Supplemental Financial & Operating Information THIRD QUARTER ENDED SEPTEMBER 30, 2018
CORPORATE OVERVIEW NYSE:SRC About Spirit Spirit Realty Capital, Inc., (NYSE: SRC) 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. Over the past decade, Spirit has become an industry leader and owner of income-producing, strategically located retail, industrial, office and data center properties. As of September 30, 2018, our diversified portfolio was composed of 1,523 properties, including properties securing mortgage loans. Our properties, with an aggregate gross leasable area of approximately 28.7 million square feet, are leased to 252 tenants across 49 states and 32 tenant industries. Corporate Headquarters Transfer Agent Investor Relations 2727 N. Harwood St., American Stock Transfer (972) 476-1403 Suite 300 & Trust Company, LLC InvestorRelations@spirit Dallas, Texas 75201 Phone: 866-703-9065 realty.com Phone: 972-476-1900 www.amstock.com www.spiritrealty.com Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 2
TABLE OF CONTENTS NYSE:SRC Portfolio and Financial Overview 4 Condensed Consolidated Statements of Operations 5 Funds and Adjusted Funds From Operations 6 Consolidated Balance Sheets 7 Capitalization and Debt Summary 8 Investment and Disposition Activity 11 Tenant / Industry / Portfolio Diversification 13 Same Store Contractual Rent 17 Occupancy 18 Lease Structure and Expirations 19 Net Asset Value (NAV) Components 20 Analyst Coverage 21 Appendix: 22 Reporting Definitions and Explanations 23 Non-GAAP Reconciliations 27 Forward-Looking Statements and Risk Factors 28 Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 3
PORTFOLIO AND FINANCIAL OVERVIEW $ in thousands NYSE:SRC Portfolio Data Percent of Top 10 Tenants Properties Contractual Total Real Estate Investments $ 5,137,341 Rent Owned Properties 1,470 1 Walgreen Company 40 3.5% Properties Securing Mortgage Loans 53 2 Cajun Global, LLC 170 3.4% Total Properties 1,523 3 Alimentation Couche-Tard, Inc. 82 3.0% Tenants 252 4 The Home Depot, Inc. 7 2.8% Tenant Industries 32 5 CVS Caremark Corporation 35 2.5% States 49 Top 5 Total 334 15.2% Weighted Average Remaining Lease Term (Years) 9.7 6 Life Time Fitness, Inc. 5 2.4% Occupancy 99.6% 7 GPM Investments, LLC 105 2.3% Quarter Ended 8 AB Acquisition, LLC 16 1.9% Financial Ratios September 30, 2018 9 Ferguson Enterprises, Inc. 7 1.7% Adjusted Debt / Enterprise Value 36.5% 10 PetSmart, Inc. 4 1.7% Adjusted Debt / Annualized Adjusted EBITDAre 5.2x Top 10 Total 471 25.2% Adjusted Debt + Preferred / Annualized Adjusted EBITDAre 5.6x Fixed Charge Coverage Ratio 4.4x Corporate Liquidity Unencumbered Assets / Unsecured Debt 2.5x Cash and Cash Equivalents $ 7,578 Availability Under Revolving Credit Facility 643,000 Capitalization Total $ 650,578 Common Market Equity $ 3,439,526 Unencumbered Assets Properties Real Estate Investment Preferred Share Liquidation Value $ 172,500 Retail 1,087 $ 3,612,933 Total Capitalization $ 3,612,026 Industrial 20 246,435 Total Adjusted Debt $ 2,072,303 Office 27 176,590 Enterprise Value $ 5,684,329 Data Centers 3 56,748 Outstanding Shares of Common Stock (1) 426,740,154 Total 1,137 $ 4,092,706 (1) Total outstanding shares as of September 30, 2018, less 1.7 million unvested restricted shares. Please see Appendix at the back of this supplement for Reporting Definitions and Explanations, Non-GAAP Reconciliations and a disclosure regarding Forward-Looking Statements. Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 4
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS $ in thousands NYSE:SRC (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenues: Rentals $ 97,311 $ 103,523 $ 290,549 $ 307,822 Interest income on loans receivable 1,121 865 2,410 2,392 Earned income from direct financing leases 465 483 1,395 1,613 Tenant reimbursement income 3,516 3,270 10,021 10,922 Related party fee income 6,750 — 8,969 — Other income 481 580 2,298 1,139 Total revenues 109,644 108,721 315,642 323,888 Expenses: General and administrative (G&A) (1) 11,033 12,712 39,843 46,789 Property costs (including reimbursable) 5,172 5,180 15,529 19,193 Real estate acquisition costs 26 177 143 851 Interest 24,784 29,948 71,385 85,805 Depreciation and amortization 40,379 43,318 121,015 130,634 Impairments 1,279 22,301 6,254 60,258 Total expenses 82,673 113,636 254,169 343,530 Income (loss) from continuing operations before other income and 26,971 (4,915) 61,473 (19,642) income tax expense Other income: Gain on debt extinguishment — 1,792 27,092 1,769 Gain on disposition of assets 436 10,089 827 21,986 Preferred dividend income from SMTA 3,750 — 5,000 — Total other income 4,186 11,881 32,919 23,755 Income from continuing operations before income tax expense 31,157 6,966 94,392 4,113 Income tax expense (135) (144) (475) (421) Income from continuing operations 31,022 6,822 93,917 3,692 (Loss) income from discontinued operations (966) (1,500) (15,979) 37,665 Net income and total comprehensive income 30,056 5,322 77,938 41,357 Dividends paid to preferred stockholders (2,588) — (7,764) — Net income attributable to common stockholders $ 27,468 $ 5,322 $ 70,174 $ 41,357 (1) Included within G&A expenses for the nine months ended September 30, 2018 is $1.4 million of accelerated stock compensation expense recorded for the early vesting of certain awards in conjunction with the Spin-Off. Please see Appendix at the back of this supplement for Reporting Definitions and Explanations, Non-GAAP Reconciliations and a disclosure regarding Forward-Looking Statements. Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 5
FUNDS AND ADJUSTED FUNDS FROM OPERATIONS (FFO/AFFO) $ in thousands, except share and per share amounts NYSE:SRC (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Net income attributable to common stockholders (1) $ 27,468 $ 5,322 $ 70,174 $ 41,357 Portfolio depreciation and amortization 40,237 63,530 156,051 192,465 Portfolio impairments 1,279 37,737 17,197 88,109 Gain on disposition of assets (436) (8,707) (553) (40,197) Funds from operations attributable to common stockholders $ 68,548 $ 97,882 $ 242,869 $ 281,734 Gain on debt extinguishment — (1,792) (26,729) (1,770) Real estate acquisition costs 26 196 482 773 Transaction costs 966 2,660 20,931 3,145 Non-cash interest expense 4,526 5,810 18,330 16,937 Accrued interest and fees on defaulted loans 286 1,344 1,137 2,917 Straight-line rent, net of related bad debt expense (3,582) (3,217) (12,226) (13,427) Other amortization and non-cash charges (892) (743) (1,586) (2,447) Non-cash compensation expense 3,084 2,339 12,189 13,778 Adjusted funds from operations attributable to common stockholders $ 72,962 $ 104,479 $ 255,397 $ 301,640 Dividends declared to common stockholders $ 53,546 $ 82,062 $ 209,270 $ 251,606 Net income per share of common stock Basic (2) $ 0.06 $ 0.01 $ 0.16 $ 0.09 Diluted (2) $ 0.06 $ 0.01 $ 0.16 $ 0.09 FFO per diluted share of common stock (2) $ 0.16 $ 0.21 $ 0.56 $ 0.59 AFFO per diluted share of common stock (2) $ 0.17 $ 0.23 $ 0.59 $ 0.64 Weighted average shares of common stock outstanding: Basic 426,678,579 456,671,617 433,162,760 472,698,692 Diluted 427,890,152 456,671,617 433,940,701 472,698,692 (1) Included in general and administrative expenses for the nine months ended September 30, 2018 is $3.9 million of severance-related costs, comprised of $2.1 million of cash compensation and $1.8 million of non-cash compensation related to the acceleration of Restricted Stock and Performance Share Awards in connection with the departure of two executive officers. Included in general and administrative expenses for the nine months ended September 30, 2017 is $11.1 million of severance-related costs, comprised of $4.2 million of cash compensation and $6.9 million of non-cash compensation related to the acceleration of Restricted Stock and Performance Share Awards in connection with the departure of one executive officer. (2) For the three months ended September 30, 2018 and 2017, dividends declared to unvested restricted stockholders of $0.2 million and $0.3 million, respectively, and for the nine months ended September 30, 2018 and 2017, dividends declared to unvested restricted stockholders of $0.9 million and $0.7 million, respectively, are deducted from Net Income, FFO and AFFO attributable to common stockholders in the computation of per share amounts. Please see Appendix at the back of this supplement for Reporting Definitions and Explanations, Non-GAAP Reconciliations and a disclosure regarding Forward-Looking Statements. Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 6
CONSOLIDATED BALANCE SHEETS $ in thousands, except per share amounts NYSE:SRC (Unaudited) September 30, December 31, 2018 2017 Assets Real estate investments: Land and improvements $ 1,629,509 $ 1,598,355 Buildings and improvements 3,100,749 2,989,451 Total real estate investments 4,730,258 4,587,806 Less: accumulated depreciation (589,599) (503,568) 4,140,659 4,084,238 Loans receivable, net 52,001 78,466 Intangible lease assets, net 302,954 306,252 Real estate assets under direct financing leases, net 24,809 24,865 Real estate assets held for sale, net 43,601 20,469 Net investments 4,564,024 4,514,290 Cash and cash equivalents 7,578 8,792 Deferred costs and other assets, net 112,149 121,949 Investment in Master Trust 2014 33,558 — Preferred equity investment in SMTA 150,000 — Goodwill 225,600 225,600 Assets related to SMTA Spin-Off — 2,392,880 Total assets $ 5,092,909 $ 7,263,511 Liabilities and stockholders’ equity Liabilities: Revolving Credit Facility $ 157,000 $ 112,000 Term Loan, net 419,920 — Senior Unsecured Notes, net 295,654 295,321 Mortgages and notes payable, net 465,433 589,644 Convertible Notes, net 726,261 715,881 Total debt, net 2,064,268 1,712,846 Intangible lease liabilities, net 123,613 130,574 Accounts payable, accrued expenses and other liabilities 99,670 131,642 Liabilities related to SMTA Spin-Off — 1,968,840 Total liabilities 2,287,551 3,943,902 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 both September 30, 166,177 166,193 2018 and December 31, 2017 Common stock, $0.01 par value, 750,000,000 shares authorized: 428,478,845 and 448,868,269 shares issued and outstanding at September 30, 2018 4,285 4,489 and December 31, 2017, respectively Capital in excess of common stock par value 4,989,804 5,193,631 Accumulated deficit (2,354,908) (2,044,704) Total stockholders’ equity 2,805,358 3,319,609 Total liabilities and stockholders’ equity $ 5,092,909 $ 7,263,511 Please see Appendix at the back of this supplement for Reporting Definitions and Explanations, Non-GAAP Reconciliations and a disclosure regarding Forward-Looking Statements. Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 7
CAPITALIZATION NYSE:SRC $ in thousands, except share and per share data Enterprise Value Capitalization & Enterprise $5,684 Million Value $7,000 Common Shares Outstanding (1) 426,740,154 $6,000 Common Share Price (2) $ 8.06 $5,000 Total Common Market Equity $ 3,439,526 Adjusted $4,000 Debt Preferred Share Liquidation Value 172,500 Preferred $3,000 Total Capitalization $ 3,612,026 Market Equity $2,000 Total Adjusted Debt 2,072,303 Common Market Equity $1,000 Total Enterprise Value $ 5,684,329 (1) Total outstanding shares as of September 30, 2018, less 1.7 million unvested restricted shares. $0 (2) Share price as of September 30, 2018. Debt Type Fixed/Floating Rate Debt Unsecured Liquidity 77% Floating Available Borrowing Capacity 28% Revolving Credit Facility 643,000 Cash & Cash Equivalents 7,578 Fixed 72% Total Liquidity $ 650,578 Secured 23% Please see Appendix at the back of this supplement for Reporting Definitions and Explanations, Non-GAAP Reconciliations and a disclosure regarding Forward-Looking Statements. Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 8
DEBT SUMMARY $ in thousands, as of September 30, 2018 NYSE:SRC % of Total Weighted Average Maturity Date Debt Balance Principal Interest Rate Years to Maturity Credit Facility Revolving Credit Facility (1) March 31, 2019 $ 157,000 7.5% 3.370% 0.5 Unsecured Term Loan Term Loan (2) November 2, 2018 420,000 20.0% 3.570% 0.1 Unamortized net premiums and deferred financing costs (80) Carrying amount 419,920 Convertible Notes 2.875% Notes due 2019 May 15, 2019 402,500 19.2% 2.875% 0.6 3.750% Notes due 2021 May 15, 2021 345,000 16.4% 3.750% 2.6 Principal amount 747,500 Unamortized net premiums and deferred financing costs (21,239) Carrying amount 726,261 Master Trust 2013 (3) Series 2013-2 Class A Notes December 20, 2023 169,012 8.1% 5.269% 5.2 Unamortized net premiums and deferred financing costs (4,389) Carrying amount 164,623 Senior Unsecured Notes 4.450 % Notes due 2026 September 15, 2026 300,000 14.3% 4.450% 8.0 Unamortized net premiums and deferred financing costs (4,346) Carrying amount 295,654 Mortgages Payable (3) 7 CMBS loans on 101 properties (4) August 2018 - August 2031 275,460 13.1% 5.510% 4.7 4 related party mortgages on 6 properties November 2025 - March 2028 28,630 1.4% 1.000% 9.5 Principal amount 304,090 Unamortized net premiums and deferred financing costs (3,280) Carrying amount 300,810 Total Debt, net $ 2,064,268 100.0% 3.930% 2.9 (1) The Revolving Credit Facility has an initial maturity date of March 31, 2019, which may be extended at the Company's option Weighted Principal % of Total pursuant to a one-year extension option. Avg. Stated (2) Balance Principal Int. Rate The Term Loan has an initial maturity date of November 2, 2018, which may be extended at the Company's option pursuant to two one-year extension options. On November 2, 2018, the Company exercised its option to extend the maturity date to Total Unsecured Debt $ 1,624,500 77.4% 3.580% November 2, 2019. (3) Total Secured Debt (3) 473,102 22.6% 5.154% A significant portion of our secured debt is partially amortizing and requires a balloon payment at maturity. (4) The weighted average rate includes the default interest rate for one single-asset fixed rate CMBS loan totaling $9.9 million, Total Principal $ 2,097,602 100.0% 3.930% including $3.1 million of capitalized interest, that is in default due to underperformance of the collateral property. Please see Appendix at the back of this supplement for Reporting Definitions and Explanations, Non-GAAP Reconciliations and a disclosure regarding Forward-Looking Statements. Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 9
SENIOR UNSECURED NOTES COVENANT COMPLIANCE NYSE:SRC Covenant Requirement September 30, 2018 Total Debt to Total Assets (1) < 60% 39.5% Total Secured Debt to Total Assets (1) < 40% 8.3% Fixed Charge Coverage (1) > 1.5x 4.72x Total Unencumbered Assets to Total Unsecured Debt (1) > 1.5x 2.52x Credit Ratings Fitch Ratings BBB- Moody's Ratings Services Baa3 Standard & Poor's Rating Services BBB- (1) All covenants are calculated per the requirements of the Indenture agreement. Please see Appendix at the back of this supplement for Reporting Definitions and Explanations, Non-GAAP Reconciliations and a disclosure regarding Forward-Looking Statements. Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 10
INVESTMENT AND DISPOSITION ACTIVITY $ in thousands NYSE:SRC Investments - The tables below detail the acquisition activity for only those assets acquired for the SRC portfolios. Q3 2018 Wtd. Avg. % of Gross Number of Number of Gross Annualized Initial Economic Lease Term Investment Transactions Properties Investment Rents Square Feet Cash Yield Yield (Years) New Tenants 90.9% 3 11 $ 208,316 $ 13,947 898,706 6.70% 7.86% 17.9 Existing Tenants 6.8 2 2 15,571 1,241 118,002 7.97 8.26 8.2 Revenue Producing Capital Expenditures 2.3 — 13 5,185 411 — 7.93 — — Total/Weighted Average 100.0% 5 26 $ 229,072 $ 15,599 1,016,708 6.81% 7.88% 17.1 By Asset Type: Retail 100.0% 5 26 $ 229,072 $ 15,599 1,016,708 6.81% 7.88% 17.1 Total/Weighted Average 100.0% 5 26 $ 229,072 $ 15,599 1,016,708 6.81% 7.88% 17.1 YTD 2018 Wtd. Avg. % of Gross Number of Number of Gross Annualized Initial Economic Lease Term Investment Transactions Properties Investment Rents Square Feet Cash Yield Yield (Years) New Tenants 83.5% 3 11 $ 208,316 $ 13,947 898,706 6.70% 7.86% 17.9 Existing Tenants 7.3 3 3 18,221 1,523 135,790 8.36 8.71 9.5 Revenue Producing Capital Expenditures 9.2 — 42 22,821 1,847 — 8.09 — — Total/Weighted Average 100.0% 6 56 $ 249,358 $ 17,317 1,034,496 6.94% 7.92% 17.1 By Asset Type: Retail 100.0% 6 56 $ 249,358 $ 17,317 1,034,496 6.94% 7.92% 17.1 Total/Weighted Average 100.0% 6 56 $ 249,358 $ 17,317 1,034,496 6.94% 7.92% 17.1 Please see Appendix at the back of this supplement for Reporting Definitions and Explanations, Non-GAAP Reconciliations and a disclosure regarding Forward-Looking Statements. Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 11
INVESTMENT AND DISPOSITION ACTIVITY $ in thousands NYSE:SRC Dispositions - The tables below detail only that activity related to SRC retained portfolios. Q3 2018 Wtd. Avg. % of R/E Number of Gross Gross Capitalization (1) Remaining Investment Properties Investment Sales Price Rate Lease Term (Yrs) Vacant 100.0% 1 $ 3,477 $ 3,725 —% — Total/Weighted Average 100.0% 1 $ 3,477 $ 3,725 —% — By Asset Type: Retail 100.0% 1 $ 3,477 $ 3,725 —% — Total/Weighted Average 100.0% 1 $ 3,477 $ 3,725 —% — YTD 2018 Wtd. Avg. % of R/E Number of Gross Gross Capitalization (1) Remaining Investment Properties Investment Sales Price Rate Lease Term (Yrs) Occupied 25.0% 8 $ 13,162 $ 13,696 8.23% 17.20 Vacant 20.9 4 11,038 10,414 — — (2) Transferred to lender 54.1 6 28,546 23,887 — — Total/Weighted Average 100.0% 18 $ 52,746 $ 47,997 8.23% 17.20 By Asset Type: Retail 88.7% 16 $ 46,747 $ 41,939 8.78% 17.19 Industrial 5.4 1 2,868 3,050 6.34 0.01 Office 5.9 1 3,131 3,008 — — Total/Weighted Average 100.0% 18 $ 52,746 $ 47,997 8.23% 17.20 (1) Capitalization rates are calculated solely on income producing properties. (2) The gross sales price for properties transferred to lender represents the net book value of the properties at time of transfer. Please see Appendix at the back of this supplement for Reporting Definitions and Explanations, Non-GAAP Reconciliations and a disclosure regarding Forward-Looking Statements. Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 12
TENANT DIVERSIFICATION – TOP 100 NYSE:SRC Percent of Percent of Tenant Concept Number of Square Feet Contractual Tenant Concept Number of Square Feet Contractual Properties (in thousands) Rent Properties (in thousands) Rent 1 Walgreens 40 589 3.5% 26 Lowe's 6 806 1.3% 2 Church's Chicken 170 243 3.4% 27 Alaska Club 5 305 1.2% 3 Circle K 82 248 3.0% 28 Kohl's 7 571 1.2% 4 Home Depot 7 821 2.8% 29 CarMax 4 155 1.1% 5 CVS 35 435 2.5% 30 Emagine Theaters 8 452 1.1% 6 Life Time Fitness 5 588 2.4% 31 Pep Boys 12 250 1.1% 7 C-Store (GPM Investments, LLC) 105 272 2.3% 32 Specialists in Urology (21st Century 9 128 1.0% Oncology Holdings, Inc.) 8 Albertsons 16 734 1.9% 33 At Home 6 756 1.0% 9 Ferguson Enterprises 7 1,003 1.7% 34 AMC Theatres 4 226 1.0% 10 PetSmart 4 1,016 1.7% 35 Rite Aid 12 158 1.0% 11 BJ's Wholesale Club 4 475 1.6% 36 Studio Movie Grill 4 203 1.0% 12 Main Event 7 441 1.5% 37 Georgia Theatre 4 171 0.9% 13 Sportsman's Warehouse 9 426 1.5% 38 Smokey Bones Barbecue & Grill 13 100 0.9% 14 Applebee's 22 120 1.5% 39 C-Store (Irving Oil Marketing, Inc.) 37 101 0.8% 15 Advance Auto Parts 54 377 1.4% 40 Flying J Travel Plaza 3 48 0.8% 16 C-Store (White Oak Station, LLC) 41 163 1.4% 41 Aaron's 26 266 0.8% 17 Dollar General 58 603 1.4% 42 South Carolina Oncology Associates 1 120 0.8% 18 LA Fitness 6 260 1.4% 43 C-Store (Supermesa Fuel & Merc, LLC) 6 24 0.7% 19 Mister Car Wash 17 113 1.4% 44 Defined Fitness 5 205 0.7% 20 IBM 2 395 1.4% 45 Zips Car Wash 13 48 0.7% 21 Tractor Supply 22 589 1.4% 46 Taco Bueno 35 98 0.7% 22 Smart & Final 5 263 1.4% 47 J. Jill 1 390 0.7% 23 Regal Cinemas 8 357 1.3% 48 Camping World 6 295 0.7% 24 Red Lobster 27 184 1.3% 49 Office Depot 10 214 0.7% 25 FedEx 4 429 1.3% 50 CircusTrix 9 214 0.6% Top 50 Tenants 1,003 17,448 68.9% Please see Appendix at the back of this supplement for Reporting Definitions and Explanations, Non-GAAP Reconciliations and a disclosure regarding Forward-Looking Statements. Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 13
TENANT DIVERSIFICATION – TOP 100 (continued) NYSE:SRC Percent of Percent of Tenant Concept Number of Square Feet Contractual Tenant Concept Number of Square Feet Contractual Properties (in thousands) Rent Properties (in thousands) Rent 51 Dave & Buster's 3 80 0.6% 76 Sonny's BBQ 8 48 0.4% 52 Best Buy 4 188 0.6% 77 La-Z-Boy 3 72 0.4% 53 C-Store (Town Star Holdings, LLC) 12 43 0.6% 78 Staples 6 137 0.3% 54 Sunny Delight 1 286 0.6% 79 Jo-Ann's 3 110 0.3% 55 Childcare Network 20 191 0.6% 80 Missoula Fresh Market 2 110 0.3% 56 Universal Tax Systems 1 101 0.6% 81 Liberty Oilfield Services 2 85 0.3% 57 Curacao 1 103 0.5% 82 Taco Bell 9 20 0.3% 58 24 Hour Fitness 2 105 0.5% 83 Faurecia Interior Systems 1 107 0.3% 59 Malibu Boats 2 303 0.5% 84 Clean Freak 5 22 0.3% 60 American Lubefast 27 60 0.5% 85 Accel International 2 270 0.3% 61 Walmart 4 370 0.5% 86 Childtime 9 73 0.3% 62 DOW Emergency 3 41 0.5% 87 Dollar Tree 12 115 0.3% 63 Ladybird Academy 6 72 0.5% 88 Cinemark 1 54 0.3% 64 Gold's Gym 3 118 0.5% 89 Winco Grocery 1 82 0.3% 65 Academy Sports 4 241 0.5% 90 HOM Furniture 1 122 0.3% 66 Old Time Pottery 3 355 0.5% 91 Brookshire Brothers 7 213 0.3% 67 Crunch Fitness 4 163 0.5% 92 III Forks 1 19 0.3% 68 Southern Theatres 2 106 0.5% 93 Hobby Lobby 1 141 0.3% 69 Food City 3 130 0.4% 94 C-Store (Wawa, Inc.) 3 14 0.3% 70 C-Store (Mountain Express Oil Company 13 27 0.4% 95 Ryan's 5 54 0.3% Southeast, LLC) 71 Riverview 14 GDX 1 66 0.4% 96 In-Shape 2 85 0.3% 72 Davis-Standard 2 361 0.4% 97 Milo's 8 25 0.3% 73 KFC 14 40 0.4% 98 Sonic Drive-In 14 24 0.2% 74 Hardee's 17 60 0.4% 99 Fox Rehabilitation Services 1 90 0.2% 75 C-Store (Jordan Oil Company of the 8 49 0.4% 100 Bank of America 1 73 0.2% Carolinas, Inc) Top 100 Tenants 1,271 23,272 88.7% Please see Appendix at the back of this supplement for Reporting Definitions and Explanations, Non-GAAP Reconciliations and a disclosure regarding Forward-Looking Statements. Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 14
INDUSTRY DIVERSIFICATION NYSE:SRC Industry Number of Total Square Percent of Tenant Industry Category Owned Feet Contractual Properties (in thousands) Rent Convenience Stores Service 312 963 10.2% Industry Category Concentration: Health and Fitness Service 40 2,128 8.2% Percent of Contractual Rent Restaurants - Quick Service Service 332 686 7.2% Drug Stores / Pharmacies Service 87 1,183 6.9% Movie Theaters Service 32 1,636 6.4% Restaurants - Casual Dining Service 101 727 5.9% Service Grocery Retail 42 1,940 5.3% 61.1% Home Improvement Retail 14 1,653 4.2% Specialty Retail Retail 62 1,682 3.9% Medical Office Service 36 620 3.9% Home Furnishings Retail 19 1,869 3.6% Entertainment Service 22 842 3.0% Manufacturing Industrial 13 1,875 2.8% Professional Services Service 6 684 2.5% Car Washes Service 35 183 2.4% Warehouse Clubs/Supercenters Retail 9 883 2.2% Automotive Services Service 54 419 2.1% Sporting Goods Retail 13 667 2.0% Building Materials Retail 9 1,047 1.9% Dollar Stores Retail 70 718 1.7% Pet Supplies & Services Retail 4 1,016 1.7% Distribution Industrial 6 677 1.6% Education Service 37 390 1.6% Industrial Automotive Dealers Retail 10 297 1.5% 4.4% Automotive Parts Retail 54 383 1.5% Retail General Merchandise Retail 7 571 1.2% 33.7% Office Supplies Retail 17 458 1.2% Other Apparel Retail 4 477 0.9% 0.8% Travel Plaza Service 3 48 0.8% Other Other 6 244 0.8% Consumer Electronics Retail 5 218 0.6% Discount Retailer Retail 3 166 0.3% Vacant 6 978 — Total 1,470 28,328 100.0% Tenant Industry determined using the NAICS code of the Tenant. Please see Appendix at the back of this supplement for Reporting Definitions and Explanations, Non-GAAP Reconciliations and a disclosure regarding Forward-Looking Statements. Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 15
PORTFOLIO DIVERSIFICATION NYSE:SRC KEY Northeast Midwest South West % of Contractual Rent Texas 12.0% Michigan 3.7% Minnesota 2.3% Oklahoma 1.5% Nevada 1.1% Iowa 0.8% Montana 0.5% U.S. V.I. 0.2% Florida 7.5% Arizona 3.4% Colorado 2.3% Alaska 1.3% Kansas 1.0% Utah 0.7% Massachusetts 0.5% Wyoming 0.1% Georgia 6.6% Virginia 3.2% Indiana 2.0% New Hampshire 1.3% Louisiana 1.0% North Dakota 0.7% Wisconsin 0.3% South Dakota 0.1% California 6.1% Missouri 3.0% Kentucky 1.9% Pennsylvania 1.3% Idaho 1.0% Washington 0.7% Rhode Island 0.3% Delaware 0.1% Ohio 5.0% South Carolina 2.5% New York 1.9% Arkansas 1.2% Maryland 1.0% Maine 0.5% West Virginia 0.3% Vermont * Illinois 4.1% Alabama 2.5% New Mexico 1.8% Mississippi 1.2% Connecticut 1.0% Oregon 0.5% Nebraska 0.2% Hawaii — Tennessee 3.9% North Carolina 2.4% New Jersey 1.5% * Less than 0.1% Please see Appendix at the back of this supplement for Reporting Definitions and Explanations, Non-GAAP Reconciliations and a disclosure regarding Forward-Looking Statements. Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 16
SAME STORE CONTRACTUAL RENT $ in thousands NYSE:SRC Same Store Results Contractual Rent % of Total Top Tenant Industry for the Net % Change by Industry Contributors Month Ended September 30, Change Industry Type Contribution Number of Properties 1,316 2018 2017 Total Square Feet (in thousands) 22,014 Convenience Stores $ 2,966 $ 2,966 $ — —% 11.3% September 2018 Contractual Rent $ 26,340 Restaurants - Quick 2,005 1,975 30 1.5% 7.6% Service September 2017 Contractual Rent $ 25,889 Drug Stores / 1,963 1,961 2 0.1% 7.5% Pharmacies Increase (in dollars) $ 451 Restaurants - Casual 1,763 1,719 44 2.6% 6.7% Increase (percent) 1.7% Dining Grocery 1,527 1,517 10 0.7% 5.8% Same Store Pool Defined Health and Fitness 1,449 1,407 42 3.0% 5.5% We include all properties owned throughout the measurement period in both the current and prior year Movie Theaters 1,494 1,423 71 5.0% 5.7% and exclude: multi-tenant properties, properties that were vacant, renewed or relet at any point during the Medical Office 1,216 1,183 33 2.8% 4.6% measurement period, construction in progress, and Remaining Tenant 11,957 11,738 219 1.9% 45.3% properties where contractual rent was fully or partially Categories reserved in either the current or prior measurement Total $ 26,340 $ 25,889 $ 451 1.7% 100.0% period. Contractual Rent % of Total for the Net % Change by Asset Asset Type Month Ended September 30, Change Asset Type Contribution 2018 2017 Retail $ 22,661 $ 22,357 $ 304 1.4% 86.0% Industrial 2,347 2,240 107 4.8% 8.9% Office 1,332 1,292 40 3.1% 5.1% Total $ 26,340 $ 25,889 $ 451 1.7% 100.0% Please see Appendix at the back of this supplement for Reporting Definitions and Explanations, Non-GAAP Reconciliations and a disclosure regarding Forward-Looking Statements. Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 17
OCCUPANCY NYSE:SRC Owned Properties Change in Vacant Properties Occupied 1,464 Vacant Properties at December 31, 2017 19 Vacant 6 Additions 14 Dispositions (9) Total Owned Properties 1,470 Relets (3) Contributions to SMTA (15) Occupancy Rate 99.6% Vacant Properties at September 30, 2018 6 Historical Occupancy Rates 99.6% 99.6% 98.4% 98.3% 98.7% 98.5% 98.6% 98.7% 98.3% 98.4% 98.2% 97.7% 97.9% 99.1% 99.2% 98.9% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Please see Appendix at the back of this supplement for Reporting Definitions and Explanations, Non-GAAP Reconciliations and a disclosure regarding Forward-Looking Statements. Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 18
LEASE STRUCTURE AND EXPIRATIONS $ in thousands NYSE:SRC Lease Expirations as a Percent of Contractual Rent Number of Total Contractual Rent Owned Square Feet (1) Year Properties (in thousands) Annualized Remainder of 2018 0.5% 2018 Remainder 3 378 $ 2,020 2019 1.6% 2020 3.2% 2019 20 529 6,138 2021 8.0% 2020 35 1,010 12,354 2022 5.4% 2021 116 2,399 30,762 2023 9.8% 2022 45 1,916 20,424 2024 4.0% 2025 4.3% 2023 111 3,780 37,335 2026 5.9% 2024 27 1,291 15,157 2027 8.7% 2025 36 1,270 16,458 2028 and thereafter 48.6% 2026 78 1,686 22,527 2027 114 2,277 33,064 Thereafter 879 10,814 185,516 Lease Escalations as a Percent of Contractual Rent (Excludes Multi-Tenant Properties) Vacant 6 978 — Totals 1,470 28,328 $ 381,755 (1) Contractual Rent multiplied by twelve. Annualized Cash Rents were $380.9 million as of September 30, 2018. Based on Contractual Rent: Contractual Fixed Increases Flat 86% of our leases (excluding those on multi-tenant 67% 14% properties) provide for periodic escalations, 38% of our leases are under master lease structures, 44% of our tenants provide unit level financials, and CPI-Related 2.7x weighted average unit level coverage for our 19% reporting tenants Please see Appendix at the back of this supplement for Reporting Definitions and Explanations, Non-GAAP Reconciliations and a disclosure regarding Forward-Looking Statements. Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 19
NET ASSET VALUE (NAV) COMPONENTS $ in thousands NYSE:SRC Number of Contractual Rent Owned Real Estate Portfolio Properties Annualized (1) Retail (2) 1,394 $ 323,699 Office 36 18,495 Industrial 26 29,719 Data Centers 3 5,979 Leased Real Estate Properties Held For Sale, Net 5 3,863 Vacant Properties (3) 5 — Properties under Defaulted Loans (4) 1 — Total Owned Real Estate Portfolio 1,470 $ 381,755 Other NAV Components Total Loans Receivable Principal Balance Outstanding: $ 49,288 Investment in Master Trust 2014 Principal Balance Outstanding: $ 33,558 Cash and Cash Equivalents $ 7,578 Restricted Cash 17,721 Contractual Rent Annualized (1) Preferred Equity Investment in Spirit MTA REIT 150,000 Top Ten Tenants $ 95,586 Accounts Receivable, Prepaid Assets, and Other Tangible Assets, Net 24,481 Top 100 Tenants $ 337,782 Total Other Tangible Assets Net Book Value: $ 199,780 (1) September Contractual Rent multiplied by twelve. (2) Includes five direct financing lease properties with a Real Estate Total Debt Principal Balance Outstanding: $ 2,097,602 Investment value of $24.8 million. Annualized Cash Rents include the tenants' current cash obligations of $1.9 million for the lease of these properties. Accounts Payable, Accrued Expenses (3) Includes one property that is held for sale with a net book value of $7.7 (5) Net Book Value: $ 99,670 million. and Other Tangible Liabilities (4) One vacant property, with a net book value of $0.7 million, securing a fixed rate CMBS loan with $9.9 million of outstanding principal payable (including $3.1 million of capitalized interest) that is in default due to the Preferred Shares Liquidation Value: $ 172,500 underperformance of the property. (5) Includes $55.0 million in dividends payable. (6) (6) Total outstanding shares as of September 30, 2018, less 1.7 million Common Shares Outstanding 426,740,154 unvested restricted shares. Please see Appendix at the back of this supplement for Reporting Definitions and Explanations, Non-GAAP Reconciliations and a disclosure regarding Forward-Looking Statements. Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 20
ANALYST COVERAGE NYSE:SRC BofA Merrill Lynch Joshua Dennerlein joshua.dennerlein@baml.com 646.855.1681 BTIG Michael Gorman mgorman@btig.com 212.738.6138 Capital One Securities Chris Lucas christopher.lucas@capitalone.com 571.633.8151 Derek Johnston derek.johnston@db.com 904.520.4973 Deutsche Bank Shivani Sood shivani.sood@db.com 212.250.4617 Green Street Advisors Spenser Allaway sallaway@greenst.com 949.640.8780 Robert Stevenson robstevenson@janney.com 646.840.3217 Janney Montgomery Scott Venkat Kommineni vkommineni@janney.com 646.840.3219 Anthony Paolone anthony.paolone@jpmorgan.com 212.622.6682 J.P. Morgan Nikita Bely nikita.bely@jpmorgan.com 212.622.0695 Ladenburg Thalman & Co. John J. Massocca jmassocca@ladenburg.com 212.409.2543 Mizuho Securities Haendel St. Juste haendel.st.juste@us.mizuho-sc.com 212.205.7860 Vikram Malhotra vikram.malhotra@morganstanley.com 212.761.7064 Morgan Stanley Kevin Egan kevin.egan@morganstanley.com 212.761.5028 Collin Mings collin.mings@raymondjames.com 727.567.2585 Raymond James Marnie Georges marnie.georges@raymondjames.com 727.567.2538 Wes Golladay wes.golladay@rbccm.com 440.715.2650 RBC Capital Markets Brian Hawthorne brian.hawthorne@rbccm.com 440.715.2653 Richard J. Milligan rjmilligan@rwbaird.com 813.273.8252 Robert W. Baird Will Harman wharman@rwbaird.com 414.298.2337 Ki Bin Kim kibin.kim@suntrust.com 212.303.4124 Sun Trust Robinson Humphrey Ian Gaule ian.gaule@suntrust.com 212.590.0948 The aforementioned security analysts currently provide opinions, estimates and forecasts, which are their own and are not promoted or endorsed by Spirit or its management team. Therefore, their opinions, estimates or forecasts are their own and should not be interpreted as Spirit’s opinions, estimates or forecasts. Any reference or distribution by Spirit expressly disclaims any endorsement of or concurrent with any information, estimates, forecasts, opinions, conclusions or recommendations provided by analysts. Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 21
APPENDIX 22
REPORTING DEFINITIONS AND EXPLANATIONS NYSE:SRC Funds from Operations (FFO) and comparable to such other equity REITs’ FFO. determined in accordance with GAAP, is not Adjusted Funds from Operations (AFFO) Accordingly, FFO should be considered only as a necessarily indicative of cash available to fund cash We calculate FFO in accordance with the standards supplement to net income (loss) attributable to needs and should not be considered as an alternative established by the National Association of Real common stockholders as a measure of our to net income (loss) (determined in accordance with Estate Investment Trusts (NAREIT). FFO represents performance. GAAP) as a performance measure. net income (loss) attributable to common stockholders (computed in accordance with GAAP), AFFO is a non-GAAP financial measure of operating Adjusted EBITDAre represents EBITDAre, or excluding real estate-related depreciation and performance used by many companies in the REIT earnings before interest, taxes, depreciation and amortization, impairment charges and net (gains) industry. We adjust FFO to eliminate the impact of amortization for real estate, modified to include other losses from property dispositions. FFO is a certain items that we believe are not indicative of our adjustments to GAAP net income (loss) for supplemental non-GAAP financial measure. We use core operating performance, including restructuring transaction costs, adjustments for revenue producing FFO as a supplemental performance measure and divestiture costs, other G&A costs associated acquisitions and dispositions for the quarter as if such because we believe that FFO is beneficial to with relocation of the Company's headquarters, acquisitions and dispositions had occurred as of the investors as a starting point in measuring our transactions costs associated with our spin-off, beginning of the quarter, severance charges, real operational performance. Specifically, in excluding default interest and fees on non-recourse mortgage estate acquisition costs, debt extinguishment gains real estate-related depreciation and amortization, indebtedness, debt extinguishment gains (losses), (losses) and other items that we do not consider to gains and losses from property dispositions and transaction costs incurred in connection with the be indicative of our on-going operating performance. impairment charges, which do not relate to or are not acquisition of real estate investments subject to We focus our business plans to enable us to sustain indicative of operating performance, FFO provides a existing leases and certain non-cash items. These increasing shareholder value. Accordingly, we believe performance measure that, when compared year certain non-cash items include non-cash revenues that excluding these items, which are not key drivers over year, captures trends in occupancy rates, rental (comprised of straight-line rents, amortization of of our investment decisions and may cause short- rates and operating costs. We also believe that, as a above and below market rent on our leases, term fluctuations in net income, provides a useful widely recognized measure of the performance of amortization of lease incentives, amortization of net supplemental measure to investors and analysts in equity REITs, FFO will be used by investors as a premium (discount) on loans receivable, provision for assessing the net earnings contribution of our real basis to compare our operating performance with that bad debts and amortization of capitalized lease estate portfolio. Because these measures do not of other equity REITs. However, because FFO transaction costs), non-cash interest expense represent net income (loss) that is computed in excludes depreciation and amortization and does not (comprised of amortization of deferred financing accordance with GAAP, they should not be capture the changes in the value of our properties costs and amortization of net debt discount/premium) considered alternatives to net income (loss) or as an that result from use or market conditions, all of which and non-cash compensation expense (stock-based indicator of financial performance. A reconciliation of have real economic effects and could materially compensation expense). In addition, other equity net income (loss) attributable to common impact our results from operations, the utility of FFO REITs may not calculate AFFO as we do, and, stockholders (computed in accordance with GAAP) to as a measure of our performance is limited. In accordingly, our AFFO may not be comparable to EBITDAre and Adjusted EBITDAre is included in the addition, other equity REITs may not calculate FFO such other equity REITs’ AFFO. AFFO does not Appendix found at the end of this presentation. as we do, and, accordingly, our FFO may not be represent cash generated from operating activities Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 23
REPORTING DEFINITIONS AND EXPLANATIONS NYSE:SRC Annualized Adjusted EBITDAre is calculated by We believe this ratio is a beneficial disclosure to Contractual Rent represents monthly contractual multiplying Adjusted EBITDAre of a quarter by four. investors as a supplemental means of evaluating our cash rent and earned income from direct financing Our computation of Adjusted EBITDAre and ability to meet obligations senior to those of our leases, excluding percentage rents, from our Owned Annualized Adjusted EBITDAre may differ from the equity holders. Our computation of this ratio may Properties recognized during the final month of the methodology used by other equity REITs to calculate differ from the methodology used by other equity reporting period, adjusted to exclude amounts these measures and, therefore, may not be REITs and, therefore, may not be comparable to such received from properties sold during that period and comparable to such other REITs. A reconciliation of other REITs. adjusted to include a full month of contractual rent for Annualized Adjusted EBITDAre is included in the properties acquired during that period. We use Annualized Cash Rents represents the annualized Appendix found at the end of this presentation. Contractual Rent when calculating certain metrics monthly Contractual Rent, less any rent reserved for, that are useful to evaluate portfolio credit, asset type, Adjusted Debt represents interest bearing debt multiplied by twelve. industry and geographic diversity and to manage risk. (reported in accordance with GAAP) adjusted to Capitalization Rate represents the Annualized Cash exclude unamortized debt discount/premium, EBITDAre is a non-GAAP financial measure and is Rents on the date of a property disposition divided by deferred financing costs, and reduced by cash and computed in accordance with standards established the gross sales price. For multi-tenant properties, cash equivalents and cash reserves on deposit with by NAREIT. EBITDAre is defined as net income (loss) non-reimbursable property costs are deducted from lenders as additional security. By excluding these (computed in accordance with GAAP), plus interest the Annualized Cash Rents prior to computing the amounts, the result provides an estimate of the expense, plus income tax expense (if any), plus disposition Capitalization Rate. contractual amount of borrowed capital to be repaid, depreciation and amortization, plus (minus) losses net of cash available to repay it. We believe this CMBS are those notes secured by commercial real and gains on the disposition of depreciated property, calculation constitutes a beneficial supplemental non- estate and rents therefrom under which certain plus impairment write-downs of depreciated property GAAP financial disclosure to investors in indirect wholly-owned special purpose entity and investments in unconsolidated real estate understanding our financial condition. A reconciliation subsidiaries of the Company are the borrowers. ventures, plus adjustments to reflect the Company's of interest bearing debt (reported in accordance with These liabilities are discussed in greater detail in our share of EBITDAre of unconsolidated real estate GAAP) to Adjusted Debt is included in the Appendix financial statements and the notes thereto included in ventures. found at the end of this presentation. our periodic reports filed with the SEC. Economic Yield is calculated by dividing the Adjusted Debt to Annualized Adjusted EBITDAre Convertible Notes are the $402.5 million convertible contractual cash rent, including fixed rent escalations is a supplemental non-GAAP financial measure we notes of the Company due in 2019 and the $345.0 and/or cash increases determined by CPI (increases use to evaluate the level of borrowed capital being million convertible notes of the Company due in calculated using a month to month historical CPI used to increase the potential return of our real estate 2021, together. These liabilities are discussed in index) by the initial lease term, expressed as a investments and a proxy for a measure we believe is greater detail in our financial statements and the percentage of the Gross Investment. used by many lenders and ratings agencies to notes thereto included in our periodic reports filed evaluate our ability to repay and service our debt with the SEC. obligations over time. Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 24
REPORTING DEFINITIONS AND EXPLANATIONS NYSE:SRC Enterprise Value represents Total Market Initial Cash Yield from properties is calculated by Master Trust 2013 Notes are net-lease mortgage Capitalization less cash and cash equivalents and dividing the first twelve months of contractual cash notes issued under the Spirit Master Funding reserves on deposit with lenders as of the date rent (excluding any future rent escalations provided Program and the securitization trusts established indicated. subsequently in the lease and percentage rent) by thereunder. Indirect special purpose entity the Gross Investment in the related properties. Initial subsidiaries of the Company are the borrowers. Equity Market Capitalization is calculated by Cash Yield is a measure (expressed as a These liabilities are discussed in greater detail in our multiplying the number of shares outstanding by the percentage) of the contractual cash rent expected to financial statements and the notes thereto included in closing share price of the Company’s common stock be earned on an acquired property in the first year. our periodic reports filed with the SEC. as of the date indicated. Because it excludes any future rent increases or additional rent that may be contractually provided for Net Asset Value (NAV) We believe disclosing Fixed Charge Coverage Ratio (FCCR) is the ratio of in the lease, as well as any other income or fees that information frequently used in the calculation of NAV Annualized Adjusted EBITDAre to Annualized Fixed may be earned from lease modifications or asset is useful to investors and because it enables and Charges, a ratio derived from non-GAAP measures dispositions, Initial Cash Yield does not represent the facilitates calculation of a metric frequently used by that we use to evaluate our liquidity and ability to annualized investment rate of return of our acquired our management as one method to estimate the fair obtain financing. Fixed charges consist of interest properties. Additionally, actual contractual cash rent value of our business. The assessment of the fair expense, reported in accordance with GAAP, less earned from the properties acquired may differ from value of our business is subjective in that it involves non-cash interest expense. Annualized Fixed the Initial Cash Yield based on other factors, estimates and assumptions and can be calculated Charges is calculated by multiplying fixed charges for including difficulties collecting anticipated rental using various methods. Therefore, we have the quarter by four. revenues and unanticipated expenses at these presented certain information regarding our financial properties that we cannot pass on to tenants, as well and operating results, as well as our assets and GAAP are the Generally Accepted Accounting as the risk factors set forth in our Annual Report on liabilities that we believe are important in calculating Principles in the United States. Form 10-K for the year ended December 31, 2017, our NAV, but have not presented any specific and Quarterly Report on Form 10-Q for the quarter methodology nor provided any guidance on the Gross Investment represents the gross acquisition ended September 30, 2018. assumptions or estimates that should be used in the cost including the contracted purchase price and calculation of NAV. The components of NAV do not related capitalized transaction costs. Lease Expiration is the end of the initial term under consider the potential changes in the value of assets, a lease and does not account for extension periods the collectability of rents or other receivable under the lease. obligations, or the value associated with our operating platform. Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 25
REPORTING DEFINITIONS AND EXPLANATIONS NYSE:SRC Net Book Value represents the Real Estate Tenant represents the legal entity ultimately Weighted Average Remaining Lease Term is Investment value, less impairment charges and net of responsible for obligations under the lease calculated by dividing the sum product of (a) a stated accumulated depreciation. agreement or an affiliated entity. Other tenants may revenue or sales price component and (b) the lease operate the same or similar business concept or term for each lease by (c) the sum of the total Occupancy is calculated by dividing the number of brand. revenue or sale price components for all leases economically yielding Owned Properties in the within the sample. portfolio as of the measurement date by the number Term Loan refers to a $420.0 million unsecured term of total Owned Properties on said date. facility which includes an accordion feature which Weighted Average Stated Interest Rate is allows the facility to be increased to up to $600.0 calculated by dividing the sum product of (a) coupon Owned Properties refers to properties owned fee- million, subject to obtaining additional lender interest rate of each note and (b) the principal simple or ground leased by Company subsidiaries as commitments. Borrowings may be repaid without balance outstanding of each note by (c) the sum of lessee. premium or penalty, and may be re-borrowed within the total principal balances outstanding for all notes 30 days up to the then available loan commitment. in the sample. Real Estate Investment represents the Gross Investment plus improvements less impairment Total Market Capitalization represents Equity Weighted Average Unit Level Rent Coverage is charges. Market Capitalization plus Total Debt as of the date used as an indicator of individual asset profitability, as indicated. well as signaling the property’s importance to our Revolving Credit Facility refers to the $800 million tenants’ financial viability. We calculate Unit Level unsecured credit facility which matures on March 31, Total Debt represents the sum of the principal Rent Coverage by dividing our reporting tenants’ 2019. The Revolving Credit Facility includes sublimits balances outstanding on interest-bearing debt on the trailing 12-month EBITDAR (earnings before interest, for swingline loans and letter of credit issuances. Company’s balance sheet as of the date indicated. tax, depreciation, amortization and rent) by annual Swingline loans and letters of credit reduce contractual rent. These are then weighted based on availability under the Revolving Credit Facility. The Unencumbered Assets represents the assets in our the tenant's Contractual Rent. Tenants in the ability to borrow under the Revolving Credit Facility is portfolio that are not subject to mortgage manufacturing industry are excluded from the subject to the ongoing compliance with customary indebtedness, which we use to evaluate our calculation. financial covenants. potential access to capital and in our management of financial risk. The asset value attributed to these Senior Unsecured Notes refers to the $300 million assets is the Real Estate Investment. aggregate principal amount of 4.450% senior unsecured notes due 2026. Unsecured Debt represents components of Total Debt that are not secured by liens, mortgages or deeds of trust on Company assets. Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 26
NON-GAAP RECONCILIATIONS $ in thousands NYSE:SRC Adjusted Debt, Adjusted EBITDAre, Annualized Adjusted EBITDAre Q3 2018 Fixed Charge Coverage Ratio (FCCR) Q3 2018 Revolving Credit Facility $ 157,000 Annualized Adjusted EBITDAre $ 399,224 Term Loan, net 419,920 Interest expense 24,784 Unsecured Senior Notes, net 295,654 Less: Non-cash interest (4,526) Mortgages and notes payable, net 465,433 Preferred Stock dividends 2,588 Convertible Notes, net 726,261 Fixed charges $ 22,846 Total debt, net 2,064,268 Annualized fixed charges $ 91,384 Add/(less): Fixed Charge Coverage Ratio 4.4x Unamortized debt discount, net 17,406 Unamortized deferred financing costs 15,928 Adjusted Debt to Enterprise Value Cash and cash equivalents (7,578) Q3 2018 Restricted cash balances held for the benefit of lenders (17,721) Adjusted Debt $ 2,072,303 Total adjustments 8,035 Enterprise value 5,684,329 Adjusted Debt $ 2,072,303 Adjusted Debt / Enterprise Value 36.5% Preferred Stock at liquidation value 172,500 Adjusted Debt + Preferred Stock $ 2,244,803 Unencumbered Assets to Unsecured Debt Net income $ 30,056 Q3 2018 Add/(less): Unsecured debt: Interest 24,784 Revolving Credit Facility $ 157,000 Depreciation and amortization 40,379 Term Loan 420,000 Income tax expense 135 Senior Unsecured Notes 300,000 Gain on disposition of assets (436) Convertible Notes 747,500 Impairments on real estate assets 1,279 Total Unsecured Debt $ 1,624,500 Total adjustments 66,141 Unencumbered Assets $ 4,092,706 EBITDAre $ 96,197 Unencumbered Assets / Unsecured Debt 2.5x Add/(less): Adjustments to revenue producing acquisitions and dispositions (1) 2,617 Notice Regarding Non-GAAP Financial Measures Transaction costs 966 In addition to U.S. GAAP financial measures, this presentation contains and may refer to certain non-GAAP financial measures. These non-GAAP financial measures are in addition Real estate acquisition costs 26 to, not a substitute for or superior to, measures of financial performance prepared in Gain on debt extinguishment — 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 Total adjustments to EBITDAre 3,609 measures. Reconciliations to the most directly comparable GAAP financial measures and Adjusted EBITDAre $ 99,806 statements of why management believes these measures are useful to investors are included in this Appendix if the reconciliation is not presented on the page in which the measure is Annualized Adjusted EBITDAre $ 399,224 published. Adjusted Debt / Annualized Adjusted EBITDAre 5.2x (1) Revenue producing acquisitions and dispositions were adjusted as if such acquisitions and dispositions Adjusted Debt + Preferred / Annualized Adjusted EBITDAre 5.6x had occurred at the beginning of the quarter. Please see Appendix at the back of this supplement for Reporting Definitions and Explanations, Non-GAAP Reconciliations and a disclosure regarding Forward-Looking Statements. Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 27
FORWARD-LOOKING STATEMENTS AND RISK FACTORS NYSE:SRC The information in this supplemental report should be read in conjunction with the accompanying earnings press release, as well as the Company's Quarterly Report on Form 10-Q, Annual Report on Form 10-K and other information filed with the Securities and Exchange Commission. This supplemental report is not incorporated into such filings. This document is not an offer to sell or a solicitation to buy securities of Spirit Realty Capital, Inc. Any offer or solicitation shall be made only by means of a prospectus approved for that purpose. Forward-Looking and Cautionary Statements This document 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, Spirit’s continued ability to source new investments, risks associated with using debt and equity financing to fund Spirit’s business activities (including refinancing and interest rate risks, changes in interest rates and/or credit spreads, changes in the price of our common stock, and conditions of the equity and debt capital markets, generally), 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 our properties, the inability to enter into or renew leases at favorable rates, portfolio occupancy varying from our expectations, dependence on tenants’ financial condition and operating performance, and competition from other developers, owners and operators of real estate), the financial performance of our retail tenants and the demand for retail space, particularly with respect to challenges being experienced by general merchandise retailers, potential fluctuations in the consumer price index, risks associated with our failure to maintain our status as a REIT under the Internal Revenue Code of 1986, as amended, the impact of the spin-off on Spirit's business, and other additional risks discussed in Spirit’s most recent filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Spirit 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. Q3 2018 SUPPLEMENTAL FINANCIAL AND OPERATING INFORMATION | As of September 30, 2018 28
