Segment Reporting

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company has organized its operations into two segments for management and internal financial reporting purposes, REI and Cole Capital, as further discussed below.

REI – Through its REI segment, the Company owns and actively manages a diversified portfolio of retail, restaurant, office and industrial real estate properties subject to long-term net leases with creditworthy tenants. As of June 30, 2016, the Company owned 4,291 properties comprising 98.2 million square feet of retail and commercial space located in 49 states, the District of Columbia, Puerto Rico and Canada, which includes properties owned through consolidated joint ventures. The rentable space at these properties was 97.7% leased with a weighted-average remaining lease term of 10.2 years. In addition, as of June 30, 2016, the Company owned nine commercial mortgage-backed securities (“CMBS”) and nine mortgage notes receivable.

Cole Capital – Through its Cole Capital segment, the Company is responsible for managing the day-to-day affairs of Cole Credit Property Trust IV, Inc. (“CCPT IV”); Cole Real Estate Income Strategy (Daily NAV), Inc. (“INAV”); Cole Office & Industrial REIT (CCIT II), Inc. (“CCIT II”); Cole Credit Property Trust V, Inc. (“CCPT V”); and other real estate offerings in registration (collectively with CCPT IV, INAV, CCIT II and CCPT V, the “Cole REITs”), raising capital for those Cole REITs still in offering, identifying and making acquisitions and investments on the Cole REITs’ behalf and recommending to the respective board of directors of each of the Cole REITs an approach for providing investors with liquidity. Cole Capital serves as the dealer manager and distributes shares of common stock for certain Cole REITs and advises them regarding offerings, manages relationships with participating broker-dealers and financial advisors and provides assistance in connection with compliance matters relating to the offerings. Cole Capital receives compensation and reimbursement for services relating to the Cole REITs’ offerings and the investment, management, financing and disposition of their respective assets, as applicable. Cole Capital also develops new REIT offerings and assists in obtaining regulatory approvals from the SEC, the Financial Industry Regulatory Authority, Inc. and various blue sky jurisdictions for such offerings. See Note 17 –Related Party Transactions and Arrangements for further discussion on the Cole REITs.

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
REI segment:
Revenues:
Rental income	$	311,352		$	341,183		$	625,323		$	683,942
Direct financing lease income	535			697			1,104			1,438
Operating expense reimbursements	26,646			25,312			49,893			48,286
Total real estate investment revenues	338,533			367,192			676,320			733,666
Operating expenses:
Acquisition related	27			1,563			244			3,286
Litigation and other non-routine costs, net of insurance recoveries	2,917			16,864			(2,258		)	33,287
Property operating	38,199			32,598			73,012			63,597
General and administrative	13,701			16,827			25,929			32,197
Depreciation and amortization	190,236			209,122			386,227			419,910
Impairment of real estate	8,825			85,341			169,342			85,341
Total operating expenses	253,905			362,315			652,496			637,618
Operating income	84,628			4,877			23,824			96,048
Other (expense) income:
Interest expense	(82,468		)	(90,572		)	(162,894		)	(186,271		)
Gain on extinguishment and forgiveness of debt, net	252			—			252			5,302
Other income, net	1,216			3,430			1,784			6,273
Equity in income and gain on disposition of unconsolidated entities	70			1,480			10,474			1,506
(Loss) gain on derivative instruments, net	(177		)	311			(1,263		)	(717		)
Total other expenses, net	(81,107		)	(85,351		)	(151,647		)	(173,907		)
Income (loss) before taxes and real estate dispositions	3,521			(80,474		)	(127,823		)	(77,859		)
Gain (loss) on disposition of real estate, net	437			(24,674		)	17,612			(56,042		)
Income (loss) before taxes	3,958			(105,148		)	(110,211		)	(133,901		)
Provision for income taxes	(1,791		)	(3,119		)	(3,156		)	(4,973		)
Net income (loss)	$	2,167		$	(108,267	)	$	(113,367	)	$	(138,874	)

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Cole Capital segment:
Revenues:
Offering-related fees and reimbursements	$	10,914		$	5,516		$	23,305		$	8,633
Transaction service fees and reimbursements	4,476			7,036			6,860			17,296
Management fees and reimbursements	17,096			13,977			33,554			28,094
Total Cole Capital revenues	32,486			26,529			63,719			54,023
Operating expenses:
Cole Capital reallowed fees and commissions	6,975			3,710			15,043			5,741
Acquisition related	14			—			39			459
General and administrative	19,393			17,131			36,565			34,867
Depreciation and amortization	7,109			8,391			15,426			16,744
Total operating expenses	33,491			29,232			67,073			57,811
Operating loss	(1,005		)	(2,703		)	(3,354		)	(3,788		)
Total other income, net	—			392			494			1,611
Loss before taxes	(1,005		)	(2,311		)	(2,860		)	(2,177		)
Benefit from income taxes	2,071			1,869			3,380			1,649
Net income (loss)	$	1,066		$	(442	)	$	520		$	(528	)
Total Company:
Total revenues	$	371,019		$	393,721		$	740,039		$	787,689
Total operating expenses	$	(287,396	)	$	(391,547	)	$	(719,569	)	$	(695,429	)
Total other expense, net	$	(81,107	)	$	(84,959	)	$	(151,153	)	$	(172,296	)
Net income (loss)	$	3,233		$	(108,709	)	$	(112,847	)	$	(139,402	)

	Total Assets
	June 30, 2016		December 31, 2015
REI segment	$	17,006,098	$	16,966,729
Cole Capital segment	402,413		439,137
Total Company	$	17,408,511	$	17,405,866