VEREIT Exhibit 99.2 Quarterly Supplemental Information - 6.30.2015
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
| |
VEREIT Supplemental Information | |
June 30, 2015 | |
|
| | |
Section | Page | |
| |
Company Overview | |
| |
Financial Information | |
Financial Summary | |
Financial and Operations Statistics and Ratios | |
Key Balance Sheet Metrics and Capital Structure | |
Business Model | |
Consolidated Balance Sheets | |
Consolidated Statements of Operations | |
Consolidated FFO and AFFO | | |
Consolidated EBITDA and Normalized EBITDA | | |
| | |
Real Estate Investments | | |
Statements of Operations | |
FFO and AFFO | |
EBITDA and Normalized EBITDA | |
Net Operating Income | |
Same Store Contract Rental Revenue | |
Debt and Preferred Equity Summary | |
Mortgage Notes Payable | |
Credit Facility and Corporate Bond Covenants | |
Acquisitions, Development Projects and Dispositions | |
Lease Summary | | |
Lease Expirations | | |
Top 10 Concentrations | |
Tenants Comprising Over 1% of Annualized Rental Revenue | |
Diversification | |
Unconsolidated Joint Venture Investment Summary | |
| |
Cole Capital | |
Statements of Operations | |
FFO and AFFO | |
EBITDA and Normalized EBITDA | |
Program Development Costs | |
Managed Programs | | |
Definitions | | |
| | |
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
This data and other information described herein are as of and for the three months ended June 30, 2015, March 31, 2015, December 31, 2014, September 30, 2014 and June 30, 2014, unless otherwise indicated. Future performance may not be consistent with past performance and is subject to change and inherent risks and uncertainties. This information should be read in conjunction with the financial statements and the management's discussion and analysis of financial condition and results of operations section contained in VEREIT's Annual Report on Form 10-K for the year ended December 31, 2014 and Quarterly Reports on Form 10-Q for the three months ended June 30, 2015, March 31, 2015 and September 30, 2014 and Form 10-Q/A for the three months ended June 30, 2014. |
|
Forward-Looking Statements |
Certain statements contained herein may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). VEREIT intends for all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable. Such statements include, in particular, statements about VEREIT's plans, strategies, and prospects and are subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of VEREIT's performance in future periods. Such forward-looking statements can generally be identified by VEREIT's use of forward-looking terminology such as "may," "will," "would," "could," "should," "expect," "intend," "anticipate," "estimate," "believe," "continue," or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. VEREIT makes no representation or warranty (express or implied) about the accuracy of any such forward-looking statements contained herein, and does not intend, and undertakes no obligation, to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Factors and risks that could cause actual results to differ materially from expectations are disclosed from time to time in greater detail in VEREIT's filings with the U.S. Securities and Exchange Commission including, but not limited to, VEREIT's Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and 10-Q/A, as well as its press releases. |
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Company Overview (unaudited) |
|
VEREIT, Inc. (the "Company," , "VEREIT", "us," "our" and "we") is a self-managed and self-administered real estate company, incorporated in Maryland on December 2, 2010, which has elected to be taxed, and currently qualifies as a real estate investment trust ("REIT") for U.S. federal income tax purposes. On September 6, 2011, the Company completed its initial public offering.
The Board of Directors authorized amendments to the Company’s Articles of Amendment and Restatement and the Certificate of Limited Partnership of the Company's operating partnership to effect name changes from American Realty Capital Properties, Inc. and ARC Properties Operating Partnership, L.P., to VEREIT, Inc. and VEREIT Operating Partnership, L.P., respectively, effective July 28, 2015. Effective July 31, 2015, VEREIT transferred the listing of its common and preferred stock to the New York Stock Exchange (the “NYSE”) from the NASDAQ Global Select Market . The common and preferred stock now trade under the trading symbols “VER” and “VER PRF”, respectively.
VEREIT is a full service real estate operating company that operates in two business segments, Real Estate Investment ("REI") and Cole Capital®, the Company's investment management segment ("Cole Capital"). Through our REI segment, we own and actively manage a diversified portfolio of retail, restaurant, office and industrial real estate assets primarily subject to long-term net leases with high credit quality tenants. We target properties that are strategically located and essential to the business operations of the tenant, as well as retail properties that offer necessity- and value-oriented products and/or services. At June 30, 2015, approximately 47.4% of our Annualized Rental Income was delivered from investment-grade tenants, our occupancy was 98.4% and our weighted-average lease term was 11.5 years. Cole Capital is contractually responsible for raising capital for, managing the affairs of and identifying and making acquisitions and investments on behalf of non-traded REITs and other real estate programs sponsored by Cole Capital (the "Managed Programs") on a day-to-day basis. We receive compensation and reimbursement for services relating to the Managed Programs' offerings and the investment, management, financing and disposition of their respective assets, as applicable. Cole Capital allows us to generate earnings without the corresponding need to invest capital in that business or incur balance sheet debt in order to fund or expand operations. Cole Capital also develops new REIT offerings and coordinates receipt of regulatory approvals from the SEC, the Financial Industry Regulatory Authority, Inc. and various jurisdictions for such offerings. At the appropriate time, Cole Capital recommends to each of the Managed Program's respective board of directors an approach for providing investors with liquidity.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 4
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
| | |
Senior Management | | Board of Directors |
| | |
Glenn J. Rufrano, Chief Executive Officer | | Hugh R. Frater, Non-Executive Chairman |
| | |
Michael J. Sodo, Executive Vice President, Chief Financial Officer and Treasurer | | Thomas A. Andruskevich, Independent Director |
| | |
Lauren R. Goldberg, Executive Vice President, General Counsel and Secretary | | Bruce D. Frank, Independent Director |
| | |
Paul H. McDowell, President, Office and Industrial Group | | Mark S. Ordan, Independent Director |
| | |
William C. Miller, Executive Vice President, Investment Management | | Julie G. Richardson, Independent Director |
| | |
Thomas W. Roberts, Executive Vice President, Real Estate | | William G. Stanley, Independent Director |
| | |
Gavin B. Brandon, Senior Vice President and Chief Accounting Officer | | Glenn J. Rufrano, Chief Executive Officer |
| | |
Corporate Offices and Contact Information
|
| | |
2325 E. Camelback Road, Suite 1100 | | 5 Bryant Park, 23rd Floor |
Phoenix, AZ 85016 | | New York, NY 10018 |
800-606-3610 | | 212-413-9100 |
www.VEREIT.com | | |
Trading Symbols: VER, VER PRF
Stock Exchange Listing: New York Stock Exchange
Transfer Agent
Computershare Trust Company, N.A.
250 Royall Street
Canton, MA 02021
800-736-3001
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 5
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Financial Summary (unaudited, dollars in thousands, except per share amounts) |
|
|
| | | | | | | | | | | | | | | | | | | |
| Q2 2015 | | Q1 2015 | | Q4 2014 | | Q3 2014 | | Q2 2014 |
Consolidated Financial Results | | | | | | | | | |
Revenue | $ | 393,721 |
| | $ | 393,968 |
| | $ | 418,807 |
| | $ | 457,118 |
| | $ | 382,178 |
|
Net loss | $ | (108,709 | ) | | $ | (30,693 | ) | | $ | (360,427 | ) | | $ | (288,047 | ) | | $ | (56,598 | ) |
Normalized EBITDA | $ | 309,306 |
| | $ | 315,161 |
| | $ | 323,643 |
| | $ | 358,301 |
| | $ | 291,664 |
|
Funds from operations (FFO) | $ | 193,951 |
| | $ | 195,030 |
| | $ | (58,825 | ) | | $ | 195,798 |
| | $ | 156,967 |
|
FFO per diluted share | $ | 0.21 |
| | $ | 0.21 |
| | $ | (0.06 | ) | | $ | 0.21 |
| | $ | 0.18 |
|
Adjusted funds from operations (AFFO) | $ | 202,338 |
| | $ | 200,135 |
| | $ | 205,459 |
| | $ | 244,549 |
| | $ | 185,934 |
|
AFFO per diluted share | $ | 0.22 |
| | $ | 0.22 |
| | $ | 0.22 |
| | $ | 0.26 |
| | $ | 0.21 |
|
Dividends paid per common share | $ | — |
| | $ | — |
| | $ | 0.25 |
| | $ | 0.25 |
| | $ | 0.25 |
|
| | | | | | | | | |
Real Estate Investments | | | | | | | | | |
Revenue | $ | 367,192 |
| | $ | 366,474 |
| | $ | 366,525 |
| | $ | 397,321 |
| | $ | 344,956 |
|
Net loss | $ | (108,267 | ) | | $ | (30,607 | ) | | $ | (82,458 | ) | | $ | (289,133 | ) | | $ | (46,124 | ) |
Normalized EBITDA | $ | 303,331 |
| | $ | 306,323 |
| | $ | 309,791 |
| | $ | 331,067 |
| | $ | 283,527 |
|
FFO | $ | 194,393 |
| | $ | 195,116 |
| | $ | 219,144 |
| | $ | 194,712 |
| | $ | 167,441 |
|
FFO per diluted share | $ | 0.21 |
| | $ | 0.21 |
| | $ | 0.24 |
| | $ | 0.21 |
| | $ | 0.19 |
|
AFFO | $ | 195,370 |
| | $ | 195,073 |
| | $ | 193,934 |
| | $ | 214,991 |
| | $ | 168,188 |
|
AFFO per diluted share | $ | 0.21 |
| | $ | 0.21 |
| | $ | 0.21 |
| | $ | 0.23 |
| | $ | 0.19 |
|
Properties owned | 4,645 |
| | 4,647 |
| | 4,648 |
| | 4,714 |
| | 3,966 |
|
Rentable square feet (in thousands) | 101,836 |
| | 102,133 |
| | 103,149 |
| | 113,801 |
| | 106,800 |
|
Economic occupancy rate | 98.4 | % | | 98.4 | % | | 99.3 | % | | 99.2 | % | | 98.8 | % |
Weighted-average remaining lease term (years) | 11.5 |
| | 11.7 |
| | 11.8 |
| | 11.5 |
| | 10.4 |
|
Investment-grade tenants (1) | 47.4 | % | | 47.0 | % | | 46.9 | % | | 44.8 | % | | 49.0 | % |
| | | | | | | | | |
Cole Capital | | | | | | | | | |
Revenue | $ | 26,529 |
| | $ | 27,494 |
| | $ | 52,282 |
| | $ | 59,797 |
| | $ | 37,222 |
|
Net (loss) income | $ | (442 | ) | | $ | (86 | ) | | $ | (277,969 | ) | | $ | 1,086 |
| | $ | (10,474 | ) |
Normalized EBITDA | $ | 5,975 |
| | $ | 8,838 |
| | $ | 13,853 |
| | $ | 27,234 |
| | $ | 8,137 |
|
FFO | $ | (442 | ) | | $ | (86 | ) | | $ | (277,969 | ) | | $ | 1,086 |
| | $ | (10,474 | ) |
FFO per diluted share | $ | — |
| | $ | — |
| | $ | (0.30 | ) | | $ | — |
| | $ | (0.01 | ) |
AFFO | $ | 6,968 |
| | $ | 5,062 |
| | $ | 11,524 |
| | $ | 29,558 |
| | $ | 17,746 |
|
AFFO per diluted share | $ | 0.01 |
| | $ | 0.01 |
| | $ | 0.01 |
| | $ | 0.03 |
| | $ | 0.02 |
|
Capital raised on behalf of Managed Programs, excluding DRIP | $ | 58,205 |
| | $ | 29,770 |
| | $ | 128,282 |
| | $ | 218,270 |
| | $ | 113,241 |
|
Purchase price of property acquisitions on behalf of Managed Programs | $ | 214,694 |
| | $ | 225,814 |
| | $ | 942,818 |
| | $ | 1,111,900 |
| | $ | 754,612 |
|
Gross Real Estate Investments (2) | $ | 6,286,402 |
| | $ | 6,084,979 |
| | $ | 8,563,540 |
| | $ | 7,705,703 |
| | $ | 6,565,984 |
|
(1) Reflects the percent of our tenants, including parent companies of our tenants and lease guarantors, with a Standard and Poor's credit rating of BBB- or higher or a Moody's credit rating of Baa3 or higher. The weighted-average credit rating of our investment-grade tenants was BBB+ as of June 30, 2015.
(2) Cole Corporate Income Trust, Inc. ("CCIT") merged with Select Income REIT on January 29, 2015. Prior to the sale, Cole Capital had managed $2.7 billion of assets on behalf of CCIT. As such, June 30, 2015 and March 31, 2015 excludes CCIT's Gross Real Estate Investments.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 6
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Financial and Operations Statistics and Ratios (unaudited, dollars in thousands) |
|
|
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | June 30, 2015 | | March 31, 2015 | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 |
Interest Coverage Ratio | | | | | | | | | | |
Interest expense | | $ | 88,422 |
| | $ | 91,658 |
| | $ | 91,620 |
| | $ | 97,333 |
| | $ | 97,500 |
|
Normalized EBITDA | | 309,306 |
| | 315,161 |
| | 323,643 |
| | 358,301 |
| | 291,664 |
|
Interest coverage ratio | | 3.50x |
| | 3.44x |
| | 3.53x |
| | 3.68x |
| | 2.99x |
|
| | | | | | | | | | |
Fixed Charge Coverage Ratio | | | | | | | | | | |
Interest expense | | $ | 88,422 |
| | $ | 91,658 |
| | $ | 91,620 |
| | $ | 97,333 |
| | $ | 97,500 |
|
Secured debt principal amortization | | 8,520 |
| | 10,999 |
| | 8,993 |
| | 6,938 |
| | 6,789 |
|
Dividends attributable to preferred shares | | 17,973 |
| | 17,973 |
| | 17,973 |
| | 36,282 |
| | 22,016 |
|
Total fixed charges | | 114,915 |
| | 120,630 |
| | 118,586 |
| | 140,553 |
| | 126,305 |
|
Normalized EBITDA | | 309,306 |
| | 315,161 |
| | 323,643 |
| | 358,301 |
| | 291,664 |
|
Fixed charge coverage ratio | | 2.69x |
| | 2.61x |
| | 2.73x |
| | 2.55x |
| | 2.31x |
|
| | | | | | | | | | |
| | June 30, 2015 | | March 31, 2015 | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 |
Net Debt Ratios | | | | | | | | | | |
Total Debt | | $ | 9,401,839 |
| | $ | 10,333,173 |
| | $ | 10,469,121 |
| | $ | 11,551,644 |
| | $ | 9,672,412 |
|
Less: cash and cash equivalents | | 121,651 |
| | 788,739 |
| | 416,711 |
| | 145,310 |
| | 195,529 |
|
Net Debt | | 9,280,188 |
| | 9,544,434 |
| | 10,052,410 |
| | 11,406,334 |
| | 9,476,883 |
|
Normalized EBITDA annualized | | 1,237,224 |
| | 1,260,644 |
| | 1,294,572 |
| | 1,433,204 |
| | 1,166,656 |
|
Net Debt to Normalized EBITDA annualized ratio | | 7.50x |
| | 7.57x |
| | 7.77x |
| | 7.96x |
| | 8.12x |
|
| | | | | | | | | | |
Net Debt | | $ | 9,280,188 |
| | $ | 9,544,434 |
| | $ | 10,052,410 |
| | $ | 11,406,334 |
| | $ | 9,476,883 |
|
Gross Real Estate Investments | | 17,725,642 |
| | 17,904,710 |
| | 18,211,712 |
| | 20,369,206 |
| | 18,281,837 |
|
Net Debt leverage ratio | | 52.4 | % | | 53.3 | % | | 55.2 | % | | 56.0 | % | | 51.8 | % |
| | | | | | | | | | |
Unencumbered Assets/Real Estate Assets | | | | | | | | |
Unencumbered Gross Real Estate Investments | | $ | 11,360,689 |
| | $ | 11,187,797 |
| | $ | 11,570,474 |
| | $ | 12,602,273 |
| | $ | 10,374,329 |
|
Gross Real Estate Investments | | 17,725,642 |
| | 17,904,710 |
| | 18,211,712 |
| | 20,369,206 |
| | 18,281,837 |
|
Unencumbered asset ratio | | 64.1 | % | | 62.5 | % | | 63.5 | % | | 61.9 | % | | 56.7 | % |
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 7
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Key Balance Sheet Metrics and Capital Structure (unaudited, dollars and shares in thousands, except per share amounts) |
|
|
| | | | |
| | Common equity | 41.9 | % |
| | | |
| | Secured debt | 19.8 | % |
| | | |
| | Corporate bonds | 14.1 | % |
| | | |
| | Revolving credit facility | 7.2 | % |
| | | |
| | Preferred equity | 6.0 | % |
| | | |
| | Unsecured term loan | 5.5 | % |
| | | |
| | Convertible term notes | 5.5 | % |
Fixed vs. Variable Rate Debt
|
| | |
Fixed | 72.5 | % |
Swapped to Fixed | 13.7 | % |
Variable | 13.8 | % |
|
| | | | | | | |
VEREIT Capitalization Table | | | |
| Wtd. Avg. Maturity (Years) | | Rate | | June 30, 2015 |
Diluted shares and units outstanding | | | | | 929,697 |
|
Stock price | | | | | $ | 8.13 |
|
Implied Equity Market Capitalization | | $ | 7,558,437 |
|
| | | | | |
Series F Perpetual Preferred | | 6.70% | | 1,070,853 |
|
| | | | | |
Mortgage notes payable | 6.8 | | 4.95% | | 3,514,540 |
|
KBC secured term loan | 2.5 | | 5.81% | | 37,299 |
|
Total secured debt | 6.8 | | 4.96% | | 3,551,839 |
|
| | | | | |
Unsecured term loan (swapped to fixed) | 3.0 | | 3.30% | | 1,000,000 |
|
Revolving credit facility | 3.0 | | 1.98% | | 1,300,000 |
|
Total unsecured credit facility | 3.0 | | 2.55% | | 2,300,000 |
|
3-year corporate bonds | 1.6 | | 2.00% | | 1,300,000 |
|
5-year corporate bonds | 3.6 | | 3.00% | | 750,000 |
|
5-year convertible term notes | 3.1 | | 3.00% | | 597,500 |
|
7-year convertible term notes | 5.5 | | 3.75% | | 402,500 |
|
10-year corporate bonds | 8.6 | | 4.60% | | 500,000 |
|
Total unsecured debt | 3.4 | | 2.79% | | 5,850,000 |
|
| | | | | |
Total Debt | 4.7 | | 3.61% | | 9,401,839 |
|
| | | | | |
Total Capitalization | | $ | 18,031,129 |
|
Less: Cash and cash equivalents | | | | | 121,651 |
|
Enterprise Value | | $ | 17,909,478 |
|
| | | | | |
Net Debt/Enterprise Value | | | | | 51.8 | % |
Net Debt/Normalized EBITDA Annualized | | | | 7.50x |
|
Net Debt + Preferred/Normalized EBITDA Annualized | | 8.37 | x |
Fixed Charge Coverage | | | | | 2.69x |
|
Liquidity (1) | | | | | $ | 1,421,651 |
|
_____________________________________
(1) Liquidity represents cash and cash equivalents of $121.7 million and $1.3 billion available capacity on credit facility. Subsequent to June 30, 2015, the Company amended the credit agreement and reduced the maximum capacity on the credit facility by $0.3 million.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 8
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Business Model (unaudited) |
|
(1) Not represented are the 24 properties that consist of billboards, construction in progress and parking lots.
(2) Excludes CCIT, as it merged with Select Income REIT on January 29, 2015.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 9
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Consolidated Balance Sheets (unaudited, in thousands, except per share data) |
|
|
| | | | | | | | | | | | | | | | | | | | |
| | June 30, 2015 | | March 31, 2015 | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 |
Assets | | | | | | | | | | |
Real estate investments, at cost: | | | | | | | | | | |
Land | | $ | 3,351,303 |
| | $ | 3,434,414 |
| | $ | 3,472,298 |
| | $ | 3,487,824 |
| | $ | 3,343,235 |
|
Buildings, fixtures and improvements | | 11,779,450 |
| | 12,081,061 |
| | 12,307,758 |
| | 12,355,029 |
| | 12,420,626 |
|
Land and construction in progress | | 83,104 |
| | 83,284 |
| | 77,450 |
| | 86,973 |
| | 62,594 |
|
Intangible lease assets | | 2,339,273 |
| | 2,386,904 |
| | 2,435,054 |
| | 2,424,076 |
| | 2,227,393 |
|
Total real estate investments, at cost | | 17,553,130 |
| | 17,985,663 |
| | 18,292,560 |
| | 18,353,902 |
| | 18,053,848 |
|
Less: accumulated depreciation and amortization | | 1,401,843 |
| | 1,238,320 |
| | 1,034,122 |
| | 828,624 |
| | 660,617 |
|
Total real estate investments, net | | 16,151,287 |
| | 16,747,343 |
| | 17,258,438 |
| | 17,525,278 |
| | 17,393,231 |
|
Investment in unconsolidated entities | | 94,502 |
| | 95,390 |
| | 98,053 |
| | 100,762 |
| | 102,047 |
|
Investment in direct financing leases, net | | 49,801 |
| | 54,822 |
| | 56,076 |
| | 57,441 |
| | 62,094 |
|
Investment securities, at fair value | | 55,802 |
| | 56,493 |
| | 58,646 |
| | 59,131 |
| | 219,204 |
|
Loans held for investment, net | | 40,598 |
| | 41,357 |
| | 42,106 |
| | 96,981 |
| | 97,587 |
|
Cash and cash equivalents | | 121,651 |
| | 788,739 |
| | 416,711 |
| | 145,310 |
| | 195,529 |
|
Restricted cash | | 53,336 |
| | 64,578 |
| | 62,651 |
| | 72,754 |
| | 69,544 |
|
Intangible assets, net | | 135,340 |
| | 142,851 |
| | 150,359 |
| | 323,332 |
| | 347,618 |
|
Deferred costs and other assets, net | | 403,606 |
| | 400,884 |
| | 389,922 |
| | 446,606 |
| | 418,199 |
|
Goodwill | | 1,847,295 |
| | 1,871,114 |
| | 1,894,794 |
| | 2,096,450 |
| | 2,293,020 |
|
Due from affiliates | | 53,456 |
| | 58,457 |
| | 86,122 |
| | 55,666 |
| | 73,686 |
|
Assets held for sale | | 242,701 |
| | — |
| | 1,261 |
| | 1,887,872 |
| | 38,737 |
|
Total assets | | $ | 19,249,375 |
| | $ | 20,322,028 |
| | $ | 20,515,139 |
| | $ | 22,867,583 |
| | $ | 21,310,496 |
|
| | | | | | | | | | |
Liabilities and Equity | | | | | | | | | | |
Mortgage notes payable and other debt, net | | $ | 3,500,144 |
| | $ | 3,672,496 |
| | $ | 3,805,761 |
| | $ | 3,830,994 |
| | $ | 4,373,652 |
|
Corporate bonds, net | | 2,546,864 |
| | 2,546,701 |
| | 2,546,499 |
| | 2,546,294 |
| | 2,546,089 |
|
Convertible debt, net | | 979,852 |
| | 978,769 |
| | 977,521 |
| | 976,251 |
| | 975,003 |
|
Credit facility | | 2,300,000 |
| | 3,184,000 |
| | 3,184,000 |
| | 4,259,000 |
| | 1,896,000 |
|
Below-market lease liabilities, net | | 298,102 |
| | 304,754 |
| | 317,838 |
| | 318,494 |
| | 281,954 |
|
Accounts payable and accrued expenses | | 168,877 |
| | 160,129 |
| | 163,025 |
| | 180,338 |
| | 174,942 |
|
Deferred rent, derivative and other liabilities | | 122,999 |
| | 139,241 |
| | 127,611 |
| | 195,256 |
| | 223,419 |
|
Distributions payable | | 9,938 |
| | 9,959 |
| | 9,995 |
| | 9,927 |
| | 10,779 |
|
Due to affiliates | | 268 |
| | 547 |
| | 559 |
| | 2,757 |
| | 3,184 |
|
Mortgage notes payable associated with assets held for sale | | 118,493 |
| | — |
| | — |
| | 545,382 |
| | — |
|
Total liabilities | | 10,045,537 |
| | 10,996,596 |
| | 11,132,809 |
| | 12,864,693 |
| | 10,485,022 |
|
Series D preferred stock | | — |
| | — |
| | — |
| | — |
| | 269,299 |
|
Series F preferred stock | | 428 |
| | 428 |
| | 428 |
| | 428 |
| | 427 |
|
Common stock | | 9,051 |
| | 9,051 |
| | 9,055 |
| | 9,080 |
| | 9,079 |
|
Additional paid-in capital | | 11,924,547 |
| | 11,919,358 |
| | 11,920,253 |
| | 11,905,338 |
| | 11,901,675 |
|
Accumulated other comprehensive (loss) income | | (1,928 | ) | | (4,136 | ) | | 2,728 |
| | 8,600 |
| | 7,058 |
|
Accumulated deficit | | (2,951,019 | ) | | (2,826,524 | ) | | (2,778,576 | ) | | (2,182,731 | ) | | (1,639,208 | ) |
Total stockholders' equity | | 8,981,079 |
| | 9,098,177 |
| | 9,153,888 |
| | 9,740,715 |
| | 10,279,031 |
|
Non-controlling interests | | 222,759 |
| | 227,255 |
| | 228,442 |
| | 262,175 |
| | 277,144 |
|
Total equity | | 9,203,838 |
|
| 9,325,432 |
| | 9,382,330 |
| | 10,002,890 |
| | 10,556,175 |
|
Total liabilities and equity | | $ | 19,249,375 |
| | $ | 20,322,028 |
| | $ | 20,515,139 |
| | $ | 22,867,583 |
| | $ | 21,310,496 |
|
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 10
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Consolidated Statements of Operations (unaudited, in thousands, except per share data) |
|
|
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | June 30, 2015 | | March 31, 2015 | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 |
Revenues: | | | | | | | | | | |
Rental income | | $ | 341,183 |
| | $ | 342,759 |
| | $ | 346,928 |
| | $ | 365,712 |
| | $ | 314,519 |
|
Direct financing lease income | | 697 |
| | 741 |
| | 791 |
| | 625 |
| | 1,181 |
|
Operating expense reimbursements | | 25,312 |
| | 22,974 |
| | 18,806 |
| | 30,984 |
| | 29,256 |
|
Cole Capital revenue | | 26,529 |
| | 27,494 |
| | 52,282 |
| | 59,797 |
| | 37,222 |
|
Total revenues | | 393,721 |
|
| 393,968 |
|
| 418,807 |
|
| 457,118 |
|
| 382,178 |
|
Operating expenses: | | | | | | | | | | |
Cole Capital reallowed fees and commissions | | 3,710 |
| | 2,031 |
| | 9,326 |
| | 15,398 |
| | 7,068 |
|
Acquisition related | | 1,563 |
| | 2,182 |
| | 4,215 |
| | 13,998 |
| | 7,201 |
|
Merger and other non-routine transactions | | 16,864 |
| | 16,423 |
| | 25,162 |
| | 7,632 |
| | 7,422 |
|
Property operating | | 32,598 |
| | 30,999 |
| | 27,723 |
| | 40,977 |
| | 39,286 |
|
General and administrative | | 33,958 |
| | 33,106 |
| | 44,622 |
| | 30,213 |
| | 37,224 |
|
Depreciation and amortization | | 217,513 |
| | 219,141 |
| | 226,272 |
| | 265,150 |
| | 250,739 |
|
Impairments | | 85,341 |
| | — |
| | 406,136 |
| | 2,299 |
| | 1,556 |
|
Total operating expenses | | 391,547 |
| | 303,882 |
| | 743,456 |
| | 375,667 |
| | 350,496 |
|
Operating income (loss) | | 2,174 |
| | 90,086 |
| | (324,649 | ) | | 81,451 |
| | 31,682 |
|
Other (expense) income: | | | | | | | | | | |
Interest expense, net | | (90,572 | ) | | (95,699 | ) | | (126,157 | ) | | (101,643 | ) | | (103,897 | ) |
Extinguishment of debt, net | | — |
| | 429 |
| | (605 | ) | | (5,396 | ) | | (6,469 | ) |
Other income, net | | 5,302 |
| | 8,961 |
| | 65,848 |
| | 8,687 |
| | 4,442 |
|
Gain (loss) on derivative instruments, net | | 311 |
| | (1,028 | ) | | (172 | ) | | (17,484 | ) | | 14,207 |
|
Gain on sale of investments | | — |
| | — |
| | — |
| | 6,357 |
| | — |
|
Total other expenses, net | | (84,959 | ) | | (87,337 | ) | | (61,086 | ) | | (109,479 | ) | | (91,717 | ) |
Loss before income and franchise taxes and loss on disposition of real estate and held for sale assets | | (82,785 | ) | | 2,749 |
| | (385,735 | ) | | (28,028 | ) | | (60,035 | ) |
Loss on disposition of real estate and held for sale assets, net | | (24,674 | ) | | (31,368 | ) | | (1,263 | ) | | (256,894 | ) | | (1,269 | ) |
Loss before income and franchise taxes | | (107,459 | ) | | (28,619 | ) | | (386,998 | ) | | (284,922 | ) | | (61,304 | ) |
(Provision for) benefit from income and franchise taxes | | (1,250 | ) | | (2,074 | ) | | 26,571 |
| | (3,125 | ) | | 4,706 |
|
Net loss | | (108,709 | ) |
| (30,693 | ) |
| (360,427 | ) |
| (288,047 | ) |
| (56,598 | ) |
Net loss attributable to non-controlling interests | | 2,187 |
| | 723 |
| | 9,804 |
| | 7,649 |
| | 1,878 |
|
Net loss attributable to the Company | | $ | (106,522 | ) | | $ | (29,970 | ) | | $ | (350,623 | ) | | $ | (280,398 | ) | | $ | (54,720 | ) |
| | | | | | | | | | |
Basic and diluted net loss per share attributable to common stockholders | | $ | (0.14 | ) | | $ | (0.05 | ) | | $ | (0.41 | ) | | $ | (0.35 | ) | | $ | (0.10 | ) |
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 11
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Consolidated FFO and AFFO (unaudited, in thousands, except share and per share data) |
|
|
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | June 30, 2015 | | March 31, 2015 | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 |
Net loss | | $ | (108,709 | ) | | $ | (30,693 | ) | | $ | (360,427 | ) | | $ | (288,047 | ) | | $ | (56,598 | ) |
Dividends on non-convertible preferred stock | | (17,973 | ) | | (17,973 | ) | | (17,973 | ) | | (17,974 | ) | | (17,773 | ) |
Loss on disposition of real estate and held for sale assets, net | | 24,674 |
| | 31,368 |
| | 1,263 |
| | 256,894 |
| | 1,269 |
|
Depreciation and amortization of real estate assets | | 209,132 |
| | 210,770 |
| | 219,080 |
| | 240,046 |
| | 225,940 |
|
Impairment of real estate assets | | 85,341 |
| | — |
| | 96,692 |
| | 2,299 |
| | 1,556 |
|
Proportionate share of adjustments for unconsolidated entities | | 1,486 |
| | 1,558 |
| | 2,540 |
| | 2,580 |
| | 2,573 |
|
FFO | | $ | 193,951 |
| | $ | 195,030 |
| | $ | (58,825 | ) | | $ | 195,798 |
| | $ | 156,967 |
|
| | | | | | | | | | |
Acquisition related | | 1,563 |
| | 2,182 |
| | 4,215 |
| | 13,998 |
| | 7,201 |
|
Merger and other non-routine transactions | | 16,864 |
| | 16,423 |
| | 25,162 |
| | 7,632 |
| | 7,422 |
|
Impairment of intangible assets | | — |
| | — |
| | 309,444 |
| | — |
| | — |
|
Legal settlements and insurance proceeds | | — |
| | (1,250 | ) | | (60,720 | ) | | (3,275 | ) | | — |
|
Loss (gain) on sale and unrealized gains of investment securities | | 172 |
| | (233 | ) | | — |
| | (6,357 | ) | | — |
|
(Gain) loss on derivative instruments, net | | (311 | ) | | 1,028 |
| | 172 |
| | 17,484 |
| | (14,207 | ) |
Amortization of premiums and discounts on debt and investments, net | | (5,298 | ) | | (3,858 | ) | | 11,461 |
| | (8,106 | ) | | (4,606 | ) |
Amortization of below-market lease liabilities, net of amortization of above-market lease assets | | 1,064 |
| | 1,007 |
| | 1,475 |
| | 1,934 |
| | 2,103 |
|
Net direct financing lease adjustments | | 491 |
| | 495 |
| | 448 |
| | 620 |
| | 137 |
|
Amortization and write-off of deferred financing costs | | 7,428 |
| | 7,929 |
| | 23,475 |
| | 12,486 |
| | 10,985 |
|
Amortization of management contracts | | 7,510 |
| | 7,510 |
| | 6,233 |
| | 24,288 |
| | 24,024 |
|
Deferred tax benefit(1) | | (3,874 | ) | | (3,972 | ) | | (33,324 | ) | | — |
| | — |
|
Extinguishment of debt and forgiveness of debt, net | | — |
| | (5,302 | ) | | 605 |
| | 5,396 |
| | 6,469 |
|
Straight-line rent | | (23,997 | ) | | (19,107 | ) | | (25,367 | ) | | (24,871 | ) | | (17,413 | ) |
Equity-based compensation expense, net of forfeiture(2) | | 5,355 |
| | 818 |
| | (980 | ) | | 5,541 |
| | 5,690 |
|
Other amortization and non-cash charges | | 766 |
| | 753 |
| | 895 |
| | 713 |
| | 698 |
|
Proportionate share of adjustments for unconsolidated entities | | 654 |
| | 682 |
| | 1,090 |
| | 1,268 |
| | 464 |
|
AFFO | | $ | 202,338 |
| | $ | 200,135 |
| | $ | 205,459 |
| | $ | 244,549 |
| | $ | 185,934 |
|
| | | | | | | | | | |
Weighted-average shares outstanding - basic | | 903,339,143 |
| | 902,996,270 |
| | 902,528,136 |
| | 902,096,102 |
| | 815,406,408 |
|
Effect of dilutive securities (3) | | 26,348,273 |
| | 26,157,663 |
| | 29,629,740 |
| | 44,970,255 |
| | 52,613,117 |
|
Weighted-average shares outstanding - diluted(4) | | 929,687,416 |
| | 929,153,933 |
| | 932,157,876 |
| | 947,066,357 |
| | 868,019,525 |
|
| | | | | | | | | | |
FFO per diluted share | | $ | 0.21 |
| | $ | 0.21 |
| | $ | (0.06 | ) | | $ | 0.21 |
| | $ | 0.18 |
|
AFFO per diluted share | | $ | 0.22 |
| | $ | 0.22 |
| | $ | 0.22 |
| | $ | 0.26 |
| | $ | 0.21 |
|
_______________________________________
(1) This adjustment represents the non-current portion of the provision or benefit in order to show only the current portion of the benefit 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 and six months ended June 30, 2015, 1.4 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 June 30, 2015.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 12
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Consolidated EBITDA and Normalized EBITDA (unaudited, in thousands) |
|
|
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | June 30, 2015 | | March 31, 2015 | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 |
Net loss | | $ | (108,709 | ) | | $ | (30,693 | ) | | $ | (360,427 | ) | | $ | (288,047 | ) | | $ | (56,598 | ) |
Adjustments: | | | | | | | | | | |
Interest expense | | 90,572 |
| | 95,699 |
| | 126,157 |
| | 101,643 |
| | 103,897 |
|
Depreciation and amortization | | 217,513 |
| | 219,141 |
| | 226,272 |
| | 265,150 |
| | 250,739 |
|
Provision for (benefit from) income and franchise taxes | | 1,250 |
| | 2,074 |
| | (26,571 | ) | | 3,125 |
| | (4,706 | ) |
Proportionate share of adjustments for unconsolidated entities | | 2,415 |
| | 2,661 |
| | 3,402 |
| | 3,433 |
| | 3,453 |
|
EBITDA | | $ | 203,041 |
| | $ | 288,882 |
| | $ | (31,167 | ) | | $ | 85,304 |
| | $ | 296,785 |
|
Management adjustments: | | | | | | | | | | |
Loss on held for sale assets and disposition of real estate, net | | 24,674 |
| | 31,368 |
| | 1,263 |
| | 256,894 |
| | 1,269 |
|
Impairments | | 85,341 |
| | — |
| | 406,136 |
| | 2,299 |
| | 1,556 |
|
Acquisition related | | 1,563 |
| | 2,182 |
| | 4,215 |
| | 13,998 |
| | 7,201 |
|
Merger and other non-routine transactions | | 16,864 |
| | 16,423 |
| | 25,162 |
| | 7,632 |
| | 7,422 |
|
Loss (gain) on sale and unrealized gains of investment securities | | 172 |
| | (233 | ) | | — |
| | (6,357 | ) | | — |
|
(Gain) loss on derivative instruments, net | | (311 | ) | | 1,028 |
| | 172 |
| | 17,484 |
| | (14,207 | ) |
Amortization of below-market lease liabilities, net of amortization of above-market lease assets | | 1,064 |
| | 1,007 |
| | 1,475 |
| | 1,934 |
| | 2,103 |
|
(Gain) loss on early extinguishment of debt and forgiveness of debt, net | | — |
| | (5,302 | ) | | 605 |
| | 5,396 |
| | 6,469 |
|
Net direct financing lease adjustments | | 491 |
| | 495 |
| | 448 |
| | 620 |
| | 137 |
|
Straight-line rent | | (23,997 | ) | | (19,107 | ) | | (25,367 | ) | | (24,871 | ) | | (17,413 | ) |
Legal settlement and insurance proceeds | | — |
| | (1,250 | ) | | (60,720 | ) | | (3,275 | ) | | — |
|
Other amortization and non-cash charges | | (125 | ) | | (78 | ) | | 335 |
| | (33 | ) | | (95 | ) |
Proportionate share of adjustments for unconsolidated entities | | 529 |
| | (254 | ) | | 1,086 |
| | 1,276 |
| | 437 |
|
Normalized EBITDA | | $ | 309,306 |
| | $ | 315,161 |
| | $ | 323,643 |
| | $ | 358,301 |
| | $ | 291,664 |
|
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 13
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 14
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Statements of Operations - REI Segment (unaudited, in thousands) |
|
|
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | June 30, 2015 | | March 31, 2015 | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 |
Revenues: | | | | | | | | | | |
Rental income | | $ | 341,183 |
| | $ | 342,759 |
| | $ | 346,928 |
| | $ | 365,712 |
| | $ | 314,519 |
|
Direct financing lease income | | 697 |
| | 741 |
| | 791 |
| | 625 |
| | 1,181 |
|
Operating expense reimbursements | | 25,312 |
| | 22,974 |
| | 18,806 |
| | 30,984 |
| | 29,256 |
|
Total real estate investment revenues | | 367,192 |
|
| 366,474 |
|
| 366,525 |
|
| 397,321 |
|
| 344,956 |
|
Operating expenses: | | | | | | | | | | |
Acquisition related | | 1,563 |
| | 1,723 |
| | 853 |
| | 13,998 |
| | 7,201 |
|
Merger and other non-routine transactions | | 16,864 |
| | 16,423 |
| | 25,139 |
| | 7,613 |
| | 5,999 |
|
Property operating | | 32,598 |
| | 30,999 |
| | 27,723 |
| | 40,977 |
| | 39,286 |
|
General and administrative | | 16,827 |
| | 15,370 |
| | 13,586 |
| | 12,948 |
| | 15,189 |
|
Depreciation and amortization | | 209,122 |
| | 210,788 |
| | 219,222 |
| | 240,073 |
| | 225,965 |
|
Impairment of real estate | | 85,341 |
| | — |
| | 96,692 |
| | 2,299 |
| | 1,556 |
|
Total operating expenses | | 362,315 |
|
| 275,303 |
|
| 383,215 |
| | 317,908 |
| | 295,196 |
|
Operating income (loss) | | 4,877 |
|
| 91,171 |
|
| (16,690 | ) | | 79,413 |
| | 49,760 |
|
Other (expense) income: | | | | | | | | | | |
Interest expense, net | | (90,572 | ) | | (95,699 | ) | | (126,157 | ) | | (101,643 | ) | | (103,897 | ) |
Extinguishment of debt, net | | — |
| | 429 |
| | (605 | ) | | (5,396 | ) | | (6,469 | ) |
Other income, net | | 4,910 |
| | 7,742 |
| | 63,837 |
| | 8,508 |
| | 4,332 |
|
(Loss) gain on derivative instruments, net | | 311 |
| | (1,028 | ) | | (172 | ) | | (17,484 | ) | | 14,207 |
|
Gain on sale of investments | | — |
| | — |
| | — |
| | 6,357 |
| | — |
|
Total other expenses, net | | (85,351 | ) |
| (88,556 | ) |
| (63,097 | ) | | (109,658 | ) | | (91,827 | ) |
Loss before income and franchise taxes and loss on disposition of real estate and held for sale assets | | (80,474 | ) | | 2,615 |
| | (79,787 | ) | | (30,245 | ) | | (42,067 | ) |
Loss on disposition of real estate and held for sale assets, net | | (24,674 | ) | | (31,368 | ) | | (1,263 | ) | | (256,894 | ) | | (1,269 | ) |
Loss before income and franchise taxes | | (105,148 | ) |
| (28,753 | ) |
| (81,050 | ) | | (287,139 | ) | | (43,336 | ) |
Provision for income and franchise taxes | | (3,119 | ) | | (1,854 | ) | | (1,408 | ) | | (1,994 | ) | | (2,788 | ) |
Net loss | | $ | (108,267 | ) |
| $ | (30,607 | ) |
| $ | (82,458 | ) |
| $ | (289,133 | ) |
| $ | (46,124 | ) |
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 15
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
FFO and AFFO - REI Segment (unaudited, in thousands, except share and per share data) |
|
|
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | June 30,
2015 | | March 31, 2015 | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 |
Net loss | | $ | (108,267 | ) | | $ | (30,607 | ) | | $ | (82,458 | ) | | $ | (289,133 | ) | | $ | (46,124 | ) |
Dividends on non-convertible preferred stock | | (17,973 | ) | | (17,973 | ) | | (17,973 | ) | | (17,974 | ) | | (17,773 | ) |
Loss on disposition of real estate and held for sale assets, net | | 24,674 |
| | 31,368 |
| | 1,263 |
| | 256,894 |
| | 1,269 |
|
Depreciation and amortization of real estate assets | | 209,132 |
| | 210,770 |
| | 219,080 |
| | 240,046 |
| | 225,940 |
|
Impairment of real estate | | 85,341 |
| | — |
| | 96,692 |
| | 2,299 |
| | 1,556 |
|
Proportionate share of adjustments for unconsolidated entities | | 1,486 |
| | 1,558 |
| | 2,540 |
| | 2,580 |
| | 2,573 |
|
FFO | | $ | 194,393 |
| | $ | 195,116 |
| | $ | 219,144 |
| | $ | 194,712 |
| | $ | 167,441 |
|
| | | | | | | | | | |
Acquisition related | | 1,563 |
| | 1,723 |
| | 853 |
| | 13,998 |
| | 7,201 |
|
Merger and other non-routine transactions | | 16,864 |
| | 16,423 |
| | 25,139 |
| | 7,613 |
| | 5,999 |
|
Legal settlement and insurance proceeds | | — |
| | (1,250 | ) | | (60,720 | ) | | (3,275 | ) | | — |
|
Loss (gain) on sale and unrealized gains of investment securities | | 172 |
| | (233 | ) | | — |
| | (6,357 | ) | | — |
|
Loss (gain) on derivative instruments, net | | (311 | ) | | 1,028 |
| | 172 |
| | 17,484 |
| | (14,207 | ) |
Amortization of premiums and discounts on debt and investments, net | | (5,298 | ) | | (3,858 | ) | | 11,461 |
| | (8,106 | ) | | (4,606 | ) |
Amortization of below-market lease liabilities, net of amortization of above-market lease assets | | 1,064 |
| | 1,007 |
| | 1,475 |
| | 1,934 |
| | 2,103 |
|
Net direct financing lease adjustments | | 491 |
| | 495 |
| | 448 |
| | 620 |
| | 137 |
|
Amortization and write-off of deferred financing costs | | 7,428 |
| | 7,929 |
| | 23,475 |
| | 12,486 |
| | 10,985 |
|
Extinguishment of debt and forgiveness of debt, net | | — |
| | (5,302 | ) | | 605 |
| | 5,396 |
| | 6,469 |
|
Straight-line rent | | (23,997 | ) | | (19,107 | ) | | (25,367 | ) | | (24,871 | ) | | (17,413 | ) |
Equity-based compensation expense, net of forfeitures (1) | | 2,357 |
| | 402 |
| | (3,997 | ) | | 2,086 |
| | 3,575 |
|
Other amortization and non-cash charges | | (10 | ) | | 18 |
| | 156 |
| | 3 |
| | 40 |
|
Proportionate share of adjustments for unconsolidated entities | | 654 |
| | 682 |
| | 1,090 |
| | 1,268 |
| | 464 |
|
AFFO | | $ | 195,370 |
| | $ | 195,073 |
| | $ | 193,934 |
| | $ | 214,991 |
| | $ | 168,188 |
|
| | | | | | | | | | |
Weighted-average shares outstanding - basic | | 903,339,143 |
| | 902,996,270 |
| | 902,528,136 |
| | 902,096,102 |
| | 815,406,408 |
|
Effect of dilutive securities (2) | | 26,348,273 |
| | 26,157,663 |
| | 29,629,740 |
| | 44,970,255 |
| | 52,613,117 |
|
Weighted-average shares outstanding - diluted (3) | | 929,687,416 |
| | 929,153,933 |
| | 932,157,876 |
| | 947,066,357 |
| | 868,019,525 |
|
| | | | | | | | | | |
FFO per diluted share | | $ | 0.21 |
| | $ | 0.21 |
| | $ | 0.24 |
| | $ | 0.21 |
| | $ | 0.19 |
|
AFFO per diluted share | | $ | 0.21 |
| | $ | 0.21 |
| | $ | 0.21 |
| | $ | 0.23 |
| | $ | 0.19 |
|
_________________________________
(1) 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.
(2) Dilutive securities include limited partnership interests in our operating partnership, 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 Company’s common stock as of the end of each reporting period presented. In addition, for the three and six months ended June 30, 2015, 1.4 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 June 30, 2015.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 16
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
EBITDA and Normalized EBITDA - REI Segment (unaudited, in thousands) |
|
|
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | June 30, 2015 | | March 31, 2015 | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 |
Net loss | | $ | (108,267 | ) | | $ | (30,607 | ) | | $ | (82,458 | ) | | $ | (289,133 | ) | | $ | (46,124 | ) |
Adjustments: | | | | | | | | | | |
Interest expense | | 90,572 |
| | 95,699 |
| | 126,157 |
| | 101,643 |
| | 103,897 |
|
Depreciation and amortization | | 209,122 |
| | 210,788 |
| | 219,222 |
| | 240,073 |
| | 225,965 |
|
Provision for income and franchise taxes | | 3,119 |
| | 1,854 |
| | 1,408 |
| | 1,994 |
| | 2,788 |
|
Proportionate share of adjustments for unconsolidated entities | | 2,415 |
| | 2,661 |
| | 3,402 |
| | 3,433 |
| | 3,453 |
|
EBITDA | | $ | 196,961 |
| | $ | 280,395 |
| | $ | 267,731 |
| | $ | 58,010 |
| | $ | 289,979 |
|
Management adjustments: | | | | | | | | | | |
Loss on held for sale assets and disposition of real estate, net | | 24,674 |
| | 31,368 |
| | 1,263 |
| | 256,894 |
| | 1,269 |
|
Impairments | | 85,341 |
| | — |
| | 96,692 |
| | 2,299 |
| | 1,556 |
|
Acquisition related | | 1,563 |
| | 1,723 |
| | 853 |
| | 13,998 |
| | 7,201 |
|
Merger and other non-routine transactions | | 16,864 |
| | 16,423 |
| | 25,139 |
| | 7,613 |
| | 5,999 |
|
Loss (gain) on sale and unrealized gains of investment securities | | 172 |
| | (233 | ) | | — |
| | (6,357 | ) | | — |
|
(Gain) loss on derivative instruments, net | | (311 | ) | | 1,028 |
| | 172 |
| | 17,484 |
| | (14,207 | ) |
Amortization of below-market lease liabilities, net of amortization of above-market lease assets | | 1,064 |
| | 1,007 |
| | 1,475 |
| | 1,934 |
| | 2,103 |
|
(Gain) loss on early extinguishment of debt and forgiveness of debt, net | | — |
| | (5,302 | ) | | 605 |
| | 5,396 |
| | 6,469 |
|
Net direct financing lease adjustments | | 491 |
| | 495 |
| | 448 |
| | 620 |
| | 137 |
|
Straight-line rent | | (23,997 | ) | | (19,107 | ) | | (25,367 | ) | | (24,871 | ) | | (17,413 | ) |
Legal settlement and insurance proceeds | | — |
| | (1,250 | ) | | (60,720 | ) | | (3,275 | ) | | — |
|
Other amortization and non-cash charges | | (20 | ) | | 30 |
| | 414 |
| | 46 |
| | (3 | ) |
Proportionate share of adjustments for unconsolidated entities | | 529 |
| | (254 | ) | | 1,086 |
| | 1,276 |
| | 437 |
|
Normalized EBITDA | | $ | 303,331 |
| | $ | 306,323 |
| | $ | 309,791 |
| | $ | 331,067 |
| | $ | 283,527 |
|
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 17
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Net Operating Income - REI Segment (unaudited, dollars in thousands) |
|
REI Segment NOI and Cash NOI
|
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | June 30,
2015 | | March 31, 2015 | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 |
Rental income - as reported(1) | | $ | 341,183 |
| | $ | 342,759 |
| | $ | 346,928 |
| | $ | 365,712 |
| | $ | 314,519 |
|
Direct financing lease income - as reported | | 697 |
| | 741 |
| | 791 |
| | 625 |
| | 1,181 |
|
Operating expense reimbursements - as reported | | 25,312 |
| | 22,974 |
| | 18,806 |
| | 30,984 |
| | 29,256 |
|
Property operating expense - as reported | | (32,598 | ) | | (30,999 | ) | | (27,723 | ) | | (40,977 | ) | | (39,286 | ) |
NOI | | 334,594 |
|
| 335,475 |
| | 338,802 |
| | 356,344 |
| | 305,670 |
|
Adjustments: | | | | | | | | | | |
Straight line rent | | (23,997 | ) | | (19,107 | ) | | (25,367 | ) | | (24,871 | ) | | (17,413 | ) |
Amortization of below-market lease liabilities, net of amortization of above-market lease assets | | 1,064 |
| | 1,007 |
| | 1,475 |
| | 1,934 |
| | 2,103 |
|
Net direct financing lease adjustments | | 491 |
| | 495 |
| | 448 |
| | 620 |
| | 137 |
|
Cash NOI | | $ | 312,152 |
|
| $ | 317,870 |
| | $ | 315,358 |
| | $ | 334,027 |
| | $ | 290,497 |
|
_____________________________________
(1) Rental income includes percentage rent of $2.1 million, $2.6 million, $1.6 million, $1.9 million, and $2.7 million for the three months ended June 30, 2015, March 31, 2015, December 31, 2014, September 30, 2014, and June 30, 2014, respectively.
Normalized Cash NOI
|
| | | | |
| | Three Months Ended |
| | June 30, 2015 |
Cash NOI | | $ | 312,152 |
|
Adjustments for intra-quarter acquisitions and dispositions | | (1,079 | ) |
Normalized Cash NOI(1) | | $ | 311,073 |
|
_____________________________________
(1) For properties acquired or build-to-suits completed during the three months ended June 30, 2015, the adjustments for intra-quarter acquisitions and dispositions replaces Cash NOI for the partial period with an amount estimated to be equivalent to Cash NOI for the full period. For properties disposed of during the three months ended June 30, 2015, the adjustment eliminates Cash NOI for the period.
Cash NOI by Property Type
|
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | June 30, 2015 | | March 31, 2015 | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 |
Properties owned | | 4,645 |
| | 4,647 |
| | 4,648 |
| | 4,714 |
| | 3,966 |
|
| | | | | | | | | | |
Single-tenant retail | | $ | 105,714 |
| | $ | 110,742 |
| | $ | 105,910 |
| | $ | 103,149 |
| | $ | 96,338 |
|
Multi-tenant retail | | 5,902 |
| | 5,662 |
| | 10,810 |
| | 37,118 |
| | 37,889 |
|
Restaurant | | 82,568 |
| | 81,583 |
| | 80,557 |
| | 73,189 |
| | 48,045 |
|
Industrial and distribution | | 47,508 |
| | 48,230 |
| | 47,580 |
| | 46,845 |
| | 42,842 |
|
Office | | 70,341 |
| | 71,574 |
| | 70,485 |
| | 73,118 |
| | 65,189 |
|
Other(1) | | 119 |
| | 79 |
| | 16 |
| | 608 |
| | 194 |
|
Total | | $ | 312,152 |
|
| $ | 317,870 |
|
| $ | 315,358 |
|
| $ | 334,027 |
|
| $ | 290,497 |
|
(1) Other includes billboards and parking lots.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 18
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Same Store Contract Rental Revenue (unaudited, dollars in thousands) |
|
The Company reviews the stabilized operating results from properties that were refer to as "same store." In determining the same store property pool, we include all properties that were owned for the entirety of both the current and prior reporting periods, except for properties during the current or prior year that were under development or redevelopment or had revenues that were reserved for in accordance with GAAP. The following tables show the Company's same store portfolio statistics, which included 3,597(1) properties, with 82.6 million aggregate square feet, acquired prior to April 1, 2014 and owned through June 30, 2015:
|
| | | | | | | | | | | | | | | |
| | Quarter Ended June 30, | | Increase/(Decrease) |
| | 2015 | | 2014 | | $ Change | | % Change |
Contract Rental Revenue | | $ | 248,558 |
| | $ | 245,693 |
| | $ | 2,865 |
| | 1.2 | % |
Economic occupancy rate | | 98.2 | % | | 98.5 | % | | NA |
| | NA |
|
|
| | | | | | | | | | | | | | | | | | |
| | | | Contract Rental Revenue |
| | Number of | | Quarter Ended June 30, | | Increase/(Decrease) |
| | Properties | | 2015 | | 2014 | | $ Change | | % Change |
Single-tenant retail | | 1,779 |
| | $ | 93,390 |
| | $ | 92,330 |
| | $ | 1,060 |
| | 1.1 | % |
Multi-tenant retail | | 19 |
| | 5,814 |
| | 5,762 |
| | 52 |
| | 0.9 | % |
Restaurant | | 1,551 |
| | 46,646 |
| | 46,652 |
| | (6 | ) | | — | % |
Industrial and Distribution | | 101 |
| | 38,968 |
| | 39,357 |
| | (389 | ) | | (1.0 | )% |
Office | | 141 |
| | 63,710 |
| | 61,562 |
| | 2,148 |
| | 3.5 | % |
Other(2) | | 6 |
| | 30 |
| | 30 |
| | — |
| | — | % |
Total | | 3,597 |
| | $ | 248,558 |
| | $ | 245,693 |
| | $ | 2,865 |
| | 1.2 | % |
_______________________________________________
(1) Built-to-suit and expansion properties are included in the same store population if the placed in service date was prior to June 1, 2014.
(2) Other properties includes billboards and parking lots.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 19
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Same Store Contract Rental Revenue |
|
The following graphs compare the Company's same store Contract Rental Revenue composition to the Company's total portfolio, based on Annualized Rental Income.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 20
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Debt and Preferred Equity Summary (unaudited, dollars in thousands) |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Principal Payments Due | | Total | | Remaining2015 | | 2016 | | 2017 | | 2018 | | 2019 | | Thereafter |
Mortgage notes payable | | $ | 3,514,540 |
| | $ | 11,524 |
| | $ | 252,235 |
| | $ | 457,932 |
| | $ | 220,184 |
| | $ | 296,006 |
| | $ | 2,276,659 |
|
Unsecured credit facility | | 2,300,000 |
| | — |
| | — |
| | — |
| | 2,300,000 |
| | — |
| | — |
|
Corporate bonds | | 2,550,000 |
| | — |
| | — |
| | 1,300,000 |
| | — |
| | 750,000 |
| | 500,000 |
|
Convertible debt | | 1,000,000 |
| | — |
| | — |
| | — |
| | 597,500 |
| | — |
| | 402,500 |
|
Other debt | | 37,299 |
| | 3,836 |
| | 12,516 |
| | 7,680 |
| | 13,267 |
| | — |
| | — |
|
Total | | $ | 9,401,839 |
| | $ | 15,360 |
| | $ | 264,751 |
| | $ | 1,765,612 |
| | $ | 3,130,951 |
| | $ | 1,046,006 |
| | $ | 3,179,159 |
|
|
| | | | | | | | | |
Debt Type | | Percentage of Total Debt | | Weighted-Average Effective Interest Rate | | Weighted-Average Years to Maturity |
Mortgage notes payable | | 37.4 | % | | 4.95 | % | | 6.8 |
|
Unsecured credit facility | | 24.5 | % | | 2.55 | % | | 3.0 |
|
Corporate bonds | | 27.1 | % | | 2.80 | % | | 3.6 |
|
Convertible debt | | 10.6 | % | | 3.30 | % | | 4.0 |
|
Other debt | | 0.4 | % | | 5.81 | % | | 2.5 |
|
Total | | 100.0 | % | | 3.61 | % | | 4.7 |
|
|
| | | | | | | | | |
Debt Type | | Percentage of Total Debt | | Weighted-Average Effective Interest Rate | | Weighted-Average Years to Maturity |
Total unsecured debt | | 62.2 | % | | 2.79 | % | | 3.4 |
|
Total secured debt | | 37.8 | % | | 4.96 | % | | 6.8 |
|
Total | | 100.0 | % | | 3.61 | % | | 4.7 |
|
| | | | | | |
Total fixed rate debt (1) | | 86.2 | % | | 3.86 | % | | 5.0 |
|
Total floating rate debt | | 13.8 | % | | 2.04 | % | | 3.0 |
|
Total | | 100.0 | % | | 3.61 | % | | 4.7 |
|
|
| | | | | | | | | | |
Preferred Equity | | Amount Outstanding | | Percent of Total Preferred Equity | | Dividend Rate |
Series F preferred stock | | $ | 1,070,853 |
| | 100.00 | % | | 6.7 | % |
_______________________________________________
(1) Includes $1.3 billion of variable-rate debt fixed by way of interest rate swap agreement.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 21
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Debt and Preferred Equity Summary (cont.) (unaudited, dollars in thousands) |
|
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 22
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Mortgage Notes Payable (unaudited, dollars in thousands) |
|
|
| | | | | | | | | | | | | | |
Lender | | Maturity | | Outstanding Balance as of June 30, 2015 | | Coupon Rate | | Effective Rate (1) | | Payment Terms (2) |
Cantor Commercial Real Estate Lending, L.P. | | 1/6/2024 | | $ | 465,000 |
| | 4.97 | % | | 4.97 | % | | I/O |
Wells Fargo Bank, National Association | | 8/10/2036 | | 277,403 |
| | 4.16 | % | | 4.16 | % | | P&I |
Cantor Commercial Real Estate Lending, L.P. | | 1/6/2024 | | 155,000 |
| | 4.97 | % | | 4.97 | % | | I/O |
Wells Fargo Bank, National Association | | 1/1/2018 | | 133,025 |
| | 5.61 | % | | 5.61 | % | | I/O through 02/01/2016, then P&I |
The Royal Bank of Scotland Plc | | 5/1/2023 | | 124,300 |
| | 3.84 | % | | 3.84 | % | | I/O |
JPMorgan Chase Bank, N.A. | | 9/1/2020 | | 102,999 |
| | 5.55 | % | | 5.55 | % | | P&I |
Bank of America, N.A. | | 1/1/2017 | | 94,884 |
| | 6.30 | % | | 6.30 | % | | I/O |
Wells Fargo Bank, National Association | | 3/1/2023 | | 74,250 |
| | 4.23 | % | | 4.23 | % | | I/O |
Wells Fargo Bank, National Association | | 7/1/2022 | | 68,110 |
| | 4.54 | % | | 4.54 | % | | I/O |
Wells Fargo Bank, National Association | | 1/1/2023 | | 66,000 |
| | 4.24 | % | | 4.24 | % | | I/O |
Goldman Sachs Commercial Mortgage Capital, L.P. | | 6/6/2020 | | 63,600 |
| | 5.73 | % | | 5.73 | % | | I/O through 07/06/2015, then P&I |
Wells Fargo Bank, National Association | | 5/1/2021 | | 60,450 |
| | 5.54 | % | | 5.54 | % | | I/O |
PNC Bank, National Association | | 1/1/2019 | | 59,500 |
| | 4.10 | % | | 4.10 | % | | I/O |
New York State Teachers' Retirement System | | 3/1/2019 | | 55,000 |
| | 4.41 | % | | 4.41 | % | | I/O |
Citigroup Global Markets Realty Corp | | 5/6/2022 | | 54,300 |
| | 6.05 | % | | 6.05 | % | | I/O |
Bank of America, N.A. | | 1/1/2017 | | 51,836 |
| | 5.90 | % | | 5.90 | % | | I/O |
Capital One, N.A. | | 11/20/2019 | | 51,400 |
| | 1mo. Libor + 1.95% |
| | 5.22 | % | | I/O through 11/01/2017, then P&I |
American General Life Insurance Company | | 11/1/2021 | | 51,250 |
| | 5.25 | % | (3) | 5.25 | % | | I/O |
US Bank National Association | | 11/11/2029 | | 50,912 |
| | 7.23 | % | | 7.23 | % | | I/O |
Wells Fargo Bank, National Association | | 2/1/2017 | | 48,500 |
| | 1mo. Libor + 2.47% |
| (3) | 3.75 | % | | I/O |
JPMorgan Chase Bank, N.A. | | 5/1/2021 | | 46,910 |
| | 5.53 | % | | 5.53 | % | | I/O |
Goldman Sachs Commercial Mortgage Capital, L.P. | | 5/6/2021 | | 46,670 |
| | 5.92 | % | | 5.92 | % | | I/O |
US Bank National Association | | 7/11/2016 | | 43,700 |
| | 6.03 | % | | 6.03 | % | | I/O |
People's United Bank | | 4/1/2021 | | 42,500 |
| | 5.55 | % | | 5.55 | % | | I/O through 05/01/2016, then P&I |
JPMorgan Chase Bank, N.A. | | 6/1/2020 | | 41,610 |
| | 5.71 | % | | 5.71 | % | | I/O through 07/01/2015, then P&I |
Wells Fargo Bank, National Association | | 6/1/2022 | | 41,000 |
| | 4.73 | % | | 4.73 | % | | I/O |
Morgan Stanley Mortgage Capital Holdings LLC | | 1/1/2023 | | 40,800 |
| | 4.46 | % | | 4.46 | % | | I/O |
JPMorgan Chase Bank, N.A. | | 11/1/2019 | | 38,500 |
| | 4.10 | % | | 4.10 | % | | I/O |
JPMorgan Chase Bank, N.A. | | 11/1/2017 | | 38,315 |
| | 6.34 | % | | 6.34 | % | | I/O |
LaSalle Bank National Association | | 1/1/2016 | | 38,051 |
| | 10.68 | % | (4) | 10.68 | % | | P&I |
Wells Fargo Bank, National Association | | 3/1/2017 | | 36,600 |
| | 1mo. Libor + 2.50% |
| | 3.76 | % | | I/O |
The Royal Bank of Scotland Plc | | 1/1/2021 | | 34,000 |
| | 5.48 | % | (3) | 5.48 | % | | I/O |
Goldman Sachs Mortgage Company | | 12/6/2020 | | 31,500 |
| | 5.25 | % | | 5.25 | % | | I/O |
Oritani Bank | | 5/1/2024 | | 30,050 |
| | 3.25 | % | | 3.25 | % | | I/O through 05/01/2019, then P&I |
Goldman Sachs Mortgage Company | | 12/6/2020 | | 30,000 |
| | 5.25 | % | (3) | 5.25 | % | | I/O |
BOKF, NA dba Bank of Oklahoma | | 7/29/2018 | | 29,579 |
| | 1mo. Libor + 2.75% |
| | 4.10 | % | | I/O |
Jackson National Life Insurance Company | | 10/1/2021 | | 29,450 |
| | 4.25 | % | | 4.25 | % | | I/O through 11/01/2018, then P&I |
German American Capital Corporation | | 10/6/2022 | | 29,160 |
| | 4.48 | % | | 4.48 | % | | I/O |
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 23
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Mortgage Notes Payable (cont.) (unaudited, dollars in thousands) |
|
|
| | | | | | | | | | | | | | |
Lender | | Maturity | | Outstanding Balance as of June 30, 2015 | | Coupon Rate | | Effective Rate (1) | | Payment Terms (2) |
LaSalle Bank National Association | | 1/1/2016 | | $ | 28,552 |
| | 5.69 | % | | 5.69 | % | | I/O through 02/01/2015, then P&I |
PNC Bank, National Association | | 9/1/2022 | | 28,539 |
| | 4.00 | % | | 4.00 | % | | P&I |
German American Capital Corporation | | 10/6/2022 | | 28,440 |
| | 4.48 | % | | 4.48 | % | | I/O |
BOKF, NA dba Bank of Texas | | 7/31/2017 | | 28,350 |
| | 1mo. Libor + 2.20% |
| | 3.28 | % | | I/O |
PNC Bank, National Association | | 6/1/2022 | | 27,750 |
| | 4.22 | % | (3) | 4.22 | % | | I/O |
GS Commercial Real Estate LP | | 8/6/2019 | | 27,725 |
| | 4.73 | % | | 4.73 | % | | I/O |
Jackson National Life Insurance Company | | 7/1/2019 | | 27,200 |
| | 3.10 | % | | 3.10 | % | | I/O |
LaSalle Bank National Association | | 1/1/2017 | | 25,620 |
| | 5.81 | % | | 5.81 | % | | I/O |
Bank of America, N.A. | | 9/1/2017 | | 24,624 |
| | 5.28 | % | | 5.28 | % | | P&I |
John Hancock Life Insurance Company | | 10/1/2022 | | 22,500 |
| | 4.04 | % | | 4.04 | % | | I/O |
BOKF, NA dba Bank of Texas | | 12/31/2018 | | 21,766 |
| | 1mo. Libor + 1.80% |
| | 3.57 | % | | I/O |
German American Capital Corp | | 6/6/2022 | | 19,710 |
| | 4.60 | % | (3) | 4.60 | % | | P&I |
Aviva Life and Annuity Company | | 7/1/2021 | | 19,600 |
| | 5.02 | % | | 5.02 | % | | I/O through 08/01/2019, then P&I |
The Variable Annuity Life Insurance Company | | 1/1/2023 | | 19,525 |
| | 4.00 | % | | 4.00 | % | | I/O |
Morgan Stanley Mortgage Capital Holdings LLC | | 5/10/2021 | | 19,513 |
| | 5.67 | % | | 5.67 | % | | I/O |
Oritani Bank | | 5/1/2024 | | 18,889 |
| | 3.25 | % | | 3.25 | % | | I/O through 05/01/2019, then P&I |
The Royal Bank of Scotland Plc | | 3/1/2021 | | 18,100 |
| | 5.88 | % | | 5.88 | % | | I/O |
US Bank National Association | | 12/11/2016 | | 17,500 |
| | 5.55 | % | | 5.55 | % | | I/O |
BOKF, NA dba Bank of Texas | | 7/31/2017 | | 16,555 |
| | 1mo. Libor + 2.20% |
| | 3.28 | % | | I/O |
JPMorgan Chase Bank, National Association | | 5/1/2021 | | 16,422 |
| | 5.54 | % | | 5.54 | % | | P&I |
US Bank National Association | | 1/11/2017 | | 16,200 |
| | 5.48 | % | (3) | 5.48 | % | | I/O |
Wachovia Bank, National Association | | 12/11/2016 | | 16,043 |
| | 5.63 | % | | 5.63 | % | | I/O |
Oritani Bank | | 1/1/2023 | | 15,000 |
| | 3.75 | % | | 3.75 | % | | I/O through 01/01/2018, then P&I |
US Bank National Association | | 5/1/2016 | | 14,809 |
| | 5.84 | % | | 5.84 | % | | P&I |
Wells Fargo Bank, National Association | | 3/20/2023 | | 14,743 |
| | 3.23 | % | | 3.23 | % | | I/O |
BOKF, NA dba Bank of Texas | | 12/31/2018 | | 14,150 |
| | 1mo. Libor + 1.80% |
| | 3.57 | % | | I/O |
Wells Fargo Bank, National Association | | 3/1/2016 | | 13,500 |
| | 5.17 | % | (3) | 5.17 | % | | I/O |
BOKF, NA dba Bank of Texas | | 12/31/2020 | | 13,420 |
| | 1mo. Libor + 1.85% |
| | 4.25 | % | | I/O |
US Bank National Association | | 7/1/2016 | | 12,937 |
| | 6.05 | % | (3) | 6.05 | % | | P&I |
BOKF, NA dba Bank of Texas | | 7/13/2017 | | 12,725 |
| | 1mo. Libor + 2.25% |
| | 3.43 | % | | I/O |
Goldman Sachs Commercial Mortgage Capital, L.P. | | 9/6/2017 | | 12,270 |
| | 3.70 | % | (3) | 3.70 | % | | I/O |
Customers Bank | | 12/1/2016 | | 11,850 |
| | 3.75 | % | | 3.75 | % | | I/O |
JPMorgan Chase Bank, N.A. | | 7/1/2020 | | 11,375 |
| | 5.50 | % | | 5.50 | % | | I/O through 08/01/2015, then P&I |
US Bank National Association | | 2/11/2017 | | 10,332 |
| | 5.68 | % | | 5.68 | % | | I/O |
US Bank National Association | | 11/11/2016 | | 10,137 |
| | 5.50 | % | | 5.50 | % | | I/O |
40/86 Mortgage Capital, Inc. | | 1/1/2019 | | 10,050 |
| | 5.00 | % | | 5.00 | % | | I/O |
Monumental Life Insurance Company | | 4/1/2023 | | 9,792 |
| | 3.95 | % | | 3.95 | % | | I/O through 05/01/2014, then P&I |
Wachovia Bank, National Association | | 6/11/2016 | | 8,625 |
| | 6.56 | % | | 6.56 | % | | I/O |
Amegy Bank, National Association | | 8/31/2016 | | $ | 8,107 |
| | 1mo. Libor + 2.95% |
| | 3.13 | % | | I/O |
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 24
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Mortgage Notes Payable (cont.) (unaudited, dollars in thousands) |
|
|
| | | | | | | | | | | | | | |
Lender | | Maturity | | Outstanding Balance as of June 30, 2015 | | Coupon Rate | | Effective Rate (1) | | Payment Terms (2) |
Transamerica Life Insurance Company | | 8/1/2030 | | 7,586 |
| | 5.57 | % | | 5.57 | % | | P&I |
Transamerica Life Insurance Company | | 8/1/2030 | | 6,773 |
| | 5.32 | % | | 5.32 | % | | P&I |
US Bank National Association | | 5/11/2017 | | 6,262 |
| | 5.45 | % | | 5.45 | % | | I/O |
Customers Bank | | 8/16/2017 | | 5,500 |
| | 3.63 | % | | 3.63 | % | | I/O |
BOKF, NA dba Bank of Texas | | 10/31/2016 | | 5,060 |
| | 1mo. Libor + 2.25% |
| | 3.70 | % | | I/O |
Wells Fargo Bank, National Association | | 3/1/2017 | | 4,800 |
| | 1mo. Libor + 2.50% |
| (3) | 3.76 | % | | I/O |
Capital Lease Funding, LLC | | 7/15/2018 | | 1,812 |
| | 7.20 | % | (3) | 7.20 | % | | P&I |
US Bank National Association | | 4/15/2019 | | 1,778 |
| | 5.40 | % | | 5.40 | % | | I/O |
Bear Stearns Commercial Mortgage, Inc. | | 9/1/2017 | | 1,678 |
| | 5.88 | % | | 5.88 | % | | I/O |
BOKF, NA dba Bank of Texas | | 4/12/2018 | | 1,562 |
| | 1mo. Libor + 2.45% |
| | 3.39 | % | | I/O |
US Bank National Association | | 12/11/2016 | | 1,383 |
| | 6.18 | % | | 6.18 | % | | I/O |
BOKF, NA dba Bank of Texas | | 4/12/2018 | | 562 |
| | 1mo. Libor + 2.45% |
| (3) | 3.39 | % | | I/O |
Transamerica Life Insurance Company | | 8/1/2030 | | 384 |
| | 5.93 | % | | 5.93 | % | | P&I |
US Bank National Association | | 12/11/2015 | | 341 |
| | 5.83 | % | (3) | 5.83 | % | | I/O |
| | | | $ | 3,514,540 |
| | | | 4.95 | % | | |
_______________________________________________
(1) Represents interest rate in effect at June 30, 2015. For loans subject to interest rate swaps, this represents the all-in fixed interest rate.
(2) I/O means interest only is due monthly with the principal due at maturity. P&I means both principal and interest are due monthly.
(3) Variable-rate loan fixed by way of interest rate swap agreement.
(4) On March 6, 2015, the Company received a notice of default from the lender due to the Company's failure to pay a reserve payment required per the loan agreement. Due to the default, the Company is currently accruing interest at the default rate of interest of 10.68% per annum. The Company is actively negotiating a restructuring of the loan with the lender.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 25
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Credit Facility and Corporate Bond Covenants (unaudited) |
|
The following is a summary of key financial covenants for the Company's unsecured credit facility and corporate bonds, as defined and calculated per the terms of the facility's credit agreement and the bonds' governing documents, respectively. These calculations, which are not based on U.S. GAAP measurements, are presented to investors to show that the Company is in compliance with the covenants and are not measures of our liquidity or performance. As of June 30, 2015, the Company believes it is in compliance with these covenants based on the covenant limits and calculations in place at that time.
|
| | | | |
Unsecured Credit Facility Key Covenants | | Required | | June 30, 2015 |
Maximum leverage ratio | | ≤ 60% | | 45.5% |
Minimum fixed charge coverage ratio | | ≥ 1.5x | | 2.65x |
Secured leverage ratio | | ≤ 45% | | 17.2% |
Total unencumbered asset value ratio | | ≤ 60% | | 49.0% |
Minimum tangible net worth covenant | | ≥ $5.5 B | | $8.7 B |
Minimum unencumbered interest coverage ratio | | ≥ 1.75x | | 4.72x |
Minimum unencumbered asset value(1) | | ≥ 10.5 B | | $11.9 B |
|
| | | | |
Corporate Bond Key Covenants | | Required | | June 30, 2015 |
Limitation on incurrence of total debt | | ≤ 65% | | 50.6% |
Limitation on incurrence of secured debt | | ≤ 40% | | 19.0% |
Debt service coverage ratio | | ≥ 1.5x | | 2.67x |
Maintenance of total unencumbered assets | | ≥ 150% | | 206.7% |
_______________________________________________
(1) Subsequent to June 30, 2015, the Company amended the credit facility and this covenant was reduced from $10.5 billion to $8.0 billion.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 26
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Acquisitions and Development Projects (unaudited, square feet and dollars in thousands) |
|
Acquisitions
The following table summarizes the Company's property acquisition activity during the three months ended June 30, 2015. The Company also purchased three land parcels for an aggregate purchase price of $503,000, which is included in the Family Dollar Portfolio investment to date balance in the Development Projects table below. |
| | | | | | | | | | | | | | | |
Property | | Location | | Square Feet | | Purchase Price | | Cash Cap Rate | | Remaining Lease Term (Years)(1) |
Family Dollar | | Wilmington, DE | | 8 |
| | $ | 2,078 |
| | 6.7 | % | | 14.1 |
|
_______________________________________________
| |
(1) | Remaining lease term from June 30, 2015. |
Development Projects
The following table provides a summary of our development projects at June 30, 2015. During the three months ended June 30, 2015, the Company capitalized $14.7 million of additional development costs and placed $7.5 million of assets into service.
|
| | | | | | | | | | | | | | | | |
Description | | Number of Properties | | Estimated Completion Date | | Investment to Date | | Remaining Estimated Investment | | Cash Cap Rate |
Build-to-suits | | | | | | | | | | |
IFM Efector | | 1 |
| | 7/31/2015 | | $ | 10,699 |
| | $ | 3,829 |
| | 7.2 | % |
Family Dollar Portfolio | | 18 |
| | Various | | 13,708 |
| | 12,910 |
| | 7.2 | % |
Redevelopment(1) | | | | | | | | | | |
FedEx Expansions | | 3 |
| | Various | | 3,351 |
| | 6,770 |
| | 8.7 | % |
Invensys Systems | | 1 |
| | 7/31/2015 | | 39,993 |
| | 1,407 |
| | 7.5 | % |
Mattress Firm | | 1 |
| | 10/7/2015 | | 160 |
| | 1,279 |
| | 10.2 | % |
Total | | | | | | $ | 67,911 |
| | $ | 26,195 |
| | |
_______________________________________________
(1) Excludes tenant improvement costs incurred in accordance with existing leases. As of June 30, 2015, $10.7 million of tenant improvement costs were included in land and construction in progress in the consolidated financial statements.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 27
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Dispositions (unaudited, square feet and dollars in thousands) |
|
Dispositions
The following table shows the four properties and one land parcel that were disposed of during the three months ended June 30, 2015:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Property | | Location | | Square Feet | | Remaining Lease Term (Years)(1) | | Cash Cap Rate | | Sale Price | | Real Estate Gain (Loss)(2) | | Goodwill Allocation(3) | | GAAP Gain (Loss)(4) | |
The Commons at Aliso Viejo(5) | | Aliso Viejo, CA | | 177 |
| | 8.2 |
| | 6.3 | % | | $ | 59,500 |
| | $ | 3,028 |
| | $ | (4,318 | ) | | $ | (1,290 | ) | |
Lowe's(6) | | Denver, CO | | 122 |
| | 14.8 |
| | 6.8 | % | | 13,000 |
| | (356 | ) | | (1,031 | ) | | (1,387 | ) | |
Shaw's Supermarket | | Plymouth, MA | | 60 |
| | 5.7 |
| | 7.8 | % | | 6,300 |
| | 1,416 |
| | (563 | ) | | 853 |
| |
Famous Dave's | | Eden Prairie, MN | | 3 |
| | 11.5 |
| | 5.1 | % | | 1,649 |
| | 211 |
| | (104 | ) | | 107 |
| |
Land parcel | | Iowa City, IA | | NA |
| | NA | | NA | | 50 |
| | 43 |
| | — |
| | 43 |
| |
Total(7) | | | | 362 | | 9.2 |
| | 6.5 | % | | $ | 80,499 |
| | $ | 4,342 |
| | $ | (6,016 | ) | | $ | (1,674 | ) | (8) |
_______________________________________________
(1) Represents the remaining lease term from the date of sale. For the Commons at Aliso Viejo, the remaining lease term is weighted based on the annualized rental income derived from each respective lease.
(2) Equals sale price less GAAP net book value and selling costs.
(3) In accordance with GAAP, the Company allocated a portion of the Real Estate Investment segment goodwill to the respective sold property to calculate the GAAP gain (loss). See Note 4 – Goodwill and Other Intangibles of our Quarterly Report on Form 10-Q for the three and six months ended June 30, 2015 for a further description of our goodwill allocation methodology.
(4) Equals sale price less GAAP net book value, goodwill allocation and selling costs.
(5) This property was owned by a consolidated joint ventures, in which the Company had a 90% interest. Data presented represents the property, not the Company's pro rata share.
(6) This property was leased but unoccupied as of the date of disposition.
(7) Excludes two properties classified as held for sale in accordance with GAAP as of June 30, 2015. The two properties increase GAAP losses by $23.2 million, including a goodwill allocation of $17.8 million.
(8) Loss on dispositions of real estate, net in the consolidated financial statements includes a reduction of $137,000 of a gain on condemnation of real estate assets and $65,000 of real estate disposition credits that are either credits not related to a single property or are adjustments related to prior period dispositions.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 28
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
Type of Lease Clause
(square feet and dollars in thousands)
|
| | | | | | | | | | | | | | | | |
| | Number of Leases | | Square Feet | | Square Feet as a % of Total Portfolio | | Annualized Rental Income | | Annualized Rental Income as a % of Total Portfolio |
Fixed dollar or percent | | 2,284 |
| | 65,624 |
| | 64.4 | % | | $ | 944,811 |
| | 70.5 | % |
CPI | | 305 |
| | 8,636 |
| | 8.5 | % | | 133,696 |
| | 10.0 | % |
Flat | | 1,102 |
| | 25,565 |
| | 25.1 | % | | 262,144 |
| | 19.5 | % |
Other(1) | | 98 |
| | 397 |
| | 0.4 | % | | 58 |
| | — | % |
Vacant | | — |
| | 1,614 |
| | 1.6 | % | | $ | — |
| | — | % |
Total | | 3,789 |
|
| 101,836 |
|
| 100.0 | % |
| $ | 1,340,709 |
|
| 100 | % |
_______________________________________________
(1) Represents leases that provide for only percentage and other contingent rent, as well as short-term leases with terms of less than 12 months.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 29
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Lease Summary (cont.) (unaudited) |
|
Tenant Expense Obligation
(square feet and dollars in thousands)
|
| | | | | | | | | | | | | | | | |
| | Number of Leases | | Square Feet | | Square Feet as a % of Total Portfolio | | Annualized Rental Income | | Annualized Rental Income as a % of Total Portfolio |
NNN | | 2,766 |
| | 59,474 |
| | 58.3 | % | | $ | 855,216 |
| | 63.7 | % |
NN | | 951 |
| | 38,954 |
| | 38.3 | % | | 444,592 |
| | 33.2 | % |
Other (1) | | 72 |
| | 1,794 |
| | 1.8 | % | | 40,901 |
| | 3.1 | % |
Vacant | | — |
| | 1,614 |
| | 1.6 | % | | $ | — |
| | — | % |
Total | | 3,789 |
|
| 101,836 |
| | 100 | % | | $ | 1,340,709 |
| | 100 | % |
_______________________________________________
(1) Includes gross, modified gross, billboard and month-to-month leases
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 30
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Lease Expirations (unaudited, square feet and dollars in thousands) |
|
The following tables and graph show lease expirations from July 1, 2015 through December 31, 2024. |
| | | | | | | | | | | | | | | | |
Year of Expiration | | Number of Leases Expiring | | Square Feet | | Square Feet as a % of Total Portfolio | | Annualized Rental Income Expiring | | Annualized Rental Income Expiring as a % of Total Portfolio |
Remaining 2015 | | 55 |
| | 1,005 |
| | 0.9 | % | | $ | 10,932 |
| | 0.8 | % |
2016 | | 131 |
| | 3,415 |
| | 3.4 | % | | 30,859 |
| | 2.3 | % |
2017 | | 255 |
| | 5,042 |
| | 5.0 | % | | 58,637 |
| | 4.4 | % |
2018 | | 245 |
| | 3,096 |
| | 3.1 | % | | 40,978 |
| | 3.1 | % |
2019 | | 190 |
| | 3,381 |
| | 3.4 | % | | 57,678 |
| | 4.3 | % |
2020 | | 229 |
| | 4,132 |
| | 4.1 | % | | 49,855 |
| | 3.7 | % |
2021 | | 162 |
| | 11,005 |
| | 11.0 | % | | 84,232 |
| | 6.3 | % |
2022 | | 257 |
| | 9,381 |
| | 9.4 | % | | 78,546 |
| | 5.9 | % |
2023 | | 231 |
| | 6,553 |
| | 6.5 | % | | 87,370 |
| | 6.5 | % |
2024 | | 176 |
| | 9,933 |
| | 9.9 | % | | 122,604 |
| | 9.1 | % |
Total | | 1,931 |
| | 56,943 |
| | 56.7 | % | | $ | 621,691 |
| | 46.4 | % |
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 31
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Lease Expirations (cont.) (unaudited, square feet and dollars in thousands) |
|
|
| | | | | | | | | | | | | | | | |
Year of Expiration | | Number of Leases Expiring | | Square Feet | | Square Feet as a % of Total Portfolio | | Annualized Rental Income Expiring | | Annualized Rental Income Expiring as a % of Total Portfolio |
| | | | | | | | | | |
Remaining 2015 | | | | | | | | | | |
Single-tenant retail | | — |
| | — |
| | — | % | | $ | — |
| | — | % |
Multi-tenant retail | | 2 |
| | 2 |
| | — | % | | 71 |
| | — | % |
Restaurant | | 43 |
| | 166 |
| | 0.2 | % | | 3,125 |
| | 0.2 | % |
Industrial & distribution | | 1 |
| | 400 |
| | 0.4 | % | | 1,313 |
| | 0.1 | % |
Office | | 9 |
| | 436 |
| | 0.3 | % | | 6,423 |
| | 0.5 | % |
Other(1) | | — |
| | — |
| | — | % | | — |
| | — | % |
Total Remaining 2015 | | 55 |
| | 1,005 |
| | 0.9 | % | | $ | 10,932 |
| | 0.8 | % |
| | | | | | | | | | |
2016 | |
|
| |
|
| |
|
| |
|
| |
|
|
Single-tenant retail | | 12 |
| | 96 |
| | 0.1 | % | | $ | 1,119 |
| | 0.1 | % |
Multi-tenant retail | | 19 |
| | 112 |
| | 0.1 | % | | 1,556 |
| | 0.1 | % |
Restaurant | | 79 |
| | 367 |
| | 0.4 | % | | 8,642 |
| | 0.6 | % |
Industrial & distribution | | 7 |
| | 2,244 |
| | 2.2 | % | | 9,885 |
| | 0.7 | % |
Office | | 13 |
| | 597 |
| | 0.6 | % | | 9,638 |
| | 0.8 | % |
Other(1) | | 1 |
| | — |
| | — | % | | 19 |
| | — | % |
Total 2016 | | 131 |
| | 3,415 |
| | 3.4 | % | | $ | 30,859 |
| | 2.3 | % |
| | | | | | | | | | |
2017 | |
|
| |
|
| |
|
| |
|
| |
|
|
Single-tenant retail | | 100 |
| | 591 |
| | 0.6 | % | | $ | 13,748 |
| | 1.0 | % |
Multi-tenant retail | | 33 |
| | 158 |
| | 0.2 | % | | 2,609 |
| | 0.2 | % |
Restaurant | | 86 |
| | 596 |
| | 0.6 | % | | 10,952 |
| | 0.8 | % |
Industrial & distribution | | 10 |
| | 2,488 |
| | 2.4 | % | | 11,272 |
| | 0.8 | % |
Office | | 24 |
| | 1,209 |
| | 1.2 | % | | 19,974 |
| | 1.5 | % |
Other(1) | | 2 |
| | — |
| | — | % | | 82 |
| | 0.1 | % |
Total 2017 | | 255 |
| | 5,042 |
| | 5.0 | % | | $ | 58,637 |
| | 4.4 | % |
| | | | | | | | | | |
2018 | |
|
| |
|
| |
|
| |
|
| |
|
|
Single-tenant retail | | 74 |
| | 965 |
| | 0.9 | % | | $ | 13,877 |
| | 1.0 | % |
Multi-tenant retail | | 29 |
| | 303 |
| | 0.3 | % | | 4,192 |
| | 0.3 | % |
Restaurant | | 115 |
| | 423 |
| | 0.5 | % | | 10,150 |
| | 0.8 | % |
Industrial & distribution | | 13 |
| | 1,063 |
| | 1.1 | % | | 5,243 |
| | 0.4 | % |
Office | | 13 |
| | 342 |
| | 0.3 | % | | 7,504 |
| | 0.6 | % |
Other(1) | | 1 |
| | — |
| | — | % | | 12 |
| | — | % |
Total 2018 | | 245 |
| | 3,096 |
| | 3.1 | % | | $ | 40,978 |
| | 3.1 | % |
| | | | | | | | | | |
_______________________________________________
(1) Includes billboards and parking lots.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 32
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Lease Expirations (cont.) (unaudited, square feet and dollars in thousands) |
|
|
| | | | | | | | | | | | | | | | |
Year of Expiration | | Number of Leases Expiring | | Square Feet | | Square Feet as a % of Total Portfolio | | Annualized Rental Income Expiring | | Annualized Rental Income Expiring as a % of Total Portfolio |
| | | | | | | | | | |
2019 | | | | | | | | | | |
Single-tenant retail | | 55 |
| | 1,311 |
| | 1.3 | % | | $ | 15,295 |
| | 1.1 | % |
Multi-tenant retail | | 24 |
| | 213 |
| | 0.2 | % | | 3,362 |
| | 0.3 | % |
Restaurant | | 88 |
| | 474 |
| | 0.5 | % | | 10,527 |
| | 0.8 | % |
Industrial & distribution | | 4 |
| | 180 |
| | 0.2 | % | | 1,425 |
| | 0.1 | % |
Office | | 19 |
| | 1,203 |
| | 1.2 | % | | 27,069 |
| | 2.0 | % |
Total 2019 | | 190 |
| | 3,381 |
| | 3.4 | % | | $ | 57,678 |
| | 4.3 | % |
| | | | | | | | | | |
2020 | | | | | | | | | | |
Single-tenant retail | | 83 |
| | 1,088 |
| | 1.1 | % | | $ | 13,760 |
| | 1.0 | % |
Multi-tenant retail | | 13 |
| | 136 |
| | 0.1 | % | | 1,595 |
| | 0.1 | % |
Restaurant | | 106 |
| | 386 |
| | 0.4 | % | | 8,129 |
| | 0.6 | % |
Industrial & distribution | | 7 |
| | 1,191 |
| | 1.2 | % | | 5,143 |
| | 0.4 | % |
Office | | 19 |
| | 1,323 |
| | 1.3 | % | | 21,227 |
| | 1.6 | % |
Other(1) | | 1 |
| | 8 |
| | — | % | | 1 |
| | — | % |
Total 2020 | | 229 |
| | 4,132 |
| | 4.1 | % | | $ | 49,855 |
| | 3.7 | % |
| | | | | | | | | | |
2021 | | | | | | | | | | |
Single-tenant retail | | 64 |
| | 1,276 |
| | 1.3 | % | | $ | 19,877 |
| | 1.5 | % |
Multi-tenant retail | | 9 |
| | 118 |
| | 0.1 | % | | 1,874 |
| | 0.1 | % |
Restaurant | | 54 |
| | 204 |
| | 0.2 | % | | 5,941 |
| | 0.4 | % |
Industrial & distribution | | 16 |
| | 7,636 |
| | 7.6 | % | | 26,818 |
| | 2.0 | % |
Office | | 19 |
| | 1,771 |
| | 1.8 | % | | 29,722 |
| | 2.3 | % |
Total 2021 | | 162 |
| | 11,005 |
| | 11.0 | % | | $ | 84,232 |
| | 6.3 | % |
| | | | | | | | | | |
2022 | | | | | | | | | | |
Single-tenant retail | | 157 |
| | 2,131 |
| | 2.1 | % | | $ | 28,422 |
| | 2.1 | % |
Multi-tenant retail | | 5 |
| | 66 |
| | 0.1 | % | | 1,333 |
| | 0.1 | % |
Restaurant | | 55 |
| | 371 |
| | 0.4 | % | | 8,146 |
| | 0.6 | % |
Industrial & distribution | | 30 |
| | 5,742 |
| | 5.7 | % | | 21,127 |
| | 1.6 | % |
Office | | 10 |
| | 1,071 |
| | 1.1 | % | | 19,518 |
| | 1.5 | % |
Total 2022 | | 257 |
| | 9,381 |
| | 9.4 | % | | $ | 78,546 |
| | 5.9 | % |
_______________________________________________
(1) Includes billboards and parking lots.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 33
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Lease Expirations (cont.) (unaudited, square feet and dollars in thousands) |
|
|
| | | | | | | | | | | | | | | | |
2023 | | | | | | | | | | |
Single-tenant retail | | 124 |
| | 1,885 |
| | 2.0 | % | | $ | 23,553 |
| | 1.8 | % |
Multi-tenant retail | | 8 |
| | 132 |
| | 0.1 | % | | 2,699 |
| | 0.2 | % |
Restaurant | | 57 |
| | 325 |
| | 0.3 | % | | 7,194 |
| | 0.5 | % |
Industrial & distribution | | 16 |
| | 2,526 |
| | 2.5 | % | | 17,542 |
| | 1.3 | % |
Office | | 26 |
| | 1,685 |
| | 1.6 | % | | 36,382 |
| | 2.7 | % |
Total 2023 | | 231 |
| | 6,553 |
| | 6.5 | % | | $ | 87,370 |
| | 6.5 | % |
| | | | | | | | | | |
2024 | | | | | | | | | | |
Single-tenant retail | | 86 |
| | 2,111 |
| | 2.1 | % | | $ | 27,395 |
| | 2.0 | % |
Multi-tenant retail | | 3 |
| | 14 |
| | — | % | | 332 |
| | — | % |
Restaurant | | 47 |
| | 192 |
| | 0.2 | % | | 5,631 |
| | 0.4 | % |
Industrial & distribution | | 12 |
| | 3,509 |
| | 3.5 | % | | 15,481 |
| | 1.2 | % |
Office | | 28 |
| | 4,107 |
| | 4.1 | % | | 73,765 |
| | 5.5 | % |
Total 2024 | | 176 |
| | 9,933 |
| | 9.9 | % | | $ | 122,604 |
| | 9.1 | % |
| | | | | | | | | | |
Total Remaining 2015 - 2024 | | 1,931 |
| | 56,943 |
| | 56.7 | % | | $ | 621,691 |
| | 46.4 | % |
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 34
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Top 10 Tenant Concentrations (unaudited, square feet and dollars in thousands) |
|
|
| | | | | | | | | | | | | | | | | | |
Tenant Concentration | | Number of Leases | | Square Feet | | Square Feet as a % of Total Portfolio | | Annualized Rental Income | | Annualized Rental Income as a % of Total Portfolio | | Investment Rating |
Red Lobster | | 31 |
| | 3,889 |
| | 3.8 | % | | $ | 159,625 |
| | 11.9 | % | | B- |
CVS | | 175 |
| | 2,414 |
| | 2.4 | % | | 52,096 |
| | 3.9 | % | | BBB+ |
Walgreens | | 123 |
| | 1,786 |
| | 1.8 | % | | 44,732 |
| | 3.3 | % | | BBB |
Family Dollar | | 195 |
| | 3,343 |
| | 3.3 | % | | 36,377 |
| | 2.7 | % | | BBB- |
Dollar General | | 405 |
| | 3,748 |
| | 3.7 | % | | 34,289 |
| | 2.6 | % | | BBB- |
FedEx | | 55 |
| | 3,360 |
| | 3.3 | % | | 32,854 |
| | 2.5 | % | | BBB |
Albertson's | | 33 |
| | 1,923 |
| | 1.9 | % | | 23,633 |
| | 1.8 | % | | B |
General Service Administration | | 23 |
| | 1,021 |
| | 1.0 | % | | 23,616 |
| | 1.8 | % | | AA+ |
Citizens Bank | | 190 |
| | 973 |
| | 1.0 | % | | 22,865 |
| | 1.7 | % | | A- |
AT&T | | 4 |
| | 1,107 |
| | 1.1 | % | | 20,092 |
| | 1.5 | % | | BBB+ |
Total | | 1,234 |
| | 23,564 |
| | 23.3 | % | | $ | 450,179 |
| | 33.7 | % | | |
Concentration percentages based on annualized rental income.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 35
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Top 10 Tenant Industry Concentrations (unaudited, square feet and dollars in thousands) |
|
|
| | | | | | | | | | | | | | | | |
Tenant Industry Concentration | | Number of Leases | | Square Feet | | Square Feet as a % of Total Portfolio | | Annualized Rental Income | | Annualized Rental Income as a % of Total Portfolio |
Restaurants - Casual Dining | | 410 |
| | 6,788 |
| | 6.7 | % | | $ | 252,594 |
| | 18.8 | % |
Manufacturing | | 67 |
| | 18,665 |
| | 18.3 | % | | 122,607 |
| | 9.1 | % |
Restaurants - Quick Service | | 991 |
| | 4,313 |
| | 4.2 | % | | 119,111 |
| | 8.9 | % |
Retail - Pharmacy | | 338 |
| | 4,906 |
| | 4.8 | % | | 110,581 |
| | 8.3 | % |
Retail - Discount | | 628 |
| | 10,423 |
| | 10.2 | % | | 94,804 |
| | 7.1 | % |
Finance | | 310 |
| | 3,108 |
| | 3.1 | % | | 66,214 |
| | 4.9 | % |
Professional Services | | 71 |
| | 4,239 |
| | 4.2 | % | | 59,126 |
| | 4.4 | % |
Retail - Grocery & Supermarket | | 84 |
| | 5,450 |
| | 5.4 | % | | 57,086 |
| | 4.3 | % |
Retail - Home & Garden | | 100 |
| | 7,479 |
| | 7.3 | % | | 53,061 |
| | 4.0 | % |
Logistics | | 63 |
| | 4,814 |
| | 4.7 | % | | 41,733 |
| | 3.1 | % |
Total | | 3,062 |
| | 70,185 |
| | 68.9 | % | | $ | 976,917 |
| | 72.9 | % |
Concentration percentages based on annualized rental income.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 36
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Top 10 Geographic Concentrations (unaudited, square feet and dollars in thousands) |
|
|
| | | | | | | | | | | | | | | | |
Geographic Concentration | | Number of Properties | | Square Feet | | Square Feet as a % of Total Portfolio | | Annualized Rental Income | | Annualized Rental Income as a % of Total Portfolio |
Texas | | 629 |
| | 11,848 |
| | 11.6 | % | | $ | 172,597 |
| | 12.9 | % |
Illinois | | 193 |
| | 6,134 |
| | 6.0 | % | | 81,975 |
| | 6.1 | % |
Florida | | 302 |
| | 5,124 |
| | 5.0 | % | | 80,181 |
| | 6.0 | % |
California | | 101 |
| | 4,851 |
| | 4.8 | % | | 71,242 |
| | 5.3 | % |
Georgia | | 226 |
| | 4,891 |
| | 4.8 | % | | 66,980 |
| | 5.0 | % |
Pennsylvania | | 175 |
| | 5,803 |
| | 5.7 | % | | 58,072 |
| | 4.3 | % |
Ohio | | 301 |
| | 5,828 |
| | 5.7 | % | | 56,489 |
| | 4.2 | % |
Indiana | | 147 |
| | 5,972 |
| | 5.9 | % | | 44,412 |
| | 3.3 | % |
North Carolina | | 187 |
| | 3,966 |
| | 3.9 | % | | 43,394 |
| | 3.2 | % |
Michigan | | 194 |
| | 2,496 |
| | 2.5 | % | | 39,114 |
| | 2.9 | % |
Total | | 2,455 |
| | 56,913 |
| | 55.9 | % | | $ | 714,456 |
| | 53.2 | % |
Concentration percentages based on annualized rental income.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 37
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Top 10 MSA Concentrations (unaudited, square feet and dollars in thousands) |
|
|
| | | | | | | | | | | | | | | | |
Metropolitan Statistical Area (MSA) Concentration(1) | | Number of Properties | | Square Feet | | Square Feet as a % of Total Portfolio | | Annualized Rental Income | | Annualized Rental Income as a % of Total Portfolio |
Chicago, IL | | 170 |
| | 5,730 |
| | 5.6 | % | | $ | 72,143 |
| | 5.4 | % |
Dallas, TX | | 135 |
| | 3,888 |
| | 3.8 | % | | 59,396 |
| | 4.4 | % |
Atlanta, GA | | 102 |
| | 3,559 |
| | 3.5 | % | | 46,277 |
| | 3.5 | % |
Houston, TX | | 109 |
| | 2,891 |
| | 2.8 | % | | 32,453 |
| | 2.4 | % |
Philadelphia, PA | | 56 |
| | 2,012 |
| | 2.0 | % | | 27,989 |
| | 2.1 | % |
New York, NY | | 30 |
| | 1,165 |
| | 1.1 | % | | 27,100 |
| | 2.0 | % |
Phoenix, AZ | | 55 |
| | 1,656 |
| | 1.6 | % | | 26,859 |
| | 2.0 | % |
Boston, MA | | 31 |
| | 1,831 |
| | 1.8 | % | | 25,392 |
| | 1.9 | % |
Washington, DC | | 44 |
| | 890 |
| | 0.9 | % | | 20,829 |
| | 1.6 | % |
Indianapolis, IN | | 45 |
| | 2,705 |
| | 2.7 | % | | 20,804 |
| | 1.6 | % |
Total | | 777 |
| | 26,327 |
| | 25.8 | % | | $ | 359,242 |
| | 26.9 | % |
_________________________
(1) MSA locations represent the single nearest major metropolitan area.
Concentration percentages based on annualized rental income.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 38
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Tenants Comprising Over 1% of Annualized Rental Revenue (unaudited, square feet and dollars in thousands) |
|
|
| | | | | | | | | | | | | | | | | | |
Tenant | | Number of Leases | | Square Feet | | Square Feet as a % of Total Portfolio | | Annualized Rental Income | | Annualized Rental Income as a % of Total Portfolio | | Investment Rating |
Red Lobster | | 31 |
| | 3,889 |
| | 3.8 | % | | $ | 159,625 |
| | 11.9 | % | | B- |
CVS | | 175 |
| | 2,414 |
| | 2.4 | % | | 52,096 |
| | 3.9 | % | | BBB+ |
Walgreens | | 123 |
| | 1,786 |
| | 1.8 | % | | 44,732 |
| | 3.3 | % | | BBB |
Family Dollar | | 195 |
| | 3,343 |
| | 3.3 | % | | 36,377 |
| | 2.7 | % | | BBB- |
Dollar General | | 405 |
| | 3,748 |
| | 3.7 | % | | 34,289 |
| | 2.6 | % | | BBB- |
FedEx | | 55 |
| | 3,360 |
| | 3.3 | % | | 32,854 |
| | 2.5 | % | | BBB |
Albertson's | | 33 |
| | 1,923 |
| | 1.9 | % | | 23,633 |
| | 1.8 | % | | B |
General Service Administration | | 23 |
| | 1,021 |
| | 1.0 | % | | 23,616 |
| | 1.8 | % | | AA+ |
Citizens Bank | | 190 |
| | 973 |
| | 1.0 | % | | 22,865 |
| | 1.7 | % | | A- |
AT&T | | 4 |
| | 1,107 |
| | 1.1 | % | | 20,092 |
| | 1.5 | % | | BBB+ |
BJ's Wholesale Club | | 4 |
| | 2,223 |
| | 2.2 | % | | 19,254 |
| | 1.4 | % | | B- |
AON | | 8 |
| | 1,203 |
| | 1.2 | % | | 18,154 |
| | 1.4 | % | | A- |
Petsmart | | 12 |
| | 858 |
| | 0.8 | % | | 17,610 |
| | 1.3 | % | | B |
Goodyear | | 10 |
| | 4,728 |
| | 4.6 | % | | 16,550 |
| | 1.2 | % | | BB |
Tractor Supply | | 58 |
| | 1,213 |
| | 1.2 | % | | 15,709 |
| | 1.2 | % | | NR |
Wal-Mart | | 9 |
| | 1,944 |
| | 1.9 | % | | 14,608 |
| | 1.1 | % | | AA |
Home Depot | | 12 |
| | 2,162 |
| | 2.1 | % | | 14,252 |
| | 1.1 | % | | A |
Amazon | | 3 |
| | 3,048 |
| | 3.0 | % | | 14,159 |
| | 1.1 | % | | AA- |
Total | | 1,350 |
| | 40,943 |
| | 40.3 | % | | $ | 580,475 |
| | 43.5 | % | | |
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 39
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Diversification: Tenant Industry (unaudited, square feet and dollars in thousands) |
|
|
| | | | | | | | | | | | | | | | |
Industry (1) | | Number of Leases | | Square Feet | | Square Feet as a % of Total Portfolio | | Annualized Rental Income | | Annualized Rental Income as a % of Total Portfolio |
Administrative & Support Services | | 5 |
| | 430 |
| | 0.4 | % | | $ | 4,054 |
| | 0.3 | % |
Agricultural | | 2 |
| | 138 |
| | 0.1 | % | | 1,246 |
| | 0.1 | % |
Education | | 4 |
| | 1,288 |
| | 1.3 | % | | 5,813 |
| | 0.4 | % |
Entertainment & Recreation | | 21 |
| | 848 |
| | 0.8 | % | | 15,803 |
| | 1.2 | % |
Finance | | 310 |
| | 3,108 |
| | 3.1 | % | | 66,210 |
| | 4.9 | % |
Government & Public Services | | 31 |
| | 1,280 |
| | 1.3 | % | | 30,502 |
| | 2.3 | % |
Healthcare | | 81 |
| | 1,661 |
| | 1.6 | % | | 30,310 |
| | 2.3 | % |
Information & Communications | | 16 |
| | 1,302 |
| | 1.3 | % | | 24,509 |
| | 1.8 | % |
Insurance | | 19 |
| | 2,170 |
| | 2.1 | % | | 39,503 |
| | 2.9 | % |
Logistics | | 63 |
| | 4,814 |
| | 4.7 | % | | 41,735 |
| | 3.1 | % |
Manufacturing | | 67 |
| | 18,665 |
| | 18.3 | % | | 122,609 |
| | 9.1 | % |
Mining & Natural Resources | | 16 |
| | 745 |
| | 0.7 | % | | 14,763 |
| | 1.1 | % |
Other Services | | 31 |
| | 5,217 |
| | 5.1 | % | | 18,963 |
| | 1.4 | % |
Professional Services | | 71 |
| | 4,239 |
| | 4.2 | % | | 59,123 |
| | 4.4 | % |
Real Estate | | 4 |
| | 59 |
| | 0.1 | % | | 935 |
| | 0.1 | % |
Rental | | 9 |
| | 713 |
| | 0.7 | % | | 6,734 |
| | 0.5 | % |
Restaurant - Casual Dining | | 410 |
| | 6,788 |
| | 6.7 | % | | 252,588 |
| | 18.8 | % |
Restaurants - Quick Service | | 991 |
| | 4,313 |
| | 4.2 | % | | 119,118 |
| | 8.9 | % |
Retail - Apparel & Jewelry | | 15 |
| | 1,403 |
| | 1.4 | % | | 15,313 |
| | 1.1 | % |
Retail - Automotive | | 167 |
| | 1,197 |
| | 1.2 | % | | 21,993 |
| | 1.6 | % |
Retail - Department Stores | | 13 |
| | 965 |
| | 1.0 | % | | 8,015 |
| | 0.6 | % |
Retail - Discount | | 628 |
| | 10,423 |
| | 10.2 | % | | 95,159 |
| | 7.1 | % |
Retail - Electronics & Appliances | | 22 |
| | 676 |
| | 0.7 | % | | 9,222 |
| | 0.7 | % |
Retail - Gas & Convenience | | 127 |
| | 527 |
| | 0.5 | % | | 27,183 |
| | 2.0 | % |
Retail - Grocery & Supermarket | | 84 |
| | 5,450 |
| | 5.4 | % | | 57,086 |
| | 4.3 | % |
Retail - Hobby, Books & Music | | 9 |
| | 340 |
| | 0.3 | % | | 2,979 |
| | 0.2 | % |
Retail - Home & Garden | | 100 |
| | 7,479 |
| | 7.3 | % | | 53,061 |
| | 4.0 | % |
Retail - Home Furnishings | | 40 |
| | 492 |
| | 0.5 | % | | 7,686 |
| | 0.6 | % |
Retail - Internet | | 3 |
| | 3,048 |
| | 3.0 | % | | 14,159 |
| | 1.1 | % |
Retail - Office Supply | | 4 |
| | 76 |
| | 0.1 | % | | 1,155 |
| | 0.1 | % |
Retail - Pet Supply | | 15 |
| | 903 |
| | 0.9 | % | | 18,446 |
| | 1.4 | % |
Retail - Pharmacy | | 338 |
| | 4,906 |
| | 4.8 | % | | 110,580 |
| | 8.2 | % |
Retail - Specialty (Other) | | 23 |
| | 561 |
| | 0.6 | % | | 6,161 |
| | 0.5 | % |
Retail - Sporting Goods | | 21 |
| | 1,229 |
| | 1.2 | % | | 14,279 |
| | 1.1 | % |
Retail - Warehouse Clubs | | 8 |
| | 2,631 |
| | 2.6 | % | | 22,369 |
| | 1.7 | % |
Utilities | | 2 |
| | 37 |
| | — | % | | 813 |
| | 0.1 | % |
Other(2) | | 19 |
| | 101 |
| | 0.1 | % | | 532 |
| | — | % |
Vacant | | — |
| | 1,614 |
| | 1.6 | % | | — |
| | — | % |
Total | | 3,789 |
| | 101,836 |
| | 100 | % | | $ | 1,340,709 |
| | 100 | % |
_______________________________________________
(1) Industry classifications are based on the North American Industry Classification System.
(2) Includes billboard, construction in progress, license agreements and parking lots.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 40
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Diversification: Property Geographic (unaudited, square feet and dollars in thousands) |
|
|
| | | | | | | | | | | | | | | | |
Location | | Number of Properties | | Square Feet | | Leased Square Feet as a % of Total Portfolio | | Annualized Rental Income | | Annualized Rental Income as a % of Total Portfolio |
United States | | | | | | | | | | |
Alabama | | 158 |
| | 1,772 |
| | 1.7 | % | | $ | 32,773 |
| | 2.4 | % |
Alaska | | 3 |
| | 25 |
| | — | % | | 775 |
| | 0.1 | % |
Arizona | | 87 |
| | 2,410 |
| | 2.4 | % | | 38,153 |
| | 2.8 | % |
Arkansas | | 103 |
| | 1,028 |
| | 1.0 | % | | 13,071 |
| | 1.0 | % |
California | | 101 |
| | 4,851 |
| | 4.8 | % | | 71,242 |
| | 5.3 | % |
Colorado | | 58 |
| | 1,813 |
| | 1.8 | % | | 28,186 |
| | 2.1 | % |
Connecticut | | 20 |
| | 100 |
| | 0.1 | % | | 2,840 |
| | 0.2 | % |
Delaware | | 13 |
| | 115 |
| | 0.1 | % | | 2,709 |
| | 0.2 | % |
District of Columbia | | 1 |
| | 3 |
| | — | % | | 44 |
| | — | % |
Florida | | 302 |
| | 5,124 |
| | 5.0 | % | | 80,181 |
| | 6.0 | % |
Georgia | | 226 |
| | 4,891 |
| | 4.8 | % | | 66,980 |
| | 5.0 | % |
Idaho | | 20 |
| | 148 |
| | 0.1 | % | | 4,440 |
| | 0.3 | % |
Illinois | | 193 |
| | 6,134 |
| | 6.0 | % | | 81,975 |
| | 6.1 | % |
Indiana | | 147 |
| | 5,972 |
| | 5.9 | % | | 44,412 |
| | 3.3 | % |
Iowa | | 54 |
| | 1,621 |
| | 1.6 | % | | 14,094 |
| | 1.1 | % |
Kansas | | 52 |
| | 2,324 |
| | 2.3 | % | | 15,988 |
| | 1.2 | % |
Kentucky | | 95 |
| | 2,247 |
| | 2.2 | % | | 27,199 |
| | 2.0 | % |
Louisiana | | 103 |
| | 1,686 |
| | 1.7 | % | | 23,927 |
| | 1.8 | % |
Maine | | 25 |
| | 648 |
| | 0.6 | % | | 8,547 |
| | 0.6 | % |
Maryland | | 35 |
| | 869 |
| | 0.9 | % | | 17,446 |
| | 1.3 | % |
Massachusetts | | 40 |
| | 2,591 |
| | 2.5 | % | | 30,604 |
| | 2.3 | % |
Michigan | | 194 |
| | 2,496 |
| | 2.5 | % | | 39,114 |
| | 2.9 | % |
Minnesota | | 47 |
| | 583 |
| | 0.6 | % | | 9,188 |
| | 0.7 | % |
Mississippi | | 81 |
| | 1,843 |
| | 1.8 | % | | 16,482 |
| | 1.2 | % |
Missouri | | 173 |
| | 1,955 |
| | 1.9 | % | | 27,900 |
| | 2.1 | % |
Montana | | 10 |
| | 115 |
| | 0.1 | % | | 2,015 |
| | 0.2 | % |
Nebraska | | 23 |
| | 779 |
| | 0.8 | % | | 11,407 |
| | 0.9 | % |
Nevada | | 33 |
| | 753 |
| | 0.7 | % | | 9,708 |
| | 0.7 | % |
New Hampshire | | 20 |
| | 254 |
| | 0.3 | % | | 4,397 |
| | 0.3 | % |
New Jersey | | 39 |
| | 1,693 |
| | 1.7 | % | | 37,346 |
| | 2.8 | % |
New Mexico | | 60 |
| | 959 |
| | 0.9 | % | | 14,585 |
| | 1.1 | % |
New York | | 95 |
| | 1,822 |
| | 1.8 | % | | 34,379 |
| | 2.6 | % |
North Carolina | | 187 |
| | 3,966 |
| | 3.9 | % | | 43,394 |
| | 3.2 | % |
North Dakota | | 12 |
| | 201 |
| | 0.2 | % | | 4,252 |
| | 0.3 | % |
Ohio | | 301 |
| | 5,828 |
| | 5.7 | % | | 56,489 |
| | 4.2 | % |
Oklahoma | | 91 |
| | 2,151 |
| | 2.1 | % | | 27,560 |
| | 2.1 | % |
Oregon | | 17 |
| | 320 |
| | 0.3 | % | | 4,431 |
| | 0.3 | % |
Pennsylvania | | 175 |
| | 5,803 |
| | 5.7 | % | | 58,072 |
| | 4.3 | % |
Rhode Island | | 14 |
| | 214 |
| | 0.2 | % | | 3,649 |
| | 0.3 | % |
South Carolina | | 128 |
| | 3,397 |
| | 3.3 | % | | 30,893 |
| | 2.3 | % |
South Dakota | | 12 |
| | 141 |
| | 0.1 | % | | 1,610 |
| | 0.1 | % |
Tennessee | | 135 |
| | 3,481 |
| | 3.4 | % | | 34,398 |
| | 2.6 | % |
Texas | | 629 |
| | 11,848 |
| | 11.6 | % | | 172,597 |
| | 12.9 | % |
Utah | | 14 |
| | 143 |
| | 0.2 | % | | 3,179 |
| | 0.2 | % |
Vermont | | 8 |
| | 37 |
| | — | % | | 734 |
| | 0.1 | % |
Virginia | | 120 |
| | 2,134 |
| | 2.1 | % | | $ | 38,223 |
| | 2.8 | % |
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 41
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Diversification: Property Geographic (cont.) (unaudited, square feet and dollars in thousands)
|
|
|
| | | | | | | | | | | | | | | | |
Location | | Number of Properties | | Square Feet | | Leased Square Feet as a % of Total Portfolio | | Annualized Rental Income | | Annualized Rental Income as a % of Total Portfolio |
Washington | | 27 |
| | 492 |
| | 0.5 | % | | 11,836 |
| | 0.9 | % |
West Virginia | | 44 |
| | 272 |
| | 0.3 | % | | 6,880 |
| | 0.5 | % |
Wisconsin | | 87 |
| | 1,483 |
| | 1.5 | % | | 18,498 |
| | 1.4 | % |
Wyoming | | 11 |
| | 70 |
| | 0.1 | % | | 1,702 |
| | 0.1 | % |
Territories | | | | | | | | | | |
Puerto Rico | | 3 |
| | 88 |
| | 0.1 | % | | 2,430 |
| | 0.2 | % |
Canadian Providences | | | | | | | | | | |
Alberta | | 4 |
| | 32 |
| | — | % | | 1,911 |
| | 0.1 | % |
Manitoba | | 2 |
| | 16 |
| | — | % | | 827 |
| | 0.1 | % |
Ontario | | 11 |
| | 78 |
| | 0.1 | % | | 4,209 |
| | 0.3 | % |
Saskatchewan | | 2 |
| | 17 |
| | — | % | | 828 |
| | 0.1 | % |
Total | | 4,645 |
| | 101,836 |
| | 100.0 | % | | $ | 1,340,709 |
| | 100.0 | % |
Percentages based on annualized rental income.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 42
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Diversification: Property Building Type (unaudited, square feet and dollars in thousands) |
|
|
| | | | | | | | | | | | | | | | |
Property Type | | Number of Properties | | Square Feet | | Square Feet as a % of Total Portfolio | | Annualized Rental Income | | Annualized Rental Income as a % of Total Portfolio |
Single-tenant retail | | 2,089 |
| | 30,767 |
| | 30.2 | % | | $ | 439,563 |
| | 32.8 | % |
Multi-tenant retail | | 20 |
| | 1,726 |
| | 1.7 | % | | 23,749 |
| | 1.8 | % |
Restaurant | | 2,170 |
| | 11,057 |
| | 10.9 | % | | 368,701 |
| | 27.5 | % |
Industrial and Distribution | | 174 |
| | 41,016 |
| | 40.3 | % | | 204,313 |
| | 15.2 | % |
Office | | 168 |
| | 17,251 |
| | 16.9 | % | | 304,271 |
| | 22.7 | % |
Other(1) | | 24 |
| | 19 |
| | — | % | | 112 |
| | — | % |
Total | | 4,645 |
|
| 101,836 |
|
| 100.0 | % |
| $ | 1,340,709 |
|
| 100.0 | % |
_______________________________________________
(1) Includes billboard, construction in progress, land and parking lots.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 43
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Diversification by Property Type: Single-Tenant Retail (unaudited, percentages based on Annualized Rental Income of the single-tenant retail properties) |
|
____________________________________________________
______________________________________________________
_________________________________________________
_________________________________________________ |
| | | | |
Statistics (square feet and dollars in thousands) |
| | | |
Number of single-tenant retail properties | | 2,089 |
| |
Square footage | | 30,767 |
| |
Weight-average remaining lease term (years) | | 11.9 |
| |
Percent investment-grade | | 59.4 | % | |
Percent flat leases | | 32.8 | % | |
Percent NNN leases | | 72.1 | % | |
| | | |
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 44
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Diversification by Property Type: Multi-Tenant Retail (unaudited, percentages based on Annualized Rental Income of the multi-tenant retail properties)
|
|
____________________________________________________
______________________________________________________
_________________________________________________
_________________________________________________ |
| | | | |
Statistics (square feet and dollars in thousands) |
| | | |
Number of multi-tenant retail properties | | 20 |
| |
Square footage | | 1,726 |
| |
Weight-average remaining lease term (years) | | 6.0 |
| |
Percent investment-grade | | 30.8 | % | |
Percent flat leases | | 50.1 | % | |
Percent NNN leases | | 6.5 | % | |
| | | |
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 45
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Diversification by Property Type: Restaurants (unaudited, percentages based on Annualized Rental Income of the restaurant properties)
|
|
____________________________________________________
______________________________________________________
_________________________________________________
_________________________________________________ |
| | | | |
Statistics (square feet and dollars in thousands) |
| | | |
Number of restaurant properties | | 2,170 |
| |
Square footage | | 11,057 |
| |
Weight-average remaining lease term (years) | | 16.1 |
| |
Percent investment-grade | | 2.7 | % | |
Percent flat leases | | 7.9 | % | |
Percent NNN leases | | 99.6 | % | |
| | | |
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 46
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Diversification by Property Type: Industrial and Distribution (unaudited, percentages based on Annualized Rental Income of the industrial and distribution properties)
|
|
____________________________________________________
______________________________________________________
_________________________________________________
_________________________________________________ |
| | | | |
Statistics (square feet and dollars in thousands) |
| | | |
Number of industrial properties | | 174 |
| |
Square footage | | 41,016 |
| |
Weight-average remaining lease term (years) | | 9.2 |
| |
Percent investment-grade | | 59.9 | % | |
Percent flat leases | | 27.3 | % | |
Percent NNN leases | | 49.4 | % | |
| | | |
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 47
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Diversification by Property Type: Office (unaudited, percentages based on Annualized Rental Income of the office properties)
|
|
____________________________________________________
______________________________________________________
_________________________________________________
_________________________________________________ |
| | | | |
Statistics (square feet and dollars in thousands) |
| | | |
Number of office properties | | 168 |
| |
Square footage | | 17,251 |
| |
Weight-average remaining lease term (years) | | 7.4 |
| |
Percent investment-grade | | 72.9 | % | |
Percent flat leases | | 7.0 | % | |
Percent NNN leases | | 22.5 | % | |
| | | |
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 48
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Unconsolidated Joint Venture Investment Summary (unaudited, square feet and dollars in thousands) |
|
The following table shows certain information regarding the Company's interests in unconsolidated joint ventures as of June 30, 2015:
|
| | | | | | | | | | | | | | | | | | | | | | |
Joint Venture | | Partner | | Ownership % | | Pro rata Share of Purchase Price | | Rentable Square Feet (1) | | Annualized Rental Income (1) | | Debt (1) (2) | | Major Tenants |
Cole/Mosaic JV South Elgin IL, LLC | | Affiliate of Mosaic Properties and Development, LLC | | 50% | | $ | 17,000 |
| | 232 |
| | $ | 2,958 |
| | $ | 20,400 |
| | Home Depot, Best Buy |
SanTan Festival, LLC | | Propstra Chandler Trust & RED Development, LLC | | 45%(3) | | 27,878 |
| | 360 |
| | 5,371 |
| | 28,322 |
| | Nordstrom Rack, Buy Buy Baby, Ross, TJ Maxx |
Chandler Village Center, LLC | | Propstra Chandler Trust & RED Development, LLC | | 45%(3) | | 13,316 |
| | 130 |
| | 2,453 |
| | 20,370 |
| (4 | ) | Sports Authority, Bed Bath & Beyond, DSW |
Cole/LBA JV OF Pleasanton CA, LLC | | Affiliate of LBA Realty | | 90% | | 86,850 |
| | 343 |
| | 6,518 |
| | 57,000 |
| | Clorox Companies |
Chandler Gateway Partners, LLC | | Propstra Chandler Trust & RED Development, LLC | | 45%(3) | | 12,884 |
| | 260 |
| | 2,318 |
| | 18,023 |
| | Hobby Lobby, Wal-Mart |
Cole/Faison JV Bethlehem GA, LLC | | Faison-Winder Investors, LLC | | 90% | | 33,429 |
| | 280 |
| | 3,193 |
| | 26,000 |
| | Publix, Belk |
Total | | | | $ | 191,357 |
| | 1,605 |
| | $ | 22,811 |
| | $ | 170,115 |
| | |
| | | | | | | | | | | | | | |
Company's aggregate interest | | | | | | | | $ | 14,783 |
| | $ | 114,922 |
| | |
_______________________________________________
(1) Rentable square feet, annualized rental income and debt represent information for the total unconsolidated joint venture.
(2) Debt represents secured fixed and variable rates ranging from 2.05% to 6.15% and maturities ranging from September 2015 to July 2021, with a weighted-average interest rate of 3.69% as of June 30, 2015 and a weighted-average years to maturity of 1.5 years as of June 30, 2015.
(3) Represents the Company's 90% interest in a consolidated joint venture, whose only assets are 50% interests in the respective unconsolidated joint ventures.
(4) $5.1 million is recourse to the Company.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 49
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 50
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Statements of Operations - Cole Capital (unaudited, in thousands) |
|
|
| | | | | | | | | | | | | | | | | | | | |
| Three Months Ended |
| | June 30,
2015 | | March 31, 2015 | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 |
Revenues: | | | | | | | | | | |
Dealer manager and distribution fees, selling commissions and offering reimbursements | | $ | 5,516 |
| | $ | 3,117 |
| | $ | 13,152 |
| | $ | 21,535 |
| | $ | 9,969 |
|
Transaction service fees and reimbursements | | 7,036 |
| | 10,260 |
| | 20,550 |
| | 24,423 |
| | 15,116 |
|
Management fees and reimbursements | | 13,977 |
| | 14,117 |
| | 18,580 |
| | 13,839 |
| | 12,137 |
|
Total Cole Capital revenues | | 26,529 |
|
| 27,494 |
| | 52,282 |
| | 59,797 |
| | 37,222 |
|
Operating Expenses: | | | | | | | | | | |
Cole Capital reallowed fees and commissions | | 3,710 |
| | 2,031 |
| | 9,326 |
| | 15,398 |
| | 7,068 |
|
Acquisition related | | — |
| | 459 |
| | 3,362 |
| | — |
| | — |
|
Merger and other non-routine transaction related | | — |
| | — |
| | 23 |
| | 19 |
| | 1,423 |
|
General and administrative | | 17,131 |
| | 17,736 |
| | 31,036 |
| | 17,265 |
| | 22,035 |
|
Depreciation and amortization | | 8,391 |
| | 8,353 |
| | 7,050 |
| | 25,077 |
| | 24,774 |
|
Impairments | | — |
| | — |
| | 309,444 |
| | — |
| | — |
|
Total operating expenses | | 29,232 |
| | 28,579 |
| | 360,241 |
| | 57,759 |
| | 55,300 |
|
Operating (loss) income | | (2,703 | ) | | (1,085 | ) | | (307,959 | ) | | 2,038 |
| | (18,078 | ) |
Total other income, net | | 392 |
| | 1,219 |
| | 2,011 |
| | 179 |
| | 110 |
|
(Loss) income before income and franchise taxes | | (2,311 | ) |
| 134 |
| | (305,948 | ) | | 2,217 |
| | (17,968 | ) |
Benefit from (provision for) income and franchise taxes | | 1,869 |
| | (220 | ) | | 27,979 |
| | (1,131 | ) | | 7,494 |
|
Net (loss) income | | $ | (442 | ) | | $ | (86 | ) | | $ | (277,969 | ) | | $ | 1,086 |
| | $ | (10,474 | ) |
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 51
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
FFO and AFFO - Cole Capital (unaudited, in thousands, except share and per share data) |
|
|
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | June 30, 2015 | | March 31, 2015 | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 |
Net (loss) income | | $ | (442 | ) | | $ | (86 | ) | | $ | (277,969 | ) | | $ | 1,086 |
| | $ | (10,474 | ) |
FFO | | (442 | ) | | (86 | ) | | (277,969 | ) | | 1,086 |
| | (10,474 | ) |
| | | | | | | | | | |
Acquisition related | | — |
| | 459 |
| | 3,362 |
| | — |
| | — |
|
Merger and other non-routine transactions | | — |
| | — |
| | 23 |
| | 19 |
| | 1,423 |
|
Impairment of intangible assets | | — |
| | — |
| | 309,444 |
| | — |
| | — |
|
Amortization of management contracts | | 7,510 |
| | 7,510 |
| | 6,233 |
| | 24,288 |
| | 24,024 |
|
Deferred tax benefit (1) | | (3,874 | ) | | (3,972 | ) | | (33,324 | ) | | — |
| | — |
|
Equity-based compensation expense, net of forfeitures (2) | | 2,998 |
| | 416 |
| | 3,017 |
| | 3,455 |
| | 2,115 |
|
Other amortization and non-cash charges | | 776 |
| | 735 |
| | 739 |
| | 710 |
| | 658 |
|
AFFO | | $ | 6,968 |
| | $ | 5,062 |
| | $ | 11,525 |
| | $ | 29,558 |
| | $ | 17,746 |
|
| | | | | | | | | | |
Weighted-average shares outstanding - basic | | 903,339,143 |
| | 902,996,270 |
| | 902,528,136 |
| | 902,096,102 |
| | 815,406,408 |
|
Effect of dilutive securities (3) | | 26,348,273 |
| | 26,157,663 |
| | 29,629,740 |
| | 44,970,255 |
| | 52,613,117 |
|
Weighted-average shares outstanding - diluted (4) | | 929,687,416 |
| | 929,153,933 |
| | 932,157,876 |
| | 947,066,357 |
| | 868,019,525 |
|
| | | | | | | | | | |
FFO per diluted share | | $ | — |
| | $ | — |
| | $ | (0.30 | ) | | $ | — |
| | $ | (0.01 | ) |
AFFO per diluted share | | $ | 0.01 |
| | $ | 0.01 |
| | $ | 0.01 |
| | $ | 0.03 |
| | $ | 0.02 |
|
_________________________________
(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 June 30, 2015, 1.4 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 June 30, 2015.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 52
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
EBITDA and Normalized EBITDA - Cole Capital (unaudited, in thousands)
|
|
|
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | June 30, 2015 | | March 31, 2015 | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 |
Net loss | | $ | (442 | ) | | $ | (86 | ) | | $ | (277,970 | ) | | $ | 1,086 |
| | $ | (10,474 | ) |
Adjustments: | | | | | | | | | | |
Depreciation and amortization | | 8,391 |
| | 8,353 |
| | 7,050 |
| | 25,077 |
| | 24,774 |
|
(Benefit from) provision for income and franchise taxes | | (1,869 | ) | | 220 |
| | (27,978 | ) | | 1,131 |
| | (7,494 | ) |
EBITDA | | $ | 6,080 |
| | $ | 8,487 |
| | $ | (298,898 | ) | | $ | 27,294 |
| | $ | 6,806 |
|
Management adjustments: | | | | | | | | | | |
Impairments | | — |
| | — |
| | 309,444 |
| | — |
| | — |
|
Acquisition related | | — |
| | 459 |
| | 3,362 |
| | — |
| | — |
|
Merger and other non-routine transactions | | — |
| | — |
| | 23 |
| | 19 |
| | 1,423 |
|
Other amortization and non-cash charges | | (105 | ) | | (108 | ) | | (78 | ) | | (79 | ) | | (92 | ) |
Normalized EBITDA | | $ | 5,975 |
| | $ | 8,838 |
| | $ | 13,853 |
| | $ | 27,234 |
| | $ | 8,137 |
|
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 53
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Net G&A (unaudited, in thousands, except share and per share data)
|
|
In its capacity as advisor to the Managed Programs, Cole Capital incurs certain costs on behalf of the Managed Programs, which are reimbursable. In accordance with GAAP, the Company records these costs as general and administrative expenses and the reimbursements as revenue in the same period. The following table presents the Cole Capital segment revenue and general and administrative expenses, each net of reimbursements from the Managed Programs:
|
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | June 30, 2015 | | March 31, 2015 | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 |
Cole Capital revenue, net of reallowed fees and commissions | | $ | 22,819 |
| | $ | 25,463 |
| | $ | 42,956 |
| | $ | 44,399 |
| | $ | 30,154 |
|
Less: Expense reimbursements from Managed Programs recorded as revenue | | 4,828 |
| | 3,715 |
| | 7,807 |
| | 7,718 |
| | 4,623 |
|
Net Cole Capital Revenue | | 17,991 |
| | 21,748 |
| | 35,149 |
| | 36,681 |
| | 25,531 |
|
Other income | | 392 |
| | 1,219 |
| | 2,011 |
| | 179 |
| | 110 |
|
Net Cole Capital Revenue and other income | | $ | 18,383 |
| | $ | 22,967 |
| | $ | 37,160 |
| | $ | 36,860 |
| | $ | 25,641 |
|
| | | | | | | | | | |
Total consolidated general and administrative expenses | | $ | 33,958 |
| | $ | 33,106 |
| | $ | 44,622 |
| | $ | 30,213 |
| | $ | 37,224 |
|
Less: REI segment general and administrative expenses | | 16,827 |
| | 15,370 |
| | 13,586 |
| | 12,948 |
| | 15,189 |
|
Cole Capital general and administrative expenses | | 17,131 |
| | 17,736 |
| | 31,036 |
| | 17,265 |
| | 22,035 |
|
Less: | | | | | | | | | | |
Expenses reimbursed from Managed Programs | | 4,828 |
| | 3,715 |
| | 7,807 |
| | 7,718 |
| | 4,623 |
|
Net Cole Capital G&A expense | | 12,303 |
| | 14,021 |
| | 23,229 |
| | 9,547 |
| | 17,412 |
|
Increase (decrease) in program development costs | | 2,684 |
| | 3,451 |
| | (5,158 | ) | | 11,045 |
| | 3,431 |
|
Normalized Net Cole Capital G&A expense | | $ | 14,987 |
| | $ | 17,472 |
| | $ | 18,071 |
| | $ | 20,592 |
| | $ | 20,843 |
|
| | | | | | | | | | |
EBITDA Margin | | 32.5 | % | | 38.5 | % | | 37.3 | % | | 73.9 | % | | 31.7 | % |
Normalized Net Cole Capital G&A expense as percent of Net Cole Capital Revenue and other income | | 81.5 | % | | 76.1 | % | | 48.6 | % | | 55.9 | % | | 81.3 | % |
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 54
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Program Development Costs (unaudited, in thousands) |
|
Cole Capital pays for organization, registration and offering expenses associated with the sale of common stock of the Managed Programs. The reimbursement of these expenses by the Managed Programs is limited to a certain percentage of the proceeds raised from their offerings, in accordance with their respective advisory agreements and charters. Such expenses paid by the Company on behalf of the Managed Programs in excess of these limits that are expected to be collected are recorded as program development costs on the balance sheet. The Company assesses the collectability of the program development costs, considering the offering period and historical and forecasted sales of shares under the Managed Programs' respective offerings and reserves for any balances considered not collectible.
The following table presents a rollforward of the program development costs balance: |
| | | | | | | | | | | | | | | | | | | | |
| | Program Development Costs(1) for the Three Months Ended |
| | June 30,
2015 | | March 31, 2015 | | December 31, 2014 | | September 30,
2014 | | June 30,
2014 |
Beginning Balance | | $ | 16,322 |
| | $ | 12,871 |
| | $ | 18,029 |
| | $ | 6,984 |
| | $ | 3,553 |
|
Expenses incurred in excess of limits | | 6,033 |
| | 6,732 |
| | 10,173 |
| | 15,191 |
| | 5,218 |
|
Offering-related reimbursement revenue | | (1,044 | ) | | (591 | ) | | (2,222 | ) | | (4,146 | ) | | (1,787 | ) |
Reserve for uncollectible amounts(2) | | (2,305 | ) | | (2,690 | ) | | (13,109 | ) | | — |
| | — |
|
Ending Balance | | $ | 19,006 |
| | $ | 16,322 |
| | $ | 12,871 |
| | $ | 18,029 |
| | $ | 6,984 |
|
_______________________________________________
(1) Excludes INAV (as defined in the "Program Summary" of the Managed Programs section below), as expenses are recorded as incurred and revenue is recorded when reimbursement is received.
(2) Reserves for estimated uncollectible amounts are recorded as a general and administrative expense in the respective period.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 55
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Managed Programs (unaudited, dollars in thousands) |
|
Program Summary
The following table shows the Managed Programs' cumulative activity summary information from each respective program's offering commencement date through or as of June 30, 2015:
|
| | | | | | | | | | | | | | | | | | | | |
Program | | Capital Raised (1) | | DRIP (2) | | Number of Investments (3) | | Gross Real Estate Investments | | Total Debt Outstanding | |
Open Programs: | | | | | | | | | | | |
Cole Credit Property Trust V, Inc. ("CCPT V") | | $ | 190,810 |
| | $ | 4,628 |
| | 109 |
| | $ | 455,455 |
| | $ | 302,457 |
| (4) |
Cole Real Estate Income Strategy (Daily NAV), Inc. ("INAV") | | 148,020 |
| | 4,476 |
| | 72 |
| | 217,499 |
| | 109,254 |
| |
Cole Office & Industrial REIT (CCIT II), Inc. ("CCIT II") | | 297,699 |
| | 7,430 |
| | 23 |
| | 647,507 |
| | 400,523 |
| (5) |
Total Open Programs | | 636,529 |
| | 16,534 |
| | 204 |
| | 1,320,461 |
| | 812,234 |
| |
| | | | | | | | | | | |
Closed Programs: | | | | | | | | | | | |
Cole Credit Property Trust IV, Inc. ("CCPT IV") | | 2,915,961 |
| | 187,879 |
| | 828 |
| | 4,397,078 |
| | 1,822,675 |
| |
Other Programs(6) | | 372,617 |
| | — |
| | 58 |
| | 568,863 |
| | 290,987 |
| |
Total Closed Programs(7) | | 3,288,578 |
| | 187,879 |
| | 886 |
| | 4,965,941 |
| | 2,113,662 |
| |
| | | | | | | | | | | |
Total | | $ | 3,925,107 |
| | $ | 204,413 |
| | 1,090 |
| | $ | 6,286,402 |
| | $ | 2,925,896 |
| |
(1) Represents gross proceeds, excluding DRIP shares issued.
(2) DRIP represents the value of shares issued under each respective program's distribution reinvestment plan.
(3) Number of investments includes properties owned through consolidated and unconsolidated joint ventures, as well as CMBS and notes receivable.
(4) Includes $20.0 million outstanding to the Company on a revolving line of credit.
(5) Includes $30.0 million outstanding to the Company on a revolving line of credit.
(6) Other Programs include tenant-in-common programs ("TIC"), Delaware statutory trust programs ("DST") and Cole Growth Opportunity Fund I, L.P. ("GOP").
(7) Exclusive of Cole Corporate Income Trust, Inc. ("CCIT") which merged with Select Income REIT on January 29, 2015 . Prior to the sale, Cole Capital had raised gross proceeds of $2.0 billion including $82.0 million of DRIP, and managed $2.7 billion of assets on behalf of CCIT.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 56
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Managed Programs (cont.) (unaudited)
|
|
Offering Summary
The following table shows offering summary information for the Managed Programs as of June 30, 2015:
|
| | | | | | | | | | | | | | |
Program | | Primary Investment Strategy | | Offering Commencement Date | | % of Outstanding Shares Owned by VEREIT | | Offering Price/NAV | | Annualized Distribution |
CCPT V | | Retail | | 3/17/2014 | | 1.50 | % | | $ | 25.00 |
| | 6.30 | % |
INAV | | Diversified | | 12/6/2011(1) | | 0.17 | % | | (2) (3) |
| | (3) |
|
CCIT II | | Office and industrial | | 9/17/2013 | | 0.96 | % | | $ | 10.00 |
| | 6.30 | % |
Closed Programs(4) | | Various | | Prior to 2012 | | less than 0.01% |
| | Various |
| | Various |
|
(1) On August 26, 2013, INAV designated the existing shares of INAV's common stock that were sold prior to such date to be Wrap Class shares (“W Shares”) of common stock and registered two new classes of INAV common stock, Advisor Class shares (“A Shares”) and Institutional Class shares (“I Shares”). As the existing class of common stock, W Shares were first issued on December 6, 2011, A Shares were first issued on October 10, 2013 and I Shares were first issued on November 19, 2013.
(2) The Net Asset Value for each share class ("NAV per share") is calculated daily as of the close of business using a process that reflects (i) estimated values of each of INAV's commercial real estate assets, related liabilities and notes receivable secured by real estate provided periodically by INAV's independent valuation expert in individual appraisal reports, (ii) daily updates in the price of liquid assets for which third party market quotes are available, (iii) accruals of INAV's daily distributions and (iv) estimates of daily accruals, on a net basis, of operating revenues, expenses, debt service costs and fees.
(3) Calculated using a daily distribution rate per share and NAV per share, for each share class, as of the close of business on June 30, 2015: |
| | | | | | | | | | | | | |
Share Class | | Date of Offering | | NAV Per Share | | Daily Distribution Rate | | Annualized Distribution |
W Shares | | 12/6/2011 | (3) | $ | 18.18 |
| | $ | 0.002677953 |
| | 5.38 | % |
A Shares | | 10/10/13 | (3) | $ | 18.16 |
| | $ | 0.002674908 |
| | 5.38 | % |
I Shares | | 11/19/13 | (3) | $ | 18.25 |
| | $ | 0.002687481 |
| | 5.37 | % |
(4) Includes CCPT IV, TIC programs, DST programs and GOP and excludes CCIT, as it merged with Select Income REIT on January 29, 2015.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 57
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Managed Programs (cont.) (unaudited)
|
|
Fee Summary
The following table shows fee summary information for Cole Capital for certain of the Managed Programs as of June 30, 2015:
|
| | | | | | | | | | | | | | | | | | | |
| | Offering Fees | | Transaction Fees | | Management Fees | |
Program | | Selling Commissions (1) | | Dealer Manager and Distribution Fees (2) | | Acquisition Transactional Fees (3) | | Disposition Fees | | Asset Management / Advisory Fees | | Performance Fees | |
Open Programs | | | | | | | | | | | | | |
CCPT V | | 7 | % | | 2 | % | | 2 | % | | 1 | % | | 0.65% - 0.75% |
| (5) | 15 | % | (6) |
INAV | | (4) |
| | (4) |
| | — | % | | — | % | | 0.90 | % | | 25 | % | (7) |
CCIT II | | 7 | % | | 2 | % | | 2 | % | | 1 | % | | 0.65% - 0.75% |
| (5) | 15 | % | (6) |
| | | | | | | | | | | | | |
Closed Programs | | | | | | | | | | | | | |
CCPT IV | | 7 | % | | 2 | % | | 2 | % | | 1 | % | | 0.65% - 0.75% |
| (5) | 15 | % | (6) |
Other Programs | | N/A |
| | N/A |
| | Various |
| | Various |
| | Various |
| | Various |
| |
(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) Percent taken on gross purchase price.
(4) In connection with the INAV offering, the Company will receive selling commissions, an asset-based dealer manager fee and/or an asset-based distribution fee, as summarized in the table below for each class of common stock:
|
| | | | | | | | | |
Share Class | | Selling Commission (1) | | Dealer Manager Fee (2) | | Distribution Fee (2) |
W Shares | | — |
| | 0.55 | % | | — |
|
A Shares | | up to 3.75% |
| | 0.55 | % | | 0.50 | % |
I Shares | | — |
| | 0.25 | % | | — |
|
(5) Annualized fee based on the average monthly invested assets.
(6) Performance fee paid only under the following events: (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).
(7) Performance fee paid for any year in which the total return on stockholders' capital exceeds 6% per annum on a calendar year basis.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 58
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Managed Programs (cont.) (unaudited, dollars in thousands)
|
|
Program Activity Summary
The following table shows the Managed Programs' activity summary information for the three months ended June 30, 2015:
|
| | | | | | | | | | | | | | | | | | | | | | |
Program | | Capital Raised (1) | | DRIP(2) | | Number of Investments Acquired (3) | | Purchase Price of Acquisitions (4) | | Number of Investments Sold | | Sales Price of Dispositions |
Open Programs: | | | | | | | | | | | | |
CCPT V | | $ | 10,270 |
| | $ | 1,626 |
| | 6 |
| | $ | 22,642 |
| | — |
| | $ | — |
|
INAV | | 9,910 |
| | 775 |
| | 1 |
| | 865 |
| | 4 |
| | 17,774 |
|
CCIT II | | 38,025 |
| | 2,436 |
| | — |
| | — |
| | — |
| | — |
|
Total Open Programs | | 58,205 |
|
| 4,837 |
|
| 7 |
| | 23,507 |
| | 4 |
| | 17,774 |
|
| | | | | | | | | | | | |
Closed Programs: | | | | | | | | | | | | |
CCPT IV | | — |
| | 28,303 |
| | 14 |
| | 191,187 |
| | — |
| | — |
|
Other Programs(5) | | — |
| | — |
| | — |
| | — |
| | 8 |
| | 112,078 |
|
Total Closed Programs | | — |
| | 28,303 |
| | 14 |
| | 191,187 |
| | 8 |
| | 112,078 |
|
| | | | | | | | | | | | |
Total | | $ | 58,205 |
| | $ | 33,140 |
| | 21 |
| | $ | 214,694 |
| | 12 |
| | $ | 129,852 |
|
(1) Capital raised represents gross proceeds, excluding DRIP shares issued.
(2) DRIP represents the value of shares issued under each respective program's distribution reinvestment plan.
(3) Number of investments acquired includes properties owned through consolidated joint ventures.
(4) Purchase price of acquisitions includes pro rata share of the purchase price of any investments purchased by consolidated and unconsolidated joint ventures, as well as CMBS and notes receivable, including GAAP adjustments, such as earn-out provisions.
(5) Includes TIC and DST programs and GOP.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 59
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Managed Programs (cont.) (unaudited, dollars in thousands)
|
|
Revenue Summary
The following table shows revenue earned from the Managed Programs for the three months ended June 30, 2015 by activity type (dollars in thousands):
|
| | | | | | | | | | | | | | | | |
Program | | Offering Related Revenue and Reimbursements | | Transaction Service Revenue and Reimbursements | | Management Service Revenue and Reimbursements | | Total Managed Programs Revenue and Reimbursements |
Open Programs: | | | | | | | | |
CCPT V | | $ | 1,110 |
| | $ | 536 |
| | $ | 1,374 |
| | $ | 3,020 |
|
INAV | | 312 |
| | 78 |
| | 709 |
| | 1,099 |
|
CCIT II | | 4,094 |
| | 109 |
| | 1,815 |
| | 6,018 |
|
Gross revenue - Open Programs | | 5,516 |
| | 723 |
| | 3,898 |
| | 10,137 |
|
Less: | | | | | | | | |
Reallowed revenues | | 3,710 |
| | — |
| | — |
| | 3,710 |
|
Reimbursements | | 1,105 |
| | 345 |
| | 1,159 |
| | 2,609 |
|
Net Cole Capital Revenue - Open Programs | | 701 |
| | 378 |
| | 2,739 |
| | 3,818 |
|
| | | | | | | | |
Closed Programs: | | | | | | | | |
CCPT IV | | — |
| | 4,095 |
| | 9,722 |
| | 13,817 |
|
Other Programs(1) | | — |
| | 2,224 |
| | 371 |
| | 2,595 |
|
Gross revenue - Closed Programs | | — |
| | 6,319 |
| | 10,093 |
| | 16,412 |
|
Less: | | | | | | | | |
Reimbursements(1) | | — |
| | 281 |
| | 1,958 |
| | 2,239 |
|
Net Cole Capital Revenue - Closed Programs | | — |
| | 6,038 |
| | 8,135 |
| | 14,173 |
|
| | | | | | | | |
Total Net Cole Capital Revenue | | $ | 701 |
| | $ | 6,416 |
| | $ | 10,874 |
| | $ | 17,991 |
|
____________________________
(1) CCIT merged with Select Income REIT on January 29, 2015. These amounts exclude any CCIT post-close adjustments recorded during the three months ended June 30, 2015.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 60
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Managed Programs (cont.) (unaudited, dollars in thousands) |
|
The following tables present the primary revenue drivers and Net Revenue earned by activity type for the Managed Programs and CCIT:
Offering-related revenue
|
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | June 30, 2015 | | March 31, 2015 | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 |
Capital raised (excluding DRIP) | | $ | 58,205 |
| | $ | 29,770 |
| | $ | 128,282 |
| | $ | 218,270 |
| | $ | 113,241 |
|
| | | | | | | | | | |
Securities commissions | | 3,243 |
| | 1,775 |
| | 8,030 |
| | 13,369 |
| | 6,108 |
|
Dealer manager fees | | 1,147 |
| | 696 |
| | 2,551 |
| | 4,086 |
| | 1,909 |
|
Distribution fees | | 21 |
| | 20 |
| | 18 |
| | 13 |
| | 3 |
|
Reimbursement revenue | | 1,105 |
| | 626 |
| | 2,553 |
| | 4,067 |
| | 1,949 |
|
Gross offering-related revenue | | 5,516 |
| | 3,117 |
| | 13,152 |
| | 21,535 |
| | 9,969 |
|
Less: | | | | | | | | | | |
Reallowed securities commissions | | 3,243 |
| | 1,775 |
| | 8,030 |
| | 13,369 |
| | 6,108 |
|
Reallowed dealer manager and distribution fees | | 467 |
| | 256 |
| | 1,296 |
| | 2,029 |
| | 960 |
|
Reimbursement revenue | | 1,105 |
| | 626 |
| | 2,553 |
| | 4,067 |
| | 1,949 |
|
Net offering-related revenue | | $ | 701 |
| | $ | 460 |
| | $ | 1,273 |
| | $ | 2,070 |
| | $ | 952 |
|
Transaction service revenue
|
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | June 30, 2015 | | March 31, 2015 | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 |
Purchase price of acquisitions(1) | | $ | 214,694 |
|
| $ | 225,814 |
|
| $ | 942,818 |
|
| $ | 1,111,900 |
|
| $ | 754,612 |
|
| | | | | | | | | | |
Acquisition fees | | 4,192 |
| | 4,488 |
| | 18,558 |
| | 22,897 |
| | 14,412 |
|
Disposition fees | | 2,224 |
| | 5,201 |
| | 172 |
| | 74 |
| | — |
|
Reimbursement revenue | | 620 |
| | 571 |
| | 1,820 |
| | 1,452 |
| | 704 |
|
Gross transaction service revenue | | 7,036 |
| | 10,260 |
| | 20,550 |
| | 24,423 |
| | 15,116 |
|
Less: Reimbursement revenue | | 620 |
| | 571 |
| | 1,820 |
| | 1,452 |
| | 704 |
|
Net transaction service revenue | | $ | 6,416 |
| | $ | 9,689 |
| | $ | 18,730 |
| | $ | 22,971 |
| | $ | 14,412 |
|
Management service revenue |
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | June 30, 2015 | | March 31, 2015 | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 |
Gross real estate investments | | $ | 6,286,402 |
| | $ | 6,084,979 |
| | $ | 8,563,540 |
| | $ | 7,705,703 |
| | $ | 6,565,984 |
|
| | | | | | | | | | |
Asset and property management and leasing fees | | 371 |
| | 426 |
| | 374 |
| | 428 |
| | 538 |
|
Advisory and performance fee revenue | | 10,503 |
| | 11,173 |
| | 14,772 |
| | 11,212 |
| | 9,628 |
|
Reimbursement revenue | | 3,103 |
| | 2,518 |
| | 3,434 |
| | 2,199 |
| | 1,971 |
|
Gross management service revenue | | 13,977 |
| | 14,117 |
| | 18,580 |
| | 13,839 |
| | 12,137 |
|
Less: Reimbursement revenue | | 3,103 |
| | 2,518 |
| | 3,434 |
| | 2,199 |
| | 1,971 |
|
Net management service revenue | | $ | 10,874 |
| | $ | 11,599 |
| | $ | 15,146 |
| | $ | 11,640 |
| | $ | 10,166 |
|
(1) Purchase price of acquisitions includes pro rata share of the purchase price of any investments purchased by consolidated and unconsolidated joint ventures, as well as CMBS and notes receivable, and excludes any GAAP adjustments, such as fair value adjustments of assumed notes payable and earn-out provisions.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 61
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
|
|
|
Managed Programs (cont.) (unaudited, in thousands) |
|
The following tables show the activity performed on behalf of the Managed Programs since 2009:
Source: Robert A. Stanger & Co., Inc.; Represents aggregate capital raised, excluding DRIP, on behalf of the Managed Programs.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 62
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
Annualized Rental Income is rental revenue under our leases reflecting straight-line rent adjustments associated with contractual rent increases in the leases as required by GAAP, which includes the effect of any tenant concessions, such as free rent, and excludes any contingent rent, such as percentage rent.
Cash Cap Rate equals the estimated future 12-month NOI, excluding any rent concessions or abatements, at acquisition or disposition divided by the purchase or sale price. For properties acquired or disposed of as a portfolio, the amount presented represents the portfolio cash cap rate. For development projects, Cash Cap Rate equals the estimated future 12-month NOI from the date rent commences divided by the total estimated investment. For certain properties, the Cash Cap Rate is equal to future 12-month Contract Rental Revenue, excluding any rent concessions or abatements, divided by the purchase price or sale price, as the majority of the Company's properties are subject to Triple Net Leases.
Contract Rental Revenue includes minimum rent, percentage rent and other contingent consideration, and rental revenue from parking and storage space and excludes GAAP adjustments, such as straight-line rent and amortization of above market lease assets and below market lease liabilities. Contract Rental Revenue includes such revenues from properties subject to a direct financing lease. The Company believes that Contract Rental Revenue is a useful supplemental measure to investors and analysts for assessing the performance of the Company's REI segment, although it does not represent revenue that is computed in accordance with GAAP. Therefore, Contract Rental Revenue should not be considered as an alternative to revenue, as computed in accordance with GAAP, or as an indicator of the Company's financial performance. Contract Rental Revenue may not be comparable to similarly titled measures of other companies.
The following table shows the calculation of Contract Rental Revenue for the three months ended June 30, 2015 and 2014 (dollar amounts in thousands):
|
| | | | | | | | |
| | Three Months Ended June 30, |
| | June 30, 2015 | | June 30, 2014 |
Rental income - as reported | | $ | 341,183 |
| | $ | 314,519 |
|
Direct financing lease income - as reported | | 697 |
| | 1,181 |
|
Adjustments: | | | | |
Straight line rent | | (23,997 | ) | | (17,413 | ) |
Amortization of below-market lease liabilities, net of amortization of above-market lease assets | | 1,064 |
| | 2,103 |
|
Net direct financing lease adjustments | | 491 |
| | 137 |
|
Other non-contract rental revenue | | — |
| | (488 | ) |
Contract Rental Revenue (1) | | $ | 319,438 |
| | $ | 300,039 |
|
Direct Financing Lease is a lease that requires specific treatment due to the significance of the lease payments from the inception of the lease compared to the fair value of the property, term of the lease, a transfer of ownership, or a bargain purchase option. These leases are recorded on the balance sheet as both a long-term asset and a long-term liability. The amount booked is calculated as the fair value of the remaining lease payments on the leases and the estimated fair value of any expected residual property value at the end of the lease term.
Double Net Lease (NN) is a lease under which the tenant agrees to pay all operating expenses associated with the property (e.g., real estate taxes, insurance, maintenance), but excludes some, or all, major repairs (e.g. roof, structure, parking lot).
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 63
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
EBITDA and Normalized EBITDA
Normalized EBITDA as disclosed represents EBITDA, or earnings before interest, taxes, depreciation and amortization, modified to exclude one-time items such as acquisition related costs, merger and other non-routine transactions costs, gains or losses on sale of investments, insurance and litigation settlements and extinguishment of debt cost. We also exclude certain non-cash items such as impairments of intangible, straight-line rental revenue, unrealized gains or losses on derivatives, amortization of intangibles, deferred financing costs, and above and below market lease amortization. Management believes that excluding these costs from EBITDA provides investors with supplemental performance information that is consistent with the performance models and analysis used by management, and provides investors a view of the performance of our portfolio over time. The Company believes that Normalized EBITDA is a useful supplemental measure to investors and analysts for assessing the performance of the Company's business segments, although it does not represent net income that is computed in accordance with GAAP. Therefore, Normalized EBITDA should not be considered as an alternative to net income or as an indicator of the Company's financial performance. The Company uses Normalized EBITDA as one measure of its operating performance when formulating corporate goals and evaluating the effectiveness of the Company's strategies. Normalized EBITDA may not be comparable to similarly titled measures of other companies.
EBITDA Margin is a measurement of a company's operating profitability. It is equal to earnings before interest, tax, depreciation and amortization (EBITDA) adjusted for non-recurring expenses or revenue (Normalized EBITDA), divided by Net Cole Capital Revenue and other income.
Enterprise Value equals the sum of the Implied Equity Market Capitalization, preferred stock and Net Debt.
Fixed Charge Coverage Ratio is the sum of (i)interest expense incurred on the outstanding principal balance of our debt, excluding certain GAAP adjustments reported as interest expense, such as amortization of deferred financing costs, premiums and discounts, (ii) secured debt principal amortization and (iii) dividends attributable to preferred shares divided by Normalized EBITDA.
Funds from Operations and Adjusted Funds from Operations
Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts, Inc. ("NAREIT"), an industry trade group, has promulgated a measure known as funds from operations ("FFO"), which we believe to be an appropriate supplemental measure to reflect the operating performance of a REIT. The use of FFO, a non-GAAP supplemental financial performance measure, is recommended by the REIT industry as a supplemental performance measure. FFO is not equivalent to our net income or loss as determined under U.S. GAAP.
NAREIT defines FFO as net income or loss computed in accordance with U.S. GAAP, excluding gains or losses from disposition of property, depreciation and amortization of real estate assets and impairment write-downs on real estate including the pro rata share of adjustments for unconsolidated partnerships and joint ventures. Our FFO calculation complies with NAREIT's policy described above.
In addition to FFO, we use Adjusted Funds From Operations ("AFFO") as a non-GAAP supplemental financial performance measure to evaluate the operating performance of the Company. AFFO, as defined by the Company, excludes from FFO non-routine items such as acquisition related costs, merger and other non-routine transactions costs, gains or losses on sale of investments, insurance and litigation settlements and extinguishment of debt cost. We also exclude certain non-cash items such as impairments of intangible, straight-line rental revenue, unrealized gains or losses on derivatives, amortization of intangibles, deferred financing costs, above and below market lease amortization as well as equity-based compensation. Management believes that excluding these costs from FFO provides investors with supplemental performance information that is consistent with the performance models and analysis used by management, and provides investors a view of the performance of our portfolio over time, including after we cease to acquire properties on a frequent and regular basis. AFFO also allows for a comparison of the performance of our operations with other traded REITs that are not currently engaging in acquisitions and mergers, as well as a comparison of our performance with that of other traded REITs, as AFFO, or an equivalent measure, is routinely reported by traded REITs, and we believe often used by analysts and investors for comparison purposes.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 64
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
For all of these reasons, we believe FFO and AFFO, in addition to net loss and cash flows from operating activities, as defined by GAAP, are helpful supplemental performance measures and useful in understanding the various ways in which our management evaluates the performance of the Company over time. However, not all REITs calculate FFO and AFFO the same way, so comparisons with other REITs may not be meaningful. FFO and AFFO should not be considered as alternatives to net loss or to cash flows from operating activities, and are not intended to be used as a liquidity measure indicative of cash flow available to fund our cash needs.
AFFO may provide investors with a view of our future performance and future dividend policy. However, because AFFO excludes items that are an important component in an analysis of the historical performance of a property, AFFO should not be construed as a historic performance measure. Neither the SEC, NAREIT, nor any other regulatory body has evaluated the acceptability of the exclusions contemplated to adjust FFO in order to calculate AFFO and its use as a non-GAAP financial performance measure.
Gross Real Estate Investments represent total gross real estate and related assets, including net investments in unconsolidated entities, investment in direct financing leases, investment securities backed by real estate, such as CMBS, and loans held for investment, net of gross intangible lease liabilities.
Implied Equity Market Capitalization equals shares of common stock outstanding, including restricted stock awards, multiplied by the closing sale price of the Company's stock as reported on the New York Stock Exchange (we traded on such exchange as of June 30, 2015).
Interest Coverage Ratio reflects interest expense incurred on the outstanding principal balance of our debt, excluding certain GAAP adjustments reported as interest expense, such as amortization of deferred financing costs, premiums and discounts divided by Normalized EBITDA.
Investment-Grade Tenants are tenants, which, for these purposes, include the parent company of the tenant or lease guarantor, with an investment-grade credit rating from one of the major rating agencies.
Net Cole Capital G&A Expense
Cole Capital incurs certain costs on behalf of the Managed Programs, which are reimbursable. In accordance with GAAP, the Company records these costs as general and administrative expenses and the subsequent reimbursements as revenue. We believe Net G&A Expense is a helpful supplemental measure in determining the effective cost to the Company, eliminating any gross up presentation required by GAAP.
Net Cole Capital Revenue
Cole Capital incurs certain costs on behalf of the Managed Programs, which are reimbursable. In accordance with GAAP, Cole Capital records the reimbursement of these costs as fee and commission revenue and as reimbursement revenue and records the expense in reallowed fees and commissions and general and administrative expenses. We believe Net Revenue is a helpful supplemental measure in determining the effective revenue earned by the Company, eliminating any gross up presentation required by GAAP.
Net Debt is a calculation to show the Company's outstanding principal balance, excluding certain GAAP adjustments, such as premiums and discounts, less all cash and cash equivalents. We believe that the presentation of net debt provides useful information to investors because our management reviews net debt as part of its management of our overall liquidity, financial flexibility, capital structure and leverage.
Net Debt Leverage Ratio equals Net Debt divided by Gross Real Estate Investments.
Net Debt to Normalized EBITDA Annualized equals Net Debt divided by the current quarter Normalized EBITDA multiplied by four.
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 65
|
| | |
| | |
Q2 2015 SUPPLEMENTAL INFORMATION |
Net Operating Income (NOI) and Cash NOI
NOI is a non-GAAP performance measure used to evaluate the operating performance of a real estate company. NOI represents rental and other property income and tenant reimbursement income less property operating expenses. NOI excludes income from discontinued operations, interest expense, depreciation and amortization, general and administrative expenses, merger related compensation and merger and acquisition related expenses. Cash NOI excludes the impact of certain GAAP adjustments to rental revenue, such as straight-line rent adjustments and amortization of above-market intangible lease assets and below-market lease intangible liabilities. It is management's view that NOI and Cash NOI provide investors relevant and useful information because it reflects only income and operating expense items that are incurred at the property level and presents them on an unleveraged basis. NOI and Cash NOI should not be considered as an alternative to net income. Further, NOI and Cash NOI may not be comparable to similarly titled measures of other companies.
Non-Cash Rent represents rent adjustments related to straight-line rent and above- and below- market lease amortization.
Normalized EBITDA includes full-year real estate activities adjusted for mid-period acquisitions and normalized full-year activity for Cole Capital, less cash, general and administrative expenses and property operating expenses
Operating Expense Ratio is calculated by dividing operating expense by gross operating income.
Property Operating Expense includes reimbursable and non-reimbursable costs to operate a property, including real estate taxes, utilities, insurance, repairs, maintenance, legal, property management fees, etc.
Total Debt is the Company's outstanding principal balance, excluding certain GAAP adjustments, such as premiums and discounts.
Triple Net Lease (NNN) is a lease under which the tenant agrees to pay all expenses associated with the property (e.g., real estate taxes, insurance, maintenance and repairs).
See the Definitions section for a description of the Company's non-GAAP and other financial measures.
VEREIT, Inc. | WWW.VEREIT.COM | 66
