation preference of $150.0 million. The SMTA Preferred Stock
    pays cash dividends at the rate of 10.0% per annum on the liquidation
    preference of $25.00 per share (equivalent to $0.625 per share on a
    quarterly basis and $2.50 per share on an annual basis).
  • In conjunction with the Spin-Off, SubREIT issued 5,000 shares of
    SubREIT Preferred Stock to a third party, with an aggregate
    liquidation preference of $5.0 million. The SubREIT Preferred Stock
    pays cash dividends at the rate of 18.0% per annum on the liquidation
    preference of $1,000.00 per share (equivalent to $45.00 per share on a
    quarterly basis and $180.00 per share on an annual basis).
  • Unencumbered Assets totaled $604.1 million as of June 30, 2018,
    representing approximately 21% of SMTA's total real estate investments.
  • As of June 30, 2018, Encumbered Assets made up $2.1 billion of total
    real estate investments, with all but one property, with a real estate
    investment amount of $123.3 million, included in Master Trust 2014.
  • Adjusted Debt to Annualized Adjusted EBITDAre was 9.6x as of
    June 30, 2018, based on the one month ended June 30, 2018.
  • Sold three properties leased to Shopko for gross proceeds of $15.1
    million during the period from July 1, 2018 through August 7, 2018.
  • As of August 7, 2018, SMTA had approximately $55.1 million in cash and
    cash equivalents.
  • As of August 7, 2018, SMTA had additional funds available for
    acquisitions of approximately $54.8 million in its SMTA Master Trust
    Program release accounts.
  • As of August 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: (877) 344-7529 (Domestic) / (412) 317-0088 (International) / (855)
669-9658 (Canada) Access code 10123123
 

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 June 30, 2018, our diversified portfolio was comprised of 888
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 contains 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," and other
similar expressions that do not relate to historical matters. These
forward-looking statements are subject to known and unknown risks and
uncertainties that can cause actual results to differ materially from
those currently anticipated due to a number of factors, which include,
but are not limited to, 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
expectations, dependence on tenants' financial condition and operating
performance, and competition from other developers, owners and operators
of real estate); the financial performance of SMTA's tenants and the
demand for traditional retail and restaurant space; potential
fluctuations in the consumer price index; risks associated with SMTA's
failure to maintain its status as a REIT under the Internal Revenue Code
of 1986, as amended, and other additional risks discussed in SMTA's most
recent filings with the SEC, including its registration statement on
Form 10, as amended. 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 proposed 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 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, severance charges, real estate acquisition costs,
debt transactions 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
(loss), 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 at the end of 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, 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.

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.

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.

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. 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.

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.

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)

 
June 30, 2018 December 31, 2017
Assets
Investments:
Real estate investments:
Land and improvements $ 955,446 $ 973,231
Buildings and improvements 1,665,483   1,658,023  
Total real estate investments 2,620,929 2,631,254
Less: accumulated depreciation (574,519 ) (557,948 )
2,046,410 2,073,306
Loans receivable, net 67,752 32,307
Intangible lease assets, net 93,756 102,262
Real estate assets held for sale, net 36,060   28,460  
Net investments 2,243,978 2,236,335
Cash and cash equivalents 37,356 6
Deferred costs and other assets, net 105,901 107,770
Goodwill 13,549   13,549  
Total assets $ 2,400,784   $ 2,357,660  
Liabilities and equity
Liabilities:
Mortgages and notes payable, net $ 1,999,748 $ 1,926,835
Intangible lease liabilities, net 22,850 23,847
Accounts payable, accrued expenses and other liabilities 20,861   16,060  
Total liabilities 2,043,459 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 June 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 June 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;
42,851,010
and 10,000 shares issued and outstanding at June 30, 2018
and
December 31, 2017, respectively

429
Capital in excess of common stock par value 199,998
Accumulated earnings 1,898    
Total stockholders' equity and parent company equity 202,325   390,918  
Total liabilities and equity $ 2,400,784   $ 2,357,660  
 
             

Spirit MTA REIT

Consolidated Statements of Operations and Comprehensive Income
(Loss)

(In Thousands, Except Share and Per Share Data)

(Unaudited)

 

One Month
Ended June
30, 2018

Three Months Ended June 30, Six Months Ended June 30,
2018     2017 2018     2017
Revenues:
Rentals $ 19,641 $ 59,240 $ 56,003 $ 118,271 $ 112,388
Interest income on loans receivable 369 752 202 833 405
Tenant reimbursement income 114 404 372 981 1,150
Other income 171   562   668   941   1,150  
Total revenues 20,295 60,958 57,245 121,026 115,093
Expenses:
General and administrative 552 3,775 8,462 9,426 13,731
Related party fees 2,219 3,351 1,385 5,081 2,739
Transaction costs 65 5,525 367 8,542 367
Property costs (including reimbursable) 692 2,047 1,565 3,460 4,021
Interest 9,234 27,743 18,775 55,755 37,591
Depreciation and amortization 7,175 21,109 20,275 42,102 40,885
Impairments 480   1,247   5,419   6,072   11,912  
Total expenses 20,417   64,797   56,248   130,438   111,246  
(Loss) income before other income and income tax expense (122 ) (3,839 ) 997 (9,412 ) 3,847
Other income (expense):
(Loss) gain on debt extinguishment (108 ) 1 (363 ) 1
Gain on disposition of real estate assets 3,367   4,948   8,389   3,254   19,578  
Total other income 3,367   4,840   8,390   2,891   19,579  
Income (loss) before income tax expense 3,245 1,001 9,387 (6,521 ) 23,426
Income tax expense (22 ) (22 ) (45 ) (79 ) (90 )
Net income (loss) and total comprehensive income (loss) $ 3,223   $ 979   $ 9,342   $ (6,600 ) $ 23,336  
Preferred dividends (1,325 ) (1,325 )   (1,325 )  
Net income (loss) attributable to common stockholders $ 1,898   $ (346 ) $ 9,342   $ (7,925 ) $ 23,336  
 
Net income (loss) per share attributable to common stockholders
Basic $ 0.04 $ (0.01 ) $ 0.22 $ (0.18 ) $ 0.54
Diluted $ 0.04 $ (0.01 ) $ 0.22 $ (0.18 ) $ 0.54
Weighted average shares of common stock outstanding:
Basic 42,851,010 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 42,851,010
 
             

Spirit MTA REIT

Reconciliation of Non-GAAP Financial Measures

(In Thousands, Except Share and Per Share Data)

(Unaudited)

FFO and AFFO

 

One Month
Ended June
30, 2018

Three Months Ended June 30,     Six Months Ended June 30,
2018 (1)     2017 (2)     2018 (3)     2017 (2)
       
Net income (loss) attributable to common stockholders $ 1,898 $ (346 ) $ 9,342 $ (7,925 ) $ 23,336
Add/(less):
Portfolio depreciation and amortization 7,175 21,109 20,275 42,102 40,885
Portfolio impairments 480 1,247 5,419 6,072 11,912
Gain on disposition of real estate assets (3,367 ) (4,948 ) (8,389 ) (3,254 ) (19,578 )
Total adjustments to net income 4,288 17,408 17,305 44,920 33,219
                                 
FFO       $ 6,186       $ 17,062       $ 26,647       $ 36,995       $ 56,555  
Add/(less):
Loss (gain) on debt extinguishment 108 (1 ) 363 (1 )
Transaction costs 65 5,525 367 8,542 367
Real Estate Acquisition Costs 218 10 219 10
Non-cash interest expense 831 2,486 1,397 5,361 2,783
Straight-line rent, net of related bad debt expense 25 (587 ) (466 ) (1,434 ) (859 )
Other amortization and non-cash charges 52 133 192 223 324
Non-cash compensation expense   818   3,404   2,424   4,235  
Total adjustments to FFO 973 8,701 4,903 15,698 6,859
                                 
AFFO       $ 7,159       $ 25,763       $ 31,550       $ 52,693       $ 63,414  
 
Dividends declared to common stockholders $ $ N/A $ N/A
Net income (loss) per share of common stock
Basic $ 0.04 $ (0.01 ) $ 0.22 $ (0.18 ) $ 0.54
Diluted $ 0.04 $ (0.01 ) $ 0.22 $ (0.18 ) $ 0.54
FFO per share of common stock
Diluted $ 0.144 $ 0.40 $ 0.62 $ 0.86 $ 1.32
AFFO per share of common stock
Diluted $ 0.167 $ 0.60 $ 0.74 $ 1.23 $ 1.48
Weighted average shares of common stock outstanding:
Basic 42,851,010 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 42,851,010
 
(1)   Amounts for the three months ended June 30, 2018 include two months
of income and expense items based on the Predecessor Entities and
one month of actual results from SMTA operations as a stand-alone
company.
(2) Amounts for the three and six months ended June 30, 2017 are based
entirely on results of the Predecessor Entities.
(3) Amounts for the six months ended June 30, 2018 include five months
of income and expense items based on the Predecessor Entities and
one month of actual results from SMTA operations as a stand alone
company.
 
         

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

 

One Month
Ended June 30,
2018

Second Quarter
(Unaudited, In Thousands) 2018     2017
 
Master Trust 2014, net $ 1,917,244 $ 1,917,244 $ 1,337,074
CMBS, net 82,504   82,504    
Total debt, net 1,999,748 1,999,748 1,337,074
Add/(less):
Unamortized debt discount 24,491 24,491 17,924
Unamortized deferred financing costs 17,678 17,678 8,231
Cash and cash equivalents (37,356 ) (37,356 ) (6 )

Cash reserves on deposit with lenders as
additional security
classified as other assets

(60,303 ) (60,303 ) (23,864 )
Total adjustments (55,490 ) (55,490 ) 2,285  
Adjusted Debt $ 1,944,258 $ 1,944,258 $ 1,339,359
Preferred Stock at liquidation value       155,000       155,000        
Adjusted Debt + Preferred Stock       $ 2,099,258       $ 2,099,258       $ 1,339,359  
 
Net income $ 3,223 $ 979 $ 9,342
Add/(less):
Interest 9,234 27,743 18,775
Depreciation and amortization 7,175 21,109 20,275
Income tax expense 22 22 45
Gain on disposition of real estate assets (3,367 ) (4,948 ) (8,389 )
Impairments on real estate assets 480   1,247   5,419  
Total adjustments       13,544       45,173       36,125  
EBITDAre       $ 16,767       $ 46,152       $ 45,467  
Add/(less):
Transaction costs 65 5,525 367
Real estate acquisition costs 218 10
Loss (gain) on debt extinguishment   108   (1 )
Total adjustments       65       5,851       376  
Adjusted EBITDAre       $ 16,832       $ 52,003       $ 45,843  
Annualized Adjusted EBITDAre (1) $ 201,984 $ 208,012 $ 183,372
Adjusted Debt / Annualized Adjusted EBITDAre 9.6x 9.3x 7.3x
Adjusted Debt + Preferred / Adjusted EBITDAre 10.4x 10.1x N/A
 
(1)   For one month ended June 31, 2018, Adjusted EBITDAre multiplied by
12, for the quarters ended June 30, 2018 and 2017, Adjusted EBITDAre
multiplied by 4
 

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