SMTA Liquidating Trust (SMTA)

[Enterprising Investor]

Spirit MTA REIT Announces Second Quarter 2018 Financial and Operating Results (8/09/18)

- Completed Spin-Off from Spirit Realty Capital, Inc.

- Announces Cash Dividends for Common and Preferred Stock

DALLAS--(BUSINESS WIRE)--Spirit MTA REIT (NYSE: SMTA) ("SMTA" or the "Company"), a net-lease real estate investment trust ("REIT") headquartered in Dallas, Texas, today reported its financial and operating results for the second quarter ended June 30, 2018.
Unless otherwise specified, the second quarter 2018 highlights and financial statements that follow include two months of financial and operating information for the Company's predecessor entities (the "Predecessor Entities") and one month of financial and operating results for SMTA as a stand-alone company.

SECOND QUARTER HIGHLIGHTS

On May 31, 2018, the Spin-Off from Spirit Capital Realty, Inc. ("Spirit") was completed with the distribution of one share of SMTA common stock for every ten shares of Spirit common stock held by each of Spirit's stockholders as of May 18, 2018, with 42,851,010 total shares of SMTA common stock issued in conjunction with the Spin-Off.
Invested $16.7 million in acquiring four properties and other revenue producing capital expenditures. The newly acquired properties have a weighted average lease term of 14.1 years and an initial weighted-average cash yield of approximately 7.06%.

Disposed of ten properties for $26.3 million in gross proceeds. Among the sales were three properties leased to Shopko for gross proceeds of $15.6 million, at a weighted average capitalization rate of 7.92%.

CEO COMMENTS

“We are very pleased to report our financial and operating results as a stand-alone Company, having completed our Spin-Off transaction from Spirit Realty Capital, Inc. during the quarter. SMTA provides an attractive and unique opportunity for investors to benefit from the monetization of a portfolio of non-core assets and the growth of our seasoned master funding vehicle. During the second quarter, we completed $26.3 million of dispositions, including three properties leased to Shopko. Together with our highly incentivized asset manager, Spirit Realty Capital, Inc., we intend to allocate our capital in accordance with our proprietary portfolio management tools, which we believe will enhance shareholder value over the long term,” stated SMTA Chief Executive Officer, Chief Financial Officer and Treasurer Ricardo Rodriguez.

FINANCIAL RESULTS

Total revenues for the Master Trust 2014 and Other Properties segments were $44.8 million and $16.2 million, respectively, for the three months ended June 30, 2018, compared to $41.5 million and $15.7 million for the same period last year. Total revenues for the Master Trust 2014 and Other Properties segments were $90.0 million and $31.0 million, respectively, for the six months ended June 30, 2018, compared to $82.8 million and $32.3 million for the same period last year.

Net loss attributable to common stockholders was $0.3 million, or $0.01 per share, for the three months ended June 30, 2018, compared to net income of $9.3 million for the same period a year ago. Net loss attributable to common stockholders was $7.9 million or $0.18 per share, for the six months ended June 30, 2018, compared to net income of $23.3 million for the same period a year ago.

FFO per diluted share was $0.40 and $0.62 for the three months ended June 30, 2018 and 2017, respectively. FFO per diluted share was $0.86 and $1.32 for the six months ended June 30, 2018 and 2017, respectively.

AFFO for the three months ended June 30, 2018 was $25.8 million, compared to $31.6 million for the same period a year ago. AFFO per diluted share was $0.60 and $0.74 for the three months ended June 30, 2018 and 2017, respectively. AFFO for the six months ended June 30, 2018 was $52.7 million, compared to $63.4 million for the same period a year ago. AFFO per diluted share was $1.23 and $1.48 for the six months ended June 30, 2018 and 2017, respectively.

On June 14, 2018, the Board of Directors of Spirit MTA SubREIT, Inc. ("SubREIT") declared a quarterly cash dividend of $15.00 per share of 18% Series A Cumulative Redeemable Preferred Stock (the "SubREIT Preferred Stock"), pro rated for the period from June 1, 2018 to June 30, 2018, which equates to an annualized cash dividend of $180.00 per share. The quarterly dividend was paid on June 29, 2018.

On June 19, 2018, the Board of Trustees of SMTA declared a quarterly cash dividend of $0.21 per share of 10% Series A Cumulative Redeemable Preferred Stock (the "SMTA Preferred Stock"), pro rated for the period from May 31, 2018 to June 30, 2018, which equates to an annualized cash dividend of $2.50 per share. The quarterly dividend was paid on June 29, 2018.

On August 9, 2018, the Board of Trustees of SMTA declared a total cash dividend of $0.33 per common share, comprising $0.08 for the month ended June 30, 2018 and $0.25 for the quarter ended September 30, 2018, to be paid on October 15, 2018 to holders of record as of September 28, 2018, and a cash dividend of $0.625 per share of SMTA Preferred Stock to be paid on September 28, 2018 to holders of record as of September 14, 2018.

On August 9, 2018, the Board of Directors of SubREIT declared a quarterly cash dividend of $45.00 per share of SubREIT Preferred Stock to be paid on September 28, 2018 to holders of record as of September 14, 2018.

The amount and timing of dividends for 2018 and beyond, will be at the discretion of the Board of Trustees and made pursuant to the Company's Dividend Policy. The Board of Trustees' decisions regarding the payment of dividends will depend on many factors, including, but not limited to, maintaining the Company's REIT tax status, timing and magnitude of disposition activities, investment opportunities and working capital needs.

SECOND QUARTER PORTFOLIO HIGHLIGHTS

During the three months ended June 30, 2018, SMTA invested $16.7 million in acquiring four properties and other revenue producing capital expenditures, all related to the Master Trust 2014 portfolio. The newly acquired properties have a weighted average lease term of 14.1 years and an initial weighted-average cash yield of approximately 7.06%.

During the three months ended June 30, 2018, SMTA disposed of ten properties for $26.3 million in gross proceeds, including the sale of three income producing properties. Among the disposals were five properties within Master Trust 2014 for gross proceeds of $5.3 million, three properties leased to Shopko for gross proceeds of $15.6 million and two additional properties for $5.4 million in gross proceeds.
As of June 30, 2018, SMTA's diversified real estate portfolio, comprised of 888 owned properties, with 784 and 104 in the Master Trust 2014 and Other Properties segments, respectively, was 98.8% occupied with a weighted average remaining lease term of 10.1 years.

FIRST HALF PORTFOLIO HIGHLIGHTS

During the six months ended June 30, 2018, SMTA invested $16.9 million in four properties and other revenue producing capital expenditures, all related to the Master Trust 2014 portfolio. The newly acquired properties have a weighted average lease term of 14.1 years and an initial weighted-average cash yield of approximately 7.06%.

During the six months ended June 30, 2018, SMTA disposed of 30 properties for $44.2 million in gross proceeds, including the sale of 23 income producing properties for $33.5 million. Among the disposals were 25 properties within Master Trust 2014 for gross proceeds of $23.2 million, three properties leased to Shopko for gross proceeds of $15.6 million and two additional properties for $5.4 million in gross proceeds.

BALANCE SHEET, LIQUIDITY & CAPITAL MARKETS

On May 31, 2018, in conjunction with the Spin-Off, 42,851,010 shares of SMTA common stock were issued to the holders of Spirit common stock at a ratio of one share of SMTA common stock for every ten shares of Spirit common stock.

In conjunction with the Spin-Off, SMTA issued to Spirit Realty, L.P. and one of its affiliates, both wholly-owned subsidiaries of Spirit, 6.0 million shares of SMTA Preferred Stock, with an aggregate liquidation preference of $150.0 million. The SMTA Preferred Stock pays cash dividends at the rate of 10.0% per annum on the liquidation preference of $25.00 per share (equivalent to $0.625 per share on a quarterly basis and $2.50 per share on an annual basis).

In conjunction with the Spin-Off, SubREIT issued 5,000 shares of SubREIT Preferred Stock to a third party, with an aggregate liquidation preference of $5.0 million. The SubREIT Preferred Stock pays cash dividends at the rate of 18.0% per annum on the liquidation preference of $1,000.00 per share (equivalent to $45.00 per share on a quarterly
basis and $180.00 per share on an annual basis).

Unencumbered Assets totaled $604.1 million as of June 30, 2018, representing approximately 21% of SMTA's total real estate investments.
As of June 30, 2018, Encumbered Assets made up $2.1 billion of total real estate investments, with all but one property, with a real estate investment amount of $123.3 million, included in Master Trust 2014.
Adjusted Debt to Annualized Adjusted EBITDAre was 9.6x as of June 30, 2018, based on the one month ended June 30, 2018.

Sold three properties leased to Shopko for gross proceeds of $15.1 million during the period from July 1, 2018 through August 7, 2018.

As of August 7, 2018, SMTA had approximately $55.1 million in cash and cash equivalents.

As of August 7, 2018, SMTA had additional funds available for acquisitions of approximately $54.8 million in its SMTA Master Trust Program release accounts.
As of August 7, 2018, our outstanding common share count is 43,000,862.

EARNINGS WEBCAST

The Company has provided pre-recorded comments from management. Interested parties can listen to the presentation via the following:
Internet:

The webcast link can be located on the investor relations page of the Company's website at www.spiritmastertrust.com

Telephone:
[phone] (Domestic) / [phone] (International) / [phone] (Canada) Access code 10123123

ABOUT SPIRIT MTA REIT

Spirit MTA REIT (NYSE: SMTA) is a net-lease REIT headquartered in Dallas, Texas. SMTA owns one of the largest, most diversified and seasoned commercial real estate backed master funding vehicles. Our strategy relies on the disposition of non-core properties, disciplined acquisitions, and proactive portfolio management. SMTA is managed by Spirit Realty Capital, L.P, a wholly-owned subsidiary of Spirit (NYSE: SRC), one of the largest publicly traded triple net-lease REITs.
As of June 30, 2018, our diversified portfolio was comprised of 888 properties, including properties securing mortgage loans made by the Company. Our properties, with an aggregate gross leasable area of approximately 20.0 million square feet, are leased to approximately 205 tenants across 45 states and 23 industries. More information about Spirit MTA REIT can be found on the investor relations page of the Company's website at www.spiritmastertrust.com.

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