EX-99.2 3 v352038_ex99-2.htm EXHIBIT 99.2

 

 

 
 

 

 

American Realty Capital Properties, Inc.

 

Quarterly Supplemental Information

 

Second Quarter 2013

 

Table of Contents

 

Introductory Notes 1
   
Company Information 2
   
Summary of Financial Highlights 4
   
Selected Financial Information 5
   
Consolidated Balance Sheets 6
   
Consolidated Statements of Operations 7
   
Funds from Operations and Adjusted Funds from Operations 8
   
Pro Forma 2014E Earnings Guidance Summary 10
   
Common Stock Dividend Summary 11
   
Financial and Operational Statistics and Ratios 12
   
Debt Summary 13
   
Mortgage Notes Payable 14
   
Summary of Debt Covenants 15
   
Top 10 Concentrations 16
   
Tenant Diversification 17
   
Tenant Industry Diversification 20
   
Property Geographic Diversification 21
   
Property Building Type Diversification 22
   
Lease Expirations 23
   
Definitions 24

 

 

 
 

 

American Realty Capital Properties, Inc.

 

Introductory Notes

 

The financial data and other information described in this Quarterly Supplement are as of the date this Quarterly Supplement was filed or an earlier date where indicated. Future performance may not be consistent with past performance, and is subject to change with inherent risks and uncertainties.

 

This Quarterly Supplement contains certain statements that are the Company’s (as defined below) and its management’s hopes, intentions, beliefs, expectations, or projections of the future and might be considered to be forward-looking statements under Federal securities laws. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance, and involve inherent risks and uncertainties. The Company’s actual future results may differ significantly from the matters discussed in these forward-looking statements, we do not undertake to, and may not, release revisions to these forward-looking statements to reflect changes after we have made the statements. Factors and risks that could cause actual results to differ materially from expectations are disclosed from time to time in greater detail in the Company’s filings with the Securities and Exchange Commission (“SEC”), including, but not limited to, the Company’s Annual Report on Form 10-K filed with the SEC, the Company’s quarterly reports on Form 10-Q filed with the SEC, as well as other reports and Company press releases filed with the SEC.

 

This Quarterly Supplement information includes certain combined consolidated financial information. We use the terms “on a combined basis” throughout this Quarterly Supplement. The consolidated financial information combines the historical financial statements of American Realty Capital Properties, Inc. (“ARCP” or the “Company”) and American Realty Capital Trust III, Inc. (“ARCT III”) after giving effect to the merger of ARCT III into a wholly-owned subsidiary of ARCP (the “ARCT III Merger”), using the carryover basis of accounting as ARCP and ARCT III were considered to be entities under common control under United States generally accepted accounting principles. The consolidated financial information should be read in conjunction with ARCP’s historical consolidated financial statements including the notes thereto, and the notes to the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2012.

 

The combined consolidated financial information is presented for illustrative purposes only and does not purport to be indicative of the results that would actually have occurred if the ARCT III Merger had occurred as presented in such statements. In addition, future results may vary significantly from the results reflected in such statements.

 

Definitions of specialized terms can be found at the end of this presentation on page 24.

 

 

1
 

 

American Realty Capital Properties, Inc.

 

Company Information

 

Company Profile

 

American Realty Capital Properties, Inc. (NASDAQ:ARCP) ("ARCP") is a publicly traded Maryland corporation that qualified as a real estate investment trust (“REIT”) for U.S. federal income tax purposes beginning in the taxable year ended December 31, 2011, that acquires, owns and operates primarily single-tenant, freestanding commercial real estate properties. Our high-quality property portfolio is generally net leased to corporate tenants. These tenants are primarily investment grade rated, occupying properties located at the corner of “Main & Main” and in other strategic locations. Unlike other net lease REITs, ARCP focuses on acquiring properties with both mid-term and long-term leases, which provide for both income generation and growth potential over the longer term. Our investment strategy emphasizes durable income delivered through dependable monthly dividends. ARCP completed its IPO on September 7, 2011, and on February 28, 2013, ARCP completed its merger with ARCT III, a public non-traded REIT with a similar investment strategy.

 

ARCP's shares trade on the NASDAQ Global Select Market under the ticker symbol "ARCP".

 

Company Mission

 

Our mission is to provide our investors with durable income and growth potential while preserving investor capital through a professionally managed investment strategy focused on investment grade corporate tenants occupying properties subject to mid-term and long-term net leases in strategic locations. We believe this approach enables us to generate attractive risk-adjusted returns for our investors. Management adheres to a strict code of industry best practices designed to put the investor first and to align the interests of our stockholders with those of management. These practices include lower fees, fulsome disclosures, a best of class management team, properly sized equity raises, pay for performance, prudent use of leverage and coverage of distributions.

 

 

Investment Strategy

 

Our investment strategy is designed to generate monthly dividends from a durable and predictable level of monthly rents paid by primarily investment grade rated and other credit-worthy tenants, and to provide significant growth potential. We place a premium on stability of cash flow for our investors, and therefore sustain a portfolio blend of both mid-term and long-term lease durations. Our continued focus will be on expanding and diversifying our portfolio of high-quality, well located net leased properties by tenant, industry and geography. We intend to pursue an investment strategy that maximizes current cash flow and achieves sustainable long-term growth, thereby enhancing total return for our investors.

 

2
 

 

American Realty Capital Properties, Inc.

 

Company Information

 

(Continued)

 

 

Senior Management Board of Directors
Nicholas S. Schorsch, Chief Executive Officer Nicholas S. Schorsch, Chairman
   
Edward M. Weil, Jr., President, Secretary and Treasurer Edward M. Weil, Jr., Director
   
Peter M. Budko, Executive Vice President and Chief Investment Officer William M. Kahane, Director
   
Brian S. Block, Executive Vice President and Chief Financial Officer Leslie D. Michelson, Lead Independent Director
   
Brian D. Jones, Executive Vice President and Chief Operating Officer Governor Edward G. Rendell, Independent Director
   
  Walter P. Lomax, Jr., M.D., Independent Director
   
  Scott J. Bowman, Independent Director

 

Corporate Offices and Contact Information

405 Park Avenue, 15th Floor

New York, NY 10022

212-415-6500

www.arcpreit.com

 

Trading Symbol: ARCP

 

Stock Exchange Listing: NASDAQ Global Select Market

 

Transfer Agent

Computershare Trust Company, N.A.

250 Royall Street

Canton, MA 02021

800-736-3001

 

Covering Analysts

 JMP Securities Ladenburg Thalmann
 Mitch Germain Dan Donlan
212-906-3546212-409-2056
mgermain@jmpsecurities.comddonlan@ladenburg.com

  

3
 

 

American Realty Capital Properties, Inc.

 

Summary of Financial Highlights

 

Second Quarter 2013 Operating Highlights (three months ended June 30, 2013)

 

•Revenues: $45.0 million. Annualized revenues as of June 30, 2013 are $227.8 million.
•Net operating income (excluding one-time merger and acquisition related costs and non-cash depreciation and amortization expenses): $37.9 million.
•Core funds from operations: $28.8 million, or $0.17 per share (excluding one-time acquisition related costs).
•Adjusted funds from operations: $32.8 million, or $0.19 per share.
•Normalized AFFO per share: $0.23 per share (run rate to normalize timing of second quarter events).
•Total dividends paid to common stockholders: $37.1 million, or $0.904 per share on an annualized basis ($0.910 per share on an annualized basis at June 30, 2013).
•Dividend increase: Declared on May 28, 2013, an increase in annual dividend rate from $0.910 per share to $0.940 per share, contingent upon and effective with the earlier of the close of the ARCT IV merger and the CapLease merger (each described below).
•Fully diluted weighted-average shares outstanding: 171.0 million.

 

Property Portfolio Highlights

 

•Portfolio composition: 1,181 properties, 100% occupied (excluding one vacant property classified as held-for-sale), freestanding single-tenant properties comprised of 19.4 million square feet, occupied by 69.3% investment grade corporate tenants (attributing the rating of each parent company to its wholly owned subsidiary, as applicable) with a weighted average remaining lease term of 10 years.
•2Q asset acquisitions: $878.3 million of properties acquired at an average capitalization rate of 7.6% (including expected contingent rental income).
•Acquisitions subsequent to quarter end: 26 properties acquired for $25.3 million since July 1, 2013, at an average capitalization rate of 8.6%.
•2H 2013 acquisition targets and pipeline: Target acquisitions for the balance of 2013 increased to $1.1 billion at an average capitalization rate of 8.0%, including approximately 150 properties with an aggregate purchase price of approximately $690 million under definitive purchase agreement.

 

Other Activity

 

•CapLease merger: Announced on May 28, 2013 $2.2 billion acquisition of CapLease Inc. ("CapLease"), which is expected to close mid-September, with the CapLease special stockholder meeting scheduled for September 10, 2013.
•ARCT IV merger: Announced on July 2, 2013 $3.1 billion acquisition of American Realty Capital Trust IV, Inc. ("ARCT IV"), expected to close mid- to late-September (respective special shareholder meetings have not yet been scheduled).
•Equity offerings: Closed $900 million common and preferred stock private placements.
•Debt offering: $310 million underwritten 3.00% convertible notes offering (closed July 29, 2013), including $10 million over-allotment option exercised (closed August 1, 2013).
•Senior corporate credit facility: Upsized senior corporate credit facility by $250 million as of August 1, 2013, providing total financing capacity of up to $1.7 billion with additional “accordion” capacity, subject to certain conditions, of up to $2.5 billion.
•Credit facility capacity: Credit facility balance as of June 30, 2013 consisted of $600 million term loan, providing $1.1 billion of capacity including new commitments.

 

 

4
 

American Realty Capital Properties, Inc.

 

Selected Financial Information

(in 000’s, except share and per share data)

 

 

    Quarter Ended
    June 30, 2013   March 31, 2013   December 31, 2012   September 30, 2012  

June 30,

2012 

Total revenues   $ 44,960     $ 40,071     $ 29,946     $ 18,816     $ 11,430  
Net loss attributable to stockholders   (51,679 )   (137,920 )   (14,610 )   (12,691 )   (7,070 )
Basic and diluted net loss per share from continuing operations attributable to common stockholders   (0.32 )   (0.90 )   (0.08 )   (0.09 )   (0.10 )
Basic and diluted net loss per share attributable to common stockholders   (0.32 )   (0.90 )   (0.08 )   (0.09 )   (0.10 )
                     
Funds from operations (FFO)   13,611     24,407     6,431     (1,012 )   26  
Core FFO   28,755     29,989     21,827     13,624     7,840  
Adjusted funds from operations (AFFO)   32,833     30,666     21,447     13,854     8,041  
                     
General and administrative expenses   1,125     1,307     2,386     504     497  
Interest expense   (11,238 )   (6,202 )   (4,351 )   (3,454 )   (2,686 )
Straight-line revenue adjustment   (1,605 )   (1,370 )   (1,013 )   (599 )   (362 )
                     
Dividends paid on common stock   37,088     32,304     31,078     20,082     8,962  

 

 

    Quarter Ended
    June 30, 2013   March 31, 2013   December 31, 2012   September 30, 2012  

June 30,

2012 

Total real estate investments, at cost, including net investments in direct financing leases   $ 2,933,838     $ 2,061,286     $ 1,798,490     $ 1,181,061     $ 727,702  
Total assets   2,916,785     2,088,102     1,965,452     1,879,966     1,125,809  
Total debt, excluding premiums and discounts   1,314,918     905,118     389,722     283,580     249,613  
Total equity   1,552,212     1,166,021     1,548,159     1,575,773     863,190  

 

 

5
 

American Realty Capital Properties, Inc.

 

Consolidated Balance Sheets

(in 000’s) 

 

    June 30, 2013   March 31, 2013   December 31, 2012   September 30, 2012  

June 30,

2012 

ASSETS                    
Real estate investments, at cost:                    
Land   $ 504,562     $ 298,280     $ 249,541     $ 172,063     $ 109,892  
Buildings, fixtures and improvements   2,043,270     1,521,505     1,336,726     869,424     534,858  
Acquired intangible lease assets   318,488     241,501     212,223     139,574     82,952  
Total real estate investments, at cost   2,866,320     2,061,286     1,798,490     1,181,061     727,702  
Less: accumulated depreciation and amortization   (108,765 )   (81,207 )   (56,110 )   (37,666 )   (25,903 )
Total real estate investments, net   2,757,555     1,980,079     1,742,380     1,143,395     701,799  
Cash and cash equivalents   10,958     52,412     156,873     695,453     393,848  
Investment in direct financing leases, net   67,518     —     —     —     —  
Other investments, at fair value   9,920     4     41,654     8,089     —  
Derivatives, at fair value   10,161     —     —     —     —  
Restricted cash   1,576     1,287     1,108     1,212     1,547  
Prepaid expenses and other assets   14,626     15,397     7,416     10,837     16,873  
Receivable for issuance of common stock   —     —     —     4,320     —  
Deferred costs, net   38,443     38,244     15,356     15,848     10,330  
Assets held for sale   6,028     679     665     812     1,412  
Total assets   $ 2,916,785     $ 2,088,102     $ 1,965,452     $ 1,879,966     $ 1,125,809  
                     
LIABILITIES AND EQUITY                    
Mortgage notes payable   $ 269,918     $ 265,118     $ 265,118     $ 192,490     $ 174,720  
Senior secured revolving credit facility   —     —     124,604     91,090     74,893  
Senior corporate credit facility   600,000     640,000     —     —     —  
Convertible obligation to Series C Convertible Preferred stockholders   445,000     —     —     —     —  
Contingent value rights obligation to preferred and common investors, at fair value   31,134     —     —     —     —  
Derivatives, at fair value   1,186     5,012     3,830     4,122     2,924  
Accounts payable and accrued expenses   12,060     6,589     9,459     4,439     3,861  
Deferred rent and other liabilities   5,274     5,270     4,336     2,801     1,701  
Distributions payable   1     92     9,946     9,251     4,520  
Total liabilities   1,364,573     922,081     417,293     304,193     262,619  
                     
Convertible preferred stock, $0.01 par value, 100,000,000 shares authorized, 828,472 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively   8     8     8     8     5  
Common stock, $0.01 par value, 240,000,000 shares authorized, 184,893,886 and 179,167,112 issued and outstanding at June 30, 2013 and December 31, 2012, respectively   1,846     1,543     1,792     1,777     978  
Additional paid-in capital   1,801,460     1,335,863     1,653,900     1,639,179     891,306  
Accumulated other comprehensive income (loss)   8,919     (5,018 )   (3,934 )   (4,101 )   (2,937 )
Accumulated deficit   (379,502 )   (290,484 )   (120,072 )   (73,603 )   (35,937 )
Total stockholders’ equity   1,432,731     1,041,912     1,531,694     1,563,260     853,415  
Non-controlling interests   119,481     124,109     16,465     12,513     9,775  
Total equity   1,552,212     1,166,021     1,548,159     1,575,773     863,190  
Total liabilities and equity   $ 2,916,785     $ 2,088,102     $ 1,965,452     $ 1,879,966     $ 1,125,809  
6
 

American Realty Capital Properties, Inc.

 

Consolidated Statements of Operations (1)

(in 000’s, except per share data) 

                     
    Quarter Ended
  June 30, 2013   March 31, 2013   December 31, 2012   September 30, 2012   June 30,
2012
Revenues:                                        
Rental income   $ 43,130     $ 38,249     $ 28,717     $ 18,301     $ 11,329  
Operating expense reimbursements   1,830     1,822     1,229     515     101  
Total revenues   44,960     40,071     29,946     18,816     11,430  
Operating expenses:                    
Acquisition related   15,144     5,582     15,396     14,636     7,814  
Merger and other transaction related   4,680     137,769     2,583     —     20  
Property operating   2,465     2,388     1,827     1,077     288  
General and administrative   1,125     1,307     2,386     504     497  
Equity-based compensation   3,454     876     378     473     183  
Depreciation and amortization   27,806     25,023     18,310     11,632     6,994  
Operating fees to affiliates   —     —     —     —     —  
Total operating expenses   54,674     172,945     40,880     28,322     15,796  
Operating loss   (9,714 )   (132,874 )   (10,934 )   (9,506 )   (4,366 )
Other income (expenses):                    
Interest expense   (11,238 )   (6,202 )   (4,351 )   (3,454 )   (2,686 )
Loss on contingent value rights   (31,134 )   —     —     —     —  
Income from investment securities   —     218     —     —     —  
Gain on sale of investment securities   —     451     —     —     —  
Gain (loss) on derivative instruments   (40 )   (5 )   90     —     —  
Other income   91     35     687     206     62  
Total other expenses, net   (42,321 )   (5,503 )   (3,574 )   (3,248 )   (2,624 )
Loss from continuing operations   (52,035 )   (138,377 )   (14,508 )   (12,754 )   (6,990 )
Net loss from continuing operations attributable to non-controlling interests   322     433     117     65     72  
Net loss from continuing operations attributable to stockholders   (51,713 )   (137,944 )   (14,391 )   (12,689 )   (6,918 )
Discontinued operations:                    
Net income (loss) from operations of held for sale properties   36     11     (90 )   45     (84 )
Gain (loss) on held for sale properties   —     14     (148 )   (47 )   (82 )
Net gain (loss) from discontinued operations   36     25     (238 )   (2 )   (166 )
Net (gain) loss from discontinued operations attributable to non-controlling interests   (2 )   (1 )   19     —     14  
Net gain (loss) from discontinued operations attributable to stockholders   34     24     (219 )   (2 )   (152 )
Net loss   (51,999 )   (138,352 )   (14,746 )   (12,756 )   (7,156 )
Net loss attributable to non-controlling interests   320     432     136     65     86  
Net loss attributable to stockholders   $ (51,679 )   $ (137,920 )   $ (14,610 )   $ (12,691 )   $ (7,070 )
Basic and diluted net loss per share from continuing operations attributable to common stockholders   $ (0.32 )   $ (0.90 )   $ (0.08 )   $ (0.09 )   $ (0.10 )
Basic and diluted net loss per share attributable to common stockholders   $ (0.32 )   $ (0.90 )   $ (0.08 )   $ (0.09 )   $ (0.10 )

_______________________________________________

(1) Certain historical balances have been restated for discontinued operations.

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American Realty Capital Properties, Inc.

 

Funds from Operations and Adjusted Funds from Operations

(in 000’s, except share and per share data)

 

 

    Quarter Ended   Quarter Ended
    June 30, 2013   Per Share   March 31, 2013   Per Share
Net loss attributable to stockholders (in accordance with U.S. GAAP)   $ (51,679 )   $ (0.30 )   $ (137,920 )   $ (0.89 )
Merger and other transaction costs   4,680     0.03     137,769     0.89  
Loss on contingent valuation rights   31,134     0.18     —     —  
(Gain) loss on held for sale properties   —     —     (14 )   —  
Gain on sale of investment securities   —     —     (451 )   —  
Loss on derivative instruments   40     —     —     —  
Interest on convertible obligation to preferred investors   1,630     0.01     —     —  
Depreciation and amortization   27,806     0.16     25,023     0.16  
FFO   13,611     0.08     24,407     0.16  
                 
Acquisition and transaction related costs   15,144     0.09     5,582     0.04  
Core FFO   28,755     0.17     29,989     0.19  
                 
Amortization of above-market lease   63     —     63     —  
Amortization of deferred financing costs   2,166     0.01     1,108     0.01  
Straight-line rent   (1,605 )   (0.01 )   (1,370 )   (0.01 )
Non-cash equity compensation expense   3,454     0.02     876     0.01  
AFFO   $ 32,833     $ 0.19     $ 30,666     $ 0.21  
                 
Weighted average shares - fully diluted (1)   171,012         154,322      

_______________________________________________

 

(1) Weighted average shares for the three months ended March 31, 2013 are adjusted on a pro forma basis as if 27.7 million shares that were repurchased in conjunction with the ARCT III merger were repurchased as of the beginning of the period. Amounts exclude operating partnership units as operating results are adjusted for the corresponding impact of non-controlling interests.

 

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American Realty Capital Properties, Inc.

 

Funds from Operations and Adjusted Funds from Operations

(in 000’s except share and per share data)

 

 

    Quarter Ended
    June 30, 2013   March 31, 2013   December 31, 2012   September 30, 2012   June 30, 2012
Net loss attributable to stockholders (in accordance with U.S. GAAP)   $ (51,679 )   $ (137,920 )   $ (14,610 )   $ (12,691 )   $ (7,070 )
Merger and other transaction costs   4,680     137,769     2,583     —     20  
Loss on contingent valuation rights   31,134     —     —     —     —  
(Gain) loss on held for sale properties   —     (14 )   148     47     82  
Gain on sale of investment securities   —     (451 )   —     —     —  
Loss on derivative instruments   40     —     —     —     —  
Interest on convertible obligation to preferred investors   1,630     —             —  
Depreciation and amortization   27,806     25,109     18,310     11,632     6,994  
FFO   13,611     24,493     6,431     (1,012 )   26  
                     
Acquisition and transaction related costs   15,144     5,582     15,396     14,636     7,814  
Core FFO   28,755     30,075     21,827     13,624     7,840  
                     
Amortization of above-market lease   63     63     61     56     —  
Amortization of deferred financing costs   2,166     1,108     276     201     385  
Straight-line rent   (1,605 )   (1,370 )   (1,013 )   (599 )   (362 )
Non-cash equity compensation expense   3,454     876     387     481     178  
Mark to market adjustment   —     —     (91 )   91     —  
AFFO   $ 32,833     $ 30,752     $ 21,447     $ 13,854     $ 8,041  
                     
Common stock distributions paid (cash and shares)   $ 37,088     $ 32,304     $ 31,078     $ 20,082     $ 8,962  
Common stock distributions paid in cash   $ 37,088     $ 27,409     $ 16,906     $ 11,726     $ 5,627  

 

 

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American Realty Capital Properties, Inc.

 

Pro Forma 2014E Earnings Guidance Summary

 

 

    2014E Revised Guidance
(dollar amounts in millions, except per share data)   Low   High
FFO/share (fully diluted)   $ 1.15     $ 1.18  
AFFO/share (fully diluted)   $ 1.14     $ 1.18  

 

Second-Half 2013 Key Assumptions:

 

•Acquisitions: Acquire $1.1 billion of assets at 8.0% average cap rate (balance of 2013)

 

•ARCT IV Cash Election: $160 million (7.5% of total consideration)

 

•Senior Unsecured Debt: $1.4 billion aggregate 5-, 7- and 10-year senior unsecured notes at 4.10% weighted average interest rate

 

•CapLease Mortgages: Assume additional $502 million mortgage debt at high end; reduce defeasance cost by $40 million

 

•Equity Raise: No equity raise for high end guidance

 

•Equity Raise: $525.8 million equity raise for low end guidance

 

•Shares Outstanding at Year End: 388.6 million at low end, 356.7 million at high end (fully diluted)

  

2014 Key Assumptions:

 

•Acquisitions: Acquire $1.0 billion of assets at 8.25% average cap rate

 

•Capitalization: 65% equity issuance, 35% debt utilization

 

•Wtd. Ave. Shares Outstanding: 407.9 million at low end, 376.0 million at high end (fully diluted)

 

 

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American Realty Capital Properties, Inc.

 

Common Stock Dividend Summary

(in 000’s, except per share data)

 

 

    Dividends Paid    
Month   Cash   DRIP  

Total Common Stock

Dividends  

  

Dividends per share

(annualized) (1) 

Jun-13   $ 13,952     $ —     $ 13,952     $ 0.910  
May-13   11,580     —     11,580     0.900  
Apr-13   11,556     —     11,556     0.900  
Q2 2013   37,088     —     37,088      
Mar-13   11,575     —     11,575     0.900  
Feb-13   9,950     —     9,950     0.895  
Jan-13   5,884     4,895     10,779     0.895  
Q1 2013   27,409     4,895     32,304      
2013 to date   $ 64,497     $ 4,895     $ 69,392      
                 
Dec-12   $ 5,641     $ 4,731     $ 10,372      
Nov-12   5,784     4,864     10,648     0.895  
Oct-12   5,481     4,577     10,058     0.890  
Q4 2012   16,906     14,172     31,078     0.890  
Sept-12   4,626     3,599     8,225      
Aug-12   3,860     2,678     6,538     0.890  
Jul-12   3,240     2,079     5,319     0.885  
Q3 2012   11,726     8,356     20,082     0.885  
Jun-12   2,541     1,688     4,229      
May-12   1,820     1,019     2,839     0.885  
Apr-12   1,266     628     1,894     0.880  
Q2 2012   5,627     3,335     8,962     0.880  
Mar-12   536     380     916      
Feb-12   1,321     302     1,623     0.880  
Jan-12   793     231     1,024     0.875  
Q1 2012   2,650     913     3,563     0.875  
Total 2012   $ 36,909     $ 26,776     $ 63,685      
                 
Dec-11   $ 696     $ 162     $ 858      
Nov-11   630     101     731     0.875  
Oct-11   415     9     424     0.875  
Q4 2011   1,741     272     2,013     0.875  
Sept-11   —     —     —      
Q3 2011   —     —     —      
Total 2011   $ 1,741     $ 272     $ 2,013      

_______________________________________________

 

(1) Excludes distributions paid to ARCT III stockholders prior to its merger with ARCP.

 

11
 

American Realty Capital Properties, Inc.

 

Financial and Operational Statistics and Ratios

 

 

Financial and Operational Statistics and Ratios   As of June 30, 2013 and
for the Quarter then
Ended
Debt to total capitalization (1)   21.6 %
Net debt to total capitalization (1)   21.4 %
Net debt to enterprise value (1)   20.8 %
Annualized Adjusted EBITDA (2)   153,292  
Net debt to annualized EBITDA (1)   2.9  
Annualized EBITDA/annualized interest expense (1)   4.2  
Annualized EBITDA/annualized fixed charges (1)   4.2  
Total debt/gross assets (1)   29.8 %
Common shares outstanding   184,550,186  
Fully diluted shares outstanding, excluding operating partnership units   214,115,012  
Operating partnership units outstanding (3)   9,051,660  
Stock price at end of period   $ 15.26  
Market capitalization (equity capitalization) (in 000's)   $ 2,816,236  
Total capitalization (in 000's)   $ 4,162,288  
Enterprise value (in 000's)   $ 4,270,819  
High stock close price   $ 17.82  
Low stock close price   $ 14.23  

_______________________________________________

 

(1) Debt and interest expense statistics exclude balances related to Convertible obligation to Series C Convertible Preferred stockholders as this amount is convertible to common shares at ARCP's option.

(2) Amount excludes one-time for acquisition, merger and other transaction costs as well as unrealized losses on contingent value rights.

(3) Excludes 8.2 million long-term incentive plan units which are unearned at June 30, 2013.

 

12
 

American Realty Capital Properties, Inc.

 

Debt Summary

(in 000’s) 

 

 

 

Debt Maturities:   Total   July 1, 2013 -
December 31, 2013		   2014 – 2015   2016 – 2017   Thereafter
Mortgage notes payable   $ 269,918     $ 74     $ 13,956     $ 186,588     $ 69,300  
Senior corporate credit facility   600,000     —     —     —     600,000  
Convertible obligation to Series C Convertible Preferred stockholders   445,000     $ 455,000     —     —     —  
Total   $ 1,314,918     $ 455,074     $ 13,956     $ 186,588     $ 669,300  

 

 

Debt Summary   Percentage of Total Debt   Weighted Average Effective Interest Rate   Weighted Average Maturity (years)
Mortgage notes payable     20.5 %   4.25 %   4.99  
Unsecured credit facility   45.6 %   2.69 %   5.7  
Convertible obligation to Series C Convertible Preferred stockholders   33.9 %   5.81 %   0.5  

 

Excludes $310.0 million of convertible debt issued in July 2013 and August 2013, which matures in August 2018. The notes bear an annualized interest rate of 3.00%.

 

 

13
 

American Realty Capital Properties, Inc.

 

Mortgage Notes Payable 

 

Lender   Maturity   Balance (000's)   Coupon Rate   Effective Rate   Payment Terms (1)
Citigroup   2/6/2022   $ 39,200     6.05 %   6.13 %   IO
Wells Fargo   2/28/2017   36,600     3.76 %   3.81 %   IO
Bank of Texas   7/31/2017   28,350     3.28 %   3.32 %   IO
Wells Fargo   1/31/2017   24,406     3.75 %   3.80 %   IO
Wells Fargo   1/31/2017   24,094     3.75 %   3.80 %   IO
Bank of Texas   7/31/2017   16,555     3.28 %   3.32 %   IO
Citi Group   2/6/2022   15,100     6.05 %   6.13 %   IO
Oritani   1/1/2023   15,000     3.75 %   3.80 %   IO
Ladder Capital   7/6/2015   13,850     5.25 %   5.32 %   IO through 7/2013, then P&I
Bank of Texas   7/13/2017   12,725     3.43 %   3.48 %   IO
Goldman Sachs   8/6/2017   12,270     3.70 %   3.75 %   IO
Customers Bank   12/28/2016   11,940     3.75 %   3.80 %   IO through 12/2014, then P&I
Customers Bank   8/16/2017   5,500     3.63 %   3.68 %   IO
Bank of Texas   10/31/2016   5,060     3.67 %   3.72 %   IO
Wells Fargo   3/1/2017   4,800     2.69 %   2.73 %   IO
First Place Bank   1/1/2017   4,468     4.89 %   4.96 %   IO
Total       $ 269,918     4.19 %   4.25 %    

_______________________________________________

(1)IO means only interest is due monthly with the principal due at maturity; P&I means both principal and interest are due monthly.

  

 

14
 

American Realty Capital Properties, Inc.

 

Summary of Debt Covenants

 

The following is a summary of key financial covenants for the Company's senior corporate credit facility as defined and calculated per the terms of the facilities credit agreement. These calculations, which are not based on U.S. generally accepted accounting principles measurements, are presented to investors to show our ability to incur additional debt only and are not measures of our liquidity or performance. 

 

Key Covenants   Required   Q2 2013 (1)   Q1 2013
Maximum consolidated leverage ratio   ≤ 60%   52.44%   44.82%
Maximum recourse indebtedness   ≤ Total Asset Value x 10%   Limit = $310 MM/Actual = $0   Limit = $202 MM/Actual = $0
Minimum fixed charge coverage ratio   > 1.5x   2.52x   7.29x
Minimum borrowing base interest coverage ratio   ≥ 1.65x   1.68x   8.88x
Secured leverage ratio   ≤ 40%   8.71%   13.13%
Borrowing base asset value ratio   ≥ 1.67x   1.90x   2.25x
Minimum tangible net worth ("TNW") covenant   ≥ base TNW plus 85% of equity issuances   Limit ≥ $1.3 B/Actual = $1.5 B   Limit ≥ $1.0 B/Actual =$1.2 B
Variable rate indebtedness   ≤Total Asset Value x 20%   Limit = $620 MM/Actual = $0.09 MM   Limit = $404 MM/ Actual = $125 MM

_______________________________________________

(1) Q2 covenant calculations include the effect of $310.0 million of convertible notes issued in July 2013.

  

 

15
 

American Realty Capital Properties, Inc. 

Top 10 Concentrations

 

Tenant Concentration

 

Tenant  

Number of

Properties 

   Square Feet  

Square Feet as

a % of Total

Portfolio 

  

Average

Annual Rent

(in 000's) 

  

Average

Annual Rent as

a % of Total

Portfolio 

   Investment Rating
Dollar General   227     2,093,589     10.8 %   $ 18,311     8.0 %   BBB-
Citizens Bank   156     698,366     3.6 %   17,430     7.7 %   A-
FedEx   29     1,385,568     7.1 %   16,028     7.0 %   BBB
Walgreens   37     530,595     2.7 %   13,258     5.8 %   BBB
AON Corporation   1     818,686     4.2 %   10,822     4.8 %   BBB+
General Mills   2     1,872,112     9.6 %   6,670     2.9 %   BBB+
DineEquity Inc.   38     183,400     0.9 %   5,397     2.4 %   B
Advance Auto   54     380,171     2.0 %   5,259     2.3 %   BBB-
Jack In The Box, Inc.   45     120,417     0.6 %   5,202     2.3 %   NR
Family Dollar   49     411,922     2.1 %   4,762     2.1 %   BBB-
Total   638     8,494,826     43.6 %   $ 103,139     45.3 %   89.7%

 

Industrial Concentration

 

Industry  

Number of

Properties 

   Square Feet  

Square Feet as a %

of Total Portfolio 

  

Average Annual Rent

(in 000's) 

  

Average Annual Rent

as a % of Total

Portfolio 

Quick Service Restaurant   276     772,358     4.0 %   27,564     12.1 %
Consumer Products   12     6,738,395     34.7 %   25,023     11.0 %
Discount Retail   278     2,702,451     13.9 %   24,815     10.9 %
Retail Banking   161     858,779     4.4 %   20,753     9.1 %
Pharmacy   61     824,731     4.3 %   19,987     8.8 %
Family Dining   115     699,851     3.6 %   16,087     7.1 %
Freight   29     1,385,568     7.1 %   16,028     7.0 %
Casual Dining   97     715,369     3.7 %   15,580     6.8 %
Healthcare   21     656,638     3.4 %   13,073     5.7 %
Insurance   1     818,686     4.2 %   10,821     4.8 %
Total   1,051     16,172,826     83.3 %   $ 189,731     83.3 %
                                 

 

Geographic Concentration

 

State/Possession  

Number of

Properties 

   Square Feet  

Square Feet as a %

of Total Portfolio

  

Average Annual

Rent (in 000's) 

  

Average Annual Rent

as a % of Total

Portfolio 

Illinois   42     1,486,911     7.7 %   19,123     8.4 %
Texas   127     983,549     5.1 %   15,323     6.7 %
Michigan   78     677,709     3.5 %   12,674     5.6 %
California   16     1,450,328     7.5 %   12,488     5.5 %
Missouri   86     942,859     4.9 %   11,019     4.8 %
North Carolina   54     1,123,948     5.8 %   10,840     4.8 %
Ohio   63     1,197,640     6.2 %   10,754     4.7 %
Georgia   64     403,579     2.1 %   8,896     3.9 %
Pennsylvania   69     365,231     1.9 %   8,697     3.8 %
Mississippi   36     1,380,764     7.1 %   8,327     3.7 %
Total   635     10,012,518     51.8 %   $ 118,141     51.9 %
                                 
16
 

American Realty Capital Properties, Inc.

Tenant Diversification (1)

 

Tenant  

Number of

Properties 

   Square Feet  

Square Feet as

a % of Total

Portfolio 

  

Average

Remaining

Lease Term (2) 

   Industry  

Average

Annual Rent

(in 000's) 

  

Average

Annual Rent as

a % of Total

Portfolio 

3432, LLC   1     4,283     0.02 %   14.2     Family Dining   89     0.04 %
7-Eleven   4     10,526     0.05 %   6.0     Gas/Convenience   411     0.18 %
Academy Sports   2     133,713     0.69 %   15.4     Specialty Retail   1,455     0.64 %
ADF Companies Group   1     2,626     0.01 %   2.0     Family Dining   66     0.03 %
Advance Auto   54     380,171     1.96 %   8.4     Auto Retail   5,259     2.31 %
Advanced Dental Implant and Denture Center, LLC   1     2,775     0.01 %   11.0     Healthcare   40     0.02 %
AFC Enterprises   1     1,564     0.01 %   0.7     Quick Service Restaurant   30     0.01 %
Ale House Management   3     18,807     0.10 %   4.8     Casual Dining   636     0.28 %
AMCOR   1     221,035     1.14 %   10.1     Consumer Products   1,480     0.65 %
Ameriprise   1     145,003     0.75 %   11.5     Financial Services   1,269     0.56 %
AM-PM Enterprises III, Inc.   1     3,530     0.02 %   19.1     Quick Service Restaurant   42     0.02 %
Ann Ching Chen   1     6,948     0.04 %   1.3     Family Dining   92     0.04 %
AON Corporation   1     818,686     4.22 %   11.5     Insurance   10,822     4.75 %
Arbed Tosa 100   1     5,712     0.03 %   11.9     Casual Dining   172     0.08 %
Arby's Restaurant Group, Inc.   35     104,229     0.54 %   5.1     Quick Service Restaurant   3,753     1.65 %
Auto Zone   1     6,782     0.03 %   15.5     Auto Retail   152     0.07 %
Baxters Steakhouse   1     5,186     0.03 %   3.0     Casual Dining   42     0.02 %
Bed Bath & Beyond   1     1,035,840     5.34 %   11.2     Consumer Products   4,717     2.07 %
Bee Mac Enterprises   2     4,232     0.02 %   4.6     Quick Service Restaurant   150     0.07 %
Bighorn Associates   1     3,600     0.02 %   3.5     Casual Dining   121     0.05 %
BJ's Warehouse   1     108,532     0.56 %   10.4     Discount Retail   883     0.39 %
Black Angus Steakhouse, LLC   1     6,552     0.03 %   5.9     Casual Dining   295     0.13 %
Bloomin Apple   1     4,234     0.02 %   5.5     Casual Dining   200     0.09 %
Bojangles   13     47,824     0.25 %   12.1     Quick Service Restaurant   1,807     0.79 %
Boston Market Corporation   4     13,713     0.07 %   5.4     Quick Service Restaurant   369     0.16 %
Brinker International   2     10,640     0.05 %   3.5     Casual Dining   388     0.17 %
Bruegger's Enterprises   2     5,265     0.03 %   6.0     Quick Service Restaurant   113     0.05 %
Buca   2     14,885     0.08 %   5.0     Casual Dining   384     0.17 %
Bullard Restaurants   1     2,693     0.01 %   4.4     Quick Service Restaurant   108     0.05 %
Bullitt Ventures, Inc.   1     5,325     0.03 %   10.2     Family Dining   85     0.04 %
Burger King   1     2,800     0.01 %   11.2     Quick Service Restaurant   85     0.04 %
Burgerbusters, LLC   6     12,903     0.07 %   5.7     Quick Service Restaurant   579     0.25 %
Caribou Coffee   1     1,625     0.01 %   1.9     Quick Service Restaurant   91     0.04 %
Carlos O'Kelly's   9     47,349     0.24 %   4.5     Casual Dining   1,401     0.62 %
Carrols   18     61,000     0.31 %   7.6     Quick Service Restaurant   1,982     0.87 %
Charlestons   1     6,874     0.04 %   1.7     Casual Dining   122     0.05 %
Checkers Drive-In Restaurants   12     9,540     0.05 %   12.0     Casual Dining   1,139     0.50 %
Cherryden   1     7,213     0.04 %   6.7     Family Dining   223     0.10 %
Chi-Co., Inc.   1     2,751     0.01 %   4.5     Quick Service Restaurant   74     0.03 %
Circle K   3     9,460     0.05 %   10.6     Gas/Convenience   416     0.18 %
Citizens Bank   156     698,366     3.60 %   7.6     Retail Banking   17,430     7.65 %
CKE Restaurants   7     24,841     0.13 %   6.9     Quick Service Restaurant   568     0.25 %
Community Bank   1     4,410     0.02 %   3.1     Retail Banking   36     0.02 %
Corral Group   1     2,968     0.02 %   8.0     Quick Service Restaurant   63     0.03 %
Cracker Barrel   5     50,479     0.26 %   16.1     Family Dining   1,605     0.70 %
CVS   14     151,903     0.78 %   9.6     Pharmacy   3,226     1.42 %
Darrin Cobb   1     5,180     0.03 %   8.4     Casual Dining   69     0.03 %
Davco Restaurants   1     3,471     0.02 %   12.5     Quick Service Restaurant   133     0.06 %
DaVita Dialysis   4     209,818     1.08 %   10.6     Healthcare   2,972     1.30 %
Den Columbia   1     2,730     0.01 %   3.6     Family Dining   134     0.06 %
Denny's Corporation   7     30,193     0.16 %   3.6     Family Dining   696     0.31 %
Den-Tex Centra   4     21,098     0.11 %   6.9     Family Dining   505     0.22 %
DineEquity Inc.   38     183,400     0.95 %   6.6     Family Dining   5,397     2.37 %
Dollar General   227     2,093,589     10.79 %   12.7     Discount Retail   18,311     8.04 %
Dunkin' Brands   1     2,880     0.01 %   11.2     Quick Service Restaurant   92     0.04 %
Dynamic Management LLC   1     3,263     0.02 %   5.2     Quick Service Restaurant   61     0.03 %
Einstein/Noah Bagel   1     3,875     0.02 %   8.8     Quick Service Restaurant   77     0.03 %
Enterprises, LLC   1     2,759     0.01 %   9.7     Quick Service Restaurant   45     0.02 %
Express Scripts   1     227,467     1.17 %   8.5     Healthcare   3,347     1.47 %
Fal Co L.L.C   3     6,240     0.03 %   9.2     Quick Service Restaurant   47     0.02 %
Family Dollar   49     411,922     2.12 %   8.6     Discount Retail   4,762     2.09 %
FedEx   29     1,385,568     7.14 %   10.3     Freight   16,028     7.04 %
Frandeli Group   11     237,898     1.23 %   3.6     Casual Dining   1,469     0.64 %
Fresenius   14     116,226     0.60 %   9.8     Healthcare   2,482     1.09 %
Fresh Creations, LLC   2     11,315     0.06 %   9.9     Family Dining   232     0.10 %
Garden Fresh Restaurant   1     7,411     0.04 %   10.8     Family Dining   180     0.08 %
GBM, LLC   2     5,700     0.03 %   6.1     Quick Service Restaurant   119     0.05 %
GDK Development   1     3,682     0.02 %   3.3     Quick Service Restaurant   56     0.02 %
GE Aviation   1     303,035     1.56 %   11.4     Aerospace   2,511     1.10 %
Geko   1     5,012     0.03 %   16.8     Casual Dining   107     0.05 %
General Mills   2     1,872,112     9.65 %   9.6     Consumer Products   6,670     2.93 %

 

17
 

 

 

Tenant  

Number of

Properties 

   Square Feet  

Square Feet as

a % of Total

Portfolio 

  

Average

Remaining

Lease Term (2) 

   Industry  

Average

Annual Rent

(in 000's) 

  

Average

Annual Rent as

a % of Total

Portfolio 

Georgetowne Affiliates   1     3,102     0.02 %   7.1     Quick Service Restaurant   68     0.03 %
Globamax Restaurants   1     3,600     0.02 %   13.4     Casual Dining   71     0.03 %
GMRI, Inc.   2     12,190     0.06 %   2.8     Casual Dining   382     0.17 %
Golden Corral   18     175,150     0.90 %   1.6     Family Dining   3,191     1.40 %
Grandys   5     20,584     0.11 %   3.5     Casual Dining   315     0.14 %
GSA   12     217,615     1.12 %   6.8     Government Services   5,833     2.56 %
H & K Partners   1     2,000     0.01 %   13.9     Quick Service Restaurant   99     0.04 %
Hanesbrands   1     758,463     3.91 %   11.2     Consumer Products   2,366     1.04 %
HB Boys   1     2,437     0.01 %   23.9     Quick Service Restaurant   109     0.05 %
Heartland   2     6,139     0.03 %   2.8     Quick Service Restaurant   283     0.12 %
Home Depot   1     465,600     2.40 %   16.4     Home Maintenance   2,258     0.99 %
Hometown Folks   2     6,252     0.03 %   19.2     Quick Service Restaurant   204     0.09 %
Houlihan's Restaurant Group   1     10,089     0.05 %   3.9     Casual Dining   273     0.12 %
Hy-Vee   1     40,461     0.21 %   10.5     Supermarket   326     0.14 %
Interfoods of America   3     6,440     0.03 %   4.7     Quick Service Restaurant   232     0.10 %
Iron Mountain   1     126,664     0.65 %   4.5     Storage Facility   443     0.19 %
J.C. Corral, Inc.   1     9,952     0.05 %   6.1     Family Dining   162     0.07 %
Jack In The Box, Inc.   45     120,417     0.62 %   3.6     Quick Service Restaurant   5,202     2.28 %
JCS Holdings, Inc.   3     16,718     0.09 %   6.1     Casual Dining   501     0.22 %
John C. Brown   1     6,002     0.03 %   —     Family Dining   42     0.02 %
John Deere   1     552,960     2.85 %   4.6     Specialty Retail   2,353     1.03 %
Kaiser Foundation   1     100,352     0.52 %   9.6     Healthcare   4,233     1.86 %
Ker Management Services, LLC   2     14,105     0.07 %   9.3     Casual Dining   236     0.10 %
Key Bank   1     3,575     0.02 %   9.5     Retail Banking   98     0.04 %
K-MAC Holdings Corp   1     2,121     0.01 %   1.1     Quick Service Restaurant   115     0.05 %
Kohl's   1     88,408     0.46 %   10.6     Discount Retail   859     0.38 %
Koning Restaurants International   2     5,860     0.03 %   7.3     Family Dining   106     0.05 %
Krystal   23     50,447     0.26 %   19.3     Quick Service Restaurant   2,584     1.13 %
Krystal (GE Portfolio)   4     8,926     0.05 %   4.9     Quick Service Restaurant   429     0.19 %
Kum & Go   12     55,057     0.28 %   18.3     Gas/Convenience   2,707     1.19 %
Leeann Chin   3     9,051     0.05 %   7.9     Quick Service Restaurant   263     0.12 %
Little General Store, Inc.   1     1,940     0.01 %   9.4     Quick Service Restaurant   49     0.02 %
Logan's Roadhouse   6     48,406     0.25 %   13.4     Casual Dining   1,821     0.80 %
Mattress Firm   6     47,912     0.25 %   9.8     Specialty Retail   853     0.37 %
Meritage Group   1     2,606     0.01 %   2.7     Quick Service Restaurant   106     0.05 %
Metro Corral Partners   1     12,260     0.06 %   10.9     Family Dining   393     0.17 %
Michael Callahan   1     3,206     0.02 %   1.2     Quick Service Restaurant   84     0.04 %
Michigan Mult-King   1     2,036     0.01 %   2.8     Quick Service Restaurant   88     0.04 %
Midwest BBQ Ventures, LLC   1     5,803     0.03 %   —     Casual Dining   202     0.09 %
Mountain Range Restaurants   1     5,985     0.03 %   6.6     Family Dining   91     0.04 %
MrEats Corral, LLC   1     9,952     0.05 %   0.8     Family Dining   221     0.10 %
Mrs. Baird's   1     75,050     0.39 %   3.9     Consumer Goods   631     0.28 %
NBI Food Services   1     2,900     0.01 %   11.9     Quick Service Restaurant   97     0.04 %
NEA-BBQ, LLC   3     16,920     0.09 %   4.9     Casual Dining   416     0.18 %
North Country Management   1     3,400     0.02 %   5.5     Quick Service Restaurant   69     0.03 %
NTB   1     12,244     0.06 %   10.4     Auto Services   146     0.06 %
NTW & Big O Tires   2     17,159     0.09 %   10.6     Auto Services   312     0.14 %
Ohio Valley Bistros   1     8,242     0.04 %   5.0     Casual Dining   333     0.15 %
Ok Apple, Inc.   1     4,761     0.02 %   11.0     Casual Dining   223     0.10 %
O'Reilly Auto   2     12,084     0.06 %   14.2     Auto Retail   166     0.07 %
Pacific Bells   3     6,594     0.03 %   10.7     Quick Service Restaurant   424     0.19 %
Pantry Gas & Convenience   11     32,393     0.17 %   8.8     Gas/Convenience   2,746     1.21 %
PENNANT FOODS CORP.   10     29,417     0.15 %   4.6     Quick Service Restaurant   928     0.41 %
Pilot Flying J   1     17,480     0.09 %   5.5     Gas/Convenience   970     0.43 %
Platinum Corral, LLC   2     22,382     0.12 %   2.1     Family Dining   431     0.19 %
Price Rite   1     42,100     0.22 %   14.7     Supermarket   354     0.16 %
Prometheus Partners   11     27,601     0.14 %   8.4     Quick Service Restaurant   1,342     0.59 %
Qdoba   2     5,000     0.03 %   9.8     Quick Service Restaurant   209     0.09 %
Quality Dining   4     19,573     0.10 %   6.6     Quick Service Restaurant   373     0.16 %
Razzoos   1     6,607     0.03 %   2.7     Casual Dining   201     0.09 %
Real Mex Restaurants   2     15,563     0.08 %   9.5     Casual Dining   417     0.18 %
Reckitt Benckiser   1     32,000     0.16 %   4.8     Consumer Products   964     0.42 %
Restaurant Management Co.   6     14,536     0.07 %   3.2     Family Dining   287     0.13 %
Rite Aid   10     142,233     0.73 %   14.8     Pharmacy   3,503     1.54 %
Roger K Osborne   1     2,850     0.01 %   7.1     Quick Service Restaurant   95     0.04 %
Royal Capital   5     27,418     0.14 %   9.6     Family Dining   667     0.29 %
Rubbermaid   2     1,160,820     5.98 %   9.4     Consumer Products   3,135     1.38 %
Rubio's Restaurants   1     2,379     0.01 %   1.2     Casual Dining   120     0.05 %
Ruby Tuesday, Inc.   6     30,851     0.16 %   5.6     Casual Dining   839     0.37 %
Run Restaurants   1     6,356     0.03 %   11.7     Casual Dining   163     0.07 %
Saulat Enterprises   10     36,844     0.19 %   6.0     Quick Service Restaurant   450     0.20 %
Scotts Company   3     551,249     2.84 %   9.5     Consumer Products   1,512     0.66 %
Shaw's Supermarkets   1     59,766     0.31 %   7.7     Supermarket   513     0.23 %
Shoney's   6     31,939     0.16 %   9.6     Family Dining   375     0.16 %

 

18
 

 

 

Tenant  

Number of

Properties 

   Square Feet  

Square Feet as

a % of Total

Portfolio 

  

Average

Remaining

Lease Term (2) 

   Industry  

Average

Annual Rent

(in 000's) 

  

Average

Annual Rent as

a % of Total

Portfolio 

Shoot the Moon   1     5,208     0.03 %   3.5     Casual Dining   128     0.06 %
Shorest, LLC   5     26,512     0.14 %   10.2     Family Dining   459     0.20 %
Sonfish   2     6,737     0.03 %   10.4     Quick Service Restaurant   204     0.09 %
Southeast New Mexico Foods   2     4,346     0.02 %   19.2     Quick Service Restaurant   122     0.05 %
Southern Boys Restaurant Group   2     10,283     0.05 %   2.3     Family Dining   171     0.08 %
Southern Rock Restaurants, LLC   1     3,389     0.02 %   4.6     Casual Dining   66     0.03 %
Southern Star Management Group   1     2,763     0.01 %   5.3     Quick Service Restaurant   60     0.03 %
Subhash Gupta   1     2,591     0.01 %   3.8     Quick Service Restaurant   66     0.03 %
Subway Restaurants   1     2,485     0.01 %   9.4     Quick Service Restaurant   35     0.02 %
Synovus Bank   1     3,744     0.02 %   8.0     Retail Banking   336     0.15 %
Tacala   2     4,220     0.02 %   5.8     Quick Service Restaurant   199     0.09 %
Talbots   1     313,000     1.61 %   19.9     Specialty Retail   3,803     1.67 %
Tally Ho Partners   1     2,608     0.01 %   6.9     Quick Service Restaurant   61     0.03 %
TCF National Bank   1     5,654     0.03 %   17.1     Retail Banking   104     0.05 %
TD Bank   1     143,030     0.74 %   11.5     Retail Banking   2,750     1.21 %
Texas Roadhouse, Inc.   9     59,852     0.31 %   2.5     Casual Dining   1,635     0.72 %
The Bailey Company   1     3,477     0.02 %   3.2     Quick Service Restaurant   131     0.06 %
Tire Kingdom   1     6,656     0.03 %   10.2     Auto Services   155     0.07 %
Top Line Restaurants   1     7,025     0.04 %   16.4     Family Dining   125     0.05 %
Tractor Supply   6     129,975     0.67 %   12.1     Specialty Retail   1,547     0.68 %
Tripoli   1     4,558     0.02 %   2.7     Family Dining   164     0.07 %
Twin Dragon LLC   1     6,400     0.03 %   3.5     Casual Dining   106     0.05 %
United States Beef   5     14,725     0.08 %   5.4     Quick Service Restaurant   319     0.14 %
Valenti Management   1     2,535     0.01 %   8.3     Quick Service Restaurant   148     0.06 %
Vitamin Shoppe   1     3,500     0.02 %   9.4     Specialty Retail   166     0.07 %
Vsgh Partners   2     4,802     0.02 %   0.5     Quick Service Restaurant   63     0.03 %
Walgreens   37     530,595     2.73 %   15.4     Pharmacy   13,258     5.82 %
Wendab Associates   4     11,831     0.06 %   12.7     Quick Service Restaurant   598     0.26 %
Wendy's Company   1     3,199     0.02 %   8.5     Quick Service Restaurant   108     0.05 %
West Marine   1     15,404     0.08 %   9.0     Specialty Retail   277     0.12 %
Williams Sonoma   1     1,106,876     5.70 %   9.5     Consumer Products   4,179     1.83 %
Woodland Group   9     43,623     0.22 %   5.2     Casual Dining   1,311     0.58 %
Yum! Brands   1     2,900     0.01 %   6.8     Quick Service Restaurant   112     0.05 %
Z & H Foods, Inc.   3     5,295     0.03 %   1.6     Quick Service Restaurant   137     0.06 %
Zee&Son, LLC   1     2,007     0.01 %   19.2     Family Dining   27     0.01 %
Total   1,181     19,404,596     100 %   9.9         227,764     100 %

_______________________________________________

(1) Excludes one vacant property classified as held for sale.

(2) Remaining lease term in years as of June 30, 2013.

 

19
 

American Realty Capital Properties, Inc.

 

Tenant Industry Diversification (1)

 

 

Industry  

Number of

Properties 

   Square Feet  

Square Feet as a %

of Total Portfolio 

  

Average Annual Rent

(in 000's) 

  

Average Annual Rent

as a % of Total

Portfolio 

Aerospace   1     303,035     1.6 %   $ 2,511     1.1 %
Auto Retail   57     399,037     2.1 %   5,577     2.4 %
Auto Services   4     36,059     0.2 %   613     0.3 %
Casual Dining   97     715,369     3.7 %   15,580     6.8 %
Consumer Goods   1     75,050     0.4 %   631     0.3 %
Consumer Products   12     6,738,395     34.7 %   25,023     11.0 %
Discount Retail   278     2,702,451     13.9 %   24,815     10.9 %
Family Dining   115     699,851     3.6 %   16,087     7.1 %
Financial Services   1     145,003     0.7 %   1,269     0.6 %
Freight   29     1,385,568     7.1 %   16,028     7.0 %
Gas/Convenience   31     124,916     0.6 %   7,250     3.2 %
Government Services   12     217,615     1.1 %   5,833     2.6 %
Healthcare   21     656,638     3.4 %   13,073     5.7 %
Home Maintenance   1     465,600     2.4 %   2,258     1.0 %
Insurance   1     818,686     4.2 %   10,821     4.8 %
Pharmacy   61     824,731     4.3 %   19,987     8.8 %
Quick Service Restaurant   276     772,358     4.0 %   27,564     12.1 %
Retail Banking   161     858,779     4.4 %   20,753     9.1 %
Specialty Retail   18     1,196,464     6.2 %   10,456     4.6 %
Storage Facility   1     126,664     0.7 %   443     0.2 %
Supermarket   3     142,327     0.7 %   1,192     0.5 %
Total   1,181     19,404,596     100 %   $ 227,764     100 %

_______________________________________________

(1) Excludes one vacant property classified as held for sale.

 

 

20
 

American Realty Capital Properties, Inc. 

Property Geographic Diversification (1) 

 

State/Possession  

Number of

Properties 

   Square Feet  

Square Feet as a %

of Total Portfolio 

  

Average Annual

Rent (in 000's) 

  

Average Annual Rent

as a % of Total

Portfolio 

Alabama   43     578,951     3.0 %   $ 8,121     3.6 %
Arizona   8     74,227     0.4 %   1,613     0.7 %
Arkansas   18     250,618     1.3 %   3,652     1.6 %
California   16     1,450,328     7.5 %   12,488     5.5 %
Colorado   13     238,886     1.2 %   4,673     2.1 %
Connecticut   10     37,126     0.2 %   1,184     0.5 %
Delaware   4     12,369     0.1 %   286     0.1 %
Florida   36     188,676     1.0 %   5,366     2.4 %
Georgia   64     403,579     2.1 %   8,896     3.9 %
Idaho   8     71,565     0.4 %   1,552     0.7 %
Illinois   42     1,486,911     7.7 %   19,123     8.4 %
Indiana   28     1,762,150     9.1 %   8,288     3.6 %
Iowa   19     671,074     3.5 %   4,810     2.1 %
Kansas   22     1,305,125     6.7 %   4,611     2.0 %
Kentucky   27     263,260     1.4 %   4,629     2.0 %
Louisiana   28     221,238     1.1 %   2,871     1.3 %
Maine   2     146,430     0.8 %   2,819     1.2 %
Maryland   2     11,205     0.1 %   366     0.2 %
Massachusetts   18     435,195     2.2 %   6,157     2.7 %
Michigan   78     677,709     3.5 %   12,674     5.6 %
Minnesota   11     200,487     1.0 %   1,693     0.7 %
Mississippi   36     1,380,764     7.1 %   8,327     3.7 %
Missouri   86     942,859     4.9 %   11,019     4.8 %
Montana   5     55,377     0.3 %   856     0.4 %
Nebraska   3     25,355     0.1 %   409     0.2 %
Nevada   12     100,660     0.5 %   2,414     1.1 %
New Hampshire   10     65,328     0.3 %   1,349     0.6 %
New Jersey   8     85,721     0.4 %   2,640     1.2 %
New Mexico   10     54,475     0.3 %   870     0.4 %
New York   25     326,461     1.7 %   7,522     3.3 %
North Carolina   54     1,123,948     5.8 %   10,840     4.8 %
North Dakota   4     31,318     0.2 %   572     0.3 %
Ohio   63     1,197,640     6.2 %   10,754     4.7 %
Oklahoma   22     370,185     1.9 %   2,882     1.3 %
Oregon   6     25,143     0.1 %   652     0.3 %
Pennsylvania   69     365,231     1.9 %   8,697     3.8 %
Puerto Rico   2     31,050     0.2 %   1,105     0.5 %
Rhode Island   5     23,488     0.1 %   636     0.3 %
South Carolina   30     649,029     3.3 %   6,920     3.0 %
South Dakota   2     49,641     0.3 %   415     0.2 %
Tennessee   48     362,779     1.9 %   6,526     2.9 %
Texas   127     983,549     5.1 %   15,323     6.7 %
Utah   3     14,009     0.1 %   415     0.2 %
Vermont   4     15,432     0.1 %   335     0.1 %
Virginia   25     150,269     0.8 %   3,395     1.5 %
Washington   5     219,700     1.1 %   3,139     1.4 %
West Virginia   9     57,079     0.3 %   1,434     0.6 %
Wisconsin   7     187,439     1.0 %   1,869     0.8 %
Wyoming   4     23,558     0.1 %   577     0.3 %
Total   1,181     19,404,596     100 %   $ 227,764     100 %

_______________________________________________

(1) Excludes one vacant property classified as held for sale

 

.

21
 

American Realty Capital Properties, Inc.

 

Property Building Type Diversification (1)

 

 

Building Type  

Number of

Properties 

   Square Feet  

Square Feet as a %

of Total Portfolio 

  

Average Annual Rent

(in 000's) 

  

Average Annual Rent

as a % of Total

Portfolio 

Retail   1,100     7,609,157     39.2 %   $ 143,757     63.1 %
Office   35     1,992,555     10.3 %   33,275     14.6 %
Distribution   46     9,802,884     50.5 %   50,732     22.3 %
Total   1,181     19,404,596     100 %   $ 227,764     100 %

_______________________________________________

(1) Excludes one vacant property classified as held for sale.

 

 

 

22
 

American Realty Capital Properties, Inc.

 

Lease Expirations

 

 

Year of Expiration  

Number of Leases

Expiring 

  

Average Annual Rent

(in 000's) 

  

% of Portfolio

Average Annual Rent

Expiring 

  

Leased Rentable

Square Feet 

  

% of Portfolio

Rentable Square

Feet Expiring 

July 31, 2013 through December 31, 2013   7     605     0.3 %   34,936     0.2 %
2014   34     4,358     1.9 %   200,243     1.0 %
2015   46     5,009     2.2 %   278,769     1.4 %
2016   54     6,157     2.7 %   256,987     1.3 %
2017   100     13,117     5.8 %   914,069     4.7 %
2018   121     19,625     8.6 %   1,328,382     6.8 %
2019   71     10,436     4.6 %   461,073     2.4 %
2020   58     7,377     3.2 %   300,376     1.6 %
2021   63     13,635     6.0 %   920,691     4.7 %
2022   124     24,138     10.6 %   4,073,687     21.0 %
2023   70     25,437     11.2 %   2,690,873     13.9 %
Total   748     129,894     57.1 %   11,460,086     59.0 %

 

 

 

 

23
 

American Realty Capital Properties, Inc.

 

Definitions

 

Average annual rent is annualized rental income or Net Operating Income under our leases reflecting straight-line rent adjustments associated with contractual rent increases in the leases as required by GAAP, as further adjusted to reflect the effect of (i) tenant concessions and abatements such as free rent, and (ii) in respect of our modified gross leased properties, the effect of operating expense reimbursement revenue less property operating expenses.

 

Creditworthy tenants are determined by us based on our own assessment of the tenant financial condition based on our underwriting criteria.

 

Funds from operations, core funds from operations and adjusted funds from operations (FFO/Core FFO/AFFO) -We define FFO, a non-GAAP measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT, as revised in February 2004 (the "White Paper"). The White Paper defines FFO as net income or loss computed in accordance with U.S. GAAP, excluding gains or losses from sales of property but including asset impairment writedowns, plus depreciation and amortization, after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO. Our FFO calculation complies with NAREIT’s policy described above.

The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time, especially if such assets are not adequately maintained or repaired and renovated as required by relevant circumstances and/or is requested or required by lessees for operational purposes in order to maintain the value disclosed. We believe that, since real estate values historically rise and fall with market conditions, including inflation, interest rates, the business cycle, unemployment and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation may be less informative. Historical accounting for real estate involves the use of U.S. GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in U.S. GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate related depreciation and amortization, provides a more complete understanding of our performance to investors and to management, and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income. We also add back to net income deriving FFO certain costs associated with our Merger and other transactions as these expenses and transactions do not reflect our operations in the current period. However, FFO, core FFO and AFFO, as described below, should not be construed to be more relevant or accurate than the current U.S. GAAP methodology in calculating net income or in its applicability in evaluating our operating performance. The method utilized to evaluate the value and performance of real estate under U.S. GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP FFO, core FFO and AFFO measures and the adjustments to U.S. GAAP in calculating FFO, core FFO and AFFO.

 

We consider FFO, core FFO adjusted to exclude acquisition related costs and AFFO, adjusted to exclude certain other non-cash income or expense items, useful indicators of the performance of a REIT. Because FFO calculations exclude such factors as depreciation and amortization of real estate assets and gains or losses from sales of operating real estate assets (which can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates), they facilitate comparisons of operating performance between periods and between other REITs in our peer group. Accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered the presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves.

 

Additionally, we believe that core FFO and AFFO, by excluding acquisition-related fees and expenses, provides information consistent with management's analysis of the operating performance of the properties. By providing core FFO and AFFO, we believe we are presenting useful information that assists investors and analysts to better assess the sustainability of our operating performance. Further, we believe core FFO and AFFO is useful in comparing the sustainability of our operating performance with the sustainability of the operating performance of other real estate companies, including exchange-traded and non-traded REITs.

 

 

24
 

 

American Realty Capital Properties, Inc.

 

Definitions

 

(Continued)

 

As a result, we believe that the use of FFO, core FFO and AFFO, together with the required U.S. GAAP presentations, provide a more complete understanding of our performance relative to our peers and a more informed and appropriate basis on which to make decisions involving operating, financing, and investing activities.

 

FFO, core FFO and AFFO are non-GAAP financial measures and do not represent net income as defined by U.S. GAAP. FFO, core FFO and AFFO do not represent cash flows from operations as defined by U.S. GAAP, are not indicative of cash available to fund all cash flow needs and liquidity, including our ability to pay distributions and should not be considered as alternatives to net income, as determined in accordance with U.S. GAAP, for purposes of evaluating our operating performance. Other REITs may not define FFO in accordance with the current NAREIT definition (as we do) or may interpret the current NAREIT definition differently than we do and/or calculate core FFO and AFFO differently than we do. Consequently, our presentation of FFO, core FFO and AFFO may not be comparable to other similarly titled measures presented by other REITs.

 

 

Investment grade - a determination made by major credit rating agencies.

 

25