Segment Reporting

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Segment Reporting

Note 6 — Segment Reporting (As Restated)

The Company operates under two segments, REI and Cole Capital.

REI – Through its REI segment, the Company acquires, owns and operates primarily single-tenant, freestanding commercial real estate properties primarily subject to net leases with high credit quality tenants. The Company focuses on investing in properties that are net leased to credit tenants, which are generally large public companies with investment-grade ratings and other creditworthy tenants. The Company’s long-term business strategy is to continue to acquire a diverse portfolio consisting of approximately 70% long-term leases and 30% medium-term leases, with an average remaining primary lease term of approximately 10 to 12 years. The Company considers properties that are leased on a “medium-term” basis to mean properties originally leased long-term (10 years or longer) that currently have a primary remaining lease duration of generally three to eight years, on average. The Company seeks to acquire granular, self-originated single-tenant net lease assets, which may be purchased through sale-leaseback transactions, small portfolio acquisitions and in connection with build-to-suit opportunities, to the extent they are appropriate in terms of capitalization rate and scale. The Company expects this investment strategy to provide for stable income from credit tenants and for growth opportunities from re-leasing of current below market leases. As of June 30, 2014, the Company owned 3,966 properties comprising 106.8 million square feet of single and multi-tenant retail and commercial space located in 49 states, which include properties owned through consolidated joint ventures. As of June 30, 2014, the rentable space at these properties was 98.8% leased with a weighted average remaining lease term of 9.95 years. As of June 30, 2014, the Company also owned 25 commercial mortgage-backed securities (“CMBS”), 14 loans held for investment and, through the Unconsolidated Joint Ventures, had interests in six properties comprising 1.6 million rentable square feet of commercial and retail space.

Cole Capital – Cole Capital is contractually responsible for managing the Managed REITs’ affairs on a day-to-day basis, identifying and making acquisitions and investments on the Managed REITs’ behalf and recommending to each of the Managed REIT’s respective board of directors an approach for providing investors with liquidity. Cole Capital serves as the dealer manager and distributes shares of common stock for certain Managed REITs and advises them regarding offerings, manages relationships with participating broker-dealers and financial advisors and provides assistance in connection with compliance matters relating to the offerings. Cole Capital receives compensation and reimbursement for services relating to the Managed REITs’ offerings and the investment, management, financing and disposition of their respective assets, as applicable. Cole Capital also develops new REIT offerings, including obtaining regulatory approvals from the SEC, the Financial Industry Regulatory Authority, Inc. (“FINRA”) and various blue sky jurisdictions for such offerings.

The Company allocates certain operating expenses, such as audit and legal fees, board of director fees, employee-related costs and benefits and general overhead expenses between its two segments. The following tables present a summary of the comparative financial results and total assets for each business segment (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
	(As Restated)			(As Restated)			(As Restated)			(As Restated)
REI:
Rental income	$	314,519		$	52,664		$	558,934		$	93,651
Direct financing lease income		1,181			—			2,187			—
Operating expense reimbursements		29,256			2,281			50,732			4,191
Total real estate investment revenues		344,956			54,945			611,853			97,842
Acquisition related		7,201			37,266			20,618			47,593
Merger and other non-routine transactions		5,999			5,865			165,793			129,433
Property operating expenses		39,286			3,086			69,041			5,635
Management fees to affiliate		—			—			13,888			12,493
General and administrative expenses		17,977			6,283			53,638			14,055
Depreciation and amortization		225,965			33,681			385,448			60,434
Impairment of real estate		1,556			—			1,556			—
Total operating expenses		297,984			86,181			709,982			269,643
Operating income (loss)		46,972			(31,236	)		(98,129	)		(171,801	)
Interest expense, net		(103,897	)		(11,424	)		(224,848	)		(18,225	)
Extinguishment of debt, net	$	(6,469	)	$	—		$	(15,868	)	$	—
Other (expense) income, net		4,332			1,523			8,291			2,522
Gain (loss) on derivative instruments, net		14,207			(31,174	)		7,086			(31,179	)
Loss on disposition of properties, net		(1,269	)		—			(18,874	)		—
Gain on sale of investments		—			—			—			451
Total other expenses, net		(93,096	)		(41,075	)		(244,213	)		(46,431	)
Net loss from continuing operations		(46,124	)		(72,311	)		(342,342	)		(218,232	)
Discontinued operations:
Income from operations of held for sale properties	$	—		$	36		$	—		$	20
Net income from discontinued operations		—			36			—			20
Net loss	$	(46,124	)	$	(72,275	)	$	(342,342	)	$	(218,212	)
Cole Capital:
Dealer manager and distribution fees, selling commissions and offering reimbursements	$	9,969		$	—		$	52,422		$	—
Transaction service fees		14,411			—			18,970			—
Management fees and reimbursements		12,842			—			20,087			—
Total Cole Capital revenues		37,222			—			91,479			—
Cole Capital reallowed fees and commissions		7,068			—			41,504			—
Merger and other non-routine transactions		1,423			—			1,927			—
General and administrative expenses		22,035			—			42,866			—
Depreciation and amortization		24,774			—			39,133			—
Total operating expenses		55,300			—			125,430			—
Total other income		7,604			—			13,855			—
Net income (loss)	$	(10,474	)	$	—		$	(20,096	)	$	—
Total Company:
Total revenues	$	382,178		$	54,945		$	703,332		$	97,842
Total operating expenses	$	353,284		$	86,181		$	835,412		$	269,643
Total other expense	$	(85,492	)	$	(41,075	)	$	(230,358	)	$	(46,431	)
Loss from continuing operations	$	(56,598	)	$	(72,311	)	$	(362,438	)	$	(218,232	)
Income from discontinued operations	$	—		$	36		$	—		$	20
Net loss	$	(56,598	)	$	(72,275	)	$	(362,438	)	$	(218,212	)

	Total Assets
	June 30, 2014 (As Restated)		December 31, 2013 (As Restated)
REI	$	20,182,178	$	7,809,083
Cole Capital		1,128,318		—
Total Company	$	21,310,496	$	7,809,083