x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _________ to __________
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VEREIT, Inc.
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VEREIT Operating Partnership, L.P.
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(Exact name of registrant as specified in its charter)
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Maryland (VEREIT, Inc.)
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45-2482685
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Delaware (VEREIT Operating Partnership, L.P.)
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45-1255683
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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2325 E. Camelback Road, Suite 1100, Phoenix, AZ
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85016
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(Address of principal executive offices)
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(Zip Code)
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(800) 606-3610
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(Registrant’s telephone number, including area code)
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VEREIT, Inc.
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
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(Do not check if a smaller reporting company)
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Smaller reporting company
o
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VEREIT Operating Partnership, L.P.
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
x
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(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Page
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PART I — FINANCIAL INFORMATION
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PART II — OTHER INFORMATION
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September 30, 2015
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December 31, 2014
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||||
ASSETS
|
|
|
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||||
Real estate investments, at cost:
|
|
|
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||||
Land
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$
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3,257,396
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$
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3,472,298
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Buildings, fixtures and improvements
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11,615,474
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12,307,758
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Land and construction in progress
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37,356
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77,450
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Intangible lease assets
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2,313,369
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2,435,054
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Total real estate investments, at cost
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17,223,595
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18,292,560
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Less: accumulated depreciation and amortization
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1,595,667
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1,034,122
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Total real estate investments, net
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15,627,928
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17,258,438
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Investment in unconsolidated entities
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57,247
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98,053
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Investment in direct financing leases, net
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49,244
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56,076
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Investment securities, at fair value
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54,455
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58,646
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Loans held for investment, net
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40,002
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42,106
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Cash and cash equivalents
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171,659
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416,711
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Restricted cash
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47,775
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62,651
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Intangible assets, net
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127,835
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150,359
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Deferred costs and other assets, net
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385,806
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389,922
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|
||
Goodwill
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1,828,005
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1,894,794
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Due from affiliates
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66,981
|
|
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86,122
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|
||
Real estate assets held for sale, net
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247,951
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1,261
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Total assets
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$
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18,704,888
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$
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20,515,139
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|
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||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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||||
Mortgage notes payable and other debt, net
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$
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3,210,413
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$
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3,805,761
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Corporate bonds, net
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2,547,059
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2,546,499
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Convertible debt, net
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981,031
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977,521
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Credit facility
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2,110,000
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3,184,000
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Below-market lease liabilities, net
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264,232
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317,838
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Accounts payable and accrued expenses
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164,204
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163,025
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|
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Deferred rent, derivative and other liabilities
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114,343
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127,611
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Distributions payable
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137,647
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9,995
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|
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Due to affiliates
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241
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|
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559
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Mortgage notes payable associated with assets held for sale
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118,493
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—
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Total liabilities
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9,647,663
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11,132,809
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Commitments and contingencies (Note 14)
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—
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—
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Preferred stock, $0.01 par value, 100,000,000 shares authorized and 42,834,138 issued and outstanding as of each of September 30, 2015 and December 31, 2014
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428
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|
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428
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Common stock, $0.01 par value, 1,500,000,000 shares authorized and 904,960,234 and 905,530,431 issued and outstanding as of September, 30, 2015 and December 31, 2014, respectively
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9,050
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9,055
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Additional paid-in-capital
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11,928,184
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11,920,253
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Accumulated other comprehensive (loss) income
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(9,806
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)
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2,728
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|
||
Accumulated deficit
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(3,085,906
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)
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(2,778,576
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)
|
||
Total stockholders’ equity
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8,841,950
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9,153,888
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|
||
Non-controlling interests
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215,275
|
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228,442
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||
Total equity
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9,057,225
|
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9,382,330
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||
Total liabilities and equity
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$
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18,704,888
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$
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20,515,139
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|
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Three Months Ended September 30,
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Nine Months Ended September 30,
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||||||||||||
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2015
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2014
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2015
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2014
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||||||||
Revenues:
|
|
|
|
|
|
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|
||||||||
Rental income
|
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$
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333,766
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$
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365,712
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$
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1,017,708
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$
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924,646
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Direct financing lease income
|
|
659
|
|
|
625
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|
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2,097
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|
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2,812
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|
||||
Operating expense reimbursements
|
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22,983
|
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30,984
|
|
|
71,269
|
|
|
81,716
|
|
||||
Cole Capital revenue
|
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27,546
|
|
|
59,797
|
|
|
81,569
|
|
|
151,276
|
|
||||
Total revenues
|
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384,954
|
|
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457,118
|
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1,172,643
|
|
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1,160,450
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
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||||||||
Cole Capital reallowed fees and commissions
|
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3,896
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15,398
|
|
|
9,637
|
|
|
56,902
|
|
||||
Acquisition related
(1)
|
|
1,764
|
|
|
13,998
|
|
|
5,509
|
|
|
34,616
|
|
||||
Merger and other non-routine transactions
(2)
|
|
8,957
|
|
|
7,632
|
|
|
42,244
|
|
|
175,352
|
|
||||
Property operating
|
|
31,950
|
|
|
40,977
|
|
|
95,547
|
|
|
110,018
|
|
||||
Management fees to affiliates
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,888
|
|
||||
General and administrative
(3)
|
|
32,842
|
|
|
30,213
|
|
|
99,906
|
|
|
122,806
|
|
||||
Depreciation and amortization
|
|
208,542
|
|
|
265,150
|
|
|
645,196
|
|
|
689,731
|
|
||||
Impairments
|
|
—
|
|
|
2,299
|
|
|
85,341
|
|
|
3,855
|
|
||||
Total operating expenses
|
|
287,951
|
|
|
375,667
|
|
|
983,380
|
|
|
1,207,168
|
|
||||
Operating income (loss)
|
|
97,003
|
|
|
81,451
|
|
|
189,263
|
|
|
(46,718
|
)
|
||||
Other (expense) income:
|
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
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(89,530
|
)
|
|
(101,643
|
)
|
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(275,801
|
)
|
|
(326,491
|
)
|
||||
Extinguishment and forgiveness of debt, net
|
|
—
|
|
|
(5,396
|
)
|
|
5,302
|
|
|
(21,264
|
)
|
||||
Other income, net
|
|
3,401
|
|
|
8,687
|
|
|
12,791
|
|
|
17,104
|
|
||||
Gain on disposition of interest in joint venture
|
|
6,729
|
|
|
—
|
|
|
6,729
|
|
|
—
|
|
||||
Loss on derivative instruments, net
|
|
(1,420
|
)
|
|
(17,484
|
)
|
|
(2,137
|
)
|
|
(10,398
|
)
|
||||
Gain on sale of investments
|
|
—
|
|
|
6,357
|
|
|
—
|
|
|
6,357
|
|
||||
Total other expenses, net
|
|
(80,820
|
)
|
|
(109,479
|
)
|
|
(253,116
|
)
|
|
(334,692
|
)
|
||||
Income (loss) before income and franchise taxes and loss on disposition of real estate and held for sale assets
|
|
16,183
|
|
|
(28,028
|
)
|
|
(63,853
|
)
|
|
(381,410
|
)
|
||||
Loss on disposition of real estate and held for sale
assets, net |
|
(6,542
|
)
|
|
(256,894
|
)
|
|
(62,584
|
)
|
|
(275,768
|
)
|
||||
Income (loss) before income and franchise taxes
|
|
9,641
|
|
|
(284,922
|
)
|
|
(126,437
|
)
|
|
(657,178
|
)
|
||||
(Provision for) benefit from income and franchise taxes
|
|
(1,500
|
)
|
|
(3,125
|
)
|
|
(4,824
|
)
|
|
6,693
|
|
||||
Net income (loss)
|
|
8,141
|
|
|
(288,047
|
)
|
|
(131,261
|
)
|
|
(650,485
|
)
|
||||
Net (income) loss attributable to non-controlling interests
|
|
(612
|
)
|
|
7,649
|
|
|
2,298
|
|
|
23,923
|
|
||||
Net income (loss) attributable to the Company
|
|
$
|
7,529
|
|
|
$
|
(280,398
|
)
|
|
$
|
(128,963
|
)
|
|
$
|
(626,562
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||||
Basic and diluted net loss per share attributable to common stockholders
|
|
$
|
(0.01
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.94
|
)
|
Distributions declared per common share
|
|
$
|
0.14
|
|
|
$
|
0.25
|
|
|
$
|
0.14
|
|
|
$
|
0.79
|
|
(1)
|
Includes
$1.7 million
of expenses incurred during the
nine months ended September 30, 2014
, paid to affiliates.
No
such expenses were incurred during the
three months ended September 30, 2014
or the
three and nine months ended September 30, 2015
.
|
(2)
|
Includes
$137.8 million
of expenses incurred during the
nine months ended September 30, 2014
, paid to affiliates.
No
such expenses were incurred during the
three months ended September 30, 2014
or the
three and nine months ended September 30, 2015
.
|
(3)
|
Includes
$60,000
and
$16.1 million
of expenses incurred during the
three and nine months ended September 30, 2014
, respectively, paid to affiliates.
No
such expenses were incurred during the
three and nine months ended September 30, 2015
.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net income (loss)
|
|
$
|
8,141
|
|
|
$
|
(288,047
|
)
|
|
$
|
(131,261
|
)
|
|
$
|
(650,485
|
)
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized (loss) gain on interest rate derivatives
|
|
(10,076
|
)
|
|
5,800
|
|
|
(21,057
|
)
|
|
(7,896
|
)
|
||||
Amount of loss reclassified from accumulated other comprehensive loss into income as interest expense
|
|
2,787
|
|
|
2,669
|
|
|
8,316
|
|
|
6,784
|
|
||||
Unrealized (loss) gain on investment securities, net
|
|
(918
|
)
|
|
725
|
|
|
(232
|
)
|
|
9,698
|
|
||||
Reclassification of previous unrealized (loss) gain on investment securities into net loss
|
|
—
|
|
|
(7,652
|
)
|
|
110
|
|
|
(7,652
|
)
|
||||
Total other comprehensive (loss) income
|
|
(8,207
|
)
|
|
1,542
|
|
|
(12,863
|
)
|
|
934
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total comprehensive loss
|
|
(66
|
)
|
|
(286,505
|
)
|
|
(144,124
|
)
|
|
(649,551
|
)
|
||||
Comprehensive (income) loss attributable to non-controlling interests
|
|
(283
|
)
|
|
7,649
|
|
|
2,627
|
|
|
23,923
|
|
||||
Total comprehensive loss attributable to the Company
|
|
$
|
(349
|
)
|
|
$
|
(278,856
|
)
|
|
$
|
(141,497
|
)
|
|
$
|
(625,628
|
)
|
|
|
Preferred Stock
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
|
Number
of Shares |
|
Par
Value |
|
Number
of Shares |
|
Par
Value |
|
Additional Paid-In Capital
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Accumulated
Deficit |
|
Total Stock-holders’ Equity
|
|
Non-Controlling Interests
|
|
Total Equity
|
||||||||||||||||||
Balance, January 1, 2015
|
|
42,834,138
|
|
|
$
|
428
|
|
|
905,530,431
|
|
|
$
|
9,055
|
|
|
$
|
11,920,253
|
|
|
$
|
2,728
|
|
|
$
|
(2,778,576
|
)
|
|
$
|
9,153,888
|
|
|
$
|
228,442
|
|
|
$
|
9,382,330
|
|
Repurchases of common stock to settle tax obligation
|
|
—
|
|
|
—
|
|
|
(183,492
|
)
|
|
(1
|
)
|
|
(1,633
|
)
|
|
—
|
|
|
—
|
|
|
(1,634
|
)
|
|
—
|
|
|
(1,634
|
)
|
||||||||
Equity-based compensation, net of forfeitures
|
|
—
|
|
|
—
|
|
|
(386,705
|
)
|
|
(4
|
)
|
|
10,193
|
|
|
—
|
|
|
—
|
|
|
10,189
|
|
|
—
|
|
|
10,189
|
|
||||||||
Tax shortfall from equity-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(629
|
)
|
|
—
|
|
|
—
|
|
|
(629
|
)
|
|
—
|
|
|
(629
|
)
|
||||||||
Distributions declared on common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(124,225
|
)
|
|
(124,225
|
)
|
|
|
|
|
(124,225
|
)
|
||||||||
Distributions to non-controlling interest holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,879
|
)
|
|
(16,879
|
)
|
||||||||
Distributions to participating securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(222
|
)
|
|
(222
|
)
|
|
—
|
|
|
(222
|
)
|
||||||||
Distributions to preferred shareholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(53,920
|
)
|
|
(53,920
|
)
|
|
—
|
|
|
(53,920
|
)
|
||||||||
Disposition of consolidated joint venture interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,339
|
|
|
6,339
|
|
||||||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(128,963
|
)
|
|
(128,963
|
)
|
|
(2,298
|
)
|
|
(131,261
|
)
|
||||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,534
|
)
|
|
—
|
|
|
(12,534
|
)
|
|
(329
|
)
|
|
(12,863
|
)
|
||||||||
Balance, September 30, 2015
|
|
42,834,138
|
|
|
$
|
428
|
|
|
904,960,234
|
|
|
$
|
9,050
|
|
|
$
|
11,928,184
|
|
|
$
|
(9,806
|
)
|
|
$
|
(3,085,906
|
)
|
|
$
|
8,841,950
|
|
|
$
|
215,275
|
|
|
$
|
9,057,225
|
|
|
|
Preferred Stock
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
|
Number
of Shares |
|
Par
Value |
|
Number
of Shares |
|
Par
Value |
|
Additional Paid-In Capital
|
|
Accumulated Other Comprehensive Income
|
|
Accumulated
Deficit |
|
Total Stock-holders’ Equity
|
|
Non-Controlling Interests
|
|
Total Equity
|
||||||||||||||||||
Balance, January 1, 2014
|
|
42,199,547
|
|
|
$
|
422
|
|
|
239,234,725
|
|
|
$
|
2,392
|
|
|
$
|
2,940,907
|
|
|
$
|
7,666
|
|
|
$
|
(877,957
|
)
|
|
$
|
2,073,430
|
|
|
$
|
155,798
|
|
|
$
|
2,229,228
|
|
Issuance of common stock
(1)
|
|
—
|
|
|
—
|
|
|
662,305,318
|
|
|
6,623
|
|
|
8,916,830
|
|
|
—
|
|
|
—
|
|
|
8,923,453
|
|
|
—
|
|
|
8,923,453
|
|
||||||||
Conversion of Common OP Units to common stock
|
|
—
|
|
|
—
|
|
|
1,098,074
|
|
|
11
|
|
|
16,264
|
|
|
—
|
|
|
—
|
|
|
16,275
|
|
|
(16,275
|
)
|
|
—
|
|
||||||||
Conversion of Preferred OP Units to Series F Preferred Stock
|
|
622,836
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
12,464
|
|
|
—
|
|
|
—
|
|
|
12,470
|
|
|
(12,470
|
)
|
|
—
|
|
||||||||
Issuance of restricted share awards, net
|
|
—
|
|
|
—
|
|
|
5,326,404
|
|
|
54
|
|
|
(4,310
|
)
|
|
—
|
|
|
—
|
|
|
(4,256
|
)
|
|
—
|
|
|
(4,256
|
)
|
||||||||
Equity-based compensation, net of forfeitures
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,183
|
|
|
—
|
|
|
—
|
|
|
23,183
|
|
|
9,622
|
|
|
32,805
|
|
||||||||
Distributions declared on common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(593,846
|
)
|
|
(593,846
|
)
|
|
—
|
|
|
(593,846
|
)
|
||||||||
Issuance of OP Units
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
152,484
|
|
|
152,484
|
|
||||||||
Distributions to non-controlling interest holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28,809
|
)
|
|
(28,809
|
)
|
||||||||
Distributions to participating securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,617
|
)
|
|
(3,617
|
)
|
|
—
|
|
|
(3,617
|
)
|
||||||||
Distributions to preferred shareholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(80,749
|
)
|
|
(80,749
|
)
|
|
—
|
|
|
(80,749
|
)
|
||||||||
Contributions from non-controlling interest holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
982
|
|
|
982
|
|
||||||||
Non-controlling interests retained in Cole Merger
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,766
|
|
|
24,766
|
|
||||||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(626,562
|
)
|
|
(626,562
|
)
|
|
(23,923
|
)
|
|
(650,485
|
)
|
||||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
934
|
|
|
—
|
|
|
934
|
|
|
—
|
|
|
934
|
|
||||||||
Balance, September 30, 2014
|
|
42,822,383
|
|
|
$
|
428
|
|
|
907,964,521
|
|
|
$
|
9,080
|
|
|
$
|
11,905,338
|
|
|
$
|
8,600
|
|
|
$
|
(2,182,731
|
)
|
|
$
|
9,740,715
|
|
|
$
|
262,175
|
|
|
$
|
10,002,890
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2015
|
|
2014
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||
Net loss
|
|
$
|
(131,261
|
)
|
|
$
|
(650,485
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
||||
Issuance of OP Units
|
|
—
|
|
|
92,884
|
|
||
Depreciation and amortization
|
|
660,715
|
|
|
744,545
|
|
||
Loss on real estate assets and interest in joint venture, net
|
|
55,855
|
|
|
275,768
|
|
||
Impairments
|
|
85,341
|
|
|
3,855
|
|
||
Equity-based compensation
|
|
10,189
|
|
|
32,805
|
|
||
Equity in income of unconsolidated entities
|
|
(1,611
|
)
|
|
(247
|
)
|
||
Distributions from unconsolidated entities
|
|
9,578
|
|
|
6,149
|
|
||
Loss on derivative instruments
|
|
2,137
|
|
|
10,398
|
|
||
Gain on sale and unrealized gains of investments securities
|
|
(65
|
)
|
|
(6,357
|
)
|
||
Gain on extinguishment and forgiveness of debt
|
|
(5,307
|
)
|
|
(14,637
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Investment in direct financing leases
|
|
1,503
|
|
|
1,147
|
|
||
Deferred costs and other assets
|
|
(59,509
|
)
|
|
(116,614
|
)
|
||
Due from affiliates
|
|
19,141
|
|
|
(2,365
|
)
|
||
Accounts payable and accrued expenses
|
|
6,679
|
|
|
(53,434
|
)
|
||
Deferred rent, derivative and other liabilities
|
|
(24,939
|
)
|
|
(20,748
|
)
|
||
Due to affiliates
|
|
(318
|
)
|
|
(37,520
|
)
|
||
Net cash provided by operating activities
|
|
628,128
|
|
|
265,144
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Investments in real estate and other assets
|
|
(10,207
|
)
|
|
(3,517,290
|
)
|
||
Acquisition of real estate businesses, net of cash acquired
|
|
—
|
|
|
(756,232
|
)
|
||
Capital expenditures and leasing costs
|
|
(10,880
|
)
|
|
(33,378
|
)
|
||
Real estate developments
|
|
(51,863
|
)
|
|
(33,610
|
)
|
||
Principal repayments received from borrowers
|
|
6,043
|
|
|
5,091
|
|
||
Investments in unconsolidated entities
|
|
—
|
|
|
(2,699
|
)
|
||
Proceeds from disposition of interest in joint venture
|
|
43,041
|
|
|
—
|
|
||
Proceeds from disposition of real estate assets, net
|
|
370,229
|
|
|
129,212
|
|
||
Investment in leasehold improvements, property and equipment
|
|
—
|
|
|
(11,074
|
)
|
||
Proceeds from sale of investments
|
|
229
|
|
|
159,049
|
|
||
Deposits for real estate assets
|
|
(15,105
|
)
|
|
(205,896
|
)
|
||
Uses and refunds of deposits for real estate assets
|
|
42,619
|
|
|
278,362
|
|
||
Line of credit advances to affiliates
|
|
(10,000
|
)
|
|
(130,300
|
)
|
||
Line of credit repayments from affiliates
|
|
10,000
|
|
|
80,300
|
|
||
Change in restricted cash
|
|
10,488
|
|
|
(18,709
|
)
|
||
Net cash provided by (used in) investing activities
|
|
384,594
|
|
|
(4,057,174
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Proceeds from mortgage notes payable
|
|
1,379
|
|
|
1,007,787
|
|
||
Payments on mortgage notes payable and other debt
|
|
(113,570
|
)
|
|
(1,137,329
|
)
|
||
Proceeds from credit facilities
|
|
—
|
|
|
5,689,000
|
|
||
Payments on credit facilities
|
|
(1,074,000
|
)
|
|
(4,708,800
|
)
|
||
Proceeds from corporate bonds
|
|
—
|
|
|
2,545,760
|
|
||
Payments of deferred financing costs
|
|
(2,412
|
)
|
|
(92,233
|
)
|
||
Repurchases of common stock for tax obligation
|
|
(1,634
|
)
|
|
—
|
|
||
Proceeds from issuances of common stock, net of offering costs
|
|
—
|
|
|
1,593,345
|
|
||
Redemption of Series D Preferred Stock
|
|
—
|
|
|
(316,126
|
)
|
||
Contributions from non-controlling interest holders
|
|
—
|
|
|
982
|
|
||
Distributions paid
|
|
(67,537
|
)
|
|
(697,771
|
)
|
||
Net cash (used in) provided by financing activities
|
|
(1,257,774
|
)
|
|
3,884,615
|
|
||
Net change in cash and cash equivalents
|
|
(245,052
|
)
|
|
92,585
|
|
||
Cash and cash equivalents, beginning of period
|
|
416,711
|
|
|
52,725
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
171,659
|
|
|
$
|
145,310
|
|
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
ASSETS
|
|
|
|
|
||||
Real estate investments, at cost:
|
|
|
|
|
||||
Land
|
|
$
|
3,257,396
|
|
|
$
|
3,472,298
|
|
Buildings, fixtures and improvements
|
|
11,615,474
|
|
|
12,307,758
|
|
||
Land and construction in progress
|
|
37,356
|
|
|
77,450
|
|
||
Intangible lease assets
|
|
2,313,369
|
|
|
2,435,054
|
|
||
Total real estate investments, at cost
|
|
17,223,595
|
|
|
18,292,560
|
|
||
Less: accumulated depreciation and amortization
|
|
1,595,667
|
|
|
1,034,122
|
|
||
Total real estate investments, net
|
|
15,627,928
|
|
|
17,258,438
|
|
||
Investment in unconsolidated entities
|
|
57,247
|
|
|
98,053
|
|
||
Investment in direct financing leases, net
|
|
49,244
|
|
|
56,076
|
|
||
Investment securities, at fair value
|
|
54,455
|
|
|
58,646
|
|
||
Loans held for investment, net
|
|
40,002
|
|
|
42,106
|
|
||
Cash and cash equivalents
|
|
171,659
|
|
|
416,711
|
|
||
Restricted cash
|
|
47,775
|
|
|
62,651
|
|
||
Intangible assets, net
|
|
127,835
|
|
|
150,359
|
|
||
Deferred costs and other assets, net
|
|
385,806
|
|
|
389,922
|
|
||
Goodwill
|
|
1,828,005
|
|
|
1,894,794
|
|
||
Due from affiliates
|
|
66,981
|
|
|
86,122
|
|
||
Assets held for sale
|
|
247,951
|
|
|
1,261
|
|
||
Total assets
|
|
$
|
18,704,888
|
|
|
$
|
20,515,139
|
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
||
Mortgage notes payable and other debt, net
|
|
$
|
3,210,413
|
|
|
$
|
3,805,761
|
|
Corporate bonds, net
|
|
2,547,059
|
|
|
2,546,499
|
|
||
Convertible debt, net
|
|
981,031
|
|
|
977,521
|
|
||
Credit facility
|
|
2,110,000
|
|
|
3,184,000
|
|
||
Below-market lease liabilities, net
|
|
264,232
|
|
|
317,838
|
|
||
Accounts payable and accrued expenses
|
|
164,204
|
|
|
163,025
|
|
||
Deferred rent, derivative and other liabilities
|
|
114,343
|
|
|
127,611
|
|
||
Distributions payable
|
|
137,647
|
|
|
9,995
|
|
||
Due to affiliates
|
|
241
|
|
|
559
|
|
||
Mortgage notes payable associated with assets held for sale
|
|
118,493
|
|
|
—
|
|
||
Total liabilities
|
|
9,647,663
|
|
|
11,132,809
|
|
||
Commitments and contingencies (Note 14)
|
|
—
|
|
|
—
|
|
||
General partner's preferred equity, 42,834,138 General Partner Preferred Units issued and outstanding as of each of September 30, 2015 and December 31, 2014
|
|
943,067
|
|
|
996,987
|
|
||
General partner's common equity, 904,960,234 and 905,530,431 General Partner OP Units issued and outstanding as of September 30, 2015 and December 31, 2014, respectively
|
|
7,899,149
|
|
|
8,157,167
|
|
||
Limited partner's preferred equity, 86,874 Limited Partner Preferred Units issued and outstanding as of each of September 30, 2015 and December 31, 2014
|
|
3,375
|
|
|
3,375
|
|
||
Limited partner's common equity, 23,763,797 Limited Partner OP Units issued and outstanding as of each of September 30, 2015 and December 31, 2014
|
|
194,009
|
|
|
201,102
|
|
||
Total partners’ equity
|
|
9,039,600
|
|
|
9,358,631
|
|
||
Non-controlling interests
|
|
17,625
|
|
|
23,699
|
|
||
Total equity
|
|
9,057,225
|
|
|
9,382,330
|
|
||
Total liabilities and equity
|
|
$
|
18,704,888
|
|
|
$
|
20,515,139
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Rental income
|
|
$
|
333,766
|
|
|
$
|
365,712
|
|
|
$
|
1,017,708
|
|
|
$
|
924,646
|
|
Direct financing lease income
|
|
659
|
|
|
625
|
|
|
2,097
|
|
|
2,812
|
|
||||
Operating expense reimbursements
|
|
22,983
|
|
|
30,984
|
|
|
71,269
|
|
|
81,716
|
|
||||
Cole Capital revenue
|
|
27,546
|
|
|
59,797
|
|
|
81,569
|
|
|
151,276
|
|
||||
Total revenues
|
|
384,954
|
|
|
457,118
|
|
|
1,172,643
|
|
|
1,160,450
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cole Capital reallowed fees and commissions
|
|
3,896
|
|
|
15,398
|
|
|
9,637
|
|
|
56,902
|
|
||||
Acquisition related
(1)
|
|
1,764
|
|
|
13,998
|
|
|
5,509
|
|
|
34,616
|
|
||||
Merger and other non-routine transactions
(2)
|
|
8,957
|
|
|
7,632
|
|
|
42,244
|
|
|
175,352
|
|
||||
Property operating
|
|
31,950
|
|
|
40,977
|
|
|
95,547
|
|
|
110,018
|
|
||||
Management fees to affiliates
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,888
|
|
||||
General and administrative
(3)
|
|
32,842
|
|
|
30,213
|
|
|
99,906
|
|
|
122,806
|
|
||||
Depreciation and amortization
|
|
208,542
|
|
|
265,150
|
|
|
645,196
|
|
|
689,731
|
|
||||
Impairments
|
|
—
|
|
|
2,299
|
|
|
85,341
|
|
|
3,855
|
|
||||
Total operating expenses
|
|
287,951
|
|
|
375,667
|
|
|
983,380
|
|
|
1,207,168
|
|
||||
Operating income (loss)
|
|
97,003
|
|
|
81,451
|
|
|
189,263
|
|
|
(46,718
|
)
|
||||
Other (expense) income:
|
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
|
(89,530
|
)
|
|
(101,643
|
)
|
|
(275,801
|
)
|
|
(326,491
|
)
|
||||
Extinguishment and forgiveness of debt, net
|
|
—
|
|
|
(5,396
|
)
|
|
5,302
|
|
|
(21,264
|
)
|
||||
Other income, net
|
|
3,401
|
|
|
8,687
|
|
|
12,791
|
|
|
17,104
|
|
||||
Gain on disposition of interest in joint venture
|
|
6,729
|
|
|
—
|
|
|
6,729
|
|
|
—
|
|
||||
Gain (loss) on derivative instruments, net
|
|
(1,420
|
)
|
|
(17,484
|
)
|
|
(2,137
|
)
|
|
(10,398
|
)
|
||||
Gain (loss) on sale of investments
|
|
—
|
|
|
6,357
|
|
|
—
|
|
|
6,357
|
|
||||
Total other expenses, net
|
|
(80,820
|
)
|
|
(109,479
|
)
|
|
(253,116
|
)
|
|
(334,692
|
)
|
||||
Income (loss) before income and franchise taxes and loss on disposition of real estate and held for sale assets
|
|
16,183
|
|
|
(28,028
|
)
|
|
(63,853
|
)
|
|
(381,410
|
)
|
||||
Loss on disposition of real estate and held for sale
assets, net |
|
(6,542
|
)
|
|
(256,894
|
)
|
|
(62,584
|
)
|
|
(275,768
|
)
|
||||
Income (loss) before income and franchise taxes
|
|
9,641
|
|
|
(284,922
|
)
|
|
(126,437
|
)
|
|
(657,178
|
)
|
||||
(Provision for) benefit from income and franchise taxes
|
|
(1,500
|
)
|
|
(3,125
|
)
|
|
(4,824
|
)
|
|
6,693
|
|
||||
Net income (loss)
|
|
8,141
|
|
|
(288,047
|
)
|
|
(131,261
|
)
|
|
(650,485
|
)
|
||||
Net income attributable to non-controlling interests
|
|
(404
|
)
|
|
(155
|
)
|
|
(1,197
|
)
|
|
(235
|
)
|
||||
Net income (loss) attributable to the OP
|
|
$
|
7,737
|
|
|
$
|
(288,202
|
)
|
|
$
|
(132,458
|
)
|
|
$
|
(650,720
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net loss from continuing operations per unit attributable to common unitholders
|
|
$
|
(0.01
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.94
|
)
|
Distributions declared per common unit
|
|
$
|
0.14
|
|
|
$
|
0.25
|
|
|
$
|
0.14
|
|
|
$
|
0.79
|
|
(1)
|
Includes
$1.7 million
of expenses incurred during the
nine months ended September 30, 2014
, paid to affiliates.
No
such expenses were incurred during the
three months ended September 30, 2014
or the
three and nine months ended September 30, 2015
.
|
(2)
|
Includes
$137.8 million
of expenses incurred during the
nine months ended September 30, 2014
, paid to affiliates.
No
such expenses were incurred during the
three months ended September 30, 2014
or the
three and nine months ended September 30, 2015
.
|
(3)
|
Includes
$60,000
and
$16.1 million
of expenses incurred during the
three and nine months ended September 30, 2014
, respectively, paid to affiliates.
No
such expenses were incurred during the
three and nine months ended September 30, 2015
.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net income (loss)
|
|
$
|
8,141
|
|
|
$
|
(288,047
|
)
|
|
$
|
(131,261
|
)
|
|
$
|
(650,485
|
)
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized (loss) gain on interest rate derivatives
|
|
(10,076
|
)
|
|
5,800
|
|
|
(21,057
|
)
|
|
(7,896
|
)
|
||||
Amount of loss reclassified from accumulated other comprehensive loss into income as interest expense
|
|
2,787
|
|
|
2,669
|
|
|
8,316
|
|
|
6,784
|
|
||||
Unrealized (loss) gain on investment securities, net
|
|
(918
|
)
|
|
725
|
|
|
(232
|
)
|
|
9,698
|
|
||||
Reclassification of previous unrealized (loss) gain on investment securities into net loss
|
|
—
|
|
|
(7,652
|
)
|
|
110
|
|
|
(7,652
|
)
|
||||
Total other comprehensive (loss) income
|
|
(8,207
|
)
|
|
1,542
|
|
|
(12,863
|
)
|
|
934
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total comprehensive loss
|
|
(66
|
)
|
|
(286,505
|
)
|
|
(144,124
|
)
|
|
(649,551
|
)
|
||||
Comprehensive (income) loss attributable to non-controlling interests
|
|
(404
|
)
|
|
(155
|
)
|
|
(1,197
|
)
|
|
(235
|
)
|
||||
Total comprehensive loss attributable to the OP
|
|
$
|
(470
|
)
|
|
$
|
(286,660
|
)
|
|
$
|
(145,321
|
)
|
|
$
|
(649,786
|
)
|
|
|
Preferred Units
|
|
Common Units
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
|
General Partner
|
|
Limited Partner
|
|
General Partner
|
|
Limited Partner
|
|
|
|
|
|
|
||||||||||||||||||||||||||
|
|
Number of Units
|
|
Capital
|
|
Number of Units
|
|
Capital
|
|
Number of Units
|
|
Capital
|
|
Number of Units
|
|
Capital
|
|
Total Partners' Capital
|
|
Non-Controlling Interests
|
|
Total Capital
|
||||||||||||||||||
Balance, January 1, 2015
|
|
42,834,138
|
|
|
$
|
996,987
|
|
|
86,874
|
|
|
$
|
3,375
|
|
|
905,530,431
|
|
|
$
|
8,157,167
|
|
|
23,763,797
|
|
|
$
|
201,102
|
|
|
$
|
9,358,631
|
|
|
$
|
23,699
|
|
|
$
|
9,382,330
|
|
Repurchases of common OP Units to settle tax obligation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(183,492
|
)
|
|
(1,634
|
)
|
|
—
|
|
|
—
|
|
|
(1,634
|
)
|
|
—
|
|
|
(1,634
|
)
|
|||||||
Equity-based compensation, net of forfeitures
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(386,705
|
)
|
|
10,189
|
|
|
—
|
|
|
—
|
|
|
10,189
|
|
|
—
|
|
|
10,189
|
|
|||||||
Tax shortfall from equity-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(629
|
)
|
|
—
|
|
|
—
|
|
|
(629
|
)
|
|
—
|
|
|
(629
|
)
|
|||||||
Distributions to Common OP Units and non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(124,447
|
)
|
|
—
|
|
|
(3,269
|
)
|
|
(127,716
|
)
|
|
(13,610
|
)
|
|
(141,326
|
)
|
|||||||
Distributions to Preferred OP Units
|
|
—
|
|
|
(53,920
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(53,920
|
)
|
|
—
|
|
|
(53,920
|
)
|
|||||||
Disposition of consolidated joint venture interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,339
|
|
|
6,339
|
|
|||||||
Net (loss) income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(128,963
|
)
|
|
—
|
|
|
(3,495
|
)
|
|
(132,458
|
)
|
|
1,197
|
|
|
(131,261
|
)
|
|||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,534
|
)
|
|
—
|
|
|
(329
|
)
|
|
(12,863
|
)
|
|
—
|
|
|
(12,863
|
)
|
|||||||
Balance, September 30, 2015
|
|
42,834,138
|
|
|
$
|
943,067
|
|
|
86,874
|
|
|
$
|
3,375
|
|
|
904,960,234
|
|
|
$
|
7,899,149
|
|
|
23,763,797
|
|
|
$
|
194,009
|
|
|
$
|
9,039,600
|
|
|
$
|
17,625
|
|
|
$
|
9,057,225
|
|
|
|
Preferred Units
|
|
Common Units
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
|
General Partner
|
|
Limited Partner
|
|
General Partner
|
|
Limited Partner
|
|
|
|
|
|
|
||||||||||||||||||||||||||
|
|
Number of Units
|
|
Capital
|
|
Number of Units
|
|
Capital
|
|
Number of Units
|
|
Capital
|
|
Number of Units
|
|
Capital
|
|
Total Partners' Capital
|
|
Non-Controlling Interests
|
|
Total Capital
|
||||||||||||||||||
Balance, January 1, 2014
|
|
42,199,547
|
|
|
$
|
1,054,989
|
|
|
721,465
|
|
|
$
|
16,466
|
|
|
239,234,725
|
|
|
$
|
1,018,123
|
|
|
17,832,274
|
|
|
$
|
139,083
|
|
|
$
|
2,228,661
|
|
|
$
|
567
|
|
|
$
|
2,229,228
|
|
Issuance of common OP units, net
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
662,305,318
|
|
|
8,923,453
|
|
|
7,956,297
|
|
|
152,484
|
|
|
9,075,937
|
|
|
—
|
|
|
9,075,937
|
|
|||||||
Conversion of Limited Partners' Common OP Units to General Partner's Common OP Units
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,098,074
|
|
|
16,275
|
|
|
(1,098,074
|
)
|
|
(16,275
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Conversion of Limited Partners' Preferred OP Units to General Partner's Preferred OP Units
|
|
622,836
|
|
|
12,470
|
|
|
(622,836
|
)
|
|
(12,470
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Issuance of restricted share awards, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,326,404
|
|
|
(4,256
|
)
|
|
—
|
|
|
—
|
|
|
(4,256
|
)
|
|
—
|
|
|
(4,256
|
)
|
|||||||
Equity-based compensation, net of forfeitures
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,183
|
|
|
10,744,697
|
|
|
9,622
|
|
|
32,805
|
|
|
—
|
|
|
32,805
|
|
|||||||
Distributions to Common OP Units, LTIPs and non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(597,463
|
)
|
|
—
|
|
|
(27,561
|
)
|
|
(625,024
|
)
|
|
(1,248
|
)
|
|
(626,272
|
)
|
|||||||
Distributions to Preferred OP Units
|
|
—
|
|
|
(53,120
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27,629
|
)
|
|
—
|
|
|
—
|
|
|
(80,749
|
)
|
|
—
|
|
|
(80,749
|
)
|
|||||||
Contributions from non-controlling interest holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
982
|
|
|
982
|
|
|||||||
Non-controlling interests retained in Cole Merger
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,766
|
|
|
24,766
|
|
|||||||
Net (loss) income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(626,562
|
)
|
|
—
|
|
|
(24,158
|
)
|
|
(650,720
|
)
|
|
235
|
|
|
(650,485
|
)
|
|||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
899
|
|
|
—
|
|
|
35
|
|
|
934
|
|
|
—
|
|
|
934
|
|
|||||||
Balance, September 30, 2014
|
|
42,822,383
|
|
|
$
|
1,014,339
|
|
|
98,629
|
|
|
$
|
3,996
|
|
|
907,964,521
|
|
|
$
|
8,726,023
|
|
|
35,435,194
|
|
|
$
|
233,230
|
|
|
$
|
9,977,588
|
|
|
$
|
25,302
|
|
|
$
|
10,002,890
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2015
|
|
2014
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net loss
|
|
$
|
(131,261
|
)
|
|
$
|
(650,485
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
||||
Issuance of OP Units
|
|
—
|
|
|
92,884
|
|
||
Depreciation and amortization
|
|
660,715
|
|
|
744,545
|
|
||
Loss on real estate assets and interest in joint venture, net
|
|
55,855
|
|
|
275,768
|
|
||
Impairments
|
|
85,341
|
|
|
3,855
|
|
||
Equity-based compensation
|
|
10,189
|
|
|
32,805
|
|
||
Equity in income of unconsolidated entities
|
|
(1,611
|
)
|
|
(247
|
)
|
||
Distributions from unconsolidated entities
|
|
9,578
|
|
|
6,149
|
|
||
Loss on derivative instruments
|
|
2,137
|
|
|
10,398
|
|
||
Gain on sale and unrealized gains of investments securities
|
|
(65
|
)
|
|
(6,357
|
)
|
||
Gain on extinguishment and forgiveness of debt
|
|
(5,307
|
)
|
|
(14,637
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
|||
Investment in direct financing leases
|
|
1,503
|
|
|
1,147
|
|
||
Deferred costs and other assets, net
|
|
(59,509
|
)
|
|
(116,614
|
)
|
||
Due from affiliates
|
|
19,141
|
|
|
(2,365
|
)
|
||
Accounts payable and accrued expenses
|
|
6,679
|
|
|
(53,434
|
)
|
||
Deferred rent, derivative and other liabilities
|
|
(24,939
|
)
|
|
(20,748
|
)
|
||
Due to affiliates
|
|
(318
|
)
|
|
(37,520
|
)
|
||
Net cash provided by operating activities
|
|
628,128
|
|
|
265,144
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Investments in real estate and other assets
|
|
(10,207
|
)
|
|
(3,517,290
|
)
|
||
Acquisition of real estate businesses, net of cash acquired
|
|
—
|
|
|
(756,232
|
)
|
||
Capital expenditures and leasing costs
|
|
(10,880
|
)
|
|
(33,378
|
)
|
||
Real estate developments
|
|
(51,863
|
)
|
|
(33,610
|
)
|
||
Principal repayments received from borrowers
|
|
6,043
|
|
|
5,091
|
|
||
Investments in unconsolidated entities
|
|
—
|
|
|
(2,699
|
)
|
||
Proceeds from disposition of interest in joint venture
|
|
43,041
|
|
|
—
|
|
||
Proceeds from disposition of real estate, net
|
|
370,229
|
|
|
129,212
|
|
||
Investment in leasehold improvements, property and equipment
|
|
—
|
|
|
(11,074
|
)
|
||
Proceeds from sale of investments
|
|
229
|
|
|
159,049
|
|
||
Deposits for real estate assets
|
|
(15,105
|
)
|
|
(205,896
|
)
|
||
Uses and refunds of deposits for real estate assets
|
|
42,619
|
|
|
278,362
|
|
||
Line of credit advances to affiliates
|
|
(10,000
|
)
|
|
(130,300
|
)
|
||
Line of credit repayments from affiliates
|
|
10,000
|
|
|
80,300
|
|
||
Change in restricted cash
|
|
10,488
|
|
|
(18,709
|
)
|
||
Net cash provided by (used in) investing activities
|
|
384,594
|
|
|
(4,057,174
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Proceeds from mortgage notes payable
|
|
1,379
|
|
|
1,007,787
|
|
||
Payments on mortgage notes payable and other debt
|
|
(113,570
|
)
|
|
(1,137,329
|
)
|
||
Proceeds from credit facilities
|
|
—
|
|
|
5,689,000
|
|
||
Payments on credit facilities
|
|
(1,074,000
|
)
|
|
(4,708,800
|
)
|
||
Proceeds from corporate bonds
|
|
—
|
|
|
2,545,760
|
|
||
Payments of deferred financing costs
|
|
(2,412
|
)
|
|
(92,233
|
)
|
||
Repurchases of common units to settle tax obligation
|
|
(1,634
|
)
|
|
—
|
|
||
Proceeds from issuances of OP units, net of offering costs
|
|
—
|
|
|
1,593,345
|
|
||
Redemption of Series D Preferred Units
|
|
—
|
|
|
(316,126
|
)
|
||
Contributions from non-controlling interest holders
|
|
—
|
|
|
982
|
|
||
Distributions paid
|
|
(67,537
|
)
|
|
(697,771
|
)
|
||
Net cash (used in) provided by financing activities
|
|
(1,257,774
|
)
|
|
3,884,615
|
|
||
Net change in cash and cash equivalents
|
|
(245,052
|
)
|
|
92,585
|
|
||
Cash and cash equivalents, beginning of period
|
|
416,711
|
|
|
52,725
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
171,659
|
|
|
$
|
145,310
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||
Merger related costs:
|
|
|
|
|
|
|
|
|
||||||||||
Strategic advisory services
|
|
$
|
—
|
|
|
$
|
3,150
|
|
|
$
|
—
|
|
|
$
|
35,765
|
|
||
Transfer taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,109
|
|
||||||
Legal fees and expenses
|
|
—
|
|
|
579
|
|
|
—
|
|
|
5,126
|
|
||||||
Personnel costs and other reimbursements
|
|
—
|
|
|
—
|
|
|
—
|
|
|
751
|
|
||||||
Multi-tenant spin off
|
|
—
|
|
|
2,270
|
|
|
—
|
|
|
7,450
|
|
||||||
Other fees and expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,676
|
|
||||||
Other non-routine transaction related costs:
|
|
|
|
|
|
|
|
|
||||||||||
Post-transaction support services
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,251
|
|
||||||
Subordinated distribution fee
|
|
—
|
|
|
—
|
|
|
—
|
|
|
78,244
|
|
||||||
Audit Committee Investigation and related matters
(1)
|
|
9,251
|
|
|
—
|
|
|
38,953
|
|
|
—
|
|
||||||
Furniture, fixtures and equipment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,085
|
|
||||||
Legal fees and expenses
|
|
(294
|
)
|
(2
|
)
|
743
|
|
|
2,659
|
|
(2
|
)
|
2,569
|
|
||||
Personnel costs and other reimbursements
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,718
|
|
||||||
Other fees and expenses
|
|
—
|
|
|
890
|
|
|
632
|
|
|
7,608
|
|
||||||
Total
|
|
$
|
8,957
|
|
|
|
$
|
7,632
|
|
|
$
|
42,244
|
|
|
|
$
|
175,352
|
|
(1)
|
Includes all fees and costs associated with the Audit Committee Investigation and various litigations and investigations prompted by the results of the Audit Committee Investigation, including fees and costs incurred pursuant to the Company’s indemnification obligations.
|
(2)
|
For the
three and nine months ended September 30, 2015
, legal fees and expenses primarily relate to fees incurred in connection with a legal matter resolved in early 2014, which the Company received invoices for in 2015. The negative balance for the three months ended September 30, 2015 is a result of estimated costs accrued in prior periods that exceeded actual expenses incurred.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
REI segment:
|
|
|
|
|
|
|
|
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Rental income
|
|
$
|
333,766
|
|
|
$
|
365,712
|
|
|
$
|
1,017,708
|
|
|
$
|
924,646
|
|
Direct financing lease income
|
|
659
|
|
|
625
|
|
|
2,097
|
|
|
2,812
|
|
||||
Operating expense reimbursements
|
|
22,983
|
|
|
30,984
|
|
|
71,269
|
|
|
81,716
|
|
||||
Total real estate investment revenues
|
|
357,408
|
|
|
397,321
|
|
|
1,091,074
|
|
|
1,009,174
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Acquisition related
|
|
1,690
|
|
|
13,998
|
|
|
4,976
|
|
|
34,616
|
|
||||
Merger and other non-routine transactions
|
|
8,957
|
|
|
7,613
|
|
|
42,244
|
|
|
173,406
|
|
||||
Property operating
|
|
31,950
|
|
|
40,977
|
|
|
95,547
|
|
|
110,018
|
|
||||
Management fees to affiliates
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,888
|
|
||||
General and administrative
|
|
15,848
|
|
|
12,948
|
|
|
48,045
|
|
|
62,675
|
|
||||
Depreciation and amortization
|
|
200,158
|
|
|
240,073
|
|
|
620,068
|
|
|
625,521
|
|
||||
Impairment of real estate
|
|
—
|
|
|
2,299
|
|
|
85,341
|
|
|
3,855
|
|
||||
Total operating expenses
|
|
258,603
|
|
|
317,908
|
|
|
896,221
|
|
|
1,023,979
|
|
||||
Operating income (loss)
|
|
98,805
|
|
|
79,413
|
|
|
194,853
|
|
|
(14,805
|
)
|
||||
Other (expense) income:
|
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
|
(89,530
|
)
|
|
(101,643
|
)
|
|
(275,801
|
)
|
|
(326,491
|
)
|
||||
Extinguishment and forgiveness of debt, net
|
|
—
|
|
|
(5,396
|
)
|
|
5,302
|
|
|
(21,264
|
)
|
||||
Other income, net
|
|
2,936
|
|
|
8,508
|
|
|
10,715
|
|
|
16,799
|
|
||||
Gain on disposition of interest in joint venture
|
|
6,729
|
|
|
—
|
|
|
6,729
|
|
|
—
|
|
||||
Loss on derivative instruments, net
|
|
(1,420
|
)
|
|
(17,484
|
)
|
|
(2,137
|
)
|
|
(10,398
|
)
|
||||
Gain on sale of investments
|
|
—
|
|
|
6,357
|
|
|
—
|
|
|
6,357
|
|
||||
Total other expenses, net
|
|
(81,285
|
)
|
|
(109,658
|
)
|
|
(255,192
|
)
|
|
(334,997
|
)
|
||||
Income (loss) before income and franchise taxes and disposition of real estate and held for sale assets
|
|
17,520
|
|
|
(30,245
|
)
|
|
(60,339
|
)
|
|
(349,802
|
)
|
||||
Loss on disposition of real estate and held for sale assets, net
|
|
(6,542
|
)
|
|
(256,894
|
)
|
|
(62,584
|
)
|
|
(275,768
|
)
|
||||
Income (loss) before income and franchise taxes
|
|
10,978
|
|
|
(287,139
|
)
|
|
(122,923
|
)
|
|
(625,570
|
)
|
||||
Provision for income and franchise taxes
|
|
(2,238
|
)
|
|
(1,994
|
)
|
|
(7,211
|
)
|
|
(5,905
|
)
|
||||
Net income (loss)
|
|
$
|
8,740
|
|
|
$
|
(289,133
|
)
|
|
$
|
(130,134
|
)
|
|
$
|
(631,475
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Cole Capital segment:
|
|
|
|
|
|
|
|
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Offering-related fees and reimbursements
|
|
$
|
5,850
|
|
|
$
|
21,535
|
|
|
$
|
14,483
|
|
|
$
|
73,957
|
|
Transaction service fees and reimbursements
|
|
7,400
|
|
|
24,423
|
|
|
24,696
|
|
|
44,406
|
|
||||
Management fees and reimbursements
|
|
14,296
|
|
|
13,839
|
|
|
42,390
|
|
|
32,913
|
|
||||
Total Cole Capital revenues
|
|
27,546
|
|
|
59,797
|
|
|
81,569
|
|
|
151,276
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cole Capital reallowed fees and commissions
|
|
3,896
|
|
|
15,398
|
|
|
9,637
|
|
|
56,902
|
|
||||
Acquisition related
|
|
74
|
|
|
—
|
|
|
533
|
|
|
—
|
|
||||
Merger and other non-routine transactions
|
|
—
|
|
|
19
|
|
|
—
|
|
|
1,946
|
|
||||
General and administrative
|
|
16,994
|
|
|
17,265
|
|
|
51,861
|
|
|
60,131
|
|
||||
Depreciation and amortization
|
|
8,384
|
|
|
25,077
|
|
|
25,128
|
|
|
64,210
|
|
||||
Total operating expenses
|
|
29,348
|
|
|
57,759
|
|
|
87,159
|
|
|
183,189
|
|
||||
Operating (loss) income
|
|
(1,802
|
)
|
|
2,038
|
|
|
(5,590
|
)
|
|
(31,913
|
)
|
||||
Total other income, net
|
|
465
|
|
|
179
|
|
|
2,076
|
|
|
305
|
|
||||
(Loss) income before income taxes
|
|
(1,337
|
)
|
|
2,217
|
|
|
(3,514
|
)
|
|
(31,608
|
)
|
||||
Benefit from (provision for) income taxes
|
|
738
|
|
|
(1,131
|
)
|
|
2,387
|
|
|
12,598
|
|
||||
Net (loss) income
|
|
$
|
(599
|
)
|
|
$
|
1,086
|
|
|
$
|
(1,127
|
)
|
|
$
|
(19,010
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Total Company:
|
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
|
$
|
384,954
|
|
|
$
|
457,118
|
|
|
$
|
1,172,643
|
|
|
$
|
1,160,450
|
|
Total operating expenses
|
|
$
|
287,951
|
|
|
$
|
375,667
|
|
|
$
|
983,380
|
|
|
$
|
1,207,168
|
|
Total other expense, net
|
|
$
|
(80,820
|
)
|
|
$
|
(109,479
|
)
|
|
$
|
(253,116
|
)
|
|
$
|
(334,692
|
)
|
Net income (loss)
|
|
$
|
8,141
|
|
|
$
|
(288,047
|
)
|
|
$
|
(131,261
|
)
|
|
$
|
(650,485
|
)
|
|
|
Total Assets
|
||||||
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
REI segment
|
|
$
|
18,008,818
|
|
|
$
|
19,771,138
|
|
Cole Capital
|
|
696,070
|
|
|
744,001
|
|
||
Total Company
|
|
$
|
18,704,888
|
|
|
$
|
20,515,139
|
|
|
|
REI Segment
|
|
Cole Capital Segment
|
|
Consolidated
|
||||||
Balance as of January 1, 2013
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Acquisition of Caplease
|
|
92,789
|
|
|
—
|
|
|
92,789
|
|
|||
Balance as of December 31, 2013
|
|
92,789
|
|
|
—
|
|
|
92,789
|
|
|||
Cole Merger
|
|
1,654,085
|
|
|
558,835
|
|
|
2,212,920
|
|
|||
Measurement period adjustments
|
|
(27,339
|
)
|
|
49,627
|
|
|
22,288
|
|
|||
Goodwill allocated to dispositions
(1)
|
|
(210,139
|
)
|
|
—
|
|
|
(210,139
|
)
|
|||
Impairment
|
|
—
|
|
|
(223,064
|
)
|
|
(223,064
|
)
|
|||
Balance as of December 31, 2014
|
|
$
|
1,509,396
|
|
|
$
|
385,398
|
|
|
$
|
1,894,794
|
|
Goodwill allocated to dispositions and held for sale assets
(1)
|
|
(66,789
|
)
|
|
—
|
|
|
(66,789
|
)
|
|||
Balance as of September 30, 2015
|
|
$
|
1,442,607
|
|
|
$
|
385,398
|
|
|
$
|
1,828,005
|
|
|
|
Weighted-Average Useful Life
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
Intangible lease assets:
|
|
|
|
|
|
|
||||
In-place leases, net of accumulated amortization of $361,315 and $236,096, respectively
|
|
14.1
|
|
$
|
1,575,024
|
|
|
$
|
1,816,508
|
|
Leasing commissions, net of accumulated amortization of $853 and $505, respectively
|
|
7.8
|
|
3,779
|
|
|
4,205
|
|
||
Above-market leases, net of accumulated amortization of $41,449 and $22,471, respectively
|
|
16.5
|
|
330,949
|
|
|
355,269
|
|
||
Total intangible lease assets, net
|
|
|
|
$
|
1,909,752
|
|
|
$
|
2,175,982
|
|
|
|
|
|
|
|
|
||||
Intangible lease liabilities:
|
|
|
|
|
|
|
||||
Below-market leases, net of accumulated amortization of $33,493 and $19,123, respectively
|
|
17.4
|
|
$
|
264,232
|
|
|
$
|
317,838
|
|
|
|
October 1, 2015 - December 31, 2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
||||||||||
In-place leases:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total to be included in amortization expense
|
|
$
|
46,008
|
|
|
$
|
179,088
|
|
|
$
|
163,617
|
|
|
$
|
149,574
|
|
|
$
|
137,702
|
|
Leasing Commissions
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total to be included in amortization expense
|
|
$
|
141
|
|
|
$
|
547
|
|
|
$
|
519
|
|
|
$
|
409
|
|
|
$
|
382
|
|
Above-market lease assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total to be deducted from rental income
|
|
$
|
6,716
|
|
|
$
|
26,797
|
|
|
$
|
26,450
|
|
|
$
|
25,887
|
|
|
$
|
23,925
|
|
Below-market lease liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total to be included in rental income
|
|
$
|
5,368
|
|
|
$
|
21,364
|
|
|
$
|
21,222
|
|
|
$
|
20,895
|
|
|
$
|
20,153
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2015
|
|
2014
|
||||
Real estate investments, at cost:
|
|
|
|
|
||||
Land
|
|
$
|
2,047
|
|
|
$
|
812,712
|
|
Buildings, fixtures and improvements
|
|
5,258
|
|
|
2,486,868
|
|
||
Land and construction in progress
|
|
2,140
|
|
|
11,083
|
|
||
Total tangible assets
|
|
9,445
|
|
|
3,310,663
|
|
||
Acquired intangible assets:
|
|
|
|
|
||||
In-place leases
|
|
717
|
|
|
522,568
|
|
||
Above-market leases
|
|
153
|
|
|
110,230
|
|
||
Assumed intangible liabilities:
|
|
|
|
|
||||
Below-market leases
|
|
(108
|
)
|
|
(101,108
|
)
|
||
Fair value adjustment of assumed notes payable
|
|
—
|
|
|
(23,531
|
)
|
||
Total purchase price of assets acquired, net
|
|
10,207
|
|
|
3,818,822
|
|
||
Mortgage notes payable assumed
|
|
—
|
|
|
(301,532
|
)
|
||
Cash paid for acquired real estate investments
|
|
$
|
10,207
|
|
|
$
|
3,517,290
|
|
|
|
Future Minimum Operating Lease
Base Rent Payments
|
|
Future Minimum
Direct Financing Lease Payments
(1)
|
||||
October 1, 2015 - December 31, 2015
|
|
$
|
289,399
|
|
|
$
|
1,166
|
|
2016
|
|
1,225,267
|
|
|
4,674
|
|
||
2017
|
|
1,194,341
|
|
|
4,273
|
|
||
2018
|
|
1,158,149
|
|
|
3,183
|
|
||
2019
|
|
1,117,327
|
|
|
2,397
|
|
||
Thereafter
|
|
9,744,736
|
|
|
7,916
|
|
||
Total
|
|
$
|
14,729,219
|
|
|
$
|
23,609
|
|
(1)
|
37
properties are subject to direct financing leases and, therefore, revenue is recognized as direct financing lease income on the discounted cash flows of the lease payments. Amounts reflected are the minimum base rental cash payments due to the Company under the lease agreements on these respective properties.
|
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
Future minimum lease payments receivable
|
|
$
|
23,609
|
|
|
$
|
27,199
|
|
Unguaranteed residual value of property
|
|
33,598
|
|
|
39,852
|
|
||
Unearned income
|
|
(7,963
|
)
|
|
(10,975
|
)
|
||
Net investment in direct financing leases
|
|
$
|
49,244
|
|
|
$
|
56,076
|
|
Development projects in progress
|
|
14
|
|
|
|
|
|
||
Investment to date
|
|
17,666
|
|
|
Estimated cost to complete
(1)
|
|
7,447
|
|
|
Total Investment
(2)
|
|
$
|
25,113
|
|
Name of Joint Venture
|
|
Partner
|
|
Ownership %
(1)
|
|
Carrying Amount
of Investment (2) |
||
Cole/Mosaic JV South Elgin IL, LLC
|
|
Affiliate of Mosaic Properties and Development, LLC
|
|
50%
|
|
$
|
6,763
|
|
Cole/LBA JV OF Pleasanton CA, LLC
|
|
Affiliate of LBA Realty
|
|
90%
|
|
33,612
|
|
|
Cole/Faison JV Bethlehem GA, LLC
|
|
Faison-Winder Investors, LLC
|
|
90%
|
|
13,292
|
|
|
|
|
|
|
|
|
$
|
53,667
|
|
|
|
September 30, 2015
|
||||||||||||||
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
CMBS
|
|
$
|
52,502
|
|
|
$
|
2,598
|
|
|
$
|
(645
|
)
|
|
$
|
54,455
|
|
|
|
December 31, 2014
|
||||||||||||||
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
CMBS
|
|
$
|
56,459
|
|
|
$
|
2,207
|
|
|
$
|
(20
|
)
|
|
$
|
58,646
|
|
|
|
September 30, 2015
|
||||||
|
|
Amortized Cost
|
|
Fair Value
|
||||
Due within one year
|
|
$
|
—
|
|
|
$
|
—
|
|
Due after one year through five years
|
|
23,880
|
|
|
24,761
|
|
||
Due after five years through 10 years
|
|
11,738
|
|
|
12,287
|
|
||
Due after 10 years
|
|
16,884
|
|
|
17,407
|
|
||
Total
|
|
$
|
52,502
|
|
|
$
|
54,455
|
|
|
|
Loans held for investment
|
|
Outstanding Balance
|
|
Carrying Value
|
|
Weighted-Average Interest Rate
|
|
Weighted-Average Years to Maturity
|
|
||||||
Mortgage notes receivable
|
|
10
|
|
|
$
|
26,544
|
|
|
$
|
24,702
|
|
|
6.3
|
%
|
(1)
|
13.8
|
(2)
|
Unsecured note
(3)
|
|
1
|
|
|
15,300
|
|
|
15,300
|
|
|
8.0
|
%
|
|
1.5
|
|
||
Total
|
|
11
|
|
|
$
|
41,844
|
|
|
$
|
40,002
|
|
|
6.9
|
%
|
|
9.3
|
|
(1)
|
The interest rates on the mortgage notes receivable range from
5.57%
to
7.24%
, as of
September 30, 2015
.
|
(2)
|
The mortgage notes receivable have maturity dates ranging from
March 2016
to
January 2033
.
|
(3)
|
The Company’s unsecured note is with an affiliate of the Former Manager, as defined within
Note 15 –
Equity
.
The unsecured note requires principal payments of
$7.7 million
on March 31, 2016 and
$3.8 million
on September 30, 2016 and the remaining balance is due at maturity, on March 31, 2017. The note may be pre-paid at par any time prior to maturity.
|
|
|
Outstanding Balance
|
||
Due within one year
|
|
$
|
9,298
|
|
Due after one year through five years
|
|
12,924
|
|
|
Due after five years through 10 years
|
|
6,516
|
|
|
Due after 10 years
(1)
|
|
17,056
|
|
|
Total
|
|
$
|
45,794
|
|
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
Deferred costs, net
|
|
$
|
96,477
|
|
|
$
|
126,202
|
|
Accounts receivable, net
(1)
|
|
54,598
|
|
|
66,021
|
|
||
Straight-line rent receivable
|
|
155,392
|
|
|
89,355
|
|
||
Prepaid expenses
|
|
15,484
|
|
|
15,171
|
|
||
Leasehold improvements, property and equipment, net
(2)
|
|
19,163
|
|
|
21,351
|
|
||
Restricted escrow deposits
|
|
5,835
|
|
|
34,339
|
|
||
Deferred tax asset and tax receivable
|
|
15,909
|
|
|
15,924
|
|
||
Program development costs, net
(3)
|
|
20,878
|
|
|
12,871
|
|
||
Derivative assets, at fair value
|
|
—
|
|
|
5,509
|
|
||
Other assets
|
|
2,070
|
|
|
3,179
|
|
||
Total
|
|
$
|
385,806
|
|
|
$
|
389,922
|
|
(1)
|
Allowance for doubtful accounts was
$3.1 million
and
$2.5 million
as of
September 30, 2015
and
December 31, 2014
, respectively.
|
(2)
|
Amortization expense for leasehold improvements totaled
$0.4 million
and
$1.1 million
for the
three and nine months ended September 30, 2015
, respectively. Accumulated amortization was
$2.3 million
and
$1.2 million
as of
September 30, 2015
and
December 31, 2014
, respectively. Depreciation expense for property and equipment totaled
$0.5 million
and
$1.5 million
for the
three and nine months ended September 30, 2015
, respectively. Accumulated depreciation was
$3.1 million
and
$1.6 million
as of
September 30, 2015
and
December 31, 2014
, respectively.
|
(3)
|
As of
September 30, 2015
and
December 31, 2014
, the Company had reserves of
$20.2 million
and
$13.1 million
, respectively, relating to the program development costs.
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2015
|
|
2014
|
||||
Properties impaired
|
|
188
|
|
|
9
|
|
||
|
|
|
|
|
||||
Asset classes impaired:
|
|
|
|
|
||||
Investment in real estate assets, net
|
|
$
|
82,654
|
|
|
$
|
3,855
|
|
Investment in direct financing leases, net
|
|
3,417
|
|
|
—
|
|
||
Below-market lease liabilities, net
|
|
(730
|
)
|
|
—
|
|
||
Total impairment loss
|
|
$
|
85,341
|
|
|
$
|
3,855
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Balance as of September 30, 2015
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
CMBS
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
54,455
|
|
|
$
|
54,455
|
|
Total assets
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
54,455
|
|
|
$
|
54,455
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap liabilities
|
|
$
|
—
|
|
|
$
|
(15,350
|
)
|
|
$
|
—
|
|
|
$
|
(15,350
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Balance as of December 31, 2014
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
CMBS
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
58,646
|
|
|
$
|
58,646
|
|
Interest rate swap assets
|
|
—
|
|
|
5,509
|
|
|
—
|
|
|
5,509
|
|
||||
Total assets
|
|
$
|
—
|
|
|
$
|
5,509
|
|
|
$
|
58,646
|
|
|
$
|
64,155
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap liabilities
|
|
$
|
—
|
|
|
$
|
(7,384
|
)
|
|
$
|
—
|
|
|
$
|
(7,384
|
)
|
|
|
CMBS
|
||
Beginning balance, December 31, 2014
|
|
$
|
58,646
|
|
Total gains and losses:
|
|
|
||
Unrealized loss included in other comprehensive income, net
|
|
(232
|
)
|
|
Purchases, issuances, settlements and amortization:
|
|
|
||
Principal payments received
|
|
(4,055
|
)
|
|
Amortization included in net income
|
|
96
|
|
|
Ending balance, September 30, 2015
|
|
$
|
54,455
|
|
|
|
CMBS
|
|
Series D Preferred Stock Embedded Derivative
|
|
Contingent Consideration
Arrangements
|
|
Total
|
||||||||
Beginning balance, December 31, 2013
|
|
$
|
60,583
|
|
|
$
|
(16,736
|
)
|
|
$
|
—
|
|
|
$
|
43,847
|
|
Total gains and losses:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gain included in other comprehensive income, net
|
|
9,456
|
|
|
—
|
|
|
—
|
|
|
9,456
|
|
||||
Changes in fair value included in net loss
|
|
—
|
|
|
(13,574
|
)
|
|
(990
|
)
|
|
(14,564
|
)
|
||||
Purchases, issuances, settlements and amortization:
|
|
|
|
|
|
|
|
|
||||||||
Fair value at purchase/issuance
|
|
151,197
|
|
|
—
|
|
|
(3,606
|
)
|
|
147,591
|
|
||||
Sale of CMBS acquired in the Cole Merger
|
|
(151,248
|
)
|
|
—
|
|
|
—
|
|
|
(151,248
|
)
|
||||
Reclassification of previous unrealized gains on investment securities into net loss-CMBS
|
|
(7,417
|
)
|
|
—
|
|
|
—
|
|
|
(7,417
|
)
|
||||
Return of principal received
|
|
(3,678
|
)
|
|
—
|
|
|
—
|
|
|
(3,678
|
)
|
||||
Amortization included in net loss
|
|
184
|
|
|
—
|
|
|
—
|
|
|
184
|
|
||||
Reclassification of contingent consideration to held for sale
|
|
—
|
|
|
—
|
|
|
4,596
|
|
|
4,596
|
|
||||
Redemption of Series D
|
|
—
|
|
|
30,310
|
|
|
—
|
|
|
30,310
|
|
||||
Ending balance, September 30, 2014
|
|
$
|
59,077
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
59,077
|
|
|
|
Level
|
|
Carrying Amount at September 30, 2015
|
|
Fair Value at September 30, 2015
|
|
Carrying Amount at December 31, 2014
|
|
Fair Value at December 31, 2014
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loans held for investment
|
|
3
|
|
$
|
40,002
|
|
|
$
|
48,330
|
|
|
$
|
42,106
|
|
|
$
|
42,645
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Mortgage notes payable and other debt, net
(1)
|
|
3
|
|
$
|
3,210,413
|
|
|
$
|
3,476,992
|
|
|
$
|
3,805,761
|
|
|
$
|
3,931,029
|
|
Corporate bonds, net
|
|
3
|
|
2,547,059
|
|
|
2,588,214
|
|
|
2,546,499
|
|
|
2,709,845
|
|
||||
Convertible debt, net
|
|
3
|
|
981,031
|
|
|
1,020,495
|
|
|
977,521
|
|
|
1,088,069
|
|
||||
Credit facilities
|
|
3
|
|
2,110,000
|
|
|
2,114,292
|
|
|
3,184,000
|
|
|
3,145,884
|
|
||||
Total liabilities
|
|
|
|
$
|
8,848,503
|
|
|
$
|
9,199,993
|
|
|
$
|
10,513,781
|
|
|
$
|
10,874,827
|
|
|
|
|
|
|
Nine Months Ended September 30, 2015
|
|
|
||||||||||||||
|
|
|
Balance as of December 31, 2014
|
|
Debt Issuances
|
|
Repayments, Extinguishment and Assumptions
|
|
Accretion and (Amortization)
|
|
Balance as of September 30, 2015
|
||||||||||
Mortgage notes payable:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Outstanding balance
(1)
|
|
$
|
3,689,796
|
|
|
$
|
1,379
|
|
|
$
|
(457,900
|
)
|
|
$
|
—
|
|
|
$
|
3,233,275
|
|
|
Net premiums
(2)(3)
|
|
70,139
|
|
|
—
|
|
|
8,020
|
|
|
(17,977
|
)
|
|
60,182
|
|
|||||
Other debt:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Outstanding balance
|
|
45,325
|
|
|
—
|
|
|
(10,188
|
)
|
|
—
|
|
|
35,137
|
|
|||||
|
Premium
(3)
|
|
501
|
|
|
—
|
|
|
—
|
|
|
(189
|
)
|
|
312
|
|
|||||
Mortgages and other debt, net
|
|
3,805,761
|
|
|
1,379
|
|
|
(460,068
|
)
|
|
(18,166
|
)
|
|
3,328,906
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Corporate bonds:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Outstanding balance
|
|
2,550,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,550,000
|
|
|||||
|
Discount
(4)
|
|
(3,501
|
)
|
|
—
|
|
|
—
|
|
|
560
|
|
|
(2,941
|
)
|
|||||
Corporate bonds, net
|
|
2,546,499
|
|
|
—
|
|
|
—
|
|
|
560
|
|
|
2,547,059
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Convertible debt:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Outstanding balance
|
|
1,000,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,000,000
|
|
|||||
|
Discount
(4)
|
|
(22,479
|
)
|
|
—
|
|
|
—
|
|
|
3,510
|
|
|
(18,969
|
)
|
|||||
Convertible debt, net
|
|
977,521
|
|
|
—
|
|
|
—
|
|
|
3,510
|
|
|
981,031
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Credit facility:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Outstanding balance
|
|
3,184,000
|
|
|
—
|
|
|
(1,074,000
|
)
|
|
—
|
|
|
2,110,000
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total debt
|
|
$
|
10,513,781
|
|
|
$
|
1,379
|
|
|
$
|
(1,534,068
|
)
|
|
$
|
(14,096
|
)
|
|
$
|
8,966,996
|
|
(1)
|
Includes
$124.3 million
of mortgage notes secured by properties held for sale as of
September 30, 2015
.
|
(2)
|
Includes
$5.8 million
discount of mortgage notes associated with properties held for sale as of
September 30, 2015
.
|
(3)
|
Net premiums on mortgages notes payable and other debt were recorded upon the assumption of the respective debt instruments in relation to the various mergers and acquisitions. Amortization of these net premiums is recorded as a reduction to interest expense over the remaining term of the respective debt instruments using the effective-interest method.
|
(4)
|
Discounts on the corporate bonds and convertible debt were recorded based upon the fair value of the respective debt instruments as of the respective issuance dates. Amortization of these discounts is recorded as an increase to interest expense over the remaining term of the respective debt instruments using the effective-interest method.
|
|
|
Encumbered Properties
|
|
Gross Carrying Value of Collateralized Properties
(1)
|
|
Outstanding Balance
(2)
|
|
Weighted-Average
Interest Rate
(3)
|
|
Weighted-Average Years to Maturity
|
||||||
Fixed-rate debt
(4)
|
|
677
|
|
|
$
|
6,250,140
|
|
|
$
|
3,225,103
|
|
|
5.03
|
%
|
|
5.4
|
Variable-rate debt
|
|
1
|
|
|
24,628
|
|
|
8,172
|
|
|
3.15
|
%
|
|
0.9
|
||
Total
(5)
|
|
678
|
|
|
$
|
6,274,768
|
|
|
$
|
3,233,275
|
|
|
5.02
|
%
|
|
5.3
|
(1)
|
Gross carrying value is gross real estate assets, including investment in direct financing leases, net of gross real estate liabilities.
|
(2)
|
Includes
$124.3 million
of mortgage notes secured by properties held for sale.
|
(3)
|
Weighted-average interest rate for variable-rate debt represents the interest rate in effect as of
September 30, 2015
.
|
(4)
|
Includes
$284.8 million
of variable-rate debt fixed by way of interest rate swap arrangements.
|
(5)
|
The table above does not include loan amounts associated with the Unconsolidated Joint Ventures of
$103.4 million
,
none
of which is recourse to the Company. These loans mature on various dates ranging from October 2015 to
July 2021
.
|
|
|
Total
|
||
October 1, 2015 - December 31, 2015
|
|
$
|
3,738
|
|
2016
|
|
243,978
|
|
|
2017
|
|
449,073
|
|
|
2018
|
|
210,948
|
|
|
2019
|
|
286,379
|
|
|
Thereafter
|
|
2,039,159
|
|
|
Total
(1)
|
|
$
|
3,233,275
|
|
(1)
|
Includes
$124.3 million
of mortgage notes included in liabilities held for sale.
|
|
|
Outstanding Balance
|
|
Collateral Carrying Value
|
||||
Loans held for investment
|
|
$
|
9,708
|
|
|
$
|
20,428
|
|
Intercompany mortgage loans
|
|
2,715
|
|
|
8,013
|
|
||
CMBS
|
|
22,714
|
|
|
39,862
|
|
||
|
|
$
|
35,137
|
|
|
$
|
68,303
|
|
|
|
Outstanding Balance
|
|
Interest Rate
|
|
Maturity Date
|
|||
2017 Senior Notes
|
|
$
|
1,300,000
|
|
|
2.0
|
%
|
|
February 6, 2017
|
2019 Senior Notes
|
|
750,000
|
|
|
3.0
|
%
|
|
February 6, 2019
|
|
2024 Senior Notes
|
|
500,000
|
|
|
4.6
|
%
|
|
February 6, 2024
|
|
Total balance and weighted-average interest rate
|
|
$
|
2,550,000
|
|
|
2.8
|
%
|
|
|
|
|
Outstanding Balance
|
|
Interest Rate
|
|
Conversion Rate
(1)
|
|
Maturity Date
|
|||
2018 Convertible Notes
|
|
$
|
597,500
|
|
|
3.00
|
%
|
|
60.5997
|
|
August 1, 2018
|
2020 Convertible Notes
|
|
402,500
|
|
|
3.75
|
%
|
|
66.7249
|
|
December 15, 2020
|
|
Total balance and weighted-average interest rate
|
|
$
|
1,000,000
|
|
|
3.30
|
%
|
|
|
|
|
(1)
|
Conversion rate represents the amount of the General Partner OP Units per
$1,000
principal amount.
|
Interest Rate Derivative
|
|
Number of
Instruments
|
|
Notional Amount
|
||
Interest rate swaps
|
|
17
|
|
$
|
1,248,443
|
|
Derivatives Designated as Hedging Instruments
|
|
Balance Sheet Location
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
Interest rate swaps
|
|
Deferred costs and other assets, net
|
|
$
|
—
|
|
|
$
|
4,941
|
|
Interest rate swaps
|
|
Deferred rent, derivative and other liabilities
|
|
$
|
(14,876
|
)
|
|
$
|
(7,384
|
)
|
Interest Rate Derivative
|
|
Number of Instruments
|
|
Notional Amount
|
||
Interest rate swap
|
|
1
|
|
$
|
51,400
|
|
Derivatives Not Designated as Hedging Instruments
|
|
Balance Sheet Location
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
Interest rate swaps
|
|
Deferred costs and other assets, net
|
|
$
|
—
|
|
|
$
|
568
|
|
Interest rate swaps
|
|
Deferred rent, derivative and other liabilities
|
|
$
|
(474
|
)
|
|
$
|
—
|
|
|
|
Offsetting of Derivative Assets and Liabilities
|
||||||||||||||||||||||||||||||
|
|
Gross Amounts of Recognized Assets
|
|
Gross Amounts of Recognized Liabilities
|
|
Gross Amounts Offset in the Consolidated Balance Sheets
|
|
Net Amounts of Assets Presented in the Consolidated Balance Sheets
|
|
Net Amounts of Liabilities Presented in the Consolidated Balance Sheets
|
|
Financial Instruments
|
|
Cash Collateral Received
|
|
Net Amount
|
||||||||||||||||
September 30, 2015
|
|
$
|
—
|
|
|
$
|
(15,350
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(15,350
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(15,350
|
)
|
December 31, 2014
|
|
$
|
5,509
|
|
|
$
|
(7,384
|
)
|
|
$
|
—
|
|
|
$
|
5,509
|
|
|
$
|
(7,384
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,875
|
)
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2015
|
|
2014
|
||||
Supplemental Disclosures:
|
|
|
|
|
||||
Cash paid for interest
|
|
$
|
280,659
|
|
|
$
|
248,698
|
|
Cash paid for income taxes
|
|
$
|
10,205
|
|
|
$
|
7,761
|
|
Non-cash investing and financing activities:
|
|
|
|
|
||||
Common stock issued in merger with Cole
|
|
$
|
—
|
|
|
$
|
7,285,868
|
|
Accrued capital expenditures and real estate developments
|
|
$
|
4,363
|
|
|
$
|
12,634
|
|
Accrued deferred financing costs
|
|
$
|
164
|
|
|
$
|
—
|
|
Accrued distributions
|
|
$
|
130,648
|
|
|
$
|
9,927
|
|
Mortgage note payable relieved by foreclosure
|
|
$
|
53,798
|
|
|
$
|
—
|
|
Mortgage notes payable assumed in real estate disposition
|
|
$
|
300,720
|
|
|
$
|
22,701
|
|
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
Accrued interest
|
|
$
|
39,119
|
|
|
$
|
56,558
|
|
Accrued real estate taxes
|
|
60,133
|
|
|
37,633
|
|
||
Accounts payable
|
|
7,049
|
|
|
10,027
|
|
||
Accrued other
|
|
57,903
|
|
|
58,807
|
|
||
Total
|
|
$
|
164,204
|
|
|
$
|
163,025
|
|
|
|
Future Minimum Base Rent Payments
|
||||||
|
|
Ground Leases
|
|
Offices Leases
|
||||
October 1, 2015 - December 31, 2015
|
|
$
|
4,845
|
|
|
$
|
1,292
|
|
2016
|
|
18,518
|
|
|
5,010
|
|
||
2017
|
|
17,947
|
|
|
4,585
|
|
||
2018
|
|
15,785
|
|
|
4,703
|
|
||
2019
|
|
15,383
|
|
|
4,769
|
|
||
Thereafter
|
|
251,217
|
|
|
18,558
|
|
||
Total
|
|
$
|
323,695
|
|
|
$
|
38,917
|
|
|
|
Restricted Shares
|
|
Weighted-Average Grant Date Fair Value
|
|||
Unvested shares, December 31, 2014
|
|
2,684,062
|
|
|
$
|
13.84
|
|
Granted
|
|
4,010
|
|
|
9.76
|
|
|
Vested
|
|
(749,184
|
)
|
|
13.95
|
|
|
Forfeited
|
|
(424,654
|
)
|
|
13.64
|
|
|
Unvested shares, September 30, 2015
|
|
1,514,234
|
|
|
$
|
13.84
|
|
|
|
Time-Based Restricted Stock Units
|
|
Weighted-Average Grant Date Fair Value
|
|
Deferred Stock Units
|
|
Weighted-Average Grant Date Fair Value
|
||||||
Unvested units, December 31, 2014
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Granted
|
|
642,808
|
|
|
9.68
|
|
|
90,076
|
|
|
8.75
|
|
||
Vested
|
|
(379
|
)
|
|
9.76
|
|
|
(90,076
|
)
|
|
8.75
|
|
||
Forfeited
|
|
(30,344
|
)
|
|
9.76
|
|
|
—
|
|
|
—
|
|
||
Unvested units, September 30, 2015
|
|
612,085
|
|
|
$
|
9.68
|
|
|
—
|
|
|
$
|
—
|
|
|
|
Market-Based Restricted Stock Units
|
|
Weighted-Average Grant Date
Fair Value
|
|
LTI Target Awards
|
|
Weighted-Average Grant Date
Fair Value |
||||||
Unvested units, December 31, 2014
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Granted
|
|
922,686
|
|
|
8.57
|
|
|
759,241
|
|
|
11.65
|
|
||
Vested
|
|
—
|
|
|
—
|
|
|
(828
|
)
|
|
11.77
|
|
||
Forfeited
|
|
(95,592
|
)
|
|
8.58
|
|
|
(60,614
|
)
|
|
11.77
|
|
||
Unvested units, September 30, 2015
|
|
827,094
|
|
|
$
|
8.57
|
|
|
697,799
|
|
|
$
|
11.64
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Expenses and capitalized costs:
|
|
|
|
|
|
|
|
|
||||||||
Offering related costs
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,150
|
|
Acquisition related expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,652
|
|
||||
Merger and other non-routine transaction related costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
137,778
|
|
||||
Management fees to affiliates
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,888
|
|
||||
General and administrative expenses
|
|
—
|
|
|
60
|
|
|
—
|
|
|
16,089
|
|
||||
Indirect affiliate expenses
|
|
—
|
|
|
5,595
|
|
|
—
|
|
|
10,090
|
|
||||
Total expenses and capitalized costs
|
|
$
|
—
|
|
|
$
|
5,655
|
|
|
$
|
—
|
|
|
$
|
181,647
|
|
|
|
Nine Months Ended September 30, 2014
|
||||||||||||||||||
|
|
ARCT IV Merger
|
|
Internalization and Other
|
|
Cole Merger
|
|
Multi-tenant Spin Off
|
|
Total
|
||||||||||
Merger related costs:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Strategic advisory services
|
|
$
|
8,400
|
|
|
$
|
—
|
|
|
$
|
17,115
|
|
|
$
|
1,750
|
|
|
$
|
27,265
|
|
Personnel costs and other reimbursements
|
|
—
|
|
|
—
|
|
|
72
|
|
|
—
|
|
|
72
|
|
|||||
Other non-routine transaction related costs:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Subordinated distribution fees
|
|
78,244
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
78,244
|
|
|||||
Furniture, fixtures and equipment
|
|
5,800
|
|
|
10,000
|
|
|
—
|
|
|
—
|
|
|
15,800
|
|
|||||
Other fees and expenses
|
|
—
|
|
|
—
|
|
|
2,900
|
|
|
—
|
|
|
2,900
|
|
|||||
Personnel costs and other reimbursements
|
|
417
|
|
|
—
|
|
|
1,728
|
|
|
—
|
|
|
2,145
|
|
|||||
Post-transaction support services
|
|
1,352
|
|
|
10,000
|
|
|
—
|
|
|
—
|
|
|
11,352
|
|
|||||
Total merger and other non-routine transaction related costs
|
|
$
|
94,213
|
|
|
$
|
20,000
|
|
|
$
|
21,815
|
|
|
$
|
1,750
|
|
|
$
|
137,778
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
General and administrative expenses:
|
|
|
|
|
|
|
|
|
||||||||
Advisory fees and reimbursements
|
|
$
|
—
|
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
2,015
|
|
Equity awards
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,074
|
|
||||
Total general and administrative expenses
|
|
$
|
—
|
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
16,089
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Indirect affiliate expenses:
|
|
|
|
|
|
|
|
|
||||||||
Audrain building
|
|
$
|
—
|
|
|
$
|
4,769
|
|
|
$
|
—
|
|
|
$
|
8,691
|
|
ANST office build-out
|
|
—
|
|
|
114
|
|
|
—
|
|
|
449
|
|
||||
New York (405 Park Ave.) office
|
|
—
|
|
|
677
|
|
|
—
|
|
|
864
|
|
||||
Dresher, PA office
|
|
—
|
|
|
24
|
|
|
—
|
|
|
60
|
|
||||
North Carolina office
|
|
—
|
|
|
11
|
|
|
—
|
|
|
26
|
|
||||
Total indirect affiliate expenses
|
|
$
|
—
|
|
|
$
|
5,595
|
|
|
$
|
—
|
|
|
$
|
10,090
|
|
Program
|
|
Selling Commissions
(1)
|
|
Dealer Manager and Distribution Fees
(2)
|
Open Programs
|
|
|
|
|
CCPT V
|
|
7%
|
|
2%
|
INAV
|
|
(3)
|
|
(3)
|
CCIT II
|
|
7%
|
|
2%
|
|
|
|
|
|
Closed Programs
|
|
|
|
|
CCPT IV
(4)
|
|
7%
|
|
2%
|
(1)
|
The Company reallows
100%
of selling commissions earned to participating broker-dealers.
|
(2)
|
The Company may reallow all or a portion of its dealer manager fee or applicable distribution fee to participating broker-dealers as a marketing and due diligence expense reimbursement.
|
(3)
|
In connection with the INAV offering, the Company receives selling commissions, an asset-based dealer manager fee and/or an asset-based distribution fee, all based on the net asset value, as summarized in the table below for each class of common stock:
|
Share Class
|
|
Selling Commission
(1)
|
|
Dealer Manager Fee
(2)
|
|
Distribution Fee
(2)
|
Wrap Class Shares
|
|
—
|
|
0.55%
|
|
—
|
Advisor Class Shares
|
|
up to 3.75%
|
|
0.55%
|
|
0.50%
|
Institutional Class Shares
|
|
—
|
|
0.25%
|
|
—
|
Program
|
|
Acquisition Transactional Fees
(1)
|
|
Disposition Fees
|
|
Liquidation Performance Fees
(2)
|
Open Programs
|
|
|
|
|
|
|
CCPT V
|
|
2%
|
|
1%
|
|
15%
|
INAV
|
|
—
|
|
—
|
|
—
|
CCIT II
|
|
2%
|
|
1%
|
|
15%
|
|
|
|
|
|
|
|
Closed Programs
|
|
|
|
|
|
|
CCPT IV
|
|
2%
|
|
1%
|
|
15%
|
Other Programs
|
|
Various
|
|
Various
|
|
Various
|
(1)
|
Percent taken on gross purchase price.
|
(2)
|
Performance fee paid only under the following circumstances: (i) if shares are listed on a national securities exchange; (ii) if the respective Managed Program is sold or the assets are liquidated; or (iii) upon termination of the advisory agreement. In connection with such events, the performance fee will only be earned upon the return to investors of their net capital invested and an
8%
annual cumulative, non-compounded return (
6%
in the case of CCPT V).
|
Program
|
|
Asset Management / Advisory Fees
(1)
|
|
Performance Fees
(2)
|
Open Programs
|
|
|
|
|
CCPT V
|
|
0.65% - 0.75%
|
|
—
|
INAV
|
|
0.90%
|
|
25%
|
CCIT II
|
|
0.65% - 0.75%
|
|
—
|
|
|
|
|
|
Closed Programs
|
|
|
|
|
CCPT IV
|
|
0.65% - 0.75%
|
|
—
|
Other Programs
|
|
Various
|
|
—
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Offering-related fees and reimbursements
|
|
|
|
|
|
|
|
|
||||||||
Securities commissions
(1)
|
|
$
|
3,328
|
|
|
$
|
13,369
|
|
|
$
|
8,345
|
|
|
$
|
48,993
|
|
Dealer manager and distribution fees
(2)
|
|
1,258
|
|
|
4,099
|
|
|
3,143
|
|
|
14,964
|
|
||||
Reimbursement revenue
|
|
1,264
|
|
|
4,067
|
|
|
2,995
|
|
|
10,000
|
|
||||
Offering-related fees and reimbursements
|
|
5,850
|
|
|
21,535
|
|
|
14,483
|
|
|
73,957
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Transaction service fees and reimbursements
|
|
|
|
|
|
|
|
|
||||||||
Acquisition fees
|
|
6,233
|
|
|
22,897
|
|
|
14,913
|
|
|
41,868
|
|
||||
Disposition fees
(3)
|
|
764
|
|
|
74
|
|
|
8,189
|
|
|
74
|
|
||||
Reimbursement revenues
|
|
403
|
|
|
1,452
|
|
|
1,594
|
|
|
2,464
|
|
||||
Transaction service fees and reimbursements
|
|
7,400
|
|
|
24,423
|
|
|
24,696
|
|
|
44,406
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Management fees and reimbursements
|
|
|
|
|
|
|
|
|
||||||||
Asset and property management fees and leasing fees
|
|
416
|
|
|
428
|
|
|
1,213
|
|
|
1,407
|
|
||||
Advisory and performance fee revenue
|
|
10,998
|
|
|
11,212
|
|
|
32,674
|
|
|
26,134
|
|
||||
Reimbursement revenues
|
|
2,882
|
|
|
2,199
|
|
|
8,503
|
|
|
5,372
|
|
||||
Management fees and reimbursements
|
|
14,296
|
|
|
13,839
|
|
|
42,390
|
|
|
32,913
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Interest income on Affiliate Lines of Credit
|
|
306
|
|
|
76
|
|
|
967
|
|
|
101
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total related-party revenues
|
|
$
|
27,852
|
|
|
$
|
59,873
|
|
|
$
|
82,536
|
|
|
$
|
151,377
|
|
(1)
|
The Company reallows
100%
of selling commissions earned to participating broker-dealers.
|
(2)
|
The Company may reallow all or a portion of its dealer manager fee or applicable distribution fee to participating broker-dealers as a marketing and due diligence expense reimbursement.
|
(3)
|
The Company earned a disposition fee of
$4.4 million
on behalf of CCIT when it merged with Select Income REIT on January 29, 2015.
|
|
|
September 30, 2015
|
||||
Managed REIT
|
|
% of Outstanding Shares Owned
|
|
Carrying Amount of Investment
|
||
CCPT IV
|
|
0.01%
|
|
$
|
124
|
|
CCPT V
|
|
1.39%
|
|
1,692
|
|
|
CCIT II
|
|
0.85%
|
|
1,608
|
|
|
INAV
|
|
0.16%
|
|
155
|
|
|
|
|
|
|
$
|
3,579
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net income (loss) attributable to the Company
|
|
$
|
7,529
|
|
|
$
|
(280,398
|
)
|
|
$
|
(128,963
|
)
|
|
$
|
(626,562
|
)
|
Less: dividends to preferred shares and participating securities
|
|
18,191
|
|
|
37,643
|
|
|
54,142
|
|
|
84,366
|
|
||||
Net loss attributable to common stockholders
|
|
$
|
(10,662
|
)
|
|
$
|
(318,041
|
)
|
|
$
|
(183,105
|
)
|
|
$
|
(710,928
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding - basic and diluted
|
|
903,461,323
|
|
|
902,096,102
|
|
|
903,267,282
|
|
|
756,289,984
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net loss per share from continuing operations attributable to common stockholders
|
|
$
|
(0.01
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.94
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net income (loss) attributable to the Operating Partnership
|
|
$
|
7,737
|
|
|
$
|
(288,202
|
)
|
|
$
|
(132,458
|
)
|
|
$
|
(650,720
|
)
|
Less: dividends to preferred units and participating securities
|
|
18,191
|
|
|
37,643
|
|
|
54,142
|
|
|
84,366
|
|
||||
Net loss attributable to common unitholders
|
|
$
|
(10,454
|
)
|
|
$
|
(325,845
|
)
|
|
$
|
(186,600
|
)
|
|
$
|
(735,086
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common units outstanding - basic and diluted
|
|
927,225,120
|
|
|
926,801,361
|
|
|
927,031,079
|
|
|
781,112,325
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net loss from continuing operations per unit attributable to common unitholders
|
|
$
|
(0.01
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.94
|
)
|
•
|
We could be subject to unexpected costs or unexpected liabilities that may arise from potential dispositions, and may be unable to dispose of properties on advantageous terms.
|
•
|
We are subject to risks associated with lease terminations, tenant defaults, bankruptcies and insolvencies and credit, geographic and industry concentrations with respect to tenants.
|
•
|
We may be unable to renew leases, lease vacant space or re-lease space as leases expire on favorable terms or at all.
|
•
|
We may not be able to effectively manage or dispose of assets acquired in connection with certain mergers and portfolio acquisitions that do not fit within our target assets.
|
•
|
We encounter significant competition in the acquisition of properties and we may be unable to acquire properties on advantageous terms.
|
•
|
Our properties and other assets may be subject to impairment charges.
|
•
|
Our goodwill and intangible assets may be subject to impairment charges.
|
•
|
We have substantial indebtedness, which may affect our ability to pay dividends, and expose us to interest rate fluctuation risk and the risk of default under our debt obligations.
|
•
|
Our overall borrowing and operating flexibility may be adversely affected by the terms and restrictions within the loan documents governing our existing indebtedness.
|
•
|
Our access to capital and terms of future financings may be adversely affected by our credit rating downgrade and current loss of eligibility to register the offer and sale of our securities on Form S-3.
|
•
|
We may be affected by the incurrence of additional secured or unsecured debt.
|
•
|
We may not be able to achieve and maintain profitability.
|
•
|
We may be affected by risks associated with pending governmental investigations relating to the findings of the Audit Committee Investigation and related litigation.
|
•
|
We may be affected by risks resulting from losses in excess of insured limits.
|
•
|
We may fail to remain qualified as a REIT for U.S. federal income tax purposes.
|
•
|
We may be deemed to be an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”) and thus subject to regulation under the Investment Company Act.
|
•
|
We may not generate cash flows sufficient to pay our dividends to stockholders, and therefore may be forced to borrow at higher rates to fund our dividends.
|
•
|
As disclosed in our Annual Report on Form 10-K, as amended, for the fiscal year ended December 31, 2014 filed with the SEC on March 30, 2015, we reported material weaknesses in our disclosure controls and procedures and our internal control over financial reporting and we may not be able to remediate such material weaknesses in a timely manner.
|
•
|
We may be unable to fully reestablish the financial network which previously supported Cole Capital and its Managed REITs and/or regain the prior level of transaction and capital raising volume of Cole Capital.
|
•
|
Our Cole Capital operations are subject to extensive governmental regulation.
|
•
|
We may be unable to retain or hire key personnel.
|
•
|
Disposed of
74
and
89
properties, as well as classified
three
and
five
properties as held for sale, recording losses of
$6.5 million
and
$62.6 million
during the
three and nine months ended September 30, 2015
, respectively. We also disposed of our interest in
one
consolidated joint venture during the
three months ended September 30, 2015
, recording a gain of
$6.7 million
.
|
•
|
Decreased outstanding mortgage loans through property dispositions and monthly principal payments by
$281.3 million
and
$457.9 million
during the
three and nine months ended September 30, 2015
, respectively, bringing the outstanding principal to
$3.2 billion
at
September 30, 2015
.
|
•
|
Reduced the maximum capacity under the Credit Facility from
$3.6 billion
to
$3.3 billion
and reduced our minimum Unencumbered Asset Value from
$10.5 billion
to
$8.0 billion
.
|
•
|
Paid down
$190.0 million
and
$1.1 billion
on the revolving credit facility during the
three and nine months ended September 30, 2015
, respectively, bringing the outstanding balance to
$1.1 billion
at
September 30, 2015
.
|
•
|
Established a quarterly dividend of
$0.1375
per share beginning in the third quarter of 2015, at an annualized rate of
$0.55
per share.
|
|
|
September 30, 2015
|
|
September 30, 2014
|
Portfolio Metrics
|
|
|
|
|
Properties owned
|
|
4,572
|
|
4,714
|
Rentable square feet (in millions)
|
|
100.9
|
|
113.8
|
Economic occupancy rate
|
|
98.3%
|
|
99.2%
|
Investment-grade tenants
(1)
|
|
43.5%
|
|
44.8%
|
(1)
|
Investment-grade tenants are those with a Standard & Poor’s credit rating of BBB- or higher or a Moody’s credit rating of Baa3 or higher. The ratings may reflect those assigned by Standard & Poor’s or Moody’s to the lease guarantor or the parent company, as applicable.
|
|
|
September 30, 2015
|
Economic Metrics
|
|
|
Weighted-average lease term
(1)
|
|
11.1
|
Lease rollover
(1)(2)
:
|
|
|
Annual average
|
|
3.4%
|
Maximum for a single year
|
|
4.3%
|
Same store growth
(3)
:
|
|
|
Three months ended
|
|
0.9%
|
Flat leases
(1)(4)
|
|
21.5%
|
(1)
|
Based on annualized rental revenue of our real estate portfolio as of September 30, 2015. Annualized rental revenue represents rental revenue under our leases on operating properties reflecting straight-line rent adjustments associated with contractual rent increases in the leases as required by GAAP, including the effect of any tenant concessions, such as free rent, and excluding any contingent rent, such as percentage rent.
|
(2)
|
For the period beginning October 1, 2015 through December 31, 2019.
|
(3)
|
Represents contract rental revenue increase for properties that were owned for the entirety of the respective period in 2015 and 2014, except for properties during the current or prior year that were under development or redevelopment. See the Non-GAAP Measures section below for descriptions of our non-GAAP measures and reconciliations to the most comparable GAAP measure.
|
(4)
|
A flat lease is a lease that requires equal rent payments, with no increases, throughout the initial term of the lease agreement. A flat lease may include a period of free rent at the beginning or end of the lease.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Financial Metrics
|
|
|
|
|
|
|
|
|
||||||||
Real Estate Investment Segment
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
$
|
357,408
|
|
|
$
|
397,321
|
|
|
$
|
1,091,074
|
|
|
$
|
1,009,174
|
|
Operating income (loss)
|
|
$
|
98,805
|
|
|
$
|
79,413
|
|
|
$
|
194,853
|
|
|
$
|
(14,805
|
)
|
Net income (loss)
|
|
$
|
8,740
|
|
|
$
|
(289,133
|
)
|
|
$
|
(130,134
|
)
|
|
$
|
(631,475
|
)
|
Funds from operations (“FFO”)
(1)
|
|
$
|
192,161
|
|
|
$
|
194,712
|
|
|
$
|
581,670
|
|
|
$
|
226,971
|
|
Adjusted funds from operations (“AFFO”)
(1)
|
|
$
|
191,419
|
|
|
$
|
214,991
|
|
|
$
|
581,862
|
|
|
$
|
491,843
|
|
AFFO per diluted share
(1)
|
|
$
|
0.21
|
|
|
$
|
0.23
|
|
|
$
|
0.63
|
|
|
$
|
0.61
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cole Capital Segment
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
$
|
27,546
|
|
|
$
|
59,797
|
|
|
$
|
81,569
|
|
|
$
|
151,276
|
|
Operating income (loss)
|
|
$
|
(1,802
|
)
|
|
$
|
2,038
|
|
|
$
|
(5,590
|
)
|
|
$
|
(31,913
|
)
|
Net income (loss)
|
|
$
|
(599
|
)
|
|
$
|
1,086
|
|
|
$
|
(1,127
|
)
|
|
$
|
(19,010
|
)
|
Funds from operations (“FFO”)
(1)
|
|
$
|
(599
|
)
|
|
$
|
1,086
|
|
|
$
|
(1,127
|
)
|
|
$
|
(19,010
|
)
|
Adjusted funds from operations (“AFFO”)
(1)
|
|
$
|
5,009
|
|
|
$
|
29,558
|
|
|
$
|
17,039
|
|
|
$
|
53,412
|
|
AFFO per diluted share
(1)
|
|
$
|
0.01
|
|
|
$
|
0.03
|
|
|
$
|
0.02
|
|
|
$
|
0.07
|
|
|
|
|
|
|
|
|
|
|
||||||||
Consolidated
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
$
|
384,954
|
|
|
$
|
457,118
|
|
|
$
|
1,172,643
|
|
|
$
|
1,160,450
|
|
Operating income (loss)
|
|
$
|
97,003
|
|
|
$
|
81,451
|
|
|
$
|
189,263
|
|
|
$
|
(46,718
|
)
|
Net income (loss)
|
|
$
|
8,141
|
|
|
$
|
(288,047
|
)
|
|
$
|
(131,261
|
)
|
|
$
|
(650,485
|
)
|
Funds from operations (“FFO”)
(1)
|
|
$
|
191,562
|
|
|
$
|
195,798
|
|
|
$
|
580,543
|
|
|
$
|
207,961
|
|
Adjusted funds from operations (“AFFO”)
(1)
|
|
$
|
196,428
|
|
|
$
|
244,549
|
|
|
$
|
598,901
|
|
|
$
|
545,255
|
|
AFFO per diluted share
(1)
|
|
$
|
0.21
|
|
|
$
|
0.26
|
|
|
$
|
0.64
|
|
|
$
|
0.68
|
|
(1)
|
See the Non-GAAP Disclosure section below for descriptions of our non-GAAP measures and reconciliations to the most comparable GAAP measure.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||||||||
Offering-related fees
|
|
$
|
4,586
|
|
|
$
|
17,468
|
|
|
$
|
(12,882
|
)
|
|
$
|
11,488
|
|
|
$
|
63,957
|
|
|
$
|
(52,469
|
)
|
Offering-related reimbursements
|
|
1,264
|
|
|
4,067
|
|
|
(2,803
|
)
|
|
2,995
|
|
|
10,000
|
|
|
(7,005
|
)
|
||||||
Less: reallowed fees and commissions
|
|
3,896
|
|
|
15,398
|
|
|
(11,502
|
)
|
|
9,637
|
|
|
56,902
|
|
|
(47,265
|
)
|
||||||
Offering-related fees and reimbursements, net of reallowed
|
|
$
|
1,954
|
|
|
$
|
6,137
|
|
|
$
|
(4,183
|
)
|
|
$
|
4,846
|
|
|
$
|
17,055
|
|
|
$
|
(12,209
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Rental income
–
as reported
|
|
$
|
333,766
|
|
|
$
|
365,712
|
|
|
$
|
1,017,708
|
|
|
$
|
924,646
|
|
Direct financing lease income
–
as reported
|
|
659
|
|
|
625
|
|
|
2,097
|
|
|
2,812
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Straight line rent
|
|
(21,705
|
)
|
|
(24,871
|
)
|
|
(64,809
|
)
|
|
(49,804
|
)
|
||||
Amortization of below-market lease liabilities, net of amortization of above-market lease assets
|
|
1,152
|
|
|
1,934
|
|
|
3,223
|
|
|
4,425
|
|
||||
Net direct financing lease adjustments
|
|
507
|
|
|
620
|
|
|
1,493
|
|
|
1,147
|
|
||||
Other non-contract rental revenue
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Contract Rental Revenue
|
|
$
|
314,379
|
|
|
$
|
344,020
|
|
|
$
|
959,712
|
|
|
$
|
883,226
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Total Company:
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net income (loss)
|
|
$
|
8,141
|
|
|
$
|
(288,047
|
)
|
|
$
|
(131,261
|
)
|
|
$
|
(650,485
|
)
|
Dividends on non-convertible preferred stock
|
|
(17,974
|
)
|
|
(17,974
|
)
|
|
(53,920
|
)
|
|
(53,121
|
)
|
||||
(Gain) loss on real estate assets and interest in joint venture, net
|
|
(187
|
)
|
|
256,894
|
|
|
55,855
|
|
|
275,768
|
|
||||
Depreciation and amortization of real estate assets
|
|
200,159
|
|
|
240,046
|
|
|
620,061
|
|
|
625,447
|
|
||||
Impairment of real estate
|
|
—
|
|
|
2,299
|
|
|
85,341
|
|
|
3,855
|
|
||||
Proportionate share of adjustments for unconsolidated entities
|
|
1,423
|
|
|
2,580
|
|
|
4,467
|
|
|
6,497
|
|
||||
FFO
|
|
191,562
|
|
|
195,798
|
|
|
580,543
|
|
|
207,961
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Acquisition related
|
|
1,764
|
|
|
13,998
|
|
|
5,509
|
|
|
34,616
|
|
||||
Merger and other non-routine transactions
|
|
8,957
|
|
|
7,632
|
|
|
42,244
|
|
|
175,352
|
|
||||
Legal settlements and insurance proceeds
|
|
(925
|
)
|
|
(3,275
|
)
|
|
(2,175
|
)
|
|
(3,275
|
)
|
||||
Unrealized gain on investment securities
|
|
(4
|
)
|
|
(6,357
|
)
|
|
(65
|
)
|
|
(6,357
|
)
|
||||
Loss on derivative instruments, net
|
|
1,420
|
|
|
17,484
|
|
|
2,137
|
|
|
10,398
|
|
||||
Amortization of premiums and discounts on debt and investments, net
|
|
(4,920
|
)
|
|
(8,106
|
)
|
|
(14,076
|
)
|
|
(17,910
|
)
|
||||
Amortization of below-market lease liabilities, net of above-market lease assets
|
|
1,152
|
|
|
1,934
|
|
|
3,223
|
|
|
4,425
|
|
||||
Net direct financing lease adjustments
|
|
507
|
|
|
620
|
|
|
1,493
|
|
|
1,147
|
|
||||
Amortization and write-off of deferred financing costs
|
|
11,320
|
|
|
12,486
|
|
|
26,677
|
|
|
68,447
|
|
||||
Amortization of management contracts
|
|
7,510
|
|
|
24,288
|
|
|
22,530
|
|
|
62,304
|
|
||||
Deferred tax benefit
(1)
|
|
(5,701
|
)
|
|
—
|
|
|
(13,547
|
)
|
|
—
|
|
||||
Extinguishment of debt and forgiveness of debt, net
|
|
—
|
|
|
5,396
|
|
|
(5,302
|
)
|
|
21,264
|
|
||||
Straight-line rent
|
|
(21,705
|
)
|
|
(24,871
|
)
|
|
(64,809
|
)
|
|
(49,804
|
)
|
||||
Equity-based compensation
|
|
4,016
|
|
|
5,541
|
|
|
10,189
|
|
|
32,805
|
|
||||
Other amortization and non-cash charges
|
|
781
|
|
|
713
|
|
|
2,300
|
|
|
1,832
|
|
||||
Proportionate share of adjustments for unconsolidated entities
|
|
694
|
|
|
1,268
|
|
|
2,030
|
|
|
2,050
|
|
||||
AFFO
|
|
$
|
196,428
|
|
|
$
|
244,549
|
|
|
$
|
598,901
|
|
|
$
|
545,255
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding - basic
|
|
903,461,323
|
|
|
902,096,102
|
|
|
903,267,282
|
|
|
756,289,984
|
|
||||
Effect of dilutive securities
(2)
|
|
25,995,886
|
|
|
44,970,255
|
|
|
26,109,180
|
|
|
49,555,790
|
|
||||
Weighted-average shares outstanding - diluted
(3)
|
|
929,457,209
|
|
|
947,066,357
|
|
|
929,376,462
|
|
|
805,845,774
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
AFFO per diluted share
|
|
$
|
0.21
|
|
|
$
|
0.26
|
|
|
$
|
0.64
|
|
|
$
|
0.68
|
|
(1)
|
This adjustment represents the non-current portion of the tax benefit recognized in net loss in order to show only the current portion of the benefit as an impact to AFFO.
|
(2)
|
Dilutive securities include OP Units, unvested restricted shares, certain unvested restricted stock units and convertible preferred stock, as applicable.
|
(3)
|
Weighted-average shares for all periods presented exclude the effect of the convertible debt as the strike price of each convertible debt instrument is greater than the price of the General Partner’s common stock as of the end of each reporting period presented. In addition, for the
three and nine months ended September 30, 2015
,
1.5 million
shares underlying Restricted Stock Units that are contingently issuable have been excluded based on the Company’s level of achievement of certain performance targets through
September 30, 2015
.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
REI segment:
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net income (loss)
|
|
$
|
8,740
|
|
|
$
|
(289,133
|
)
|
|
$
|
(130,134
|
)
|
|
$
|
(631,475
|
)
|
Dividends on non-convertible preferred stock
|
|
(17,974
|
)
|
|
(17,974
|
)
|
|
(53,920
|
)
|
|
(53,121
|
)
|
||||
(Gain) loss on real estate assets and interest in joint venture, net
|
|
(187
|
)
|
|
256,894
|
|
|
55,855
|
|
|
275,768
|
|
||||
Depreciation and amortization of real estate assets
|
|
200,159
|
|
|
240,046
|
|
|
620,061
|
|
|
625,447
|
|
||||
Impairment of real estate
|
|
—
|
|
|
2,299
|
|
|
85,341
|
|
|
3,855
|
|
||||
Proportionate share of adjustments for unconsolidated entities
|
|
1,423
|
|
|
2,580
|
|
|
4,467
|
|
|
6,497
|
|
||||
FFO
|
|
192,161
|
|
|
194,712
|
|
|
581,670
|
|
|
226,971
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Acquisition related
|
|
1,690
|
|
|
13,998
|
|
|
4,976
|
|
|
34,616
|
|
||||
Merger and other non-routine transactions
|
|
8,957
|
|
|
7,613
|
|
|
42,244
|
|
|
173,406
|
|
||||
Legal settlement and insurance proceeds
|
|
(925
|
)
|
|
(3,275
|
)
|
|
(2,175
|
)
|
|
(3,275
|
)
|
||||
Unrealized gain on investment securities
|
|
(4
|
)
|
|
(6,357
|
)
|
|
(65
|
)
|
|
(6,357
|
)
|
||||
Loss on derivative instruments, net
|
|
1,420
|
|
|
17,484
|
|
|
2,137
|
|
|
10,398
|
|
||||
Amortization of premiums and discounts on debt and investments, net
|
|
(4,920
|
)
|
|
(8,106
|
)
|
|
(14,076
|
)
|
|
(17,910
|
)
|
||||
Amortization of below-market lease liabilities, net of amortization of above-market lease assets
|
|
1,152
|
|
|
1,934
|
|
|
3,223
|
|
|
4,425
|
|
||||
Net direct financing lease adjustments
|
|
507
|
|
|
620
|
|
|
1,493
|
|
|
1,147
|
|
||||
Amortization and write-off of deferred financing costs
|
|
11,320
|
|
|
12,486
|
|
|
26,677
|
|
|
68,447
|
|
||||
Extinguishment of debt and forgiveness of debt, net
|
|
—
|
|
|
5,396
|
|
|
(5,302
|
)
|
|
21,264
|
|
||||
Straight-line rent
|
|
(21,705
|
)
|
|
(24,871
|
)
|
|
(64,809
|
)
|
|
(49,804
|
)
|
||||
Equity-based compensation expense, net of forfeitures
(1)
|
|
1,073
|
|
|
2,086
|
|
|
3,832
|
|
|
26,301
|
|
||||
Other amortization and non-cash charges
|
|
(1
|
)
|
|
3
|
|
|
7
|
|
|
164
|
|
||||
Proportionate share of adjustments for unconsolidated entities
|
|
694
|
|
|
1,268
|
|
|
2,030
|
|
|
2,050
|
|
||||
AFFO
|
|
$
|
191,419
|
|
|
$
|
214,991
|
|
|
$
|
581,862
|
|
|
$
|
491,843
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding - basic
|
|
903,461,323
|
|
|
902,096,102
|
|
|
903,267,282
|
|
|
756,289,984
|
|
||||
Effect of dilutive securities
(2)
|
|
25,995,886
|
|
|
44,970,255
|
|
|
26,109,180
|
|
|
49,555,790
|
|
||||
Weighted-average shares outstanding - diluted
(3)
|
|
929,457,209
|
|
|
947,066,357
|
|
|
929,376,462
|
|
|
805,845,774
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
AFFO per diluted share
|
|
$
|
0.21
|
|
|
$
|
0.23
|
|
|
$
|
0.63
|
|
|
$
|
0.61
|
|
(1)
|
This adjustment represents the non-current portion of the tax benefit recognized in net loss in order to show only the current portion of the benefit as an impact to AFFO.
|
(2)
|
Dilutive securities include OP Units, unvested restricted shares, certain unvested restricted stock units and convertible preferred stock, as applicable.
|
(3)
|
Weighted-average shares for periods presented exclude the effect of the convertible debt as the strike price of each convertible debt instrument is greater than the price of the General Partner’s common stock as of the end of each reporting period presented. In addition, for the
three and nine months ended September 30, 2015
,
1.5 million
shares underlying Restricted Stock Units that are contingently issuable have been excluded based on the Company’s level of achievement of certain performance targets through
September 30, 2015
.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Cole Capital segment:
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net (loss) income
|
|
(599
|
)
|
|
1,086
|
|
|
(1,127
|
)
|
|
(19,010
|
)
|
||||
FFO
|
|
(599
|
)
|
|
1,086
|
|
|
(1,127
|
)
|
|
(19,010
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Acquisition related
|
|
74
|
|
|
—
|
|
|
533
|
|
|
—
|
|
||||
Merger and other non-routine transactions
|
|
—
|
|
|
19
|
|
|
—
|
|
|
1,946
|
|
||||
Amortization of management contracts
|
|
7,510
|
|
|
24,288
|
|
|
22,530
|
|
|
62,304
|
|
||||
Deferred tax benefit
(1)
|
|
(5,701
|
)
|
|
—
|
|
|
(13,547
|
)
|
|
—
|
|
||||
Equity-based compensation expense, net of forfeitures
(2)
|
|
2,943
|
|
|
3,455
|
|
|
6,357
|
|
|
6,504
|
|
||||
Other amortization and non-cash charges
|
|
782
|
|
|
710
|
|
|
2,293
|
|
|
1,668
|
|
||||
AFFO
|
|
$
|
5,009
|
|
|
$
|
29,558
|
|
|
$
|
17,039
|
|
|
$
|
53,412
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding - basic
|
|
903,461,323
|
|
|
902,096,102
|
|
|
903,267,282
|
|
|
756,289,984
|
|
||||
Effect of dilutive securities
(3)
|
|
25,995,886
|
|
|
44,970,255
|
|
|
26,109,180
|
|
|
49,555,790
|
|
||||
Weighted-average shares outstanding - diluted
(4)
|
|
929,457,209
|
|
|
947,066,357
|
|
|
929,376,462
|
|
|
805,845,774
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
AFFO per diluted share
|
|
$
|
0.01
|
|
|
$
|
0.03
|
|
|
$
|
0.02
|
|
|
$
|
0.07
|
|
(1)
|
This adjustment represents the non-current portion of the tax benefit recognized in net loss in order to show only the current portion of the benefit or provision as an impact to AFFO.
|
(2)
|
During the three months ended December 31, 2014, the Company reversed certain equity-based compensation amounts previously recorded due to the resignation of certain executives.
|
(3)
|
Dilutive securities include limited partnership interests in our operating partnership, unvested restricted shares, certain unvested restricted stock units and convertible preferred stock, as applicable.
|
(4)
|
Weighted-average shares for all periods presented exclude the effect of the convertible debt as the strike price of each convertible debt instrument is greater than the price of the Company’s common stock as of the end of each reporting period presented. In addition, for the three months ended
September 30, 2015
,
1.5 million
of shares underlying restricted stock units that are contingently issuable have been excluded based on the Company’s level of achievement of certain performance targets through
September 30, 2015
.
|
|
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
4-5 years
|
|
More than
5 years
|
||||||||||
Principal payments - mortgage notes and other debt
|
|
$
|
3,268,411
|
|
|
$
|
194,415
|
|
|
$
|
708,682
|
|
|
$
|
534,045
|
|
|
$
|
1,831,269
|
|
Interest payments - mortgage notes and other debt
(1) (2)
|
|
624,155
|
|
|
158,898
|
|
|
255,872
|
|
|
209,385
|
|
|
—
|
|
|||||
Principal payments - credit facility
|
|
2,110,000
|
|
|
—
|
|
|
2,110,000
|
|
|
—
|
|
|
—
|
|
|||||
Interest payments - credit facility
(1) (2)
|
|
178,578
|
|
|
60,039
|
|
|
118,539
|
|
|
—
|
|
|
—
|
|
|||||
Principal payments - corporate bonds
|
|
2,550,000
|
|
|
—
|
|
|
1,300,000
|
|
|
750,000
|
|
|
500,000
|
|
|||||
Interest payments - corporate bonds
|
|
225,341
|
|
|
71,500
|
|
|
100,028
|
|
|
53,813
|
|
|
—
|
|
|||||
Principal payments - convertible debt
|
|
1,000,000
|
|
|
—
|
|
|
597,500
|
|
|
—
|
|
|
402,500
|
|
|||||
Interest payments - convertible debt
|
|
126,257
|
|
|
33,019
|
|
|
63,050
|
|
|
30,188
|
|
|
—
|
|
|||||
Operating and ground lease commitments
|
|
362,612
|
|
|
6,137
|
|
|
46,060
|
|
|
40,640
|
|
|
269,775
|
|
|||||
Build-to-suit commitments
|
|
10,019
|
|
|
10,019
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
10,455,373
|
|
|
$
|
534,027
|
|
|
$
|
5,299,731
|
|
|
$
|
1,618,071
|
|
|
$
|
3,003,544
|
|
(1)
|
As of
September 30, 2015
, we had
$284.8 million
of variable rate mortgage notes and
$1.0 billion
of variable rate debt on the credit facility effectively fixed through the use of interest rate swap agreements. We used the effective interest rates fixed under our swap agreements to calculate the debt payment obligations in future periods.
|
(2)
|
Interest payments due in future periods on the
$1.1 million
of variable rate debt payment obligations were calculated using a forward LIBOR curve.
|
•
|
Emphasize the importance of adherence to the Company’s Code of Business Conduct and Ethics;
|
•
|
Establish appropriate policies and procedures surrounding the accounting treatment and classification of merger-related expenses, goodwill, impairments and purchase accounting;
|
•
|
Establish controls designed to prevent changes to the financial statements and supporting financial information by senior management without the proper levels of review, support and approval; and
|
•
|
Establish controls designed to ensure that accounting employees would not be subject to pressure to make inappropriate decisions affecting the financial statements and/or the financial statement components of the calculation of AFFO, and that accounting concerns raised by employees would be timely and appropriately addressed by senior management.
|
•
|
Drafts of reports are circulated sufficiently in advance of Audit Committee meetings to permit adequate review;
|
•
|
Audit Committee meetings are attended in person to the extent practicable and, in addition to Audit Committee members, required attendees include the Chief Financial Officer, Chief Accounting Officer, General Counsel, head of Internal Audit, independent auditors and outside legal counsel as necessary;
|
•
|
At Audit Committee meetings, in addition to required communications from the independent auditors, reports are made by the Chief Accounting Officer on significant changes from prior filings, significant judgments reflected in the report and the receipt of sub-certifications;
|
•
|
At Audit Committee meetings, separate executive sessions are held with the independent auditor, head of Internal Audit, General Counsel and others as necessary; and
|
•
|
Any material changes to a draft of a periodic report that is approved by the Audit Committee are submitted to and reviewed and approved by the chair of the Audit Committee prior to filing.
|
•
|
Added additional layers of review of the Company’s significant accounting policies and estimates, including the bonus accrual process;
|
•
|
Improved the controls around decisions on whether or not to reflect certain accounting adjustments in the Company’s books and records and/or to report such adjustments within financial statements, by revising its policies, implementing additional review and training all accounting personnel on the revised policies;
|
•
|
Adopted new accounting policies that incorporate technical accounting guidance as to when expenses may be appropriately classified as merger-related expenses, as well as policies for the accounting for goodwill, impairments and purchase accounting, and conducted training on the implementation of these policies with relevant members of its accounting staff; and
|
•
|
Adopted new practices surrounding the calculation and presentation of AFFO and the formulation and review of AFFO guidance.
|
|
VEREIT, INC.
|
|
|
By:
|
/s/ Michael J. Bartolotta
|
|
Michael J. Bartolotta
|
|
|
Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)
|
|
VEREIT OPERATING PARTNERSHIP, L.P.
|
|
|
By: VEREIT, Inc., its sole general partner
|
|
|
By:
|
/s/ Michael J. Bartolotta
|
|
Michael J. Bartolotta
|
|
|
Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)
|
Exhibit No.
|
|
Description
|
3.1
(1)
|
|
Articles of Amendment and Restatement of VEREIT, Inc.
|
3.2
(2)
|
|
Articles Supplementary Relating to the Series A Convertible Preferred Stock of VEREIT, Inc., dated May 10, 2012.
|
3.3
(3)
|
|
Articles Supplementary Relating to the Series B Convertible Preferred Stock of VEREIT, Inc., dated July 24, 2012.
|
3.4
(4)
|
|
Articles Supplementary Relating to the Series C Convertible Preferred Stock of VEREIT, Inc., dated June 6, 2013.
|
3.5
(5)
|
|
Articles of Amendment to Articles of Amendment and Restatement of VEREIT, Inc., effective July 2, 2013.
|
3.6
(6)
|
|
Articles Supplementary Relating to the Series D Cumulative Convertible Preferred Stock of VEREIT, Inc., filed November 8, 2013.
|
3.7
(7)
|
|
Articles of Amendment to Articles of Amendment and Restatement of VEREIT, Inc., effective December 9, 2013.
|
3.8
(8)
|
|
Articles Supplementary Relating to the 6.70% Series F Cumulative Redeemable Preferred Stock of VEREIT, Inc., dated January 2, 2014.
|
3.9
(9)
|
|
Articles of Amendment to Articles of Amendment and Restatement of VEREIT, Inc., dated July 28, 2015.
|
3.10
(10)
|
|
Articles Supplementary to Articles of Amendment and Restatement of VEREIT, Inc., dated August 5, 2015.
|
3.11
(11)
|
|
Bylaws of VEREIT, Inc.
|
3.12
(12)
|
|
Amendment No. 1 to VEREIT, Inc.’s bylaws, effective as of February 7, 2014.
|
3.13
(13)
|
|
Amendment No. 2 to VEREIT, Inc.’s bylaws, effective December 31, 2014.
|
3.14
(9)
|
|
Amendment No. 3 to VEREIT, Inc.’s bylaws, effective July 28, 2015.
|
3.15
(10)
|
|
Amendment No. 4 to VEREIT, Inc.’s bylaws, effective August 5, 2015.
|
3.16
(14)
|
|
Certificate of Limited Partnership of VEREIT Operating Partnership, L.P.
|
3.17
(10)
|
|
Amendment to Certificate of Limited Partnership of VEREIT Operating Partnership, L.P., effective July 28, 2015.
|
3.18 *
|
|
Amended and Restated Bylaws of VEREIT, Inc., effective as of January 1, 2016.
|
4.1
(15)
|
|
Third Amended and Restated Agreement of Limited Partnership of VEREIT Operating Partnership, L.P., effective January 3, 2014.
|
4.2
(10)
|
|
First Amendment to Third Amended and Restated Agreement of Limited Partnership of VEREIT Operating Partnership, L.P., dated January 26, 2015.
|
4.3
(10)
|
|
Second Amendment to Third Amended and Restated Agreement of Limited Partnership of VEREIT Operating Partnership, L.P., dated July 28, 2015.
|
10.1*
|
|
Separation Agreement, dated as of October 1, 2015, by and between VEREIT, Inc. and Michael J. Sodo.
|
10.2*
|
|
Employment Letter and Confidentiality and Non-Competition Agreement, effective as of October 5, 2015, by and between VEREIT, Inc. and Michael J. Bartolotta.
|
31.1*
|
|
Certification of the Chief Executive Officer of VEREIT, Inc. pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2*
|
|
Certification of the Chief Financial Officer of VEREIT, Inc. pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.3*
|
|
Certification of the Chief Executive Officer of VEREIT, Inc., the sole general partner of VEREIT Operating Partnership, L.P., pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.4*
|
|
Certification of the Chief Financial Officer of VEREIT, Inc., the sole general partner of VEREIT Operating Partnership, L.P., pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1*
|
|
Written statements of the Chief Executive Officer of VEREIT, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2*
|
|
Written statements of the Chief Financial Officer of VEREIT, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.3*
|
|
Written statements of the Chief Executive Officer of VEREIT, Inc., the sole general partner of VEREIT Operating Partnership, L.P., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.4*
|
|
Written statements of the Chief Financial Officer of VEREIT, Inc., the sole general partner of VEREIT Operating Partnership, L.P., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS**
|
|
XBRL Instance Document.
|
101.SCH**
|
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL**
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF**
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB**
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE**
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
(1)
|
Previously filed with the Pre-Effective Amendment No. 5 to Form S-11 Registration Statement (Registration No. 333-172205) filed with the SEC on July 5, 2011.
|
(2)
|
P
reviously filed with the Current Report on Form 8-K filed with the SEC on May 15, 2012.
|
(3)
|
Previously filed with the Current Report on Form 8-K filed with the SEC on July 30, 2012.
|
(4)
|
Previously filed with the Current Report on Form 8-K filed with the SEC on June 12, 2013.
|
(5)
|
Previously filed with the Current Report on Form 8-K filed with the SEC on July 9, 2013.
|
(6)
|
Previously filed with the Current Report on Form 8-K filed with the SEC on November 15, 2013.
|
(7)
|
Previously filed with the Amended Current Report on Form 8-K/A filed with the SEC on December 19, 2013.
|
(8)
|
Previously filed with the Registration Statement on Form 8-A filed with the SEC on January 3, 2014.
|
(9)
|
Previously filed with the Current Report on Form 8-K filed with the SEC on July 28, 2015.
|
(10)
|
Previously filed with the Quarterly Report on Form 10-Q filed with the SEC on August 6, 2015.
|
(11)
|
Previously filed with the Pre-Effective Amendment No. 4 to Form S-11 Registration Statement (Registration No. 333-172205) filed with the SEC on June 13, 2011.
|
(12)
|
Previously filed with the Current Report on Form 8-K filed with the SEC on February 7, 2014.
|
(13)
|
Previously filed with the Current Report on Form 8-K filed with the SEC on January 5, 2015.
|
(14)
|
Previously filed with the Registration Statement on Form S-4 (Registration No. 333-197780-01) filed with the SEC on August 1, 2014.
|
(15)
|
Previously filed with Amendment No. 2 to the Annual Report on Form 10-K/A for the year ended December 31, 2013 filed with the SEC on March 2, 2015.
|
(a)
|
Annual Meetings of Stockholders.
|
(c)
|
General.
|
(b)
|
Notice Requirements
.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of VEREIT, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
November 4, 2015
|
/s/ Glenn J. Rufrano
|
|
|
Glenn J. Rufrano
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of VEREIT, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
November 4, 2015
|
/s/ Michael J. Bartolotta
|
|
|
Michael J. Bartolotta
Executive Vice President, Chief Financial Officer and Treasurer
|
|
|
(Principal Financial Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of VEREIT Operating Partnership, L.P.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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November 4, 2015
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/s/ Glenn J. Rufrano
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|
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Glenn J. Rufrano
|
|
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Chief Executive Officer of VEREIT, Inc., the sole general partner
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|
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of VEREIT Operating Partnership, L.P.
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|
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(Principal Executive Officer)
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1.
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I have reviewed this Quarterly Report on Form 10-Q of VEREIT Operating Partnership, L.P.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
November 4, 2015
|
/s/ Michael J. Bartolotta
|
|
|
Michael J. Bartolotta
Executive Vice President, Chief Financial Officer and Treasurer of
|
|
|
VEREIT, Inc., the sole general partner of VEREIT Operating Partnership, L.P.
|
|
|
(Principal Financial Officer)
|
Date:
|
November 4, 2015
|
/s/ Glenn J. Rufrano
|
|
|
Glenn J. Rufrano
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
Date:
|
November 4, 2015
|
/s/ Michael J. Bartolotta
|
|
|
Michael J. Bartolotta
Executive Vice President, Chief Financial Officer and Treasurer
|
|
|
(Principal Financial Officer)
|
Date:
|
November 4, 2015
|
/s/ Glenn J. Rufrano
|
|
|
Glenn J. Rufrano
|
|
|
Chief Executive Officer of VEREIT, Inc., the sole general partner
|
|
|
of VEREIT Operating Partnership, L.P.
|
|
|
(Principal Executive Officer)
|
Date:
|
November 4, 2015
|
/s/ Michael J. Bartolotta
|
|
|
Michael J. Bartolotta
Executive Vice President, Chief Financial Officer and Treasurer of
|
|
|
VEREIT Inc., the sole general partner of VEREIT Operating Partnership, L.P.
|
|
|
(Principal Financial Officer)
|