Discontinued Operations

On February 1, 2018, the Company completed the sale of its investment management segment, Cole Capital. Substantially all of the Cole Capital segment’s operations were conducted through Cole Capital Advisors, Inc. (“CCA”), an Arizona corporation and a wholly owned subsidiary of the OP. The OP sold all of the issued and outstanding shares of common stock of CCA and certain of CCA’s subsidiaries to CCA Acquisition, LLC (the “Cole Purchaser”), an affiliate of CIM Group, LLC, for approximately $120.0 million paid in cash at closing. The Company could also receive additional fees over the next six years if future revenues of Cole Capital exceed a specified dollar threshold (the “Net Revenue Payments”), up to an aggregate of $80.0 million in Net Revenue Payments. Substantially all of the Cole Capital segment financial results are reflected in the financial statements as discontinued operations.

The following is a summary of the financial information for discontinued operations for the three and nine months ended September 30, 2018 and 2017 (in thousands):



	Three Months Ended September 30,					Nine Months Ended September 30,
Revenues:	2018		2017			2018			2017
Offering-related fees and reimbursements	$	—	$	3,882		$	1,027		$	12,721
Transaction service fees and reimbursements	—		3,964			334			12,110
Management fees and reimbursements	—		19,152			6,452			56,388
Total revenues	$	—	$	26,998		$	7,813		$	81,219
Operating expenses:
Cole Capital reallowed fees and commissions	—		2,373			602			7,907
Transaction costs ⁽¹⁾	—		—			(654		)	—
General and administrative	—		16,072			4,450			46,426
Amortization of intangible assets	—		4,140			—			12,420
Total operating expenses	—		22,585			4,398			66,753
Operating income	—		4,413			3,415			14,466
Other income, net ⁽²⁾	—		460			(1,785		)	469
Income before taxes	—		4,873			1,630			14,935
Benefit from (provision for) income taxes	—		(868		)	2,095			(3,439		)
Income from discontinued operations	$	—	$	4,005		$	3,725		$	11,496

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(1)	The negative balance for the nine months ended September 30, 2018 is a result of estimated costs accrued in prior periods that exceeded actual expenses incurred.


(2)	Includes a $1.8 million loss on disposition during the nine months ended September 30, 2018. The Company recognized a loss on classification as held for sale of $20.0 million during the three months ended December 31, 2017.

Assets related to discontinued operations as of December 31, 2017 were $125.7 million.

The following is a summary of cash flows related to discontinued operations for the nine months ended September 30, 2018 and 2017 (in thousands):



	Nine Months Ended September 30,
	2018			2017
Cash flows related to discontinued operations:
Cash flows (used in) from operating activities	$	(10,438	)	$	26,727
Cash flows from investing activities	$	122,915		$	—