UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number |
|
|
|
|
(Exact name of registrant as specified in its charter)
|
|
|
||
|
|
|
||
(State or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification Number) |
||
|
|
|
||
|
|
( |
||
(Address of principal executive offices; zip code) |
|
(Registrant’s telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
|||
|
|
|
|||
|
|
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
|
|
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
|
|
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
|
Accelerated filer □ |
Non-accelerated filer □ |
Smaller reporting company |
Emerging growth company |
|||
|
|
|
||
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
|
|
As of April 29, 2022, there were
INDEX
|
3 |
||||
|
5 |
||||
|
Item 1. |
|
|
5 |
|
|
Item 2. |
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|
24 |
|
Item 3. |
|
|
40 |
|
|
Item 4. |
|
|
40 |
|
|
41 |
||||
|
Item 1. |
|
|
41 |
|
|
Item 1A. |
|
|
41 |
|
|
Item 2. |
|
|
41 |
|
|
Item 3. |
|
|
41 |
|
|
Item 4. |
|
|
41 |
|
|
Item 5. |
|
|
41 |
|
|
Item 6. |
|
|
42 |
|
|
|
|
|
43 |
GLOSSARY
2016 ATM Program |
At-the-market equity distribution program established in November 2016, which was terminated upon entry into the 2020 ATM Program |
2017 Tax Legislation |
Tax Cuts and Jobs Act of 2017 |
2019 Credit Facility |
$800 million unsecured revolving credit facility, expanded to $1.2 billion in March 2022, pursuant to the 2019 Revolving Credit and Term Loan Agreement |
2019 Revolving Credit and Term Loan Agreement |
Revolving credit and term loan agreement between the Operating Partnership and certain lenders dated January 14, 2019, as amended or otherwise modified from time to time |
2020 ATM Program |
At-the-market equity distribution program established in November 2020, which was terminated upon entry into the 2021 ATM Program |
2020 Term Loans |
$400.0 million senior unsecured term facility pursuant to the 2020 Term Loan Agreement |
2020 Term Loan Agreement |
Term loan agreement between the Operating Partnership and certain lenders dated April 2, 2020, as amended or otherwise modified from time to time |
2021 ATM Program |
At-the-market equity distribution program established in November 2021, pursuant to which the Corporation may offer and sell registered shares of common stock from time to time |
2021 Convertible Notes |
$345.0 million convertible notes of the Corporation which matured in May 2021 |
2026 Senior Notes |
$300.0 million principal amount senior notes issued in August 2016 |
2027 Senior Notes |
$300.0 million principal amount senior notes issued in September 2019 |
2028 Senior Notes |
$450.0 million principal amount senior notes issued in March 2021 |
2029 Senior Notes |
$400.0 million principal amount senior notes issued in June 2019 |
2030 Senior Notes |
$500.0 million principal amount senior notes issued in September 2019 |
2031 Senior Notes |
$450.0 million principal amount senior notes issued in August 2020 |
2032 Senior Notes |
$350.0 million principal amount senior notes issued in March 2021 |
Adjusted Debt |
Adjusted Debt is a non-GAAP financial measure. See definition in Management's Discussion and Analysis of Financial Condition and Results of Operations |
Adjusted EBITDAre |
Adjusted EBITDAre is a non-GAAP financial measure. See definition in Management's Discussion and Analysis of Financial Condition and Results of Operations |
AFFO |
Adjusted Funds From Operations is a non-GAAP financial measure. See definition in Management's Discussion and Analysis of Financial Condition and Results of Operations |
Amended Incentive Award Plan |
Amended and Restated Spirit Realty Capital, Inc. and Spirit Realty, L.P. 2012 Incentive Award Plan, as amended |
Annualized Base Rent (ABR) |
Represents Base Rent plus earned income from direct financing leases and deferred revenue from development deals for the final month of the reporting period. It is adjusted to reflect acquisitions and dispositions for that month as if such acquisitions and dispositions had occurred as of the beginning of the month. The total is then multiplied by 12. ABR is used when calculating certain metrics to evaluate portfolio credit and diversification and to manage risk. |
AOCL |
Accumulated Other Comprehensive Loss |
ASC |
Accounting Standards Codification |
Base Cash Rent |
Represents Base Rent adjusted for contractual rental income abated, deemed not probable of collection, or recovered from prior period reserves |
Base Rent |
Represents contractual rental income for the period, prior to deferral or abatement agreements, and excluding contingent rents. |
CMBS |
Commercial Mortgage-Backed Securities |
Code |
Internal Revenue Code of 1986, as amended |
Company |
The Corporation and its consolidated subsidiaries |
Convertible Notes |
2021 Convertible Notes |
Corporation |
Spirit Realty Capital, Inc., a Maryland corporation |
CPI |
Consumer Price Index |
EBITDAre |
EBITDAre is a non-GAAP financial measure computed in accordance with standards established by NAREIT. See definition in Management's Discussion and Analysis of Financial Condition and Results of Operations |
Exchange Act |
Securities Exchange Act of 1934, as amended |
FASB |
Financial Accounting Standards Board |
FFO |
Funds From Operations is a non-GAAP financial measure. See definition in Management's Discussion and Analysis of Financial Condition and Results of Operations |
GAAP |
Generally Accepted Accounting Principles in the United States |
LIBOR |
London Interbank Offered Rate |
3
NAREIT |
National Association of Real Estate Investment Trusts |
OP Holdings |
Spirit General OP Holdings, LLC |
Operating Partnership |
Spirit Realty, L.P., a Delaware limited partnership |
REIT |
Real estate investment trust |
S&P |
S&P's Global Ratings |
SEC |
Securities and Exchange Commission |
Securities Act |
Securities Act of 1933, as amended |
Senior Unsecured Notes |
2026 Senior Notes, 2027 Senior Notes, 2028 Senior Notes, 2029 Senior Notes, 2030 Senior Notes, 2031 Senior Notes and 2032 Senior Notes, collectively |
Series A Preferred Stock |
6,900,000 shares of 6.000% Cumulative Redeemable Preferred Stock issued October 3, 2017, with a liquidation preference of $25.00 per share |
SOFR |
Secured Overnight Financing Rate |
Unless otherwise indicated or unless the context requires otherwise, all references to the “registrant, the "Company," "Spirit Realty Capital," "we," "us" or "our" refer to the Corporation and its consolidated subsidiaries, including the Operating Partnership. Unless otherwise indicated or unless the context requires otherwise, all references to the "Operating Partnership" refer to Spirit Realty, L.P. and its consolidated subsidiaries.
4
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
SPIRIT REALTY CAPITAL, INC.
Consolidated Balance Sheets
(In Thousands, Except Share and Per Share Data)
(Unaudited)
|
|
March 31, 2022 |
|
|
December 31, 2021 |
|
||
Assets |
|
|
|
|
|
|
|
|
Investments: |
|
|
|
|
|
|
|
|
Real estate assets held for investment: |
|
|
|
|
|
|
|
|
Land and improvements |
|
$ |
|
|
|
$ |
|
|
Buildings and improvements |
|
|
|
|
|
|
|
|
Less: accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Total real estate assets held for investment, net |
|
|
|
|
|
|
|
|
Intangible lease assets, net |
|
|
|
|
|
|
|
|
Real estate assets under direct financing leases, net |
|
|
|
|
|
|
|
|
Real estate assets held for sale, net |
|
|
|
|
|
|
|
|
Loans receivable, net |
|
|
|
|
|
|
|
|
Total investments, net |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
|
|
|
Deferred costs and other assets, net |
|
|
|
|
|
|
|
|
Goodwill |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
Revolving credit facilities |
|
$ |
|
|
|
$ |
|
|
Senior Unsecured Notes, net |
|
|
|
|
|
|
|
|
Mortgages payable, net |
|
|
|
|
|
|
|
|
Total debt, net |
|
|
|
|
|
|
|
|
Intangible lease liabilities, net |
|
|
|
|
|
|
|
|
Accounts payable, accrued expenses and other liabilities |
|
|
|
|
|
|
|
|
Total liabilities |
|
|
|
|
|
|
|
|
Commitments and contingencies (see Note 6) |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock and paid in capital, $ |
|
|
|
|
|
|
|
|
Common stock, $ |
|
|
|
|
|
|
|
|
Capital in excess of common stock par value |
|
|
|
|
|
|
|
|
Accumulated deficit |
|
|
( |
) |
|
|
( |
) |
Accumulated other comprehensive loss |
|
|
( |
) |
|
|
( |
) |
Total stockholders’ equity |
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
$ |
|
|
|
$ |
|
|
See accompanying notes.
5
SPIRIT REALTY CAPITAL, INC.
Consolidated Statements of Operations
(In Thousands, Except Share and Per Share Data)
(Unaudited)
|
|
Three Months Ended March 31, |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
Revenues: |
|
|
|
|
|
|
|
|
Rental income |
|
$ |
|
|
|
$ |
|
|
Interest income on loans receivable |
|
|
|
|
|
|
— |
|
Earned income from direct financing leases |
|
|
|
|
|
|
|
|
Other operating income |
|
|
|
|
|
|
|
|
Total revenues |
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
General and administrative |
|
|
|
|
|
|
|
|
Property costs (including reimbursable) |
|
|
|
|
|
|
|
|
Deal pursuit costs |
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
Impairments |
|
|
|
|
|
|
|
|
Total expenses |
|
|
|
|
|
|
|
|
Other income (loss): |
|
|
|
|
|
|
|
|
Loss on debt extinguishment |
|
|
( |
) |
|
|
( |
) |
Gain on disposition of assets |
|
|
|
|
|
|
|
|
Other income |
|
|
|
|
|
|
— |
|
Total other income (loss) |
|
|
|
|
|
|
( |
) |
Income (loss) before income tax expense |
|
|
|
|
|
|
( |
) |
Income tax expense |
|
|
( |
) |
|
|
( |
) |
Net income (loss) |
|
|
|
|
|
|
( |
) |
Dividends paid to preferred shareholders |
|
|
( |
) |
|
|
( |
) |
Net income (loss) attributable to common stockholders |
|
$ |
|
|
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
Net income (loss) per share attributable to common stockholders: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
|
|
|
$ |
( |
) |
Diluted |
|
$ |
|
|
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
Weighted average shares of common stock outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share issued |
|
$ |
|
|
|
$ |
|
|
See accompanying notes.
6
SPIRIT REALTY CAPITAL, INC.
Consolidated Statements of Comprehensive Income (Loss)
(In Thousands)
(Unaudited)
|
|
Three Months Ended March 31, |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
Net income (loss) attributable to common stockholders |
|
$ |
|
|
|
$ |
( |
) |
Other comprehensive income: |
|
|
|
|
|
|
|
|
Net reclassification of amounts from AOCL |
|
|
|
|
|
|
|
|
Total comprehensive income (loss) |
|
$ |
|
|
|
$ |
( |
) |
See accompanying notes.
7
SPIRIT REALTY CAPITAL, INC.
Consolidated Statements of Stockholders' Equity
(In Thousands, Except Share Data)
(Unaudited)
Three Months Ended March 31, 2022 |
|
Preferred Stock |
|
|
Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
Shares |
|
|
Par Value and Capital in Excess of Par Value |
|
|
Shares |
|
|
Par Value |
|
|
Capital in Excess of Par Value |
|
|
Accumulated Deficit |
|
|
AOCL |
|
|
Total Stockholders’ Equity |
|
||||||||
Balances, December 31, 2021 |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
|
|
Dividends declared on preferred stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Net income attributable to common stockholders |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
|
|
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
Dividends declared on common stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Tax withholdings related to net stock settlements |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Issuance of shares of common stock, net |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
Stock-based compensation, net |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
Balances, March 31, 2022 |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
Three Months Ended March 31, 2021 |
|
Preferred Stock |
|
|
Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
Shares |
|
|
Par Value and Capital in Excess of Par Value |
|
|
Shares |
|
|
Par Value |
|
|
Capital in Excess of Par Value |
|
|
Accumulated Deficit |
|
|
AOCL |
|
|
Total Stockholders’ Equity |
|
||||||||
Balances, December 31, 2020 |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Dividends declared on preferred stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Net loss attributable to common stockholders |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
Dividends declared on common stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Tax withholdings related to net stock settlements |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Stock-based compensation, net |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
Balances, March 31, 2021 |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
See accompanying notes.
8
SPIRIT REALTY CAPITAL, INC.
Consolidated Statements of Cash Flows
(In Thousands)
(Unaudited)
|
|
Three Months Ended March 31, |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
Operating activities |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
|
|
|
$ |
( |
) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
Impairments |
|
|
|
|
|
|
|
|
Amortization of deferred financing costs |
|
|
|
|
|
|
|
|
Amortization of debt discounts |
|
|
|
|
|
|
|
|
Amortization of deferred losses on interest rate swaps |
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
|
|
|
|
|
|
|
Loss on debt extinguishment |
|
|
|
|
|
|
|
|
Gain on dispositions of real estate and other assets |
|
|
( |
) |
|
|
( |
) |
Non-cash revenue |
|
|
( |
) |
|
|
( |
) |
Other |
|
|
— |
|
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Deferred costs and other assets, net |
|
|
( |
) |
|
|
|
|
Accounts payable, accrued expenses and other liabilities |
|
|
( |
) |
|
|
( |
) |
Net cash provided by operating activities |
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
|
|
Acquisitions of real estate |
|
|
( |
) |
|
|
( |
) |
Capitalized real estate expenditures |
|
|
( |
) |
|
|
( |
) |
Investments in loans receivable |
|
|
( |
) |
|
|
— |
|
Proceeds from dispositions of real estate and other assets, net |
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Financing activities |
|
|
|
|
|
|
|
|
Borrowings under revolving credit facilities |
|
|
|
|
|
|
|
|
Repayments under revolving credit facilities |
|
|
( |
) |
|
|
( |
) |
Repayments under mortgages payable |
|
|
( |
) |
|
|
( |
) |
Repayments under term loans |
|
|
— |
|
|
|
( |
) |
Borrowings under Senior Unsecured Notes |
|
|
— |
|
|
|
|
|
Debt extinguishment costs |
|
|
— |
|
|
|
( |
) |
Deferred financing costs |
|
|
( |
) |
|
|
( |
) |
Proceeds from issuance of common stock, net of offering costs |
|
|
|
|
|
|
— |
|
Repurchase of shares of common stock, including tax withholdings related to net stock settlements |
|
|
( |
) |
|
|
( |
) |
Common stock dividends paid |
|
|
( |
) |
|
|
( |
) |
Preferred stock dividends paid |
|
|
( |
) |
|
|
( |
) |
Net cash provided by financing activities |
|
|
|
|
|
|
|
|
Net increase in cash, cash equivalents and restricted cash |
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash, beginning of period |
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash, end of period |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest, net of interest capitalized |
|
$ |
|
|
|
$ |
|
|
Interest capitalized |
|
|
|
|
|
|
— |
|
Cash paid for income taxes |
|
|
|
|
|
|
|
|
9