Spirit Realty Capital — Q2 2023 Earnings Presentation
26 slides from Spirit Realty Capital's earnings presentation, Aug 7, 2023
Slide 1: Supplemental Investor Presentation Q2 2023
Supplemental Investor Presentation AUGUST 2023 Q2 2023 Exhibit 99.2
Slide 2: Q2 2023 Overview
35% Top 20 Tenant Concentration1 Note: Data as of or for the quarter ended June 30, 2023. 1Based on ABR. 2Represents corporate-level reporting of revenues of our tenants or their affiliated companies, excluding non-reporting tenants. Q2 2023 Overview Key Highlights Portfolio Data Top 10 Tenant Conce
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 Industry Relevance Tenant Credit Quality Real Estate
Slide 4: Progress at Spirit — portfolio and balance sheet
Progress at Spirit — portfolio and balance sheet Spirit IPO Portfolio (Q3 2012)1 IPO to Post Spin-Off Post Spin-Off Portfolio (Q2 2018) Post Spin-Off Current (Q2 2023) Portfolio # of Tenants 165 +85 250 +95 345 # of Owned Properties 1,105 +353 1,458 +606 2,064 Owned Real Estate Investment ($M) $3,56
Slide 5: Capital Deployment Highlights
Capital Deployment Highlights
Slide 6: Capital deployment activity
1Includes a $33.0 million loan provided as financing in conjunction with the sale of four movie theaters. Capital deployment Activity Moderating capital deployment volumes to maximize spreads and maintain conservative balance sheet Gross Investment Activity $294.2M Acquisitions ($ in thousands) Q3 2
Slide 7: Trailing four-quarter capital deployment
Trailing four-quarter capital deployment Note: Percentages based on Gross Investment of acquisitions. Retail industries reflect the underlying Tenant operations, and Industrial and Other industries represent the underlying property use. 1Revenue Producing Expenditures include a $33.0 million loan pr
Slide 8: Disposition activity
1Includes the sale of four movie theaters for $44.0 million, of which $33.0 million relates to a loan provided as financing. Excluding this movie theater sale, the Disposition Capitalization Rate is 6.13%. DISPOSITION activity Improving portfolio diversification and increasing returns on capital thr
Slide 9: Portfolio Composition
Portfolio Composition
Slide 10: Top 20 Tenants and Current Portfolio Composition
Tenant Concept Number of Properties % of ABR Life Time Fitness 13 4.2% Invited Clubs 21 2.8% BJ's Wholesale Club 11 2.3% At Home 16 2.1% Dave & Buster’s / Main Event 15 1.9% Church’s Chicken 160 1.9% Dollar Tree / Family Dollar 133 1.8% Circle K / Clean Freak 76 1.8% Home Depot 8 1.7% GPM 105 1.5% Z
Slide 11: Industrial portfolio highlights
Industrial portfolio highlights Note: Data as of June 30, 2023. 1Based on ABR. Represents corporate-level reporting of revenues of our tenants or their affiliated companies. Number of Properties Square Feet (000s) % of ABR % Public Distribution 141 14,287 11.6% 62.1% Manufacturing 80 12,771 11.2% 27
Slide 12: Retail portfolio highlights
Retail portfolio highlights Our retail assets are granular properties leased to sophisticated operators, with 81.3% generating over $100 million in revenue1, located in markets with strong demand drivers Note: Data as of June 30, 2023. 1Based on ABR. Represents corporate-level reporting of revenues
Slide 13: Portfolio Health
19.3% Actual Investment Grade Rated1 Note: Data as of June 30, 2023. Percentages are based on ABR. 1Investment Grade Ratings represent the credit rating of our tenants, their subsidiaries or affiliated companies. Actual ratings based on S&P or Moody’s are used. 2Represents corporate-level reporting
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 Contractual Rent Annualized (1) % 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
Slide 15: Portfolio diversification
Note: Data as of June 30, 2023. *Represent less than 0.1% of ABR. PORTFOLIO DIVERSIFICATION Pacific Northwest 2.5% of ABR Mid Atlantic 14.8% of ABR Southeast 26.5% of ABR Midwest 19.0% of ABR Southwest 18.9% of ABR Northeast 6.8% of ABR Pacific Southwest 11.5% of ABR State % of ABR TX 14.9% TN 3.7%
Slide 16: Financial Information and Non-GAAP Reconciliations
Financial Information and Non-GAAP Reconciliations
Slide 17: Consolidated Balance Sheets
(Unaudited) June 30, 2023 March 31, 2019 December 31, 2022 December 31, 2018 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 (1,310,816 ) (1,211,061 ) Total real estate assets
Slide 18: Consolidated Statements of Operations
CONSOLIDATED STATEMENTS OF OPERATIONS $ IN THOUSANDS (Unaudited) Three Months Ended June 30, Three Months Ended March 31, Six Months Ended June 30, Three Months Ended March 31, 2023 2019 2022 2018 2023 2019 2022 2018 Revenues: Rental income1 $ 104,067 186,266 $ 98,236 173,559 $ 104,067 373,560 $ 98,
Slide 19: Funds and Adjusted Funds from Operations
1Costs related to COVID-19 are included in general and administrative expense and primarily relate to legal fees for executing rent deferral or abatement agreements. 2Dividends paid and undistributed earnings allocated, if any, to unvested restricted stockholders are deducted from FFO and AFFO for t
Slide 20: Annualized Adjusted EBITDAre and Fixed Charge Coverage
Annualized Adjusted EBITDAre Q2 2023 Q1 2019 Net income $ 54,181 Interest 34,527 Depreciation and amortization 78,944 Income tax expense 296 Gain on disposition of assets (13,602) Portfolio impairments 11,539 EBITDAre 165,885 Adjustments to revenue producing acquisitions and dispositions 2,170 Const
Slide 21: Capitalization and debt summary
Note: Data as of June 30, 2023. 1Borrowings bear interest at a 1-Month adjusted SOFR rate plus an applicable margin of 0.775% per annum. As of June 30, 2023, $1.2 billion of borrowing capacity was available. 2Includes the impact of the Company’s interest rate swaps. The stated rate as of June 30, 20
Slide 22: Net Asset Value (NAV) Components
Net Asset Value (NAV) Components Note: Data as of June 30, 2023. Market Value of Real Estate $4.0B Debt and Equity $318.0M Other Assets $212.9M Other Liabilities $694.6M Annualized Base Rent $11.0M Net Book Value for Vacant Assets $3.8B Debt Principal Outstanding $172.5M Preferred Equity Liquidation
Slide 23: Appendix
Appendix
Slide 24: Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO)
Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) FFO is calculated in accordance with the standards established by NAREIT as net income (loss) attributable to common stockholders (computed in accordance with GAAP), excluding real estate-related depreciation and amortization, imp
Slide 25: Definitions and debt terms
2019 Credit Facility refers to the $1.2 billion unsecured credit facility which matures on March 31, 2026. 2022 Term Loans refers to the $800.0 million senior unsecured term loan facility, comprised of a $300.0 million tranche which matures on August 22, 2025 and a $500.0 million tranche which matur
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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