Spirit Realty Capital — Q2 2023 Earnings Presentation
26 slides from Spirit Realty Capital's earnings presentation, August 2023
Slide 1: Q2 2023 Supplemental Investor Presentation
Q2 2023 SUPPLEMENTAL INVESTOR PRESENTATION AUGUST 2023
Slide 2: Q2 2023 Overview
Q2 2023 OVERVIEW Portfolio Data Key Highlights $694.6M $9.3B 10.3yrs $0.36 $0.91 $0.91 Annualized Real Estate WALT Net Income FFO AFFO Base Rent Investments per Share per Share per Share 2,064 99.8% $1.6B Corporate 99.8% Unencumbered Owned Properties Occupancy Liquidity ABR 51.2% 86.5% Tenants with
Slide 3: Spirit's Underwriting Approach
SPIRIT’S UNDERWRITING APPROACH Utilizing proprietary tools and underwriting expertise to invest in high-quality, single- tenant, operationally essential real estate with a focus on industry relevance, tenant credit quality, and real estate strength Key Tools Industry Tenant Relevance Credit Quality
Slide 4: Progress at Spirit — Portfolio and Balance Sheet
PROGRESS AT SPIRIT — PORTFOLIO AND BALANCE SHEET Over time, Spirit has recycled capital prudently, growing its asset base significantly and building a diversified tenant/industry base with a well positioned balance sheet Spirit IPO Portfolio IPO to Post Spin-Off Portfolio Current Post Spin-Off (Q3 2
Slide 5: Capital Deployment Highlights
Capital Deployment Highlights
Slide 6: Capital Deployment Activity
CAPITAL DEPLOYMENT ACTIVITY Moderating capital deployment volumes to maximize spreads and maintain conservative balance sheet Acquisitions ($ in thousands) Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Number of Transactions 10 28 29 38 26 16 4 5 Number of Properties 31 92 41 56 51
Slide 7: Trailing Four-Quarter Capital Deployment
TRAILING FOUR-QUARTER CAPITAL DEPLOYMENT Q3 2022 | $268.4M Gross Investment Q4 2022 | $350.8M Gross Investment Discount Retail: 1.1% Revenue Producing Expenditures: 11.0% Revenue Producing Expenditures: 7.6% Country Club: 3.9% Entertainment: 1.6% Dollar Stores: 2.0% Health & Fitness: 0.6% Dealership
Slide 8: Disposition Activity
DISPOSITION ACTIVITY Improving portfolio diversification and increasing returns on capital through targeted dispositions Dispositions ($ in thousands) Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Number of Vacant Properties 3 4 4 7 1 6 — 12 Number of Leased Properties — — 1 10 10
Slide 9: Portfolio Composition
Portfolio Composition alll SPIRIT
Slide 10: Current Portfolio Composition
CURRENT PORTFOLIO COMPOSITION Top 20 Tenants Asset Composition1 Industry Composition1 Tenant Concept Number of % of Properties ABR Distribution 11.6% Manufacturing 11.2% Life Time Fitness 13 4.2% Non-Discretionary Retail Other2 Office 2.9% Invited Clubs 21 2.8% 11.4% 5.6% Country Club 2.8% Industria
Slide 11: Industrial Portfolio Highlights
INDUSTRIAL PORTFOLIO HIGHLIGHTS Industrial Flex Outdoor 3.1% Storage Our industrial assets are 7.1% mission-critical properties leased at low rents to $2.5B sophisticated operators, RE Investment with 88.6% generating over $100 million in Manufacturing Distribution revenue1 43.9% 45.9% Number of Squ
Slide 12: Retail Portfolio Highlights
RETAIL PORTFOLIO HIGHLIGHTS Non-Discretionary Retail Our retail assets are 17.7% granular properties leased to sophisticated operators, $6.1B with 81.3% generating RE Investment over $100 million in revenue1, located in Discretionary Retail markets with strong 21.4% Service demand drivers 60.9% Numb
Slide 13: Portfolio Health
PORTFOLIO HEALTH Across 345 tenants, Spirit reported 0.2% Lost Rent in Q2 2023 18.1% 51.2% Public Other Ownership 45.2% 19.3% Ownership Actual Investment Master Lease Grade Rated1 30.7% Private Equity Ownership 2.8x Weighted Average Unit Level Coverage 3.1x Combined Unit Level and Corporate Coverage
Slide 14: Lease Structure, Expirations and Escalations
LEASE STRUCTURE, EXPIRATIONS AND ESCALATIONS $ IN THOUSANDS Year Number of Owned Properties Square Feet (in thousands) Annualized Base Rent % of ABR Remainder of 2023 35 522 $ 6,927 1.0% 2024 38 1,384 15,048 2.2 2025 51 2,437 21,954 3.2 2026 115 4,946 44,414 6.4 2027 149 4,186 57,326 8.3 2028 157 3,
Slide 15: Portfolio Diversification
PORTFOLIO DIVERSIFICATION Midwest Northeast 19.0% 6.8% of ABR of ABR Pacific Northwest 2.5% of ABR Mid Atlantic Pacific Southwest 14.8% 11.5% of ABR of ABR Southeast 26.5% of ABR Southwest U.S. Virgin Islands 18.9% of ABR State % of ABR TX 14.9% TN 3.7% AL 2.6% SC 2.4% OK 1.7% MA 1.5% NH 0.8% IA 0.6
Slide 16: Financial Information and Non-GAAP Reconciliations
Financial Information and Non-GAAP Reconciliations
Slide 17: Consolidated Balance Sheets
CONSOLIDATED BALANCE SHEETS $ IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS (Unaudited) June 30, 2023 December 31, 2022 Assets: Real estate assets held for investment: Land and improvements $ 2,759,425 $ 2,740,250 Buildings and improvements 6,050,616 5,892,117 Less: accumulated depreciation (1,31
Slide 18: Consolidated Statements of Operations
CONSOLIDATED STATEMENTS OF OPERATIONS $ IN THOUSANDS (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Revenues: Rental income1 $ 186,266 $ 173,559 $ 373,560 $ 340,634 Interest income on loans receivable 1,596 522 2,413 841 Earned income from direct financing leas
Slide 19: Funds and Adjusted Funds from Operations
FUNDS AND ADJUSTED FUNDS FROM OPERATIONS $ IN THOUSANDS, EXCEPT PER SHARE AMOUNTS (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net income attributable to common stockholders $ 51,593 $ 80,152 $ 145,178 $ 133,620 Portfolio depreciation and amortization 78,799
Slide 20: Other Non-GAAP Reconciliations
OTHER NON-GAAP RECONCILIATIONS $ IN THOUSANDS Adjusted Debt Q2 2023 Leverage Ratio Q2 2023 2019 Credit Facility $ — Total debt, net / Annualized net income3 17.6x Term loans, net 1,089,146 Adjusted Debt / Annualized Adjusted EBITDAre 5.3x Senior Unsecured Notes, net 2,724,500 Adjusted Debt + Preferr
Slide 21: Debt Summary and Market Capitalization
DEBT SUMMARY AND MARKET CAPITALIZATION Interest Weighted Avg. $ In Thousands June 30, 2023 Rate Years to Maturity Fixed / Floating Rate Debt Debt Type 2019 Credit Facility1 $ — —% 2.8 Floating² Secured 0% 0.1% Term Loans2,3 1,100,000 3.86% 2.5 Unamortized deferred financing costs (10,854) Fixed Unse
Slide 22: Net Asset Value (NAV) Components
NET ASSET VALUE (NAV) COMPONENTS Market Value of Real Estate $4.0B Debt and Equity $699.0M Annualized Adjusted Cash NOI $3.8B Debt Principal Outstanding $694.6M Annualized Base Rent $172.5M Preferred Equity Liquidation Value $11.0M Net Book Value for Vacant Assets $318.0M Other Assets $212.9M Other
Slide 23: Appendix
Appendix I ie SPIRIT
Slide 24: Non-GAAP Definitions and Explanations
NON-GAAP DEFINITIONS AND EXPLANATIONS Funds from Operations (FFO) and Adjusted Funds from Operations Adjusted Debt represents interest bearing debt (reported in Adjusted Debt to Annualized Adjusted EBITDAre is used to evaluate (AFFO) FFO is calculated in accordance with the standards accordance with
Slide 25: Other Definitions and Explanations
OTHER DEFINITIONS AND EXPLANATIONS 2019 Credit Facility refers to the $1.2 billion unsecured credit CMBS are notes secured by owned properties and rents therefrom Purchase Price represents the contracted acquisition purchase facility which matures on March 31, 2026. under which certain indirect whol
Slide 26: Forward-Looking Statements and Risk Factors
FORWARD-LOOKING STATEMENTS AND RISK FACTORS The information in this presentation should be read in conjunction with the accompanying earnings press release, as well as the Company's Annual Report on Form 10-K and other information filed with the Securities and Exchange Commission. This presentation
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