Press Release

Spirit Realty Capital Announces First Quarter 2014 Operating Results

Company Release - 5/8/2014 4:05 PM ET

SCOTTSDALE, Ariz.--(BUSINESS WIRE)-- Spirit Realty Capital, Inc. (NYSE: SRC), a real estate investment trust that invests in single-tenant, operationally essential real estate, today announced operating results for the first quarter ended March 31, 2014.

Highlights

For the first quarter ended March 31, 2014, Spirit Realty Capital:

  • Generated revenues of $144.0 million, more than doubling the revenues reported in the first quarter of 2013.
  • Generated Funds from Operations (FFO) of $0.20 per share, Adjusted Funds from Operations (AFFO) of $0.20 per share, and net income of $0.04 per share.
  • Declared cash dividends for the first quarter of $0.16625 per share, which equates to an annualized dividend of $0.6650 per share.
  • Acquired 104 properties for a gross investment of $157.1 million in 12 real estate transactions with an initial cash yield of 7.81% and an average remaining lease term of 12.2 years.
  • Maintained essentially full occupancy at 99%.

CEO Comments

Reflecting on the results for the first quarter, Thomas H. Nolan, Jr., Chairman and Chief Executive Officer of Spirit Realty Capital, stated: "We began 2014 with a cycle-tested, well-diversified portfolio, a strong balance sheet and the financial flexibility to continue to invest in attractive, operationally essential real estate opportunities with high-quality middle-market tenants. Our investment focus remains consistent, and our first quarter results reflect our commitment to deliver predictable and growing results for our stockholders."

Financial Results

Revenues

First quarter 2014 total revenues more than doubled to $144.0 million, compared to $71.0 million in the first quarter of 2013. The increase reflects the benefits derived from both ordinary course real estate acquisitions, as well as the Cole II merger completed in the third quarter of 2013.

Net Income

Net income for the first quarter of 2014 was $14.2 million, or $0.04 per share based on 369.4 million weighted average shares of common stock outstanding, compared to the net loss for the first quarter of 2013 of $(8.3) million, or $(0.05) per share based on 159.4 million weighted average shares of common stock outstanding.

First quarter 2013 results included $10.2 million in Cole II merger related costs, comprised of $6.6 million in transaction related costs reported in Merger costs and $3.6 million in amortization charges associated with financing commitments obtained for the merger reported in interest expense. Absent these charges, results from operations would have provided $1.8 million in net income attributable to common stockholders for the first quarter of 2013, or $0.01 per share.

The historical shares outstanding have been adjusted by the Cole II Merger Exchange Ratio as detailed in Spirit Realty Capital's proxy statement filed with the Securities and Exchange Commission related to the merger.

FFO, AFFO, FAD and Leverage

Funds from operations (FFO) for the first quarter of 2014 were $74.7 million, or $0.20 per share. FFO for the first quarter of 2013 were $21.9 million, or $0.14 per share.

Adjusted funds from operations (AFFO) for the first quarter of 2014 totaled $74.6 million, or $0.20 per share, compared to $36.6 million, or $0.23 per share, for the first quarter of 2013.

For the three months ended March 31, 2014, dividends declared to common stockholders of $61.6 million, represented an 83% payout ratio against funds available for distribution (FAD).

Leverage at March 31, 2014 was 7.3x, unchanged from December 31, 2013. Leverage was lower at March 31, 2013, as proceeds raised from the Company's initial public offering in late 2012 had not yet been fully invested and temporarily reduced borrowings at the time.

The definitions of FFO, AFFO, FAD and Leverage are included on pages 5-7, and a reconciliation of these measures to net income (loss) is provided on pages 10-11.

Portfolio Highlights

Real Estate Transactions

Subsidiaries of Spirit Realty Capital acquired 104 properties with a gross investment of $157.1 million in 12 separate transactions during the first quarter of 2014. These investments had an initial cash yield of 7.81% and were with two existing and ten new tenants. On average, the associated leases have a remaining term of 12.2 years. Acquisitions in the first quarter of 2014 nearly tripled the volume in the first quarter a year ago of $56.1 million in 31 properties.

During the first quarter of 2014, Spirit Realty Capital sold three properties generating gross sales proceeds of $6.3 million. One of the properties sold was vacant; the other two properties were closed at an average cash yield of 8.0% and had an average remaining lease term of 6.2 years. Additionally, $2.8 million in lease termination fees associated with one of the properties that was sold was collected and reported in income from discontinued operations. Lease termination fees periodically result from agreements to remove properties from a lease and to reduce rental payments.

Portfolio

As of March 31, 2014, Spirit Realty Capital’s gross investment in real estate and loans receivable totaled $7.4 billion, substantially all of which was invested in 2,287 properties that were 99% occupied. Spirit Realty Capital’s properties are generally leased under long-term, triple net leases, with a weighted average remaining term of approximately 10.2 years. At March 31, 2014, approximately 43% of our annual rent (defined as annualized first quarter rental revenue) is contributed from properties under master leases and approximately 87% of our single-tenant property leases provide for annual rent increases.

Spirit Realty Capital’s real estate portfolio as of March 31, 2014, was diversified geographically across 48 states and among various industry types. Texas, Illinois, Wisconsin, and Georgia accounted for 12.5%, 6.5%, 5.9%, and 5.0% of the annual rent contribution of the real estate portfolio, respectively. During the three months ended March 31, 2014, revenue from Shopko, the Company's largest tenant, represented 14.0% of total revenues, down from 14.8% in the fourth quarter of 2013. During the three months ended March 31, 2014, no other tenant represented more than 5% of total revenues. Spirit Realty Capital’s three largest industry types (based on annualized rental revenue) as of March 31, 2014, were specialty retail (18.5%), general and discount retail (18.2%), and quick service restaurants (9.7%).

Capital Transactions

Spirit Master Funding Notes Exchange Offer

On April 9, 2014, Spirit Realty Capital commenced an exchange offer for up to approximately $912.4 million in anticipated principal balance of certain net-lease mortgage notes issued by indirect wholly-owned subsidiaries under its Spirit Master Funding program. The offer is to exchange any and all of the existing notes for no more than an equal aggregate principal amount of new net-lease mortgage notes from the same issuers. The exchange offer is subject to the satisfaction or waiver of certain conditions set forth in the offering documents, including that a required minimum amount of existing notes be tendered for exchange. As of April 28, 2014, this required minimum amount had been tendered for exchange. The Company expects that the exchange offer will be settled (and the new notes will be issued) on May 20, 2014.

In the event that the exchange offer is completed, among other differences, the new notes will be scheduled to amortize at a slower rate and have a later legal final repayment date than (but the same anticipated repayment date as) the existing notes for which they are exchanged, and the new notes will not be insured by third party financial guaranty insurance. Spirit Realty Capital expects that the new notes will be rated at least “A+” by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. (“S&P”), which is higher than the current ratings from S&P on the existing notes. Additionally, the transaction documents governing the new notes will provide, in certain respects, additional flexibility in the permitted types and concentrations of real estate assets securing the new notes relative to the transaction documents governing the existing notes.

The exchange offer and the issuance of the new notes have not been and will not be registered with the SEC under the Securities Act of 1933, as amended (the “Securities Act”), or any other securities laws. The exchange offer will only be made, and the new notes are only being offered and will only be issued, to holders of existing notes (i) in the United States, that are “qualified institutional buyers” as defined in Rule 144A under the Securities Act (each, a “QIB”) and (ii) outside the United States, that are persons other than “U.S. persons” in compliance with Regulation S under the Securities Act.

At-the-Market Common Stock Program

On April 15, 2014, Spirit Realty Capital filed with the SEC a prospectus supplement in connection with the commencement of a “continuous equity offering” under which Spirit Realty Capital may sell up to an aggregate of $350 million of its common stock from time to time in “at the market” offerings. Spirit Realty Capital sold 1,574,320 shares prior to April 24, 2014 under the program, raising proceeds of approximately $16.6 million (net of $0.3 million in sales agent compensation).

2014 Estimates

Spirit Realty Capital affirms its previously announced 2014 AFFO guidance in the range of $0.77 to $0.82 per share. This AFFO guidance equates to net income (excluding non-recurring items that are not reflective of ongoing operations) of $0.09 to $0.14 per share plus $0.66 per share of expected real estate depreciation and amortization plus approximately $0.02 per share related to non-cash items and real estate transaction costs.

Conference Call

Spirit Realty Capital will hold a conference call and webcast to discuss its first quarter 2014 results on May 8, 2014 at 5:00 p.m. (Eastern Time). The call can be accessed live over the phone by dialing 866-271-6130 (toll-free domestic) or 617-213-8894 (international); passcode: 87231368. A live webcast of the conference call will be available on the Investor Relations section of Spirit Realty Capital’s website at www.spiritrealty.com. A replay of the call will be available for one week via telephone starting approximately one hour after the call ends. The replay can be accessed at 888-286-8010 (toll-free domestic) or 617-801-6888 (international); passcode: 18706613. The webcast will be archived on Spirit Realty Capital’s website for 30 days after the call.

About Spirit Realty Capital

Spirit Realty Capital was formed in 2003 to invest in single-tenant operationally essential real estate, which refers to generally free-standing, commercial real estate facilities where tenants conduct retail, service or distribution activities that are essential to the generation of their sales and profits. Spirit Realty Capital completed its initial public offering in September 2012 and trades under the symbol “SRC” on the New York Stock Exchange. Spirit Realty Capital has an estimated enterprise value of $7.9 billion comprising a diverse portfolio of 2,287 properties across 48 states as of March 31, 2014. More information about Spirit Realty Capital can be found at www.spiritrealty.com.

Forward-Looking and Cautionary Statements

Statements contained in this press release that are not strictly historical are forward-looking statements, which should be regarded solely as reflections of our current operating plans and estimates. These forward-looking statements can be identified by the use of words such as “expects,” “plans,” “estimates,” “projects,” “intends,” “believes,” “guidance,” and 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, continued ability to source new investments, risks associated with using debt to fund the company’s business activities, including refinancing and interest rate risks, changes in interest rates and/or credit spreads, changes in the real estate markets, risks related to the merger and our ability to integrate the portfolios, disruption from the merger making it more difficult to maintain business and operational relationships, unknown liabilities acquired in connection with the acquired properties, portfolios of properties, or interests in real-estate related entities, and other risk factors discussed in Spirit Realty Capital’s Annual Report on Form 10-K for the year ended December 31, 2013 and other documents as filed by Spirit Realty Capital with the SEC from time to time. All forward-looking statements in this press release are made as of today, based upon information known to management as of the date hereof, and Spirit Realty Capital assumes no obligations to update or revise any of its forward-looking statements that may be made to reflect events or circumstances after the date these statements were made, except as required by law.

Non-GAAP Financial Measures

FFO, AFFO, and FAD

We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT. FFO represents net income (loss) computed in accordance with GAAP, excluding real estate-related depreciation and amortization, impairment charges and net losses (gains) on the disposition of assets. FFO is a supplemental non-GAAP financial measure. We use FFO as a supplemental performance measure because we believe that FFO is beneficial to investors as a starting point in measuring our operational performance. Specifically, in excluding real estate-related depreciation and amortization, gains and losses from property dispositions and impairment charges, which do not relate to or are not indicative of operating performance, FFO provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. We also believe that, as a widely recognized measure of the performance of equity REITs, FFO will be used by investors as a basis to compare our operating performance with that of other equity REITs. However, because FFO excludes depreciation and amortization and does not capture the changes in the value of our properties that result from use or market conditions, all of which have real economic effects and could materially impact our results from operations, the utility of FFO as a measure of our performance is limited. In addition, other equity REITs may not calculate FFO as we do, and, accordingly, our FFO may not be comparable to such other equity REITs’ FFO. Accordingly, FFO should be considered only as a supplement to net income (loss) as a measure of our performance. FFO should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make distributions or service indebtedness. FFO also should not be used as a supplement to or substitute for cash flow from operating activities computed in accordance with GAAP. A reconciliation of net income (loss) computed in accordance with GAAP to FFO is included in the financial information accompanying this release.

Adjusted FFO (“AFFO”) is a non-GAAP financial measure of operating performance used by many companies in the REIT industry. It adjusts FFO to eliminate the impact of non-recurring items that are not reflective of ongoing operations and certain non-cash items that reduce or increase net income in accordance with GAAP. Our computation of AFFO may differ from the methodology for calculating AFFO used by other equity REITs, and, therefore, may not be comparable to such other REITs. A reconciliation of net income (loss) computed in accordance with GAAP to AFFO is included in the financial information accompanying this release.

Funds Available for Distribution (“FAD”) is a measure of a REIT's ability to generate cash and to distribute dividends to its stockholders. It reduces AFFO by deducting normalized recurring expenditures that are capitalized by the REIT and then amortized, but which are necessary to maintain a REIT's properties and its revenue stream. Our calculation of FAD may differ from the methodology applied by other equity REITs, and, therefore, may not be comparable to such other REIT’s. FAD is a supplemental non-GAAP financial measure and should not be used as a measure of our liquidity or as a substitute for cash flow from operating activities computed in accordance with GAAP. A reconciliation of net income (loss) computed in accordance with GAAP to FAD is included in the financial information accompanying this release.

Adjusted EBITDA and Annualized Adjusted EBITDA

Adjusted EBITDA represents EBITDA, or earnings before interest, taxes, depreciation and amortization, modified to include other adjustments to GAAP net income (loss) for merger costs, real estate acquisition costs, impairment losses, gains/losses from the disposition of real estate and debt transactions and other items that are not considered to be indicative of our on-going operating performance. We exclude these items as they are not key drivers in our investment decision making process. We focus our business plans to enable us to sustain increasing shareholder value. Accordingly, we believe that excluding these items, which may cause short-term fluctuations in net income, but are not indicative of overall long-term operating performance, provides a useful supplemental measure to investors and analysts in assessing the net earnings contribution of our real estate portfolio. Because these measures do not represent net income that is computed in accordance with GAAP, they should not be considered alternatives to net income or as an indicator of financial performance.

Annualized Adjusted EBITDA is calculated by multiplying Adjusted EBITDA for the quarter by four. Our computation of Adjusted EBITDA and Annualized Adjusted EBITDA may differ from the methodology used by other equity REITs to calculate these measures, and, therefore, may not be comparable to such other REITs. A reconciliation of net income (loss) computed in accordance with GAAP to EBITDA, Adjusted EBITDA and Annualized Adjusted EBITDA is included in the financial information accompanying this release.

Adjusted Debt and Leverage

Adjusted Debt represents interest bearing debt (reported in accordance with GAAP) adjusted to include preferred stock and exclude unamortized debt discount, as further reduced for cash and cash equivalents and cash collateral deposits retained by lenders. We believe that including preferred stock in Adjusted Debt is appropriate because it is an equity security that has properties of a debt instrument not possessed by common stock. Additionally, by excluding unamortized debt discount, cash and cash equivalents, and cash collateral deposits retained by lenders, the result provides an estimate of the contractual amount of borrowed capital to be repaid which we believe is a beneficial disclosure to investors.

Leverage is a supplemental non-GAAP financial measure we use to evaluate the level of borrowed capital being used to increase the potential return of our real estate investments. We calculate Leverage by dividing Adjusted Debt by Annualized Adjusted EBITDA. The utility of Leverage should be considered as a supplemental measure of the level of risk that stockholder value may be exposed to. Our computation of Leverage may differ from the methodology used by other equity REITs, and, therefore, may not be comparable to such other REITs. A reconciliation of interest bearing debt (reported in accordance with GAAP) to Adjusted Debt is included in the financial information accompanying this release.

Initial Cash Yield

We calculate initial cash yield from properties by dividing the annualized first month base rent (excluding any future rent escalations provided for in the lease) by the gross acquisition cost of the related properties. Gross acquisition cost for an acquired property includes the contracted purchase price and any related capitalized costs. Initial cash yield is a measure (expressed as a percentage) of the base rent expected to be earned on an acquired property in the first year. Because it excludes any future rent increases or additional rent that may be contractually provided for in the lease, as well as any other income or fees that may be earned from lease modifications or asset dispositions, initial cash yield does not represent the annualized investment rate of return of our acquired properties. Additionally, actual base rent earned from the properties acquired may differ from the initial cash yield based on other factors, including difficulties collecting anticipated rental revenues and unanticipated expenses at these properties that we cannot pass on to tenants, as well as the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2013.

SPIRIT REALTY CAPITAL, INC.

Consolidated Statements of Operations

Unaudited

(In Thousands, Except Share and Per Share Data)

 
Three Months Ended

March 31,

2014   2013
Revenues:
Rentals $ 137,479 $ 69,776
Interest income on loans receivable 1,837 1,113
Earned income from direct financing leases 846
Tenant reimbursement income 3,319
Interest income and other 491   79  
Total revenues 143,972 70,968
Expenses:
General and administrative 11,067 6,968
Merger costs 6,537
Property costs 5,282 940
Real estate acquisition costs 1,281 89
Interest 54,399 36,439
Depreciation and amortization 60,549 26,939
Impairments 1,707    
Total expenses 134,285   77,912  
Income (loss) from continuing operations income tax expense 9,687 (6,944 )
Income tax expense 217   74  
Income (loss) from continuing operations 9,470   (7,018 )
Discontinued operations:
Income (loss) from discontinued operations 3,054 (1,494 )
(Loss) gain on dispositions of assets (7 ) 180  
Income (loss) from discontinued operations 3,047   (1,314 )
Income (loss) before gain on dispositions of assets 12,517 (8,332 )
Gain on dispositions of assets 1,722    
Net income (loss) $ 14,239   $ (8,332 )
Net income (loss) per share of common stock—basic and diluted:
Continuing operations $ 0.03 $ (0.04 )
Discontinued operations 0.01   (0.01 )
Net income (loss) per share $ 0.04   $ (0.05 )
Weighted average common shares outstanding:
Basic 368,684,942 159,421,377
Diluted 369,387,638 159,421,377
 
Dividends declared per common share issued $ 0.16625 $ 0.16406
 

SPIRIT REALTY CAPITAL, INC.

Consolidated Balance Sheets

(In Thousands, Except Share and Per Share Data)

   
March 31,
2014
December 31,
2013
(Unaudited)
Assets
Investments:
Real estate investments:
Land and improvements $ 2,378,716 $ 2,330,510
Buildings and improvements 4,280,895   4,188,783  
Total real estate investments 6,659,611 6,519,293
Less: accumulated depreciation (636,748 ) (590,067 )
6,022,863 5,929,226
Loans receivable, net 115,846 117,721
Intangible lease assets, net 613,162 618,121
Real estate assets under direct financing leases, net 56,803 58,760
Real estate assets held for sale, net 25,087   19,611  
Net investments 6,833,761 6,743,439
Cash and cash equivalents 29,984 66,588
Deferred costs and other assets, net 120,229 129,597
Goodwill 291,421   291,421  
Total assets $ 7,275,395   $ 7,231,045  
Liabilities and stockholders’ equity
Liabilities:
Revolving credit facilities, net $ 135,606 $ 35,120
Mortgages and notes payable, net 3,738,053 3,743,098
Intangible lease liabilities, net 219,877 220,114
Accounts payable, accrued expenses and other liabilities 108,902   114,679  
Total liabilities 4,202,438 4,113,011
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value; 370,949,721 issued shares; 370,732,369 outstanding shares at March 31, 2014 and 370,570,565 shares issued; 370,363,803 outstanding at December 31, 2013 3,710 3,706
Capital in excess of par value 3,862,454 3,859,823
Accumulated deficit (790,444 ) (742,915 )
Accumulated other comprehensive loss (717 ) (638 )
Treasury stock, at cost (2,046 ) (1,942 )
Total stockholders’ equity 3,072,957   3,118,034  
Total liabilities and stockholders’ equity $ 7,275,395   $ 7,231,045  
 

SPIRIT REALTY CAPITAL, INC.

Reconciliation of Non-GAAP Financial Measures

Unaudited

(In Thousands, Except Share and Per Share Data)

 
Three Months Ended
March 31,
2014     2013  
 
Net income (loss) $ 14,239 $ (8,332 )
Add/(less):
Portfolio depreciation and amortization
Continuing operations 60,455 26,912
Discontinued operations 1,377
Portfolio impairments
Continuing operations 1,707
Discontinued operations 2,103
Realized gain on sales of real estate (1,715 ) (180 )
Total adjustments 60,447   30,212  
 
FFO $ 74,686 $ 21,880
Add/(less):
Cole II merger related costs 10,152
Master Trust Notes exchange costs 17
Real estate acquisition costs 1,281 89
Non-cash interest expense 76 3,247
Non-cash revenues (3,962 ) (521 )
Non-cash compensation expense 2,452   1,772  
Total adjustments to FFO (136 ) 14,739  
 
AFFO $ 74,550 $ 36,619
Less:
Capitalized portfolio maintenance expenditures (205 ) (249 )
FAD $ 74,345   $ 36,370  
 
Dividends declared to common stockholders $ 61,634 26,510
Dividends declared as percent of FAD 83 % 73 %
Net income (loss) per share
Basic and Diluted (a) $ 0.04 $ (0.05 )
 
FFO per share of common stock
Diluted (a) $ 0.20 $ 0.14
AFFO per share of common stock
Diluted (a) $ 0.20 $ 0.23
Weighted average shares of common stock outstanding:
Basic 368,684,942 159,421,377
Diluted 369,387,638 159,421,377
 
(a) Assumes the issuance of potentially issuable shares unless the result would be anti-dilutive.
 

SPIRIT REALTY CAPITAL, INC.

Reconciliation of Non-GAAP Financial Measures

Unaudited

(In Thousands, Except Share and Per Share Data)

   
March 31, 2014 March 31, 2013
Revolving credit facilities, net $ 135,606 $ 11,400
Mortgages and notes payable, net 3,738,053   1,910,952  
3,873,659 1,922,352
Add/(less):
Preferred stock
Unamortized debt discount/(premium) (740 ) 54,250
Cash and cash equivalents (29,984 ) (55,355 )
Cash collateral deposits for the benefit of lenders classified as other assets (21,865 ) (8,805 )
Total adjustments (52,589 ) (9,910 )
Adjusted Debt $ 3,821,070   $ 1,912,442  
 
Quarter Ended
March 31, 2014 March 31, 2013
 
Net income (loss) attributable to common stockholders $ 14,239 $ (8,332 )
Add/(less) (a):
Interest 54,399 36,633
Depreciation and amortization 60,549 28,316
Income tax expense 217   74  
Total adjustments 115,165   65,023  
EBITDA $ 129,404 $ 56,691
Add/(less) (a):
Cole II merger related costs in EBITDA 10,152
Master Trust Notes exchange costs 17
Real estate acquisition costs 1,281 89
Impairments 1,707 2,103
Gains on dispositions of assets (1,715 ) (180 )
Total adjustments to EBITDA 1,290   12,164  
Adjusted EBITDA $ 130,694   $ 68,855  
Annualized Adjusted EBITDA (b) $ 522,776 $ 275,420
 
Leverage (Adjusted Debt / Annualized Adjusted EBITDA) 7.3 6.9
 
(a) Adjustments include all amounts charged to continuing and discontinued operations.
(b) Adjusted EBITDA multiplied by 4.
 

SPIRIT REALTY CAPITAL, INC.
Real Estate Portfolio

Diversification By Industry

The following table sets forth information regarding the diversification of our owned real estate properties among different industries as of March 31, 2014:

Industry   Number of Properties   Percent of Total Rent (1)  
Specialty Retail 194 18.5 %
General and discount retail 237 18.2
Restaurants - Quick Service 657 9.7
Drug Stores 134 7.5
Restaurants - Casual Dining 207 7.4
Automotive dealers, parts and service 143 5.3
Convenience Stores/car washes 158 4.5
Movie Theaters 25 4.2
Building material suppliers 110 3.6
Medical/other office 83 3.4
Industrial 29 3.1
Educational 33 2.9
Health clubs/gyms 18 2.3
Home Improvement 11 2.2
Supermarkets 39 2.1
Distribution 44 2.0
Recreational Facilities 8 1.4
Air Delivery & Freight Services 9 1.2
Interstate travel plazas 3 0.5
Total 2,142 100 %
 
(1) Total rental revenue for the quarter ended March 31, 2014.
 

Diversification By Asset Type

The following table sets forth information regarding the diversification of our owned real estate properties among different asset types as of March 31, 2014:

Asset Type   Number of Properties   Percent of Total Revenue (1)  
Retail 1,973 85.6 %
Industrial 80 9.0
Office 89 5.4
Total 2,142 100.0 %
 
(1) Total rental revenue for the quarter ended March 31, 2014.
 

Diversification By Tenant

The following table lists the top 10 tenants of our owned real estate properties as of March 31, 2014:

Tenant (2)   Number of Properties   Percent of Total Revenue (1)  
Shopko Stores/Pamida Operating Co., LLC 181 14.0 %
Walgreen Company 69 4.1
84 Properties, LLC 109 3.3
Cajun Global LLC (Church's Chicken) 201 2.5
Academy Sports + Outdoors 9 2.2
Alimentation Couche-Tard, Inc. (Circle K) 83 2.1
CVS Caremark 37 1.7
CarMax, Inc. 9 1.4
Carmike Cinemas, Inc. 12 1.4
Rite Aid Corp 30 1.3
Other 1,402 66.0
Total 2,142 100.0 %
 
(1) Total revenue for the quarter ended March 31, 2014.
(2) Tenants represent legal entities with whom we have lease agreements. Other tenants may operate certain of the same business concepts set forth above, but represent separate legal entities.
 

Diversification By Geography

The following table sets forth information regarding the geographic diversification of our owned real estate properties as of March 31, 2014:

State   Number of Properties   Percent of Total Rent (1)  
Texas 266 12.5 %
Illinois 125 6.5
Wisconsin 63 5.9
Georgia 154 5.0
Florida 116 4.5
Ohio 122 4.4
Arizona 49 2.9
Minnesota 48 2.9
Tennessee 111 2.9
Michigan 48 2.8
Indiana 72 2.8
North Carolina 64 2.7
Missouri 66 2.7
Alabama 100 2.7
Nebraska 21 2.6
South Carolina 45 2.6
California 15 2.4
Pennsylvania 64 2.4
Virginia 46 2.2
Kansas 28 1.9
Colorado 26 1.6
Utah 15 1.6
Idaho 15 1.6
New York 44 1.5
Oklahoma 47 1.5
Massachusetts 8 1.5
Nevada 4 1.4
Kentucky 44 1.3
Iowa 37 1.3
New Hampshire 17 1.0
Washington 13 1.0
Louisiana 30 1.0
New Mexico 24 *
Oregon 8 *
South Dakota 11 *
New Jersey 13 *
Mississippi 29 *
Maryland 22 *
Montana 7 *
West Virginia 26 *
Arkansas 28 *
North Dakota 5 *
Maine 26 *
Rhode Island 4 *
Wyoming 8 *
Delaware 3 *
Vermont 3 *
Virgin Islands 1 *
Connecticut 1 *
Total 2,142 100.0 %
 
* Less than 1%
(1) Total rental revenue for the quarter ended March 31, 2014.
 

Lease Expirations

The following table sets forth a summary schedule of lease expirations for leases in place as of March 31, 2014. As of March 31, 2014, the weighted average remaining non-cancelable initial term of our leases (based on annualized rental revenue) was 10.2 years. The information set forth in the table assumes that tenants exercise no renewal options and all early termination rights:

Leases Expiring In:   Number of Properties   Expiring Annual Rent (in thousands) (1)   Percent of Total Expiring Annual Rent  
Remainder of 2014 65 $ 12,734 2.3 %
2015 33 11,588 2.1
2016 47 22,516 4.1
2017 64 19,752 3.6
2018 76 24,389 4.4
2019 71 20,161 3.6
2020 101 31,310 5.7
2021 189 41,708 7.5
2022 100 22,132 4.0
2023 92 37,309 6.7
2024 and thereafter 1,280 309,543 56.0
Vacant 24
Total owned properties 2,142 $ 553,142 100 %
 
(1) Total rental revenue for the quarter ended March 31, 2014 multiplied by four.
 

Spirit Realty Capital, Inc.
Michael A. Bender, 480-315-6634
EVP, Chief Financial Officer
InvestorRelations@spiritrealty.com

Source: Spirit Realty Capital, Inc.