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Section 1: 8-K (8-K)

Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 6, 2018

SPIRIT REALTY CAPITAL, INC.
SPIRIT REALTY, L.P.
(Exact name of registrant as specified in its charter)

Maryland
(Spirit Realty Capital, Inc.)
 
001-36004
 
20-1676382
(Spirit Realty Capital, Inc.)
Delaware
(Spirit Realty, L.P.)
 
333-216815-01
 
20-1127940
(Spirit Realty, L.P.)
(State or other jurisdiction
of incorporation)
 
(Commission File Number)
 
(I.R.S. Employer
Identification No.)
 2727 North Harwood Drive, Suite 300
Dallas, Texas 75201
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (972) 476-1900
Not Applicable
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934
Spirit Realty Capital, Inc.            Emerging growth company o        
Spirit Realty, L.P.                Emerging growth company o    





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.         Spirit Realty Captial, Inc.            o    
Spirit Realty, L.P.                o            





ITEM 9.01
FINANCIAL STATEMENTS AND EXHIBITS
(a) Pro Forma Financial Information. The unaudited pro forma consolidated balance sheet of Spirit Realty Capital, Inc. dated as of March 31, 2018, unaudited pro forma consolidated statements of operations of Spirit Realty Capital, Inc. for the three months ended March 31, 2018 and for each of the three years ended December 31, 2017, 2016 and 2015, unaudited pro forma consolidated balance sheet of Spirit Realty, L.P. dated as of March 31, 2018, unaudited pro forma consolidated statements of operations of Spirit Realty, L.P. for the three months ended March 31, 2018 and for each of the three years ended December 31, 2017, 2016 and 2015, and the related notes thereto (collectively, the "unaudited pro forma financial information") are filed as Exhibit 99.1 to this Current Report on Form 8-K.

(b) Exhibits.
99.1









SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: June 6, 2018
 
 
 
 
SPIRIT REALTY CAPITAL, INC.
 
 
By:
 
/s/ Michael Hughes
 
 
Michael Hughes
Executive Vice President, Chief Financial Officer and Treasurer
 
 
 
SPIRIT REALTY, L.P.
By: Spirit General OP Holdings, LLC, as general partner of Spirit Realty, L.P.
By:
 
/s/ Michael Hughes
 
 
Michael Hughes
Executive Vice President, Chief Financial Officer and Treasurer



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


UNAUDITED PRO FORMA FINANCIAL INFORMATION
Spirit Realty Capital, Inc. (“Spirit”, “our”, “we” or “us”) is a premier net-lease real estate investment trust (“REIT”) that primarily invests in high-quality, operationally essential real estate, subject to long-term, net leases. Spirit Realty, L.P. (the “Operating Partnership” or "SRLP") is a Delaware limited partnership. Spirit is the sole member of Spirit General OP Holdings, LLC, the sole general partner of the Operating Partnership, as well as the special limited partner of the Operating Partnership.
On May 31, 2018, we completed the spin-off of the assets that collateralize Master Trust 2014, part of our asset-backed securitization program, all of the properties that we lease to Specialty Retail Shops Holding Corp. and certain of its affiliates (“Shopko”), as well as certain other assets into an independent, publicly traded REIT, Spirit MTA REIT (“SMTA”). On May 31, 2018 (the “Distribution Date”), our stockholders of record as of the close of business on May 18, 2018 (the “Record Date”) received one share of SMTA common stock for every ten shares of our common stock held as of the Record Date.
The following unaudited pro forma consolidated balance sheets of Spirit and the Operating Partnership as of March 31, 2018 assume that the spin-off occurred on March 31, 2018. The following unaudited pro forma consolidated statements of operations of Spirit and the Operating Partnership for the three months ended March 31, 2018 and for each of the years ended December 31, 2017, 2016, and 2015 are presented as if the spin-off had occurred as of January 1, 2015 (collectively with the unaudited pro forma consolidated balance sheets, the "unaudited pro forma financial statements").
The unaudited pro forma financial statements are presented based on information currently available, are intended for informational purposes only, and do not purport to represent what Spirit and the Operating Partnership’s financial position and results of operations actually would have been had the spin-off occurred on the dates indicated, or to project Spirit or the Operating Partnership’s financial performance for any future period. Beginning in the second quarter of 2018, SMTA’s historical financial results for periods prior to the spin-off will be reflected in the consolidated financial statements of Spirit and the Operating Partnership’s as discontinued operations.
The unaudited pro forma financial statements and the accompanying notes should be read in conjunction with (i) the audited consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Spirit and the Operating Partnership’s Form 10-K for the year ended December 31, 2017 and (ii) the unaudited consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Spirit and the Operating Partnership’s Form 10-Q for the three months ended March 31, 2018.
The Spirit Historical column and SRLP Historical column in the unaudited pro forma financial statements reflect Spirit and the Operating Partnership’s respective historical financial statements for the periods presented and do not reflect any adjustments related to the spin-off and related events.
The information in the Spin-off of SMTA column in the unaudited pro forma financial statements gives effect to the spin-off and related transactions, including:
the transfer from Spirit to SMTA of (i) Master Trust 2014, an asset-backed securitization trust comprised of six legal entities that has issued non-recourse net-lease mortgage notes collateralized by commercial real estate, net-leases and mortgage loans receivable, (ii) three legal entities that own properties primarily leased to Shopko, (iii) one legal entity that owns a single distribution center property leased to a sporting goods tenant and its general partner entity and (iv) two legal entities that own four unencumbered properties;
the contribution by Spirit to SMTA of a $35.0 million B-1 Term Loan made by the Operating Partnership as part of a syndicated loan and security agreement with Shopko as borrower and several banks as lenders entered into on January 16, 2018; and
the contribution by Spirit to SMTA of ten properties.
The Pro Forma Adjustments column in the unaudited pro forma financial statements reflects pro forma adjustments, which are further described in the accompanying notes.
The following unaudited pro forma financial statements were prepared in accordance with Article 11 of Regulation S-X, using the assumptions set forth in the notes to the unaudited pro forma financial statements. The unaudited pro forma financial statements are presented for illustrative purposes only and do not purport to reflect the results of Spirit and the Operating Partnership may achieve in future periods or the historical results that would have been obtained had the above transactions been completed as of March 31, 2018 in the case of the unaudited pro forma consolidated balance sheets or on January 1, 2015 in the case of the unaudited pro forma consolidated statements of operations. Further, we expect to incur incremental general and administrative costs associated with providing asset management services to SMTA. As we have not yet entered into contracts with third parties for these incremental costs, the amounts are not yet estimable and do not appear in the unaudited pro forma consolidated statements of operations.


1



SPIRIT REALTY CAPITAL, INC.
Unaudited Pro Forma Consolidated Balance Sheet
As of March 31, 2018
(In Thousands, Except Share and Per Share Data)

2



 
Spirit Historical
(A)
 
Spin-off of SMTA
(B)
 
Pro Forma Adjustments
 
Pro Forma Total
Assets
 
 
 
 
 
 
 
Investments:
 
 
 
 
 
 
 
Real estate investments:
 
 
 
 
 
 
 
Land and improvements
$
2,571,942

 
$
(974,288
)
 
$

 
$
1,597,654

Buildings and improvements
4,685,541

 
(1,699,190
)
 

 
2,986,351

Total real estate investments
7,257,483

 
(2,673,478
)
 

 
4,584,005

Less: accumulated depreciation
(1,113,804
)
 
579,889

 

 
(533,915
)
 
6,143,679

 
(2,093,589
)
 

 
4,050,090

Loans receivable, net
111,062

 
(65,624
)
 
30,105

(C)
75,543

Investment in Master Trust 2014

 

 
33,630

(D)
33,630

Intangible lease assets, net
396,596

 
(99,147
)
 

 
297,449

Real estate assets under direct financing leases, net
24,847

 

 

 
24,847

Real estate assets held for sale, net
19,432

 
(7,853
)
 

 
11,579

Net investments
6,695,616

 
(2,266,213
)
 
63,735

 
4,493,138

Cash and cash equivalents
10,989

 
(5
)
 
(3,000
)
(E)
7,984

Deferred costs and other assets, net
241,875

 
(123,570
)
 
2,000

(E)
120,305

Preferred equity investment in Spirit MTA REIT

 

 
150,000

(F)
150,000

Goodwill
254,340

 
(40,000
)
 

 
214,340

Total assets
$
7,202,820

 
$
(2,429,788
)
 
$
212,735

 
$
4,985,767

Liabilities and stockholders’ equity
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Revolving Credit Facility
$
154,500

 
$

 
$

 
$
154,500

Senior Unsecured Notes, net
295,431

 

 

 
295,431

Mortgages and notes payable, net
2,571,794

 
(2,007,771
)
 
33,630

(D)
597,653

Related party mortgages, net

 

 
30,105

(C)
30,105

Convertible Notes, net
719,295

 

 

 
719,295

Total debt, net
3,741,020

 
(2,007,771
)
 
63,735

 
1,796,984

Intangible lease liabilities, net
151,179

 
(21,672
)
 

 
129,507

Accounts payable, accrued expenses and other liabilities
141,898

 
(15,256
)
 

 
126,642

Total liabilities
4,034,097

 
(2,044,699
)
 
63,735

 
2,053,133

Stockholders’ equity:
 
 
 
 
 
 
 
Preferred stock and paid in capital, $0.01 par value, 20,000,000 shares authorized: 6,900,000 shares issued and outstanding at March 31, 2018
166,193

 

 

 
166,193

Common stock, $0.01 par value, 750,000,000 shares authorized: 436,561,654 shares issued and outstanding at March 31, 2018
4,366

 

 

 
4,366

Capital in excess of par value
5,197,988

 
(385,089
)
 
(1,000
)
(E)
4,961,899

 
 
 
 
 
150,000

(F)
 
Accumulated deficit
(2,199,824
)
 

 

 
(2,199,824
)
Total stockholders’ equity
3,168,723

 
(385,089
)
 
149,000

 
2,932,634

Total liabilities and stockholders’ equity
$
7,202,820

 
$
(2,429,788
)
 
$
212,735

 
$
4,985,767


3



SPIRIT REALTY CAPITAL, INC.
Unaudited Pro Forma Consolidated Statement of Operations
Three Months Ended March 31, 2018
(In Thousands, Except Share and Per Share Data)
 
Spirit Historical
(AA)
 
Spin-off of SMTA
(BB)
 
Pro Forma Adjustments
 
Pro Forma Total
Revenues:
 
 
 
 
 
 
 
Rentals
$
157,612

 
$
(59,985
)
 
$

 
$
97,627

Related party income

 

 
5,000

(CC)
6,730

 
 
 
 
 
1,730

(DD)
 
Interest income on loans receivable
1,827

 
(908
)
 
519

(EE)
1,438

Earned income from direct financing leases
465

 

 

 
465

Tenant reimbursement income
4,418

 
(568
)
 

 
3,850

Other income
956

 
(384
)
 

 
572

Total revenues
165,278

 
(61,845
)
 
7,249

 
110,682

Expenses:
 
 
 
 
 
 
 
General and administrative
15,885

 
(7,820
)
 
1,730

(DD)
9,795

Transaction costs
3,932

 
(3,017
)
 

 
915

Property costs (including reimbursable)
7,415

 
(2,040
)
 

 
5,375

Real estate acquisition costs
48

 
(1
)
 

 
47

Interest
51,065

 
(28,012
)
 
519

(EE)
23,572

Depreciation and amortization
62,117

 
(21,428
)
 

 
40,689

Impairments
14,569

 
(9,055
)
 

 
5,514

Total expenses
155,031

 
(71,373
)
 
2,249

 
85,907

Income before other income and income tax expense
10,247

 
9,528

 
5,000

 
24,775

Other income:
 
 
 
 
 
 
 
Preferred dividend income from Spirit MTA REIT

 

 
3,750

(FF)
3,750

Gain on debt extinguishment
21,328

 
255

 

 
21,583

Total other income
21,328

 
255

 
3,750

 
25,333

Income before income tax expense
31,575

 
9,783

 
8,750

 
50,108

Income tax expense
(252
)
 
(12
)
 

 
(264
)
Income before (loss) gain on disposition of assets
31,323

 
9,771

 
8,750

 
49,844

(Loss) gain on disposition of assets
(605
)
 
1,695

 

 
1,090

Net income
30,718

 
11,466

 
8,750

 
50,934

Dividends paid to preferred stockholders
(2,588
)
 

 

 
(2,588
)
Net income attributable to common stockholders
$
28,130

 
$
11,466

 
$
8,750

 
$
48,346

 
 
 
 
 
 
 
 
Net income per share attributable to common stockholders—basic
$
0.06

 
 
 
 
 
$
0.11

Net income per share attributable to common stockholders—diluted
$
0.06

 
 
 
 
 
$
0.11

 
 
 
 
 
 
 
 
Weighted average shares of common stock outstanding:
 
 
 
 
 
 
 
Basic
444,875,428

 
 
 
 
 
444,875,428

Diluted
445,102,225

 
 
 
 
 
445,102,225



4



SPIRIT REALTY CAPITAL, INC.
Unaudited Pro Forma Consolidated Statement of Operations
Year Ended December 31, 2017
(In Thousands, Except Share and Per Share Data)
 
Spirit Historical
(AA)
 
Spin-off of SMTA
(BB)
 
Pro Forma Adjustments
 
Pro Forma Total
Revenues:
 
 
 
 
 
 
 
Rentals
$
639,017

 
$
(230,287
)
 
$

 
$
408,730

Related party income

 

 
20,000

(CC)
25,500

 
 
 
 
 
5,500

(DD)
 
Interest income on loans receivable
3,791

 
(768
)
 
1,074

(EE)
4,097

Earned income from direct financing leases
2,078

 

 

 
2,078

Tenant reimbursement income
16,747

 
(3,228
)
 

 
13,519

Other income
7,322

 
(5,748
)
 

 
1,574

Total revenues
668,955

 
(240,031
)
 
26,574

 
455,498

Expenses:
 
 
 
 
 
 
 
General and administrative
62,064

 
(29,848
)
 
5,500

(DD)
37,716

Transaction costs
6,361

 
(4,354
)
 

 
2,007

Property costs (including reimbursable)
36,617

 
(11,546
)
 

 
25,071

Real estate acquisition costs
1,356

 
94

 

 
1,450

Interest
190,127

 
(76,733
)
 
1,074

(EE)
114,468

Depreciation and amortization
256,019

 
(82,311
)
 

 
173,708

Impairments
102,330

 
(40,732
)
 

 
61,598

Total expenses
654,874

 
(245,430
)
 
6,574

 
416,018

Income before other (expense) income and income tax expense
14,081

 
5,399

 
20,000

 
39,480

Other (expense) income:
 
 
 
 
 
 
 
Preferred dividend income from Spirit MTA REIT

 

 
15,000

(FF)
15,000

(Loss) gain on debt extinguishment
(1,645
)
 
2,223

 

 
578

Total other (expense) income
(1,645
)
 
2,223

 
15,000

 
15,578

Income before income tax expense
12,436

 
7,622

 
35,000

 
55,058

Income tax expense
(394
)
 
(676
)
 

 
(1,070
)
Income before gain (loss) on disposition of assets
12,042

 
6,946

 
35,000

 
53,988

Gain (loss) on disposition of assets
65,106

 
(22,394
)
 

 
42,712

Net income (loss)
77,148

 
(15,448
)
 
35,000

 
96,700

Dividends paid to preferred stockholders
(2,530
)
 

 

 
(2,530
)
Net income (loss) attributable to common stockholders
$
74,618

 
$
(15,448
)
 
$
35,000

 
$
94,170

 
 
 
 
 
 
 
 
Net income per share attributable to common stockholders—basic
$
0.16

 
 
 
 
 
$
0.20

Net income per share attributable to common stockholders—diluted
$
0.16

 
 
 
 
 
$
0.20

 
 
 
 
 
 
 
 
Weighted average shares of common stock outstanding:
 
 
 
 
 
 
 
Basic
467,934,945

 
 
 
 
 
467,934,945

Diluted
467,942,788

 
 
 
 
 
467,942,788




5



SPIRIT REALTY CAPITAL, INC.
Unaudited Pro Forma Consolidated Statement of Operations
Year Ended December 31, 2016
(In Thousands, Except Share and Per Share Data)
 
Spirit Historical
(AA)
 
Spin-off of SMTA
(BB)
 
Pro Forma Adjustments
 
Pro Forma Total
Revenues:
 
 
 
 
 
 
 
Rentals
$
648,363

 
$
(240,405
)
 
$

 
$
407,958

Related party income

 

 
20,000

(CC)
25,427

 
 
 
 
 
5,427

(DD)
 
Interest income on loans receivable
5,253

 
(2,207
)
 
1,040

(EE)
4,086

Earned income from direct financing leases
2,742

 

 

 
2,742

Tenant reimbursement income
14,125

 
(2,106
)
 

 
12,019

Other income
15,491

 
(6,295
)
 

 
9,196

Total revenues
685,974

 
(251,013
)
 
26,467

 
461,428

Expenses:
 
 
 
 
 
 
 
General and administrative
52,615

 
(24,229
)
 
5,427

(DD)
33,813

Restructuring charges
6,341

 
(2,465
)
 

 
3,876

Property costs (including reimbursable)
30,839

 
(6,569
)
 

 
24,270

Real estate acquisition costs
3,229

 
(112
)
 

 
3,117

Interest
196,586

 
(77,895
)
 
1,040

(EE)
119,731

Depreciation and amortization
262,276

 
(89,363
)
 

 
172,913

Impairments
88,275

 
(26,718
)
 

 
61,557

Total expenses
640,161

 
(227,351
)
 
6,467

 
419,277

Income (loss) before other income and income tax expense
45,813

 
(23,662
)
 
20,000

 
42,151

Other income:
 
 
 
 
 
 
 
Preferred dividend income from Spirit MTA REIT

 

 
15,000

(FF)
15,000

Gain on debt extinguishment
233

 
1,372

 

 
1,605

Total other income
233

 
1,372

 
15,000

 
16,605

Income (loss) before income tax expense
46,046

 
(22,290
)
 
35,000

 
58,756

Income tax expense
(965
)
 
(279
)
 

 
(1,244
)
Income (loss) before gain (loss) on disposition of assets
45,081

 
(22,569
)
 
35,000

 
57,512

Gain (loss) on disposition of assets
52,365

 
(26,161
)
 

 
26,204

Net income (loss) attributable to common stockholders
$
97,446

 
$
(48,730
)
 
$
35,000

 
$
83,716

 
 
 
 
 
 
 
 
Net income per share attributable to common stockholders—basic
$
0.21

 
 
 
 
 
$
0.18

Net income per share attributable to common stockholders—diluted
$
0.21

 
 
 
 
 
$
0.18

 
 
 
 
 
 
 
 
Weighted average shares of common stock outstanding:
 
 
 
 
 
 
 
Basic
469,217,776

 
 
 
 
 
469,217,776

Diluted
469,246,265

 
 
 
 
 
469,246,265




6



SPIRIT REALTY CAPITAL, INC.
Unaudited Pro Forma Consolidated Statement of Operations
Year Ended December 31, 2015
(In Thousands, Except Share and Per Share Data)
 
Spirit Historical
(AA)
 
Spin-off of SMTA
(BB)
 
Pro Forma Adjustments
 
Pro Forma Total
Revenues:
 
 
 
 
 
 
 
Rentals
$
634,151

 
$
(252,925
)
 
$

 
$
381,226

Related party income

 

 
20,000

(CC)
25,506

 
 
 
 
 
5,506

(DD)
 
Interest income on loans receivable
6,948

 
(3,685
)
 
1,081

(EE)
4,344

Earned income from direct financing leases
3,024

 

 

 
3,024

Tenant reimbursement income
15,952

 
(1,908
)
 

 
14,044

Other income
7,260

 
(6,393
)
 

 
867

Total revenues
667,335

 
(264,911
)
 
26,587

 
429,011

Expenses:
 
 
 
 
 
 
 
General and administrative
47,730

 
(25,845
)
 
5,506

(DD)
27,391

Restructuring charges
7,056

 
(3,036
)
 

 
4,020

Property costs (including reimbursable)
27,715

 
(6,239
)
 

 
21,476

Real estate acquisition costs
2,739

 
(283
)
 

 
2,456

Interest
222,901

 
(83,719
)
 
1,081

(EE)
140,263

Depreciation and amortization
260,633

 
(94,281
)
 

 
166,352

Impairments
70,695

 
(19,935
)
 

 
50,760

Total expenses
639,469

 
(233,338
)
 
6,587

 
412,718

Income (loss) before other (expense) income and income tax expense
27,866

 
(31,573
)
 
20,000

 
16,293

Other (expense) income:
 
 
 
 
 
 
 
Preferred dividend income from Spirit MTA REIT

 

 
15,000

(FF)
15,000

(Loss) gain on debt extinguishment
(3,162
)
 
787

 

 
(2,375
)
Total other (expense) income
(3,162
)
 
787

 
15,000

 
12,625

Income (loss) before income tax expense
24,704

 
(30,786
)
 
35,000

 
28,918

Income tax expense
(601
)
 
(196
)
 

 
(797
)
Income (loss) from continuing operations
24,103

 
(30,982
)
 
35,000

 
28,121

Discontinued operations:
 
 
 
 
 
 
 
Income (loss) from discontinued operations
98

 
(98
)
 

 

Gain (loss) on disposition of assets
590

 
(590
)
 

 

Income (loss) from discontinued operations
688

 
(688
)
 

 

Income (loss) before gain (loss) on disposition of assets
24,791

 
(31,670
)
 
35,000

 
28,121

Gain (loss) on disposition of assets
68,421

 
(84,111
)
 

 
(15,690
)
Net income (loss) attributable to common stockholders
$
93,212

 
$
(115,781
)
 
$
35,000

 
$
12,431

 
 
 
 
 
 
 
 
Net income per share attributable to common stockholders—basic
$
0.21

 
 
 
 
 
$
0.03

Net income per share attributable to common stockholders—diluted
$
0.21

 
 
 
 
 
$
0.03

 
 
 
 
 
 
 
 
Weighted average shares of common stock outstanding:
 
 
 
 
 
 
 
Basic
432,222,953

 
 
 
 
 
432,222,953

Diluted
432,545,625

 
 
 
 
 
432,545,625




7



SPIRIT REALTY, L.P.
Unaudited Pro Forma Consolidated Balance Sheet
As of March 31, 2018
(In Thousands, Except Unit and Per Unit Data)
 
SRLP Historical
(A)
 
Spin-off of SMTA
(B)
 
Pro Forma Adjustments
 
Pro Forma Total
Assets
 
 
 
 
 
 
 
Investments:
 
 
 
 
 
 
 
Real estate investments:
 
 
 
 
 
 
 
Land and improvements
$
2,571,942

 
$
(974,288
)
 
$

 
$
1,597,654

Buildings and improvements
4,685,541

 
(1,699,190
)
 

 
2,986,351

Total real estate investments
7,257,483

 
(2,673,478
)
 

 
4,584,005

Less: accumulated depreciation
(1,113,804
)
 
579,889

 

 
(533,915
)
 
6,143,679

 
(2,093,589
)
 

 
4,050,090

Loans receivable, net
111,062

 
(65,624
)
 
30,105

(C)
75,543

Investment in Master Trust 2014

 

 
33,630

(D)
33,630

Intangible lease assets, net
396,596

 
(99,147
)
 

 
297,449

Real estate assets under direct financing leases, net
24,847

 

 

 
24,847

Real estate assets held for sale, net
19,432

 
(7,853
)
 

 
11,579

Net investments
6,695,616

 
(2,266,213
)
 
63,735

 
4,493,138

Cash and cash equivalents
10,989

 
(5
)
 
(3,000
)
(E)
7,984

Deferred costs and other assets, net
241,875

 
(123,570
)
 
2,000

(E)
120,305

Preferred equity investment in Spirit MTA REIT

 

 
150,000

(F)
150,000

Goodwill
254,340

 
(40,000
)
 

 
214,340

Total assets
$
7,202,820

 
$
(2,429,788
)
 
$
212,735

 
$
4,985,767

Liabilities and partners' capital
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Revolving Credit Facility
$
154,500

 
$

 
$

 
$
154,500

Senior Unsecured Notes, net
295,431

 

 

 
295,431

Mortgages and notes payable, net
2,571,794

 
(2,007,771
)
 
33,630

(D)
597,653

Related party mortgages, net

 

 
30,105

(C)
30,105

Notes payable to Spirit Realty Capital, Inc., net
719,295

 

 

 
719,295

Total debt, net
3,741,020

 
(2,007,771
)
 
63,735

 
1,796,984

Intangible lease liabilities, net
151,179

 
(21,672
)
 

 
129,507

Accounts payable, accrued expenses and other liabilities
141,898

 
(15,256
)
 

 
126,642

Total liabilities
4,034,097

 
(2,044,699
)
 
63,735

 
2,053,133

Partners' capital:
 
 
 
 
 
 
 
General partner's capital: 3,988,218 units issued and outstanding at March 31, 2018
23,954

 
(3,435
)
 
(9
)
(E)
21,848

 
 
 
 
1,338

(F)
 
Limited partners' preferred capital: 6,900,000 units issued and outstanding at March 31, 2018
166,193

 

 

 
166,193

Limited partners' capital: 432,573,436 units issued and outstanding at March 31, 2018
2,978,576

 
(381,654
)
 
(991
)
(E)
2,744,593

 
 
 
 
148,662

(F)
 
Total partners’ capital
3,168,723

 
(385,089
)
 
149,000

 
2,932,634

Total liabilities and partners' capital
$
7,202,820

 
$
(2,429,788
)
 
$
212,735

 
$
4,985,767


8



SPIRIT REALTY, L.P..
Unaudited Pro Forma Consolidated Statement of Operations
Three Months Ended March 31, 2018
(In Thousands, Except Unit and Per Unit Data)
 
SRLP Historical
(AA)
 
Spin-off of SMTA
(BB)
 
Pro Forma Adjustments
 
Pro Forma Total
Revenues:
 
 
 
 
 
 
 
Rentals
$
157,612

 
$
(59,985
)
 
$

 
$
97,627

Related party income

 

 
5,000

(CC)
6,730

 
 
 
 
 
1,730

(DD)
 
Interest income on loans receivable
1,827

 
(908
)
 
519

(EE)
1,438

Earned income from direct financing leases
465

 

 

 
465

Tenant reimbursement income
4,418

 
(568
)
 

 
3,850

Other income
956

 
(384
)
 

 
572

Total revenues
165,278

 
(61,845
)
 
7,249

 
110,682

Expenses:
 
 
 
 
 
 
 
General and administrative
15,885

 
(7,820
)
 
1,730

(DD)
9,795

Transaction costs
3,932

 
(3,017
)
 

 
915

Property costs (including reimbursable)
7,415

 
(2,040
)
 

 
5,375

Real estate acquisition costs
48

 
(1
)
 

 
47

Interest
51,065

 
(28,012
)
 
519

(EE)
23,572

Depreciation and amortization
62,117

 
(21,428
)
 

 
40,689

Impairments
14,569

 
(9,055
)
 

 
5,514

Total expenses
155,031

 
(71,373
)
 
2,249

 
85,907

Income before other income and income tax expense
10,247

 
9,528

 
5,000

 
24,775

Other income:
 
 
 
 
 
 
 
Preferred dividend income from Spirit MTA REIT

 

 
3,750

(FF)
3,750

Gain on debt extinguishment
21,328

 
255

 

 
21,583

Total other income
21,328

 
255

 
3,750

 
25,333

Income before income tax expense
31,575

 
9,783

 
8,750

 
50,108

Income tax expense
(252
)
 
(12
)
 

 
(264
)
Income before (loss) gain on disposition of assets
31,323

 
9,771

 
8,750

 
49,844

(Loss) gain on disposition of assets
(605
)
 
1,695

 

 
1,090

Net income
30,718

 
11,466

 
8,750

 
50,934

Preferred distributions
(2,588
)
 

 

 
(2,588
)
Net income after preferred distributions
$
28,130

 
$
11,466

 
$
8,750

 
$
48,346

 
 
 
 
 
 
 
 
Net income (loss) attributable to general partners
$
229

 
$
102

 
$
78

 
$
409

Net income (loss) attributable to limited partners
$
30,489

 
$
11,364

 
$
8,672

 
$
50,525

 
 
 
 
 
 
 
 
Net income per common partnership unit—basic
$
0.06

 
 
 
 
 
$
0.11

Net income per common partnership unit—diluted
$
0.06

 
 
 
 
 
$
0.11

 
 
 
 
 
 
 
 
Weighted average common partnership units outstanding:
 
 
 
 
 
 
 
Basic
444,875,428

 
 
 
 
 
444,875,428

Diluted
445,102,225

 
 
 
 
 
445,102,225



9



SPIRIT REALTY, L.P.
Unaudited Pro Forma Consolidated Statement of Operations
Year Ended December 31, 2017
(In Thousands, Except Unit and Per Unit Data)
 
SRLP Historical
(AA)
 
Spin-off of SMTA
(BB)
 
Pro Forma Adjustments
 
Pro Forma Total
Revenues:
 
 
 
 
 
 
 
Rentals
$
639,017

 
$
(230,287
)
 
$

 
$
408,730

Related party income

 

 
20,000

(CC)
25,500

 
 
 
 
 
5,500

(DD)
 
Interest income on loans receivable
3,791

 
(768
)
 
1,074

(EE)
4,097

Earned income from direct financing leases
2,078

 

 

 
2,078

Tenant reimbursement income
16,747

 
(3,228
)
 

 
13,519

Other income
7,322

 
(5,748
)
 

 
1,574

Total revenues
668,955

 
(240,031
)
 
26,574

 
455,498

Expenses:
 
 
 
 
 
 
 
General and administrative
62,064

 
(29,848
)
 
5,500

(DD)
37,716

Transaction costs
6,361

 
(4,354
)
 

 
2,007

Property costs (including reimbursable)
36,617

 
(11,546
)
 

 
25,071

Real estate acquisition costs
1,356

 
94

 

 
1,450

Interest
190,127

 
(76,733
)
 
1,074

(EE)
114,468

Depreciation and amortization
256,019

 
(82,311
)
 

 
173,708

Impairments
102,330

 
(40,732
)
 

 
61,598

Total expenses
654,874

 
(245,430
)
 
6,574

 
416,018

Income before other (expense) income and income tax expense
14,081

 
5,399

 
20,000

 
39,480

Other (expense) income:
 
 
 
 
 
 
 
Preferred dividend income from Spirit MTA REIT

 

 
15,000

(FF)
15,000

(Loss) gain on debt extinguishment
(1,645
)
 
2,223

 

 
578

Total other (expense) income
(1,645
)
 
2,223

 
15,000

 
15,578

Income before income tax expense
12,436

 
7,622

 
35,000

 
55,058

Income tax expense
(394
)
 
(676
)
 

 
(1,070
)
Income before gain (loss) on disposition of assets
12,042

 
6,946

 
35,000

 
53,988

Gain (loss) on disposition of assets
65,106

 
(22,394
)
 

 
42,712

Net income (loss)
77,148

 
(15,448
)
 
35,000

 
96,700

Preferred distributions
(2,530
)
 

 

 
(2,530
)
Net income (loss) after preferred distributions
$
74,618

 
$
(15,448
)
 
$
35,000

 
$
94,170

 
 
 
 
 
 
 
 
Net income (loss) attributable to general partners
$
657

 
$
(131
)
 
$
298

 
$
824

Net income (loss) attributable to limited partners
$
76,491

 
$
(15,317
)
 
$
34,702

 
$
95,876

 
 
 
 
 
 
 
 
Net income per common partnership unit—basic
$
0.16

 
 
 
 
 
$
0.20

Net income per common partnership unit—diluted
$
0.16

 
 
 
 
 
$
0.20

 
 
 
 
 
 
 
 
Weighted average common partnership units outstanding:
 
 
 
 
 
 
 
Basic
467,934,945

 
 
 
 
 
467,934,945

Diluted
467,942,788

 
 
 
 
 
467,942,788



10



SPIRIT REALTY, L.P.
Unaudited Pro Forma Consolidated Statement of Operations
Year Ended December 31, 2016
(In Thousands, Except Unit and Per Unit Data)
 
SRLP Historical
(AA)
 
Spin-off of SMTA
(BB)
 
Pro Forma Adjustments
 
Pro Forma Total
Revenues:
 
 
 
 
 
 
 
Rentals
$
648,363

 
$
(240,405
)
 
$

 
$
407,958

Related party income

 

 
20,000

(CC)
25,427

 
 
 
 
 
5,427

(DD)
 
Interest income on loans receivable
5,253

 
(2,207
)
 
1,040

(EE)
4,086

Earned income from direct financing leases
2,742

 

 

 
2,742

Tenant reimbursement income
14,125

 
(2,106
)
 

 
12,019

Other income
15,491

 
(6,295
)
 

 
9,196

Total revenues
685,974

 
(251,013
)
 
26,467

 
461,428

Expenses:
 
 
 
 
 
 
 
General and administrative
52,615

 
(24,229
)
 
5,427

(DD)
33,813

Restructuring charges
6,341

 
(2,465
)
 

 
3,876

Property costs (including reimbursable)
30,839

 
(6,569
)
 

 
24,270

Real estate acquisition costs
3,229

 
(112
)
 

 
3,117

Interest
196,586

 
(77,895
)
 
1,040

(EE)
119,731

Depreciation and amortization
262,276

 
(89,363
)
 

 
172,913

Impairments
88,275

 
(26,718
)
 

 
61,557

Total expenses
640,161

 
(227,351
)
 
6,467

 
419,277

Income (loss) before other income and income tax expense
45,813

 
(23,662
)
 
20,000

 
42,151

Other income:
 
 
 
 
 
 
 
Preferred dividend income from Spirit MTA REIT

 

 
15,000

(FF)
15,000

Gain on debt extinguishment
233

 
1,372

 

 
1,605

Total other income
233

 
1,372

 
15,000

 
16,605

Income (loss) before income tax expense
46,046

 
(22,290
)
 
35,000

 
58,756

Income tax expense
(965
)
 
(279
)
 

 
(1,244
)
Income (loss) before gain (loss) on disposition of assets
45,081

 
(22,569
)
 
35,000

 
57,512

Gain (loss) on disposition of assets
52,365

 
(26,161
)
 

 
26,204

Net income (loss)
$
97,446

 
$
(48,730
)
 
$
35,000

 
$
83,716

 
 
 
 
 
 
 
 
Net income (loss) attributable to general partners
$
825

 
$
(413
)
 
$
296

 
$
708

Net income (loss) attributable to limited partners
$
96,621

 
$
(48,317
)
 
$
34,704

 
$
83,008

 
 
 
 
 
 
 
 
Net income per common partnership unit—basic
$
0.21

 
 
 
 
 
$
0.18

Net income per common partnership unit—diluted
$
0.21

 
 
 
 
 
$
0.18

 
 
 
 
 
 
 
 
Weighted average common partnership units outstanding:
 
 
 
 
 
 
 
Basic
469,217,776

 
 
 
 
 
469,217,776

Diluted
469,246,265

 
 
 
 
 
469,246,265




11



SPIRIT REALTY, L.P.
Unaudited Pro Forma Consolidated Statement of Operations
Year Ended December 31, 2015
(In Thousands, Except Unit and Per Unit Data)
 
SRLP Historical
(AA)
 
Spin-off of SMTA
(BB)
 
Pro Forma Adjustments
 
Pro Forma Total
Revenues:
 
 
 
 
 
 
 
Rentals
$
634,151

 
$
(252,925
)
 
$

 
$
381,226

Related party income

 

 
20,000

(CC)
25,506

 
 
 
 
 
5,506

(DD)
 
Interest income on loans receivable
6,948

 
(3,685
)
 
1,081

(EE)
4,344

Earned income from direct financing leases
3,024

 

 

 
3,024

Tenant reimbursement income
15,952

 
(1,908
)
 

 
14,044

Other income
7,260

 
(6,393
)
 

 
867

Total revenues
667,335

 
(264,911
)
 
26,587

 
429,011

Expenses:
 
 
 
 
 
 
 
General and administrative
47,730

 
(25,845
)
 
5,506

(DD)
27,391

Restructuring charges
7,056

 
(3,036
)
 

 
4,020

Property costs (including reimbursable)
27,715

 
(6,239
)
 

 
21,476

Real estate acquisition costs
2,739

 
(283
)
 

 
2,456

Interest
222,901

 
(83,719
)
 
1,081

(EE)
140,263

Depreciation and amortization
260,633

 
(94,281
)
 

 
166,352

Impairments
70,695

 
(19,935
)
 

 
50,760

Total expenses
639,469

 
(233,338
)
 
6,587

 
412,718

Income (loss) before other (expense) income and income tax expense
27,866

 
(31,573
)
 
20,000

 
16,293

Other (expense) income:
 
 
 
 
 
 
 
Preferred dividend income from Spirit MTA REIT

 
<