EX-99.2 3 vereitexhibit992quarte.htm EXHIBIT 99.2 Exhibit
Exhibit 99.2

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Q4 2019 SUPPLEMENTAL INFORMATION

VEREIT Supplemental Information
 
December 31, 2019
 
Section
Page
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Company Overview
Annual Financial Summary
Quarterly Financial Summary
Financial and Operations Statistics and Ratios
Key Balance Sheet Metrics and Capital Structure
Balance Sheets
Statements of Operations
Funds From Operations (FFO)
Adjusted Funds From Operations (AFFO)
EBITDA, EBITDAre and Normalized EBITDA
Net Operating Income
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Same Store Contract Rental Revenue
Debt and Preferred Equity Summary
Credit Facility and Corporate Bond Covenants
Acquisitions and Dispositions
Diversification Statistics
Top 10 Concentrations
Tenants Comprising Over 1% of Annualized Rental Income
Tenant Industry Diversification
Property Geographic Diversification
Lease Expirations
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Lease Summary
Property Type Diversification
Rent Coverage and Occupancy Costs
Unconsolidated Joint Venture Investment Summary
Definitions
 
 
 
 
 
 
 
 
 
 
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See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 2



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Q4 2019 SUPPLEMENTAL INFORMATION

 
About the Data
 
This data and other information described herein are as of and for the three months ended December 31, 2019, unless otherwise indicated. Certain balances have been reclassified to conform with the current period's presentations, including the operating expense reimbursements line item which has been combined into rental revenue for all periods presented. 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 sections contained in VEREIT, Inc.'s (the "Company," "VEREIT," "us," "our" and "we") Annual Report on Form 10-K for the year ended December 31, 2019 and Quarterly Reports on Form 10-Q for the periods ended September 30, 2019, June 30, 2019, and March 31, 2019.

In the third quarter of 2019, the Company entered into agreements to settle certain outstanding litigation, including the pending class action litigation, In re American Realty Capital Properties, Inc. Litigation, No. 1:15-mc-00040 (AKH) (the “Class Action”). In accordance with the terms of the stipulation of settlement and settlement contemplated therein for the Class Action (the "Class Action Settlement"), certain defendants agreed to pay in the aggregate $1.025 billion, comprised of contributions from the Company’s former external manager and its principals (together, the “Former Manager”) totaling $225.0 million, $12.5 million from the Company’s former Chief Financial Officer (the “Former CFO”), $49.0 million from the Company’s former auditor, and the balance of $738.5 million from the Company. The contribution from the Company’s Former Manager and Former CFO was satisfied with a combination of (i) limited partner OP Units held by the Former Manager and Former CFO, (ii) amounts due related to dividends on certain of such limited partner OP Units previously withheld from distribution, (iii) the value of substantially all of the limited partner OP Units and dividends surrendered to the Company in July 2019 as a result of a settlement by the Former Manager with the U.S. Securities and Exchange Commission (the "SEC"), and (iv) cash paid by the Former Manager and Former CFO. Pursuant to the Class Action Settlement, on October 15, 2019, the Company funded $966.3 million in connection therewith, which includes the Company's contribution of $738.5 million and cash contributed by the Company to the Class Action Settlement fund for the surrendered limited partner OP Units and amounts due related to the previously withheld dividends. The Company determined that Net Debt (as defined herein) as of September 30, 2019 should include the amounts payable in cash pursuant to the Class Action Settlement. Management believes that including the impact of the payables in Net Debt provides useful information to investors to assess our liquidity, financial flexibility, capital structure and leverage, as the Company maintained a high cash balance at September 30, 2019 with the intent to use the cash to fund the Class Action Settlement.

The Company also entered into settlement agreements and releases to settle the remaining opt out actions and paid $27.0 million during the three months ended September 30, 2019 in connection therewith, which when aggregated with the Company's contribution to the Class Action Settlement is a total cost to the Company of approximately $765.5 million in the third quarter of 2019.

In the second quarter of 2019, the Company sold six consolidated properties to two newly-formed unconsolidated joint ventures (the "Industrial Partnership"), over which the Company exercises significant influence, but not control. Under GAAP, the Company accounts for its investment in the Industrial Partnership and one previously existing joint venture under the equity method of accounting and does not consolidate the financial results and position of the underlying joint ventures. The Company determined that effective April 1, 2019, certain non-GAAP measures and operating metrics should include the Company's pro rata share of such measures and metrics from the Company's unconsolidated joint ventures, based upon the Company's legal ownership percentage, which may, at times, not equal the Company's economic interest because of various provisions in the joint venture agreements regarding distributions of cash flow based on capital account balances, allocations of profits and losses and payments of preferred returns. Management believes that including the Company's pro rata share in certain non-GAAP measures and operating metrics is helpful in understanding the financial condition and performance and operating metrics of the Company. The Company did not update data presented for prior periods as the impact on prior period non-GAAP measures and operating metrics was immaterial. The Company does not adjust non-GAAP measures and operating metrics for the partner's pro rata share of the Company's consolidated joint venture as the impact is immaterial.

Prior to the fourth quarter of 2017, the Company operated through two business segments, the real estate investment segment and the investment management segment, Cole Capital. On February 1, 2018, the Company completed the sale of Cole Capital. Substantially all of the Cole Capital segment is presented as discontinued operations and the Company's remaining financial results are reported as a single segment for all periods presented. The Company's continuing operations represent primarily those of the real estate investment segment.

See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 3



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Q4 2019 SUPPLEMENTAL INFORMATION

 
Forward-Looking Statements
 
Information set forth herein contains “forward-looking statements” (within the meaning of the federal securities laws, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended), which reflect VEREIT’s expectations and projections regarding future events and plans, VEREIT's future financial condition, results of operations and business. Generally, the words "anticipates," "assumes," "believes," "continues," "could," "estimates," "expects," "goals," "intends," "may," "plans," "projects," "seeks," "should," "targets," "will," variations of such words and similar expressions identify forward-looking statements. These forward-looking statements are based on information currently available and involve a number of known and unknown assumptions and risks, uncertainties and other factors, which may be difficult to predict and beyond VEREIT's control, that could cause actual events and plans or could cause VEREIT's business, financial condition, liquidity and results of operations to differ materially from those expressed or implied in the forward-looking statements.

The following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: VEREIT’s plans, market and other expectations, objectives, intentions and other statements that are not historical facts; VEREIT’s ability to meet its 2020 guidance; VEREIT’s ability to renew leases, lease vacant space or re-lease space as leases expire on favorable terms or at all; risks associated with tenant, geographic and industry concentrations with respect to VEREIT's properties; risks accompanying the management of its Industrial Partnership and Office Partnership; the impact of impairment charges in respect of certain of VEREIT's properties; unexpected costs or liabilities that may arise from potential dispositions, including related to limited partnership, tenant-in-common and Delaware statutory trust real estate programs and VEREIT’s management with respect to such programs; competition in the acquisition and disposition of properties; the inability to acquire, dispose of, or lease properties on advantageous terms; risks associated with bankruptcies or insolvencies of tenants, from tenant defaults generally or from the unpredictability of the business plans and financial condition of VEREIT's tenants; risks associated with obtaining approval of the settlement with the SEC by the commissioners of the SEC; risks associated with VEREIT’s substantial indebtedness, including that such indebtedness may affect VEREIT's ability to pay dividends and that the terms and restrictions within the agreements governing VEREIT's indebtedness may restrict its borrowing and operating flexibility; the ability to retain or hire key personnel; and continuation or deterioration of current market conditions. Additional factors that may affect future results are contained in VEREIT’s filings with the SEC, which are available at the SEC’s website at www.sec.gov. VEREIT disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of changes in underlying assumptions or factors, new information, future events or otherwise, except as required by law.


See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 4



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Q4 2019 SUPPLEMENTAL INFORMATION

 
Company Overview
(unaudited)
 
VEREIT is a real estate company incorporated in Maryland on December 2, 2010, which has elected to be taxed as a real estate investment trust ("REIT") for U.S. federal income tax purposes.

VEREIT is a full-service real estate operating company which owns and manages one of the largest portfolios of single-tenant commercial properties in the U.S. VEREIT's business model provides equity capital to creditworthy corporations in return for long-term leases on their properties. The Company targets 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 or services. At December 31, 2019, approximately 38.6% of the Company's Annualized Rental Income was earned from Investment-Grade Tenants, Economic Occupancy Rate was 99.1% and the Weighted Average Remaining Lease Term was 8.3 years.

Tenants, Trademarks and Logos
VEREIT is not affiliated with, is not endorsed by, does not endorse and is not sponsored by or a sponsor of the products or services pictured or mentioned. The names, logos and all related product and service names, design marks and slogans are the trademarks or service marks of their respective companies.





See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 5



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Q4 2019 SUPPLEMENTAL INFORMATION

 
Company Overview (cont.)
 
Senior Management
 
Board of Directors
 
 
 
Glenn J. Rufrano, Chief Executive Officer
 
Hugh R. Frater, Non-Executive Chairman
 
 
 
Michael J. Bartolotta, Executive Vice President and Chief Financial Officer
 
David B. Henry, Independent Director
 
 
 
Lauren Goldberg, Executive Vice President, General Counsel and Secretary
 
Mary Hogan Preusse, Independent Director
 
 
 
Paul H. McDowell, Executive Vice President and Chief Operating Officer
 
Richard J. Lieb, Independent Director
 
 
 
Thomas W. Roberts, Executive Vice President and Chief Investment Officer
 
Mark S. Ordan, Independent Director
 
 
 
Gavin B. Brandon, Senior Vice President and Chief Accounting Officer
 
Eugene A. Pinover, Independent Director
 
 
 
 
 
Julie G. Richardson, Independent Director
 
 
 
 
 
Glenn J. Rufrano, Chief Executive Officer

Corporate Offices and Contact Information
2325 E. Camelback Road, 9th Floor
 
19 West 44th Street, Suite 1401
Phoenix, AZ 85016
 
New York, NY 10036
800-606-3610
 
212-413-9100
www.VEREIT.com
 
 
 
Trading Symbols: VER, VER PF
 
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 operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 6



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Q4 2019 SUPPLEMENTAL INFORMATION

 
Annual Financial Summary
(unaudited, dollars in thousands, except share and per share amounts)
 
The following table summarizes the Company's financial results for the years ended December 31, 2019 and 2018, and portfolio metrics as of December 31, 2019 and 2018. Data presented represents continuing operations.
 
Year Ended December 31,
 
2019
 
2018
Financial Results
 
 
 
Rental revenue (1)
$
1,237,234

 
$
1,257,867

Loss from continuing operations (1)
$
(307,106
)
 
$
(91,725
)
Basic and diluted net loss from continuing operations per share attributable to common stockholders and limited partners (1)
$
(0.37
)
 
$
(0.17
)
Normalized EBITDA from continuing operations
$
1,036,821

 
$
1,040,319

FFO attributable to common stockholders and limited partners from continuing operations
$
(138,372
)
 
$
434,371

FFO attributable to common stockholders and limited partners from continuing operations per diluted share
$
(0.136
)
 
$
0.437

AFFO attributable to common stockholders and limited partners from continuing operations
$
706,935

 
$
710,688

AFFO attributable to common stockholders and limited partners from continuing operations per diluted share
$
0.694

 
$
0.716

Dividends declared per common share
$
0.55

 
$
0.55

Weighted-average shares outstanding - diluted
1,018,234,791

 
993,238,143

 
 
 
 
Portfolio Metrics
 
 
 
Operating Properties
3,858

 
3,994

Rentable Square Feet (in thousands)
89,491

 
94,953

Economic Occupancy Rate
99.1
%
 
98.8
%
Weighted Average Remaining Lease Term (years)
8.3

 
8.9

Investment-Grade Tenants
38.6
%
 
41.9
%
___________________________________
(1)
Included in our audited financial statements presented in our Annual Report on Form 10-K.



See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 7



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Q4 2019 SUPPLEMENTAL INFORMATION

 
Quarterly Financial Summary
(unaudited, dollars in thousands, except share and per share amounts)
 
The following table summarizes the Company's quarterly financial results and portfolio metrics. Data presented represents continuing operations.
 
Three Months Ended
Financial Results
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
Rental revenue
$
305,363

 
$
302,985

 
$
312,043

 
$
316,843

 
$
313,263

Income (loss) from continuing operations 
$
71,168

 
$
(741,529
)
 
$
292,284

 
$
70,971

 
$
27,872

Basic and diluted income (loss) from continuing operations per share attributable to common stockholders and limited partners 
$
0.05

 
$
(0.76
)
 
$
0.27

 
$
0.05

 
$
0.01

Normalized EBITDA
$
253,915

 
$
258,625

 
$
260,345

 
$
263,936

 
$
257,486

FFO attributable to common stockholders and limited partners from continuing operations 
$
149,433

 
$
(657,147
)
 
$
179,038

 
$
190,304

 
$
154,606

FFO attributable to common stockholders and limited partners from continuing operations per diluted share 
$
0.139

 
$
(0.655
)
 
$
0.179

 
$
0.192

 
$
0.156

AFFO attributable to common stockholders and limited partners
$
173,853

 
$
177,580

 
$
177,099

 
$
178,403

 
$
172,511

AFFO attributable to common stockholders and limited partners per diluted share
$
0.161

 
$
0.177

 
$
0.177

 
$
0.180

 
$
0.174

Dividends declared per common share
$
0.1375

 
$
0.1375

 
$
0.1375

 
$
0.1375

 
$
0.1375

Weighted-average shares outstanding - diluted
1,077,647,052

 
1,002,899,652

 
999,777,735

 
993,298,314

 
992,337,959

 
 
 
 
 
 
 
 
 
 
Portfolio Metrics
 
 
 
 
 
 
 
 
 
Operating Properties
3,858

 
3,926

 
3,950

 
3,980

 
3,994

Rentable Square Feet (in thousands)
89,491

 
90,704

 
90,631

 
94,742

 
94,953

Economic Occupancy Rate
99.1
%
 
99.0
%
 
99.0
%
 
98.9
%
 
98.8
%
Weighted Average Remaining Lease Term (years)
8.3

 
8.4

 
8.6

 
8.7

 
8.9

Investment-Grade Tenants (1)
38.6
%
 
39.5
%
 
39.6
%
 
41.3
%
 
41.9
%
___________________________________
(1)
The weighted-average credit rating of our investment-grade tenants was BBB+ as of December 31, 2019.

See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 8



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Q4 2019 SUPPLEMENTAL INFORMATION

 
Financial and Operations Statistics and Ratios
(unaudited, dollars in thousands)
 
 
 
Three Months Ended
 
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
Interest Coverage Ratio
 
 
 
 
 
 
 
 
 
 
Interest Expense, excluding non-cash amortization (1)
 
$
66,292

 
$
66,223

 
$
67,815

 
$
69,036

 
$
68,314

Normalized EBITDA (2)
 
253,915

 
258,625

 
260,345

 
263,936

 
257,486

Interest Coverage Ratio
 
3.83x

 
3.91x

 
3.84x

 
3.82x


3.77x

 
 
 
 
 
 
 
 
 
 
 
Fixed Charge Coverage Ratio
 
 
 
 
 
 
 
 
 
 
Interest Expense, excluding non-cash amortization (1)
 
$
66,292

 
$
66,223

 
$
67,815

 
$
69,036

 
$
68,314

Secured debt principal amortization
 
2,360

 
2,326

 
2,256

 
2,430

 
2,424

Dividends attributable to preferred shares 
 
15,964

 
16,578

 
17,973

 
17,973

 
17,973

Total fixed charges
 
84,616

 
85,127

 
88,044

 
89,439

 
88,711

Normalized EBITDA (2)
 
253,915

 
258,625

 
260,345

 
263,936


257,486

Fixed Charge Coverage Ratio
 
3.00
x
 
3.04x

 
2.96x

 
2.95x

 
2.90x

 
 
 
 
 
 
 
 
 
 
 
 
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
Net Debt Ratios
 
 
 
 
 
 
 
 
 
 
Net Debt (3)
 
$
5,790,308

 
$
5,658,503

 
$
5,514,805

 
$
6,049,418

 
$
6,091,874

Normalized EBITDA annualized
 
1,015,660

 
1,034,500

 
1,041,380

 
1,055,744

 
1,029,944

Net Debt to Normalized EBITDA annualized ratio
 
5.70
x
 
5.47
x
 
5.30
x
 
5.73
x
 
5.91
x
 
 
 
 
 
 
 
 
 
 
 
Net Debt (3)
 
$
5,790,308

 
$
5,658,503

 
$
5,514,805

 
$
6,049,418

 
$
6,091,874

Gross Real Estate Investments (3)
 
14,775,948

 
14,911,108

 
14,950,309

 
15,411,364

 
15,411,026

Net Debt Leverage Ratio
 
39.2
%
 
37.9
%
 
36.9
%
 
39.3
%
 
39.5
%
 
 
 
 
 
 
 
 
 
 
 
Unencumbered Assets/Real Estate Assets
 
 
 
 
 
 
 
 
Unencumbered Gross Real Estate Investments
 
$
11,681,648

 
$
11,374,138

 
$
11,361,522

 
$
11,577,487

 
$
11,574,315

Gross Real Estate Investments (3)
 
14,775,948

 
14,911,108

 
14,950,309

 
15,411,364

 
15,411,026

Unencumbered Asset Ratio
 
79.1
%
 
76.3
%
 
76.0
%
 
75.1
%
 
75.1
%
___________________________________
(1)
Refer to the Statements of Operations section for interest expense calculated in accordance with GAAP and to the Definitions section for the required reconciliation to the most directly comparable GAAP financial measure.
(2)
Refer to the Statements of Operations section for net income calculated in accordance with GAAP and to the EBITDA, EBITDAre and Normalized EBITDA section for the required reconciliation to the most directly comparable GAAP financial measure.
(3)
Refer to the Balance Sheets section for total debt and real estate investments, at cost calculated in accordance with GAAP and to the Definitions section for the required reconciliation to the most directly comparable GAAP financial measure. As discussed in the About the Data section, Net Debt as of September 30, 2019 includes the amounts payable in cash pursuant to the Class Action Settlement paid on October 15, 2019.




See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 9



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Q4 2019 SUPPLEMENTAL INFORMATION
 
Key Balance Sheet Metrics and Capital Structure
(unaudited, dollars and shares in thousands, except per share amounts)
 



chart-86e4b83c0c5a5169a07.jpg
 
 
Common equity
60.4%
 
 
 

 
 
Corporate bonds
17.2%
 
 
 

 
 
Mortgage notes payable
9.2%
 
 
 

 
 
Credit facility term loan
5.4%
 
 
 

 
 
Preferred equity
4.7%
 
 
 

 
 
Convertible notes
1.9%
 
 
 

 
 
Revolving credit facility
0.9%
 
 
 

 
 
Unconsolidated joint ventures' pro rata share
0.3%
 
 

                            

Fixed vs. Variable Rate Debt
Fixed
81.7
%
Swapped to Fixed
15.5
%
Variable
2.8
%

 
VEREIT Capitalization Table
 
 
 
Wtd. Avg. Maturity
(Years)
 
Rate (1)

 
December 31, 2019
Diluted shares outstanding
 
 
 
1,082,728

Stock price
 
 
 
 
$
9.24

Implied Equity Market Capitalization
 
$
10,004,407

 
 
 
 
 
 
Series F Perpetual Preferred (2)
 
6.70
%
 
$
773,025

 
 
 
 
 
 
Mortgage notes payable
2.8
 
5.05
%
 
1,529,057

Unconsolidated joint ventures' pro rata share
4.4
 
3.57
%
 
53,850

Total secured debt
2.8
 
5.00
%
 
$
1,582,907

 
 
 
 
 
 
Revolving credit facility
2.4
 
3.78
%
 
150,000

Credit facility term loan
3.4
 
3.59
%
 
900,000

Total unsecured credit facility
3.3
 
3.62
%
 
$
1,050,000

 
 
 
 
 
 
2020 convertible notes
1.0
 
3.75
%
 
321,802

2024 corporate bonds
4.1
 
4.60
%
 
500,000

2025 corporate bonds
5.8
 
4.63
%
 
550,000

2026 corporate bonds
6.4
 
4.88
%
 
600,000

2027 corporate bonds
7.6
 
3.95
%
 
600,000

2029 corporate bonds
10.0
 
3.10
%
 
600,000

Total unsecured debt
5.5
 
4.03
%
 
$
4,221,802

 
 
 
 
 
 
Total Adjusted Principal Outstanding
4.8
 
4.29
%
 
$
5,804,709

 
 
 
 
 
 
Total Capitalization
 
$
16,582,141

Less: Cash and cash equivalents
 
12,921

Less: Pro rata share of unconsolidated joint ventures' cash and cash equivalents
 
1,480

Enterprise Value
 
$
16,567,740

 
 
 
 
 
 
Net Debt/Enterprise Value
 
34.9
%
Net Debt/Normalized EBITDA Annualized
 
5.70
x
Net Debt + Preferred (2)/Normalized EBITDA Annualized
 
6.46
x
Fixed Charge Coverage Ratio
 
3.00
x
Liquidity (3)
 
 
 
 
$
1,359,021

___________________________________
(1)Weighted average interest rate for variable rate debt represents the interest rate in effect as of December 31, 2019.
(2)Balance represents 30.9 million shares of Series F Preferred Stock (and 30.9 million corresponding general partner Series F Preferred Units) and 49,766 limited partner Series F Preferred Units outstanding at December 31, 2019, multiplied by the liquidation preference of $25 per share.
(3)Liquidity represents cash and cash equivalents of $12.9 million and $1.3 billion available capacity on our $1.5 billion revolving credit facility. Available capacity on our revolving credit facility is reduced by letters of credit outstanding of $3.9 million at December 31, 2019.

See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 10



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Q4 2019 SUPPLEMENTAL INFORMATION

 
Balance Sheets
(unaudited, in thousands)
 
 
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
Assets
 
 
 
 
 
 
 
 
 
 
Real estate investments, at cost:
 
 
 
 
 
 
 
 
 
 
Land
 
$
2,738,679

 
$
2,728,560

 
$
2,763,348

 
$
2,824,666

 
$
2,843,212

Buildings, fixtures and improvements
 
10,200,550

 
10,287,047

 
10,352,928

 
10,741,995

 
10,749,228

Intangible lease assets
 
1,904,641

 
1,909,932

 
1,927,699

 
2,003,825

 
2,012,399

Total real estate investments, at cost
 
14,843,870


14,925,539

 
15,043,975

 
15,570,486

 
15,604,839

Less: accumulated depreciation and amortization
 
3,594,247

 
3,559,403

 
3,488,838

 
3,544,252

 
3,436,772

Total real estate investments, net
 
11,249,623


11,366,136

 
11,555,137

 
12,026,234

 
12,168,067

Operating lease right-of-use assets
 
215,227

 
218,393

 
221,798

 
224,859

 

Investment in unconsolidated entities
 
68,825

 
69,025

 
68,633

 
35,790

 
35,289

Cash and cash equivalents
 
12,921

 
1,029,315

 
211,510

 
12,788

 
30,758

Restricted cash
 
20,959

 
20,742

 
20,692

 
18,517

 
22,905

Rent and tenant receivables and other assets, net
 
348,395

 
347,455

 
343,788

 
361,641

 
366,092

Goodwill
 
1,337,773

 
1,337,773

 
1,337,773

 
1,337,773

 
1,337,773

Real estate assets held for sale, net
 
26,957

 
66,684

 
22,553

 
36,022

 
2,609

Total assets
 
$
13,280,680


$
14,455,523


$
13,781,884

 
$
14,053,624

 
$
13,963,493

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Equity
 
 
 
 
 
 
 
 
 
 
Mortgage notes payable, net
 
$
1,528,134

 
$
1,717,817

 
$
1,745,331

 
$
1,918,826

 
$
1,922,657

Corporate bonds, net
 
2,813,739

 
2,622,320

 
2,621,130

 
2,619,956

 
3,368,609

Convertible debt, net
 
318,183

 
397,726

 
396,766

 
395,823

 
394,883

Credit facility, net
 
1,045,669

 
895,351

 
895,033

 
1,089,725

 
401,773

Below-market lease liabilities, net
 
143,583

 
147,997

 
152,654

 
166,708

 
173,479

Accounts payable and accrued expenses
 
126,320

 
1,125,703

 
127,799

 
141,126

 
145,611

Deferred rent and other liabilities
 
90,349

 
101,828

 
77,713

 
70,220

 
69,714

Distributions payable
 
150,364

 
201,451

 
187,359

 
190,246

 
186,623

Operating lease liabilities
 
221,061

 
223,288

 
225,972

 
228,120

 

Total liabilities
 
6,437,402


7,433,481

 
6,429,757

 
6,820,750

 
6,663,349

 
 
 
 
 
 
 
 
 
 
 
Series F preferred stock
 
309

 
389

 
429

 
429

 
428

Common stock
 
10,768

 
10,677

 
9,734

 
9,716

 
9,675

Additional paid-in capital
 
13,251,962

 
13,360,675

 
12,655,018

 
12,645,148

 
12,615,472

Accumulated other comprehensive loss
 
(27,670
)
 
(47,886
)
 
(28,026
)
 
(12,202
)
 
(1,280
)
Accumulated deficit
 
(6,399,626
)
 
(6,306,590
)
 
(5,416,759
)
 
(5,550,574
)
 
(5,467,236
)
Total stockholders' equity
 
6,835,743


7,017,265

 
7,220,396

 
7,092,517

 
7,157,059

Non-controlling interests
 
7,535

 
4,777

 
131,731

 
140,357

 
143,085

Total equity
 
6,843,278


7,022,042


7,352,127

 
7,232,874

 
7,300,144

Total liabilities and equity
 
$
13,280,680


$
14,455,523

 
$
13,781,884

 
$
14,053,624

 
$
13,963,493



See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 11



vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION

 
Statements of Operations
(unaudited, in thousands, except per share data)
 
 
 
Three Months Ended
 
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
Rental revenue
 
$
305,363

 
$
302,985

 
$
312,043

 
$
316,843

 
$
313,263

Operating expenses:
 
 
 
 
 
 
 
 
 
 
Acquisition-related
 
1,168

 
1,199

 
985

 
985

 
1,136

Litigation and non-routine costs, net
 
8,659

 
832,024

 
(3,769
)
 
(21,492
)
 
23,541

Property operating
 
34,066

 
30,822

 
32,503

 
32,378

 
32,567

General and administrative
 
16,966

 
14,483

 
16,416

 
14,846

 
17,220

Depreciation and amortization
 
112,307

 
115,111

 
118,022

 
136,555

 
153,050

Impairments
 
22,851

 
3,944

 
8,308

 
11,988

 
18,565

Restructuring
 
356

 
783

 
290

 
9,076

 

Total operating expenses
 
196,373

 
998,366

 
172,755

 
184,336

 
246,079

Other income (expense):
 
 
 
 
 
 
 
 
 
 
Interest expense
 
(69,628
)
 
(67,889
)
 
(69,803
)
 
(71,254
)
 
(70,832
)
(Loss) gain on extinguishment and forgiveness of debt, net
 
(17,413
)
 
975

 
(1,472
)
 

 
21

Other income (loss), net
 
7,461

 
2,737

 
3,175

 
(402
)
 
7,008

Equity in income of unconsolidated entities
 
936

 
677

 
505

 
500

 
225

Gain on disposition of real estate and held for sale assets, net
 
41,541

 
18,520

 
221,755

 
10,831

 
25,880

Total other (expenses) income, net
 
(37,103
)
 
(44,980
)
 
154,160

 
(60,325
)
 
(37,698
)
Income (loss) before taxes
 
71,887

 
(740,361
)
 
293,448

 
72,182

 
29,486

Provision for income taxes from continuing operations
 
(719
)
 
(1,168
)
 
(1,164
)
 
(1,211
)
 
(1,614
)
Income (loss) from continuing operations
 
71,168

 
(741,529
)
 
292,284

 
70,971

 
27,872

Loss from discontinued operations, net of tax
 

 

 

 

 
(30
)
Net income (loss)
 
71,168


(741,529
)

292,284


70,971


27,842

Net (income) loss attributable to non-controlling interests
 
(43
)
 
15,089

 
(6,626
)
 
(1,667
)
 
(624
)
Net income (loss) attributable to the General Partner
 
$
71,125

 
$
(726,440
)
 
$
285,658

 
$
69,304

 
$
27,218

 
 
 
 
 
 
 
 
 
 
 
Basic and diluted net income (loss) per share from continuing operations attributable to common stockholders and limited partners
 
$
0.05

 
$
(0.76
)
 
$
0.27

 
$
0.05

 
$
0.01

Basic and diluted net loss per share from discontinued operations attributable to common stockholders and limited partners
 

 

 

 

 
(0.00
)
Basic and diluted net income (loss) per share attributable to common stockholders and limited partners
 
$
0.05

 
$
(0.76
)
 
$
0.27

 
$
0.05

 
$
0.01



See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 12



vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION

 
Funds From Operations (FFO)
(unaudited, in thousands, except share and per share data)
 
 
 
Three Months Ended
 
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
Net income (loss)
 
$
71,168

 
$
(741,529
)
 
$
292,284

 
$
70,971

 
$
27,842

Dividends on non-convertible preferred stock
 
(15,964
)
 
(16,578
)
 
(17,973
)
 
(17,973
)
 
(17,973
)
Gain on disposition of real estate assets, net
 
(41,541
)
 
(18,520
)
 
(221,762
)
 
(10,831
)
 
(25,951
)
Depreciation and amortization of real estate assets
 
111,892

 
114,695

 
117,616

 
135,861

 
151,837

Impairment of real estate
 
22,851

 
3,944

 
8,308

 
11,988

 
18,565

Proportionate share of adjustments for unconsolidated entities
 
1,027

 
841

 
565

 
288

 
256

FFO attributable to common stockholders and limited partners
 
$
149,433

 
$
(657,147
)
 
$
179,038

 
$
190,304

 
$
154,576

FFO attributable to common stockholders and limited partners from continuing operations
 
149,433

 
(657,147
)
 
179,038

 
190,304

 
154,606

FFO attributable to common stockholders and limited partners from discontinued operations
 

 

 

 

 
(30
)
 
 
 
 
 
 
 
 
 
 
 
Weighted-average shares outstanding - basic
 
1,070,625,899

 
978,982,729

 
973,723,139

 
968,460,296

 
967,817,245

Effect of weighted-average Limited Partner OP Units and dilutive securities (1)
 
7,021,153

 
23,916,923

 
26,054,596

 
24,838,018

 
24,520,714

Weighted-average shares outstanding - diluted (2)
 
1,077,647,052

 
1,002,899,652

 
999,777,735

 
993,298,314

 
992,337,959

 
 
 
 
 
 
 
 
 
 
 
FFO attributable to common stockholders and limited partners per diluted share (3)
 
$
0.139

 
$
(0.655
)
 
$
0.179

 
$
0.192

 
$
0.156

FFO attributable to common stockholders and limited partners from continuing operations per diluted share (3)
 
0.139

 
(0.655
)
 
0.179

 
0.192

 
0.156

FFO attributable to common stockholders and limited partners from discontinued operations per diluted share (3)
 

 

 

 

 
(0.000
)
___________________________________
(1)
In connection with the Class Action Settlement, the Former Manager and Former CFO surrendered 19.9 million limited partner OP Units that were canceled during the three months ended December 31, 2019. Dilutive securities include unvested restricted shares of Common Stock, unvested restricted stock units and stock options.
(2)
Weighted-average shares for all periods presented exclude the effect of the convertible debt as the Company would expect to settle the debt in cash and any shares underlying restricted stock units that are not issuable based on the Company’s level of achievement of certain performance targets through the respective reporting period.
(3)
Refer to the Statements of Operations section for basic and diluted net income (loss) per share attributable to common stockholders and limited partners.


See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 13



vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION

 
Adjusted Funds From Operations (AFFO)
(unaudited, in thousands, except share and per share data)
 
 
 
Three Months Ended
 
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
FFO attributable to common stockholders and limited partners
 
$
149,433

 
$
(657,147
)
 
$
179,038

 
$
190,304

 
$
154,576

 
 
 
 
 
 
 
 
 
 
 
Acquisition-related expenses
 
1,168

 
1,199

 
985

 
985

 
1,136

Litigation and non-routine costs, net
 
8,659

 
832,024

 
(3,769
)
 
(21,492
)
 
23,541

Loss on disposition of discontinued operations
 

 

 

 

 
30

Payments received on fully reserved loans
 
(133
)
 

 

 

 
(4,792
)
Loss (gain) on investments
 

 
28

 
(5
)
 
470

 
(1,790
)
Loss on derivative instruments, net
 

 

 
24

 
34

 
92

Amortization of premiums and discounts on debt and investments, net
 
(1,479
)
 
(1,177
)
 
(1,392
)
 
(1,264
)
 
(1,154
)
Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities
 
504

 
692

 
611

 
731

 
945

Net direct financing lease adjustments
 
387

 
411

 
410

 
409

 
498

Amortization and write-off of deferred financing costs
 
5,305

 
3,319

 
3,346

 
3,494

 
3,715

Loss (gain) on extinguishment and forgiveness of debt, net
 
17,413

 
(975
)
 
1,472

 

 
(21
)
Straight-line rent, net of bad debt expense related to straight-line rent (1)
 
(7,107
)
 
(5,470
)
 
(8,043
)
 
(7,412
)
 
(8,341
)
Equity-based compensation
 
2,934

 
2,924

 
3,706

 
2,687

 
2,924

Restructuring expenses
 
356

 
783

 
290

 
9,076

 

Other adjustments, net
 
(3,097
)
 
1,138

 
617

 
569

 
1,092

Proportionate share of adjustments for unconsolidated entities
 
(493
)
 
(128
)
 
(196
)
 
(188
)
 
60

Adjustment for Excluded Properties
 
3

 
(41
)
 
5

 

 

AFFO attributable to common stockholders and limited partners
 
$
173,853


$
177,580


$
177,099


$
178,403


$
172,511

 
 
 
 
 
 
 
 
 
 
 
Weighted-average shares outstanding - basic
 
1,070,625,899

 
978,982,729

 
973,723,139

 
968,460,296

 
967,817,245

Effect of weighted-average Limited Partner OP Units and dilutive securities (2)
 
7,021,153

 
23,916,923

 
26,054,596

 
24,838,018

 
24,520,714

Weighted-average shares outstanding - diluted (3)
 
1,077,647,052

 
1,002,899,652

 
999,777,735

 
993,298,314

 
992,337,959

 
 
 
 
 
 
 
 
 
 
 
AFFO attributable to common stockholders and limited partners per diluted share (4)
 
$
0.161

 
$
0.177

 
$
0.177

 
$
0.180

 
$
0.174

___________________________________
(1)
Upon adoption of ASC 842 in Q1 2019, the Company recognizes all changes in the collectability assessment for an operating lease as an adjustment to rental revenue and does not record bad debt expense for uncollectible accounts.
(2)
In connection with the Class Action Settlement, the Former Manager and Former CFO surrendered 19.9 million limited partner OP Units that were canceled during the three months ended December 31, 2019. Dilutive securities include unvested restricted shares of Common Stock, unvested restricted stock units and stock options.
(3)
Weighted-average shares for all periods presented exclude the effect of the convertible debt as the Company would expect to settle the debt in cash and any shares underlying restricted stock units that are not issuable based on the Company’s level of achievement of certain performance targets through the respective reporting period.
(4)
Refer to the Statements of Operations section for basic and diluted net income (loss) per share attributable to common stockholders and limited partners.

See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 14



vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION

 
EBITDA, EBITDAre and Normalized EBITDA
(unaudited, in thousands)
 
 
 
Three Months Ended
 
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 Net income (loss)
 
$
71,168

 
$
(741,529
)
 
$
292,284

 
$
70,971

 
$
27,842

 Adjustments:
 
 
 
 
 
 
 
 
 
 
Interest expense
 
69,628

 
67,889

 
69,803

 
71,254

 
70,832

Depreciation and amortization
 
112,307

 
115,111

 
118,022

 
136,555

 
153,050

Provision for income taxes
 
719

 
1,168

 
1,164

 
1,211

 
1,614

Proportionate share of adjustments for unconsolidated entities
 
1,603

 
1,337

 
738

 
288

 
254

 EBITDA
 
$
255,425

 
$
(556,024
)
 
$
482,011

 
$
280,279

 
$
253,592

Gain on disposition of real estate assets, net
 
(41,541
)
 
(18,520
)
 
(221,762
)
 
(10,831
)
 
(25,951
)
Impairment of real estate
 
22,851

 
3,944

 
8,308

 
11,988

 
18,565

EBITDAre
 
$
236,735


$
(570,600
)

$
268,557


$
281,436


$
246,206

Loss on disposition of discontinued operations
 

 

 

 

 
30

Payments received on fully reserved loans
 
(133
)
 

 

 

 
(4,792
)
Acquisition-related expenses
 
1,168

 
1,199

 
985

 
985

 
1,136

Litigation and non-routine costs, net
 
8,659

 
832,024

 
(3,769
)
 
(21,492
)
 
23,541

Loss (gain) on investments
 

 
28

 
(5
)
 
470

 
(1,790
)
Loss on derivative instruments, net
 

 

 
24

 
34

 
92

Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities
 
504

 
692

 
611

 
731

 
945

Loss (gain) on extinguishment and forgiveness of debt, net
 
17,413

 
(975
)
 
1,472

 

 
(21
)
Net direct financing lease adjustments
 
387

 
411

 
410

 
409

 
498

Straight-line rent, net of bad debt expense related to straight-line rent (1)
 
(7,107
)
 
(5,470
)
 
(8,043
)
 
(7,412
)
 
(8,341
)
Restructuring expenses
 
356

 
783

 
290

 
9,076

 

Other adjustments, net
 
(3,511
)
 
724

 
214

 
(113
)
 
(78
)
 Proportionate share of adjustments for unconsolidated entities
 
(559
)
 
(134
)
 
(198
)
 
(188
)
 
60

Adjustment for Excluded Properties
 
3

 
(57
)
 
(203
)
 

 

Normalized EBITDA
 
$
253,915


$
258,625


$
260,345


$
263,936


$
257,486


___________________________________
(1)
Upon adoption of ASC 842 in Q1 2019, the Company recognizes all changes in the collectability assessment for an operating lease as an adjustment to rental revenue and does not record bad debt expense for uncollectible accounts.

See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 15


 
vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION


 
Net Operating Income
(unaudited, dollars in thousands)
 
NOI and Cash NOI
 
 
Three Months Ended
 
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 Rental revenue - as reported (1)
 
$
305,363

 
$
302,985

 
$
312,043

 
$
316,843

 
$
313,263

 Property operating expense - as reported
 
(34,066
)
 
(30,822
)
 
(32,503
)
 
(32,378
)
 
(32,567
)
NOI
 
271,297


272,163


279,540

 
284,465

 
280,696

 Adjustments:
 
 
 
 
 
 
 
 
 
 
Straight-line rent, net of bad debt expense related to straight-line rent (2)
 
(7,107
)
 
(5,470
)
 
(8,043
)
 
(7,412
)
 
(8,341
)
Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities
 
504

 
692

 
611

 
731

 
945

Net direct financing lease adjustments
 
387

 
411

 
410

 
409

 
498

Unconsolidated joint ventures' pro rata share
 
1,920

 
1,817

 
1,176

 

 

Adjustment for Excluded Properties
 
3

 
(54
)
 
(203
)
 

 

 Cash NOI
 
$
267,004


$
269,559


$
273,491


$
278,193


$
273,798

___________________________________
(1)
Rental revenue includes percentage rent of $1.4 million, $0.9 million, $1.2 million, $1.3 million and $1.4 million for the three months ended December 31, 2019, September 30, 2019, June 30, 2019, March 31, 2019, and December 31, 2018, respectively.
(2)
Upon adoption of ASC 842 in Q1 2019, the Company recognizes all changes in the collectability assessment for an operating lease as an adjustment to rental revenue and does not record bad debt expense for uncollectible accounts.

Normalized Cash NOI
 
 
Three Months Ended
 
 
December 31, 2019
Cash NOI
 
$
267,004

Adjustments for intra-quarter acquisitions and dispositions (1)
 
(404
)
Normalized Cash NOI
 
$
266,600

___________________________________
(1)
The adjustment eliminates Cash NOI for properties acquired and build-to-suit projects completed during the three months ended December 31, 2019 and replaces Cash NOI for the partial period with an amount estimated to be equivalent to Cash NOI for the full period. The adjustment also eliminates Cash NOI for properties disposed of during the three months ended December 31, 2019.


See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 16


 
vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION


 
Same Store Contract Rental Revenue
(unaudited, dollars in thousands)
 
The Company reviews the stabilized operating results from properties that we refer to as "same store." In determining the same store property pool, we include Operating Properties that were owned for the entirety of both the current and prior reporting periods, except for properties that during the current or prior period were under development or redevelopment.
The following tables show the Company's same store portfolio statistics, which for the year ended December 31, 2019 included 3,738(1) Operating Properties with 82.3 million aggregate square feet, acquired prior to January 1, 2018 and owned through December 31, 2019, and for the three months ended December 31, 2019 included 3,779(2) Operating Properties, with 84.2 million aggregate square feet, acquired prior to October 1, 2018 and owned through December 31, 2019.

Year Ended December 31, 2019:
 
 
Year Ended December 31,
 
Increase/(Decrease)
 
 
2019
 
2018
 
$ Change
 
% Change
Contract Rental Revenue
 
$
1,010,496

 
$
998,798

 
$
11,698

 
1.2
%
Economic Occupancy Rate
 
99.1
%
 
99.1
%
 
N/A

 
N/A

 
 
 
 
Contract Rental Revenue
 
 
 
Number of
 
Year Ended December 31,
 
Increase/(Decrease)
 
 
 
Properties
 
2019
 
2018
 
$ Change
 
% Change
 
Retail
 
1,955

 
$
425,023

 
$
424,280

 
$
743

 
0.2
 %
 
Restaurant
 
1,562

 
220,735

 
218,925

 
1,810

 
0.8
 %
 
Industrial
 
135

 
158,270

 
157,196

 
1,074

 
0.7
 %
 
Office
 
78

 
206,305

 
198,220

 
8,085

 
4.1
 %
 
Other (3)
 
8

 
163

 
177

 
(14
)
 
(7.9
)%
 
Total
 
3,738

 
$
1,010,496

 
$
998,798

 
$
11,698

 
1.2
 %
 

Three Months Ended December 31, 2019:
 
 
Three Months Ended December 31,
 
Increase/(Decrease)
 
 
2019
 
2018
 
$ Change
 
% Change
Contract Rental Revenue
 
$
259,253

 
$
256,548

 
$
2,705

 
1.1
%
Economic Occupancy Rate
 
99.1
%
 
99.1
%
 
N/A

 
N/A

 
 
 
 
Contract Rental Revenue
 
 
 
Number of
 
Three Months Ended December 31,
 
Increase/(Decrease)
 
 
 
Properties
 
2019
 
2018
 
$ Change
 
% Change
 
Retail
 
1,989

 
$
110,710

 
$
109,934

 
$
776

 
0.7
%
 
Restaurant
 
1,562

 
55,511

 
54,943

 
568

 
1.0
%
 
Industrial
 
141

 
40,769

 
40,510

 
259

 
0.6
%
 
Office
 
79

 
52,229

 
51,129

 
1,100

 
2.2
%
 
Other (3)
 
8

 
34

 
32

 
2

 
6.3
%
 
Total
 
3,779

 
$
259,253

 
$
256,548

 
$
2,705

 
1.1
%
 
___________________________________
(1)
Development and expansion properties are included in the same store population if the placed in service date was prior to January 1, 2018.
(2)
Development and expansion properties are included in the same store population if the placed in service date was prior to October 1, 2018.
(3)
Other properties include billboards, land and parking lots.

See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 17


 
vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION


 
Adjusted Principal Outstanding and Preferred Equity Summary
(unaudited, dollars in thousands)
 
Principal Payments Due
 
Total
 
2020
 
2021
 
2022
 
2023
 
2024
 
2025
 
2026
 
Thereafter
Mortgage notes payable
 
$
1,529,057

 
$
188,385

 
$
299,015

 
$
289,451

 
$
124,217

 
$
621,021

 
$
1,078

 
$
1,138

 
$
4,752

Unsecured credit facility
 
1,050,000

 

 

 
150,000

 
900,000

 

 

 

 

Corporate bonds
 
2,850,000

 

 

 

 

 
500,000

 
550,000

 
600,000

 
1,200,000

Convertible notes
 
321,802

 
321,802

 

 

 

 

 

 

 

Unconsolidated joint ventures' pro rata share
 
53,850

 

 

 

 

 
53,850

 

 

 

Total Adjusted Principal Outstanding
 
$
5,804,709

 
$
510,187

 
$
299,015

 
$
439,451

 
$
1,024,217


$
1,174,871


$
551,078


$
601,138

 
$
1,204,752

Debt Type
 
Percentage of Adjusted Principal Outstanding
 
Weighted-Average Interest Rate
 
Weighted-Average Years to Maturity
Mortgage notes payable
 
26.4
%
 
5.05
%
 
2.8

Unsecured credit facility
 
18.1
%
 
3.62
%
 
3.3

Corporate bonds
 
49.1
%
 
4.21
%
 
6.9

Convertible notes
 
5.5
%
 
3.75
%
 
1.0

Unconsolidated joint ventures' pro rata share
 
0.9
%
 
3.57
%
 
4.4

Total
 
100.0
%
 
4.29
%
 
4.8

Debt Type
 
Percentage of Adjusted Principal Outstanding
 
Weighted-Average Interest Rate
 
Weighted-Average Years to Maturity
Total unsecured debt
 
72.7
%
 
4.03
%
 
5.5

Total secured debt
 
27.3
%
 
5.00
%
 
2.8

Total
 
100.0
%
 
4.29
%
 
4.8

 
 
 
 
 
 
 
Total fixed-rate debt (1)
 
97.2
%
 
4.31
%
 
4.9

Total variable-rate debt
 
2.8
%
 
3.88
%
 
2.2

Total
 
100.0
%
 
4.29
%
 
4.8

Preferred Equity
 
Balance (2)
 
Percent of Total Preferred Equity
 
Dividend Rate
Series F preferred stock
 
$
773,025

 
100.0
%
 
6.7
%
___________________________________
(1)
Includes $900.0 million of variable rate debt effectively fixed through the use of interest rate swap agreements. Debt payment obligations in future periods are based on the effective interest rates fixed under the agreements.
(2)
Balance represents 30.9 million shares of Series F Preferred Stock (and 30.9 million corresponding general partner Series F Preferred Units) and 49,766 limited partner Series F Preferred Units outstanding at December 31, 2019, multiplied by the liquidation preference of $25 per share.







See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 18


 
vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION


 
Adjusted Principal Outstanding and Preferred Equity Summary (cont.)
(unaudited, dollars in millions)
 

chart-ec33875d098457aab7f.jpg


See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 19


 
vereitlogoa59.jpg
 
 
Q4 2019 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 GAAP measurements, are presented to investors to show that the Company is in compliance with the financial covenants and are not measures of our liquidity or performance. As of December 31, 2019, 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
 
December 31, 2019
Ratio of total indebtedness to total asset value
 
≤ 60%
 
37.8%
Ratio of adjusted EBITDA to fixed charges
 
≥ 1.5x
 
2.96x
Ratio of secured indebtedness to total asset value
 
≤ 45%
 
10.2%
Ratio of unsecured indebtedness to unencumbered asset value
 
≤ 60%
 
35.6%
Ratio of unencumbered adjusted NOI to unsecured interest expense
 
≥ 1.75x
 
4.61x

Corporate Bond Key Covenants
 
Required
 
December 31, 2019
Limitation on incurrence of total debt
 
≤ 65%
 
38.0%
Limitation on incurrence of secured debt
 
≤ 40%
 
10.2%
Debt service coverage
 
≥ 1.5x
 
3.97x
Maintenance of total unencumbered assets
 
≥ 150%
 
282.5%


See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 20


 
vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION


 
Acquisitions and Dispositions
(unaudited, square feet and dollars in thousands)
 
Acquisitions
The following table summarizes the Company's property acquisition activity during the three months ended December 31, 2019.
Property Type
 
Number of Properties
 
Square Feet
 
Weighted Average Lease Term (Years) (1)
 
Weighted Average Cash Cap Rate
 
Purchase Price (2)
Retail
 
26
 
431

 
17.8

 
7.3
%
 
$
141,945

Total acquisitions (3)
 
26
 
431

 
17.8

 
7.3
%
 
$
141,945


Dispositions
The following table summarizes the Company's disposition activity and the related gains/losses during the three months ended December 31, 2019.
Real Estate
 
Number of Properties
 
Square Feet
 
Weighted Average Lease Term (Years) (4)
 
Weighted Average Cash Cap Rate (5)
 
Sale Price
 
Gain (Loss)
Retail
 
72
 
1,443

 
6.9

 
6.4
%
 
$
186,256

 
$
34,732

Red Lobster - GGC Participation (6)
 
3
 
21

 
19.6

 
7.8
%
 
13,088

 
2,166

Industrial
 
1
 
193

 
2.3

 
N/A

 
6,100

 
1,473

Other restaurants
 
5
 
26

 
10.0

 
7.4
%
 
9,365

 
1,887

Office
 
1
 
3

 
2.8

 
8.3
%
 
475

 
192

Vacant and other (7)
 
12
 
146

 
N/A

 
5.9
%
 
10,223

 
1,545

Total real estate dispositions
 
94
 
1,832
 
7.6

 
6.5
%
 
$
225,507

 
$
41,995

Held for sale assets
 
 
 
 
 
 
 
 
 
 
 
(454
)
Total gain on disposition of real estate, net
 
 
 
 
 
 
 
 
 
 
 
$
41,541

___________________________________
(1)
Represents the remaining lease term from the date of acquisition.
(2)
Excludes acquisition-related expenses capitalized.
(3)
During the three months ended December 31, 2019, the Company placed in service one build-to-suit project with a total investment of $27.3 million, including $3.0 million related to land acquired in 2018, at a cash cap rate of 7.85%.
(4)
Represents the remaining lease term from the date of sale.
(5)
Excludes certain properties' cash cap rates considered not meaningful due to factors such as physical and economic vacancy or short remaining lease terms. Of the $225.5 million of dispositions, $210.4 million was used in the total weighted average cash cap rate calculation of 6.5%.
(6)
The Red Lobster properties were sold under an agreement with the tenant, under which the tenant received a portion of the sales proceeds. The sales price and cash cap rate presented are based on our proceeds after making the participation payment to the tenant. The cash cap rate on the gross sales price of $15.3 million was 6.7%.
(7)
Represents eight vacant retail properties and four vacant restaurants.


See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 21


vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION
 
Diversification Statistics: Real Estate Portfolio
(unaudited, percentages based on portfolio Annualized Rental Income)
 


chart-256d799c4fc65bbbbb8.jpg
___________________________________________________
chart-7f85dd699d895c1b82a.jpg
___________________________________________________
chart-5e6636cc03a15f00982.jpg
 
chart-2c2eacdbd28d52eb878.jpg
___________________________________________________
chart-fe3b09684b2659c58ec.jpg
___________________________________________________

Statistics
(square feet in thousands)
 
 
 
 
Operating Properties
 
3,858

 
Rentable Square Feet
 
89,491

 
Economic Occupancy Rate
 
99.1
%
 
Weighted Average Remaining Lease Term
 
8.3

 
Investment-Grade Tenants
 
38.6
%
 
Flat leases
 
19.3
%
 
NNN leases
 
62.7
%
 


See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 22


 
vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION


 
Top 10 Concentrations: Real Estate Portfolio
(unaudited, square feet and dollars in thousands)
 
Tenant Concentration
 
Number of Leases
 
Leased Square Feet
 
Square Feet as a % of Total Portfolio
 
Annualized Rental Income
 
Annualized Rental Income as a % of Total Portfolio
 
Investment Rating
Red Lobster
 
25

 
1,537

 
1.7
%
 
$
52,107

 
4.7
%
 
B-
Dollar Tree/Family Dollar
 
132

 
3,470

 
3.9
%
 
39,464

 
3.5
%
 
BBB-
Dollar General
 
410

 
3,794

 
4.2
%
 
34,980

 
3.1
%
 
BBB
Walgreens
 
99

 
1,404

 
1.6
%
 
34,930

 
3.1
%
 
BBB
CVS
 
92

 
1,314

 
1.5
%
 
29,490

 
2.7
%
 
BBB
FedEx
 
42

 
3,028

 
3.4
%
 
28,446

 
2.6
%
 
BBB
LA Fitness
 
25

 
1,087

 
1.2
%
 
21,118

 
1.9
%
 
B+
BJ's Wholesale Club
 
3

 
2,223

 
2.5
%
 
20,565

 
1.8
%
 
B+
Albertson's
 
26

 
1,536

 
1.7
%
 
18,628

 
1.7
%
 
B+
PetSmart
 
13

 
886

 
1.0
%
 
18,251

 
1.6
%
 
B-
Total
 
867

 
20,279

 
22.7
%
 
$
297,979

 
26.7
%
 
 
Tenant Industry Concentration
 
Number of Leases
 
Leased Square Feet
 
Square Feet as a % of Total Portfolio
 
Annualized Rental Income
 
Annualized Rental Income as a % of Total Portfolio
Restaurants - Casual Dining
 
308

 
3,851

 
4.3
%
 
$
133,412

 
12.0
%
Manufacturing
 
53

 
16,360

 
18.3
%
 
103,930

 
9.3
%
Restaurants - Quick Service
 
806

 
3,212

 
3.6
%
 
98,232

 
8.8
%
Retail - Discount
 
571

 
9,182

 
10.3
%
 
91,550

 
8.2
%
Retail - Pharmacy
 
209

 
3,151

 
3.5
%
 
72,138

 
6.5
%
Retail - Home & Garden
 
112

 
8,360

 
9.3
%
 
61,749

 
5.6
%
Retail - Grocery & Supermarket
 
68

 
4,295

 
4.8
%
 
49,654

 
4.5
%
Retail - Motor Vehicle
 
181

 
6,034

 
6.7
%
 
43,854

 
3.9
%
Finance
 
163

 
2,005

 
2.2
%
 
42,942

 
3.9
%
Professional Services
 
48

 
3,223

 
3.6
%
 
41,056

 
3.7
%
Total
 
2,519

 
59,673

 
66.6
%
 
$
738,517

 
66.4
%
Geographic Concentration
 
Number of Properties
 
Rentable Square Feet
 
Square Feet as a % of Total Portfolio
 
Annualized Rental Income
 
Annualized Rental Income as a % of Total Portfolio
Texas
 
543

 
10,450

 
11.7
%
 
$
142,412

 
12.8
%
Illinois
 
155

 
4,803

 
5.4
%
 
67,692

 
6.1
%
Ohio
 
280

 
8,422

 
9.4
%
 
65,287

 
5.9
%
Florida
 
251

 
4,284

 
4.8
%
 
64,432

 
5.8
%
Georgia
 
168

 
3,422

 
3.8
%
 
40,746

 
3.7
%
California
 
63

 
3,390

 
3.8
%
 
40,677

 
3.7
%
Pennsylvania
 
107

 
3,782

 
4.2
%
 
40,256

 
3.6
%
Indiana
 
131

 
4,058

 
4.5
%
 
37,852

 
3.4
%
North Carolina
 
149

 
3,265

 
3.6
%
 
35,585

 
3.2
%
New Jersey
 
30

 
1,609

 
1.8
%
 
34,647

 
3.1
%
Total
 
1,877

 
47,485

 
53.0
%
 
$
569,586

 
51.3
%




See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 23


 
vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION


 
Top 10 Concentrations: Real Estate Portfolio
(unaudited, square feet and dollars in thousands)
 
Metropolitan Statistical Area (MSA) Concentration
 
Number of Properties
 
Rentable Square Feet
 
Square Feet as a % of Total Portfolio
 
Annualized Rental Income
 
Annualized Rental Income as a % of Total Portfolio
Chicago, IL
 
99

 
4,116

 
4.6
%
 
$
58,030

 
5.2
%
Dallas, TX
 
110

 
3,452

 
3.9
%
 
48,659

 
4.4
%
Atlanta, GA
 
75

 
2,449

 
2.7
%
 
26,224

 
2.4
%
Phoenix, AZ
 
48

 
1,327

 
1.5
%
 
24,673

 
2.2
%
New York, NY
 
24

 
1,100

 
1.2
%
 
24,300

 
2.2
%
Boston, MA
 
22

 
1,795

 
2.0
%
 
24,289

 
2.2
%
Houston, TX
 
86

 
2,337

 
2.6
%
 
24,268

 
2.2
%
Philadelphia, PA
 
38

 
1,144

 
1.3
%
 
20,377

 
1.8
%
Cincinnati, OH
 
40

 
2,264

 
2.5
%
 
17,755

 
1.6
%
Indianapolis, IN
 
41

 
1,721

 
1.9
%
 
17,536

 
1.6
%
Total
 
583

 
21,705

 
24.2
%
 
$
286,111

 
25.8
%



See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 24


 
vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION


 
Tenants Comprising Over 1% of Annualized Rental Income
(unaudited, square feet and dollars in thousands)
 
Tenant
 
Number of Leases
 
Leased Square Feet
 
Square Feet as a % of Total Portfolio
 
Annualized Rental Income
 
Annualized Rental Income as a % of Total Portfolio
 
Investment Rating
Red Lobster
 
25

 
1,537

 
1.7
%
 
$
52,107

 
4.7
%
 
B-
Dollar Tree/Family Dollar
 
132

 
3,470

 
3.9
%
 
39,464

 
3.5
%
 
BBB-
Dollar General
 
410

 
3,794

 
4.2
%
 
34,980

 
3.1
%
 
BBB
Walgreens
 
99

 
1,404

 
1.6
%
 
34,930

 
3.1
%
 
BBB
CVS
 
92

 
1,314

 
1.5
%
 
29,490

 
2.7
%
 
BBB
FedEx
 
42

 
3,028

 
3.4
%
 
28,446

 
2.6
%
 
BBB
LA Fitness
 
25

 
1,087

 
1.2
%
 
21,118

 
1.9
%
 
B+
BJ's Wholesale Club
 
3

 
2,223

 
2.5
%
 
20,565

 
1.8
%
 
B+
Albertson's
 
26

 
1,536

 
1.7
%
 
18,628

 
1.7
%
 
B+
PetSmart
 
13

 
886

 
1.0
%
 
18,251

 
1.6
%
 
B-
Goodyear
 
7

 
4,728

 
5.3
%
 
17,417

 
1.6
%
 
BB-
Tractor Supply
 
61

 
1,274

 
1.4
%
 
16,573

 
1.5
%
 
NR
General Service Administration
 
14

 
705

 
0.8
%
 
15,592

 
1.4
%
 
AA+
At Home
 
5

 
1,406

 
1.6
%
 
12,112

 
1.1
%
 
B
Advance Auto Parts
 
104

 
716

 
0.8
%
 
11,871

 
1.1
%
 
BBB-
Lowe's
 
14

 
1,751

 
2.0
%
 
11,442

 
1.0
%
 
BBB+
Total
 
1,072

 
30,859

 
34.6
%
 
$
382,986

 
34.4
%
 
 


See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 25


 
vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION


 
Diversification: Tenant Industry
(unaudited, square feet and dollars in thousands)
 
Industry
 
Number of Leases
 
Leased Square Feet
 
Leased Square Feet as a % of Total Portfolio
 
Annualized Rental Income
 
Annualized Rental Income as a % of Total Portfolio
Administration & Support Services
 
3

 
425

 
0.5
%
 
$
3,960

 
0.4
%
Agricultural
 
2

 
138

 
0.2
%
 
1,245

 
0.1
%
Education
 
5

 
219

 
0.2
%
 
2,155

 
0.2
%
Entertainment & Recreation
 
37

 
1,624

 
1.8
%
 
36,993

 
3.3
%
Finance
 
163

 
2,005

 
2.2
%
 
42,942

 
3.9
%
Government & Public Services
 
20

 
923

 
1.1
%
 
18,504

 
1.7
%
Healthcare
 
11

 
938

 
1.0
%
 
14,382

 
1.3
%
Information & Communication
 
6

 
505

 
0.6
%
 
7,133

 
0.6
%
Insurance
 
12

 
1,430

 
1.6
%
 
29,021

 
2.6
%
Logistics
 
46

 
3,701

 
4.1
%
 
33,551

 
3.0
%
Manufacturing
 
53

 
16,360

 
18.3
%
 
103,930

 
9.3
%
Mining & Natural Resources
 
4

 
412

 
0.5
%
 
6,605

 
0.6
%
Other Services
 
10

 
474

 
0.5
%
 
3,191

 
0.3
%
Professional Services
 
48

 
3,223

 
3.6
%
 
41,056

 
3.7
%
Rental
 
11

 
734

 
0.8
%
 
7,143

 
0.6
%
Restaurants - Casual Dining
 
308

 
3,851

 
4.3
%
 
133,412

 
12.0
%
Restaurants - Quick Service
 
806

 
3,212

 
3.6
%
 
98,232

 
8.8
%
Retail - Apparel & Jewelry
 
13

 
1,430

 
1.6
%
 
16,049

 
1.4
%
Retail - Department Stores
 
12

 
1,021

 
1.1
%
 
8,224

 
0.7
%
Retail - Discount
 
571

 
9,182

 
10.3
%
 
91,550

 
8.2
%
Retail - Electronics & Appliances
 
17

 
1,645

 
1.8
%
 
11,250

 
1.0
%
Retail - Gas & Convenience
 
125

 
694

 
0.8
%
 
33,227

 
3.0
%
Retail - Grocery & Supermarket
 
68

 
4,295

 
4.8
%
 
49,654

 
4.5
%
Retail - Hobby, Books & Music
 
16

 
2,104

 
2.4
%
 
13,297

 
1.2
%
Retail - Home & Garden
 
112

 
8,360

 
9.3
%
 
61,749

 
5.6
%
Retail - Home Furnishings
 
45

 
2,692

 
3.0
%
 
31,943

 
2.9
%
Retail - Internet
 
1

 
1,423

 
1.6
%
 
6,797

 
0.6
%
Retail - Medical Services
 
63

 
539

 
0.6
%
 
12,000

 
1.1
%
Retail - Motor Vehicle
 
181

 
6,034

 
6.7
%
 
43,854

 
3.9
%
Retail - Office Supply
 
3

 
69

 
0.1
%
 
963

 
0.1
%
Retail - Pet Supply
 
17

 
944

 
1.1
%
 
19,307

 
1.7
%
Retail - Pharmacy
 
209

 
3,151

 
3.5
%
 
72,138

 
6.5
%
Retail - Specialty (Other)
 
19

 
532

 
0.6
%
 
5,843

 
0.5
%
Retail - Sporting Goods
 
21

 
1,719

 
1.9
%
 
22,776

 
2.1
%
Retail - Warehouse Clubs
 
5

 
2,466

 
2.8
%
 
22,754

 
2.1
%
Other
 
19

 
237

 
0.2
%
 
5,389

 
0.5
%
Total
 
3,062

 
88,711

 
99.1
%
 
$
1,112,219

 
100.0
%


See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 26


vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION
 
Diversification: Property Geographic
(unaudited, square feet and dollars in thousands)
 


Location
 
Number of Properties
 
Rentable Square Feet
 
Square Feet as a % of Total Portfolio
 
Annualized Rental Income
 
Annualized Rental Income as a % of Total Portfolio
United States
 
 
 
 
 
 
 
 
 
 
Alabama
 
145

 
1,687

 
1.9
%
 
$
25,295

 
2.3
%
Alaska
 
3

 
25

 
%
 
792

 
0.1
%
Arizona
 
77

 
1,941

 
2.2
%
 
34,273

 
3.1
%
Arkansas
 
91

 
1,168

 
1.3
%
 
13,611

 
1.2
%
California
 
63

 
3,390

 
3.8
%
 
40,677

 
3.7
%
Colorado
 
45

 
1,680

 
1.9
%
 
25,633

 
2.3
%
Connecticut
 
15

 
81

 
0.1
%
 
2,189

 
0.2
%
Delaware
 
8

 
80

 
0.1
%
 
1,511

 
0.1
%
Florida
 
251

 
4,284

 
4.8
%
 
64,432

 
5.8
%
Georgia
 
168

 
3,423

 
3.8
%
 
40,746

 
3.7
%
Idaho
 
16

 
130

 
0.1
%
 
3,130

 
0.3
%
Illinois
 
155

 
4,803

 
5.4
%
 
67,692

 
6.1
%
Indiana
 
131

 
4,058

 
4.5
%
 
37,852

 
3.4
%
Iowa
 
46

 
1,059

 
1.2
%
 
12,420

 
1.1
%
Kansas
 
41

 
2,207

 
2.5
%
 
10,536

 
0.9
%
Kentucky
 
74

 
1,966

 
2.2
%
 
21,628

 
1.9
%
Louisiana
 
90

 
2,798

 
3.1
%
 
27,787

 
2.5
%
Maine
 
26

 
703

 
0.8
%
 
9,123

 
0.8
%
Maryland
 
27

 
596

 
0.7
%
 
14,198

 
1.3
%
Massachusetts
 
29

 
2,541

 
2.8
%
 
29,220

 
2.6
%
Michigan
 
167

 
1,974

 
2.2
%
 
34,386

 
3.1
%
Minnesota
 
52

 
793

 
0.9
%
 
12,767

 
1.2
%
Mississippi
 
71

 
1,905

 
2.1
%
 
14,219

 
1.3
%
Missouri
 
149

 
1,686

 
1.9
%
 
22,702

 
2.0
%
Montana
 
9

 
115

 
0.1
%
 
1,948

 
0.2
%
Nebraska
 
19

 
335

 
0.4
%
 
5,868

 
0.5
%
Nevada
 
28

 
717

 
0.8
%
 
8,491

 
0.8
%
New Hampshire
 
16

 
240

 
0.3
%
 
4,077

 
0.4
%
New Jersey
 
30

 
1,609

 
1.8
%
 
34,647

 
3.1
%
New Mexico
 
42

 
765

 
0.8
%
 
10,191

 
0.9
%
New York
 
72

 
1,502

 
1.7
%
 
26,274

 
2.4
%
North Carolina
 
149

 
3,265

 
3.6
%
 
35,585

 
3.2
%
North Dakota
 
12

 
211

 
0.2
%
 
4,348

 
0.4
%
Ohio
 
280

 
8,422

 
9.4
%
 
65,287

 
5.9
%
Oklahoma
 
76

 
2,075

 
2.3
%
 
25,387

 
2.3
%
Oregon
 
13

 
88

 
0.1
%
 
2,009

 
0.2
%
Pennsylvania
 
107

 
3,782

 
4.2
%
 
40,256

 
3.6
%
Rhode Island
 
4

 
141

 
0.1
%
 
2,259

 
0.2
%
South Carolina
 
103

 
2,231

 
2.5
%
 
22,223

 
2.0
%
South Dakota
 
12

 
180

 
0.2
%
 
2,169

 
0.2
%
Tennessee
 
106

 
2,897

 
3.2
%
 
28,177

 
2.5
%
Texas
 
543

 
10,450

 
11.7
%
 
142,412

 
12.8
%
Utah
 
11

 
515

 
0.6
%
 
5,744

 
0.5
%
Vermont
 
6

 
53

 
0.1
%
 
1,147

 
0.1
%
Virginia
 
99

 
2,596

 
2.9
%
 
33,880

 
3.0
%
Washington
 
27

 
762

 
0.9
%
 
13,629

 
1.2
%
West Virginia
 
37

 
238

 
0.3
%
 
5,457

 
0.5
%

See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 27


vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION
 
Diversification: Property Geographic (cont.)
(unaudited, square feet and dollars in thousands)

 

Location
 
Number of Properties
 
Rentable Square Feet
 
Square Feet as a % of Total Portfolio
 
Annualized Rental Income
 
Annualized Rental Income as a % of Total Portfolio
Wisconsin
 
106

 
1,182

 
1.3
%
 
20,164

 
1.8
%
Wyoming
 
8

 
54

 
0.1
%
 
1,436

 
0.1
%
Territories
 
 
 
 
 
 
 
 
 
 
Puerto Rico
 
3

 
88

 
0.1
%
 
2,335

 
0.2
%
Total
 
3,858

 
89,491

 
100.0
%
 
$
1,112,219

 
100.0
%





Percentages based on Annualized Rental Income.usmapregionaldiversityq42019.jpg

See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 28


 
vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION


 
Lease Expirations
(unaudited, square feet and dollars in thousands)
 
Year of Expiration
 
Number of Leases
Expiring
 
Leased
Square Feet
 
Leased Square Feet as a % of Total Portfolio
 
Annualized Rental Income Expiring
 
Annualized Rental Income Expiring as a % of Total Portfolio
2020
 
154

 
2,982

 
3.4
%
 
$
33,486

 
3.0
%
2021
 
179

 
8,510

 
9.6
%
 
78,469

 
7.1
%
2022
 
243

 
8,015

 
9.0
%
 
74,995

 
6.7
%
2023
 
288

 
6,202

 
6.8
%
 
76,927

 
6.9
%
2024
 
254

 
10,013

 
11.3
%
 
120,825

 
10.9
%
2025
 
241

 
4,569

 
5.0
%
 
60,565

 
5.4
%
2026
 
223

 
7,970

 
8.9
%
 
76,442

 
6.9
%
2027
 
350

 
6,983

 
7.9
%
 
98,175

 
8.8
%
2028
 
307

 
5,902

 
6.6
%
 
70,492

 
6.3
%
2029
 
140

 
5,440

 
6.1
%
 
53,488

 
4.8
%
Thereafter
 
683

 
22,125

 
24.5
%
 
368,355

 
33.2
%
Total
 
3,062

 
88,711

 
99.1
%
 
$
1,112,219

 
100.0
%

See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 29


 
vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION


 
Lease Expirations (cont.)
(unaudited, square feet and dollars in thousands)
 
Year of Expiration
 
Number of Leases
Expiring
 
Leased Square Feet
 
Square Feet as a % of Total Portfolio
 
Annualized Rental Income Expiring
 
Annualized Rental Income Expiring as a % of Total Portfolio
2020
 
 
 
 
 
 
 
 
 
 
Retail
 
65

 
767

 
0.9
%
 
$
10,065

 
0.9
%
Restaurant
 
69

 
316

 
0.4
%
 
6,599

 
0.6
%
Industrial
 
7

 
1,103

 
1.2
%
 
4,117

 
0.4
%
Office
 
10

 
796

 
0.9
%
 
12,195

 
1.1
%
Other (1)
 
3

 

 
%
 
510

 
%
Total 2020
 
154

 
2,982

 
3.4
%
 
$
33,486

 
3.0
%
 
 
 
 
 
 
 
 
 
 
 
2021
 


 


 


 


 


Retail
 
73

 
1,228

 
1.4
%
 
$
19,950

 
1.8
%
Restaurant
 
74

 
366

 
0.4
%
 
9,168

 
0.9
%
Industrial
 
12

 
5,158

 
5.8
%
 
19,058

 
1.7
%
Office
 
18

 
1,758

 
2.0
%
 
30,233

 
2.7
%
Other (1)
 
2

 

 
%
 
60

 
%
Total 2021
 
179

 
8,510

 
9.6
%
 
$
78,469

 
7.1
%
 
 
 
 
 
 
 
 
 
 
 
2022
 


 


 


 


 


Retail
 
149

 
1,614

 
1.8
%
 
$
25,522

 
2.3
%
Restaurant
 
56

 
268

 
0.3
%
 
7,115

 
0.6
%
Industrial
 
22

 
4,730

 
5.3
%
 
16,935

 
1.5
%
Office
 
15

 
1,403

 
1.6
%
 
25,350

 
2.3
%
Other (1)
 
1

 

 
%
 
73

 
%
Total 2022
 
243

 
8,015

 
9.0
%
 
$
74,995

 
6.7
%
 
 
 
 
 
 
 
 
 
 
 
2023
 


 


 


 


 


Retail
 
180

 
2,435

 
2.7
%
 
$
32,260

 
2.9
%
Restaurant
 
74

 
300

 
0.3
%
 
7,819

 
0.7
%
Industrial
 
18

 
2,458

 
2.7
%
 
16,387

 
1.5
%
Office
 
11

 
1,009

 
1.1
%
 
19,995

 
1.8
%
Other (1)
 
5

 

 
%
 
466

 
%
Total 2023
 
288

 
6,202

 
6.8
%
 
$
76,927

 
6.9
%
 
 
 
 
 
 
 
 
 
 
 
___________________________________
(1)
Includes redevelopment property, billboards, land and parking lots.


See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 30


 
vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION


 
Lease Expirations (cont.)
(unaudited, square feet and dollars in thousands)
 
Year of Expiration
 
Number of Leases
Expiring
 
Leased Square Feet
 
Square Feet as a % of Total Portfolio
 
Annualized Rental Income Expiring
 
Annualized Rental Income Expiring as a % of Total Portfolio
2024
 
 
 
 
 
 
 
 
 
 
Retail
 
139

 
2,579

 
2.9
%
 
$
36,143

 
3.3
%
Restaurant
 
76

 
336

 
0.4
%
 
8,720

 
0.8
%
Industrial
 
12

 
3,459

 
3.9
%
 
14,958

 
1.3
%
Office
 
25

 
3,639

 
4.1
%
 
60,875

 
5.5
%
Other (1)
 
2

 

 
%
 
129

 
%
Total 2024
 
254

 
10,013

 
11.3
%
 
$
120,825

 
10.9
%
 
 
 
 
 
 
 
 
 
 
 
2025
 
 
 
 
 
 
 
 
 
 
Retail
 
162

 
2,074

 
2.3
%
 
$
30,321

 
2.7
%
Restaurant
 
63

 
273

 
0.3
%
 
7,779

 
0.7
%
Industrial
 
11

 
1,645

 
1.8
%
 
13,217

 
1.2
%
Office
 
5

 
577

 
0.6
%
 
9,248

 
0.8
%
Total 2025
 
241

 
4,569

 
5.0
%
 
$
60,565

 
5.4
%
 
 
 
 
 
 
 
 
 
 
 
2026
 
 
 
 
 
 
 
 
 
 
Retail
 
92

 
1,933

 
2.2
%
 
$
22,002

 
2.0
%
Restaurant
 
108

 
490

 
0.5
%
 
17,198

 
1.5
%
Industrial
 
14

 
4,804

 
5.4
%
 
21,704

 
2.0
%
Office
 
8

 
743

 
0.8
%
 
15,392

 
1.4
%
Other (1)
 
1

 

 
%
 
146

 
%
Total 2026
 
223

 
7,970

 
8.9
%
 
$
76,442

 
6.9
%
 
 
 
 
 
 
 
 
 
 
 
2027
 
 
 
 
 
 
 
 
 
 
Retail
 
240

 
3,838

 
4.3
%
 
$
50,536

 
4.5
%
Restaurant
 
98

 
860

 
1.0
%
 
27,861

 
2.5
%
Industrial
 
9

 
1,751

 
2.0
%
 
12,365

 
1.1
%
Office
 
3

 
534

 
0.6
%
 
7,413

 
0.7
%
Total 2027
 
350

 
6,983

 
7.9
%
 
$
98,175

 
8.8
%
___________________________________
(1)
Includes redevelopment property, billboards, land and parking lots.

See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 31


 
vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION


 
Lease Expirations (cont.)
(unaudited, square feet and dollars in thousands)
 
Year of Expiration
 
Number of Leases
Expiring
 
Leased Square Feet
 
Square Feet as a % of Total Portfolio
 
Annualized Rental Income Expiring
 
Annualized Rental Income Expiring as a % of Total Portfolio
2028
 
 
 
 
 
 
 
 
 
 
Retail
 
183

 
2,976

 
3.3
%
 
$
39,021

 
3.5
%
Restaurant
 
98

 
350

 
0.4
%
 
11,224

 
1.0
%
Industrial
 
19

 
2,166

 
2.4
%
 
14,524

 
1.3
%
Office
 
7

 
410

 
0.5
%
 
5,723

 
0.5
%
Total 2028
 
307

 
5,902

 
6.6
%
 
$
70,492

 
6.3
%
 
 
 
 
 
 
 
 
 
 
 
2029
 
 
 
 
 
 
 
 
 
 
Retail
 
86

 
2,377

 
2.7
%
 
$
28,592

 
2.6
%
Restaurant
 
48

 
281

 
0.3
%
 
9,662

 
0.9
%
Industrial
 
5

 
2,575

 
2.9
%
 
11,847

 
1.0
%
Office
 
1

 
207

 
0.2
%
 
3,387

 
0.3
%
Total 2029
 
140

 
5,440

 
6.1
%
 
$
53,488

 
4.8
%
 
 
 
 
 
 
 
 
 
 
 
Thereafter
 
 
 
 
 
 
 
 
 
 
Retail
 
336

 
11,815

 
13.1
%
 
$
196,656

 
17.7
%
Restaurant
 
322

 
3,138

 
3.5
%
 
116,000

 
10.5
%
Industrial
 
14

 
6,446

 
7.1
%
 
37,977

 
3.4
%
Office
 
7

 
726

 
0.8
%
 
17,507

 
1.6
%
Other (1)
 
4

 

 
%
 
215

 
%
Total Thereafter
 
683

 
22,125

 
24.5
%
 
$
368,355

 
33.2
%
 
 
 
 
 
 
 
 
 
 
 
Total Remaining Lease Expirations
 
3,062

 
88,711

 
99.1
%
 
$
1,112,219

 
100.0
%
___________________________________
(1)
Includes redevelopment property, billboards, land and parking lots.

See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 32


 
vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION


 
Lease Summary
(unaudited)
 
Rent Escalations
(square feet and dollars in thousands)
 
 
Number of Leases
 
Leased
Square Feet
 
Leased Square Feet as a % of Total Portfolio
 
Annualized Rental Income
 
Annualized Rental Income as a % of Total Portfolio
Fixed dollar or percent increase
 
1,955

 
62,123

 
69.4
%
 
$
791,338

 
71.1
%
CPI
 
171

 
6,950

 
7.8
%
 
106,687

 
9.6
%
Flat
 
936

 
19,638

 
21.9
%
 
214,194

 
19.3
%
Total
 
3,062


88,711


99.1
%

$
1,112,219


100.0
%

chart-0789a8b7d7f25105a76.jpg

See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 33


 
vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION


 
Lease Summary (cont.)
(unaudited)
 
Tenant Expense Obligation
(square feet and dollars in thousands)
 
 
Number of Leases
 
Leased
Square Feet
 
Leased Square Feet as a % of Total Portfolio
 
Annualized Rental Income
 
Annualized Rental Income as a % of Total Portfolio
NNN
 
2,148

 
53,917

 
60.2
%
 
$
697,619

 
62.7
%
NN
 
884

 
33,450

 
37.4
%
 
382,032

 
34.4
%
Other (1)
 
30

 
1,344

 
1.5
%
 
32,568

 
2.9
%
Total
 
3,062


88,711

 
99.1
%
 
$
1,112,219

 
100.0
%
___________________________________
(1)
Includes gross, modified gross and billboard leases.
 
chart-2969b2494fc352e898e.jpg

See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 34


 
vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION


 
Property Type Diversification
(unaudited, square feet and dollars in thousands)
 
Property Type Diversification
Property Type
 
Number of Properties (1)
 
Rentable Square Feet
 
Square Feet as a % of Total Portfolio
 
Annualized Rental Income
 
Annualized Rental Income as a % of Total Portfolio
Retail (1)
 
2,062

 
33,899

 
37.9
%
 
$
491,068

 
44.2
%
Restaurant
 
1,562

 
7,227

 
8.1
%
 
229,145

 
20.6
%
Industrial
 
146

 
36,295

 
40.5
%
 
183,089

 
16.5
%
Office
 
79

 
12,070

 
13.5
%
 
207,318

 
18.6
%
Other (2)
 
9

 

 
%
 
1,599

 
0.1
%
Total
 
3,858


89,491


100.0
%

$
1,112,219


100.0
%
___________________________________
(1) Includes six anchored shopping centers, representing 1.1% of Annualized Rental Income.
(2) Includes redevelopment property, billboards, land and parking lots.







See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 35


 
vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION


 
Rent Coverage and Occupancy Costs
(unaudited)
 
Rent Coverage
The following table shows weighted-average rent coverage for retail and restaurant properties calculated as property level EBITDAR (earnings before interest, tax, depreciation, amortization and rent), prior to the deduction of any corporate overhead expenses, for the most recently provided trailing twelve-month period, divided by annualized December 2019 rent per the lease terms. (1) 
Property Type
 
Number of Properties (2)
 
2019 Rent Coverage
Retail and Restaurant
 
1,485

 
2.63
x


Occupancy Costs
The following tables show occupancy costs for retail and restaurant properties calculated as rent per the lease terms, divided by property level sales for the year ended December 31, 2018.
Retail
 
Number of Properties (3)
 
2018 Occupancy Cost
 
Target Percentage
Automotive
 
98

 
8.7
%
 
8.0 - 10.0%
Discount
 
302

 
7.4
%
 
6.0 - 8.0%
Grocery & Supermarket
 
35

 
2.9
%
 
2.0 - 4.0%
Home & Garden
 
4

 
2.0
%
 
2.0 - 4.0%
Pharmacy
 
80

 
4.8
%
 
4.0 - 6.0%
Other
 
119

 
3.9
%
 
N/A

Restaurant
 
Number of Properties (3)
 
2018 Occupancy Cost
 
Target Percentage
Casual Dining
 
455

 
7.0
%
 
6.75 - 8.0%
Quick Service
 
586

 
7.4
%
 
7.5 - 8.5%

__________________________________
(1)
In certain cases, property level EBITDAR reflects a period of less than twelve months, annualized.
(2)
Property level performance data was collected for 92.6% of retail and restaurant properties required to provide unit level financial information, representing 43.0% of retail and restaurant properties owned at December 31, 2019 (excluding vacant and dark properties; percentages based on property count).
(3)
Property level sales data was collected for 79.5% of retail and restaurant properties required to provide unit level sales reports, representing 49.6% of retail and restaurant properties owned for the entirety of 2018 (excluding vacant and dark properties; percentages based on property count).


See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 36



vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION
 
Diversification by Property Type: Retail
(unaudited, percentages based on Annualized Rental Income of the retail properties)
 


chart-ffcb34aade725a1fb78.jpg____________________________________________________
chart-c1476381ac435adeae4.jpg______________________________________________________
chart-86b8ffb889a6587eb06.jpg
 
chart-8ce312263dd45109b22.jpg_________________________________________________
chart-a5485382422b5e5e9bf.jpg_________________________________________________

Statistics
(square feet in thousands)
 
 
 
 
Operating Properties
 
2,062

 
Rentable Square Feet
 
33,899

 
Economic Occupancy Rate
 
99.2
%
 
Weighted Average Remaining Lease Term
 
9.1

 
Investment-Grade Tenants
 
46.9
%
 
Flat leases
 
28.5
%
 
NNN leases
 
65.7
%
 


See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 37


vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION
 
Diversification by Property Type: Restaurants
(unaudited, percentages based on Annualized Rental Income of the restaurant properties)

 


chart-9343207145605a548f7.jpg
______________________________________________________
chart-74cfaf7a64315403914.jpg______________________________________________________
chart-e2f64febb8555f27b59.jpg
 
chart-9ab8939964235b879a2.jpg
_________________________________________________
chart-d14e4b4b2c9b5d97802.jpg_________________________________________________

Statistics
(square feet in thousands)
 
 
 
 
Operating Properties
 
1,562

 
Rentable Square Feet
 
7,227

 
Economic Occupancy Rate
 
96.6
%
 
Weighted Average Remaining Lease Term
 
10.9

 
Investment-Grade Tenants
 
3.3
%
 
Flat leases
 
8.5
%
 
NNN leases
 
99.4
%
 

See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 38


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Q4 2019 SUPPLEMENTAL INFORMATION
 
Diversification by Property Type: Industrial
(unaudited, percentages based on Annualized Rental Income of the industrial properties)

 


chart-ce06b8d1172c538c8ce.jpg____________________________________________________
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Statistics
(square feet in thousands)
 
 
 
 
Operating Properties
 
146

 
Rentable Square Feet
 
36,295

 
Economic Occupancy Rate
 
100.0
%
 
Weighted Average Remaining Lease Term
 
7.3

 
Investment-Grade Tenants
 
45.6
%
 
Flat leases
 
17.1
%
 
NNN leases
 
54.7
%
 

See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 39


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Q4 2019 SUPPLEMENTAL INFORMATION
 
Diversification by Property Type: Office
(unaudited, percentages based on Annualized Rental Income of the office properties)

 


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Statistics
(square feet in thousands)
 
 
 
 
Operating Properties
 
79

 
Rentable Square Feet
 
12,070

 
Economic Occupancy Rate
 
97.8
%
 
Weighted Average Remaining Lease Term
 
4.6

 
Investment-Grade Tenants
 
51.9
%
 
Flat leases
 
11.2
%
 
NNN leases
 
22.6
%
 

See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 40


 
vereitlogoa59.jpg
 
 
Q4 2019 SUPPLEMENTAL INFORMATION


 
Unconsolidated Joint Venture Investment Summary
(unaudited, square feet and dollars in thousands)
 
 Joint Venture
 
Legal Ownership %
 
Property Type
 
Number of Properties
 
Pro Rata Share of Gross Real Estate Investments
 
 Pro Rata Share of Rentable Square Feet
 
 Pro Rata Share of Annualized Rental Income
 
Pro Rata Share of Adjusted Principal Outstanding
Industrial Partnership
 
20%
 
Industrial
 
6
 
$
81,736

 
952

 
$
5,267

 
$
53,850

Faison JV Bethlehem GA
 
90%
 
Retail
 
1
 
40,137

 
295

 
3,393

 

Total
 
 
 
 
 
 
$
121,873

 
1,247


$
8,660


$
53,850


See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 41




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Q4 2019 SUPPLEMENTAL INFORMATION
 
Definitions
(unaudited, in thousands, except share and per share data)
 








Annualized Rental Income is rental revenue under our leases on Operating Properties on a straight-line basis, which includes the effect of rent escalations and any tenant concessions, such as free rent, and our pro rata share of such revenues from properties owned by unconsolidated joint ventures. Annualized Rental Income excludes any adjustments to rental income due to changes in the collectability assessment, contingent rent, such as percentage rent, and operating expense reimbursements. Management uses Annualized Rental Income as a basis for tenant, industry and geographic concentrations and other metrics within the portfolio. Annualized Rental Income is not indicative of future performance.

Cash Cap Rate equals the estimated future 12-month Cash 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 the Company's pro rata share of such revenues from properties owned by unconsolidated joint ventures. Contract Rental Revenue 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, and omits the Contract Rental Revenue related to Excluded Properties. The Company believes that Contract Rental Revenue is a useful non-GAAP supplemental measure to investors and analysts for assessing performance. However, 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 twelve and three months ended December 31, 2019 and 2018 (dollar amounts in thousands):
 
Year Ended December 31,
 
Three Months Ended December 31,
 
2019
 
2018
 
2019
 
2018
Rental revenue - as reported
$
1,237,234

 
$
1,257,867

 
$
305,363

 
$
313,263

Adjustments:
 
 
 
 
 
 
 
Costs reimbursed related to CAM, property operating expenses and ground leases
(108,365
)
 
(99,732
)
 
(27,954
)
 
(25,433
)
Straight-line rent
(28,032
)
 
(39,772
)
 
(7,107
)
 
(8,605
)
Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities
2,538

 
4,178

 
504

 
945

Net direct financing lease adjustments
1,617

 
2,023

 
387

 
498

Other non-contract rental revenue
(249
)
 
(1,813
)
 
9

 
(349
)
Unconsolidated joint ventures' pro rata share
5,170

 

 
2,031

 

Contract Rental Revenue - Excluded Properties
(289
)
 

 

 

Contract Rental Revenue
$
1,109,624

 
$
1,122,751

 
$
273,233

 
$
280,319


CPI is a lease in which base rent is adjusted based on changes in a consumer price index.
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 as a net asset on the balance sheet. 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).



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Q4 2019 SUPPLEMENTAL INFORMATION
 
Definitions (cont.)
(unaudited, in thousands, except share and per share data)
 


Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), EBITDA for Real Estate ("EBITDAre") and Normalized EBITDA
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 supplemental performance measure known as Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate. Nareit defines EBITDAre as net income or loss computed in accordance with GAAP, adjusted for interest expense, income tax expense (benefit), depreciation and amortization, impairment write-downs on real estate, gains or losses from disposition of property and our pro rata share of EBITDAre adjustments related to unconsolidated partnerships and joint ventures. We calculated EBITDAre in accordance with Nareit's definition described above.
In addition to EBITDAre, we use Normalized EBITDA as a non-GAAP supplemental performance measure to evaluate the operating performance of the Company. Normalized EBITDA, as defined by the Company, represents EBITDAre, modified to exclude non-routine items such as acquisition-related expenses, litigation and non-routine costs, net, loss on disposition of discontinued operations, net revenue or expense earned or incurred that is related to the services agreement, gains or losses on sale of investment securities or mortgage notes receivable, payments on fully reserved loan receivables and restructuring expenses. We also exclude certain non-cash items such as impairments of goodwill and intangible assets, straight-line rental revenue, gains or losses on derivatives, gains or losses on the extinguishment or forgiveness of debt, write-off of program development costs, and amortization of intangibles, above-market lease assets and below-market lease liabilities. Normalized EBITDA omits the Normalized EBITDA impact of Excluded Properties. Management believes that excluding these costs from EBITDAre 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. Therefore, EBITDA, EBITDAre and Normalized EBITDA should not be considered as an alternative to net income, as computed in accordance with GAAP. The Company uses EBITDA, EBITDAre and 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.


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Q4 2019 SUPPLEMENTAL INFORMATION
 
Definitions (cont.)
(unaudited, in thousands, except share and per share data)
 


 
 
Year Ended December 31,
 
 
2019
 
2018
 Net loss
 
$
(307,106
)
 
$
(88,030
)
 Adjustments:
 
 
 
 
Interest expense
 
278,574

 
280,887

Depreciation and amortization
 
481,995

 
640,618

Provision for income taxes
 
4,262

 
3,006

Proportionate share of adjustments for unconsolidated entities
 
3,966

 
1,448

 EBITDA
 
$
461,691

 
$
837,929

Gain on disposition of real estate assets, including joint ventures, net
 
(292,654
)
 
(95,034
)
Impairment of real estate
 
47,091

 
54,647

Proportionate share of adjustments for unconsolidated entities
 

 

EBITDAre
 
$
216,128

 
$
797,542

Loss on disposition of discontinued operations
 

 
1,815

Payments received on fully reserved loans
 
(133
)
 
(4,792
)
Acquisition-related expenses
 
4,337

 
3,632

Litigation and non-routine costs, net
 
815,422

 
290,309

Loss (gain) on investments
 
493

 
(4,092
)
Loss (gain) on derivative instruments, net
 
58

 
(355
)
Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities
 
2,538

 
4,178

Loss (gain) on extinguishment and forgiveness of debt, net
 
17,910

 
(5,360
)
Net direct financing lease adjustments
 
1,617

 
2,023

Straight-line rent, net of bad debt expense related to straight-line rent (1)
 
(28,032
)
 
(39,723
)
Restructuring expenses
 
10,505

 

Other adjustments, net
 
(2,686
)
 
(2,150
)
 Proportionate share of adjustments for unconsolidated entities
 
(1,079
)
 
18

Adjustment for Excluded Properties
 
(257
)
 
35

Normalized EBITDA
 
$
1,036,821

 
$
1,043,080

Normalized EBITDA from continuing operations
 
1,036,821

 
1,040,319

Normalized EBITDA from discontinued operations
 

 
2,761

(1)
Upon adoption of ASC 842 in Q1 2019, the Company recognizes all changes in the collectability assessment for an operating lease as an adjustment to rental revenue and does not record bad debt expense for uncollectible accounts.
Economic Occupancy Rate equals the sum of Leased Square Feet divided by Rentable Square Feet.
Enterprise Value equals the sum of the Implied Equity Market Capitalization, preferred stock and Net Debt.
Excluded Properties are properties for which (i) the related mortgage loan is in default, and (ii) management decides to transfer the properties to the lender in connection with settling the mortgage note obligation. Certain non-GAAP measures and operating metrics omit the impact of such properties for the month beginning with the date that such criteria are met and ending with the disposition date, in order to better reflect the ongoing operations of the Company.
At and during the three months ended December 31, 2019 and September 30, 2019, there were no Excluded Properties. At and during the three months ended June 30, 2019, there was one Excluded Property which was an office property comprising 145,186 square feet, of which 6,926 square feet was vacant, with Principal Outstanding of $19.5 million. At March 31, 2019 and December 31, 2018, there were no Excluded Properties. During the year ended December 31, 2018, the Excluded Property was one vacant industrial property, comprising 307,725 square feet with Principal Outstanding of $16.2 million.


VEREIT, Inc. | WWW.VEREIT.COM | 44



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Q4 2019 SUPPLEMENTAL INFORMATION
 
Definitions (cont.)
(unaudited, in thousands, except share and per share data)
 


Fixed Charge Coverage Ratio is the sum of (i) Interest Expense, excluding non-cash amortization, (ii) secured debt principal amortization on Adjusted Principal Outstanding and (iii) dividends attributable to preferred shares divided by Normalized EBITDA. Management believes that Fixed Charge Coverage Ratio is a useful supplemental measure of our ability to satisfy fixed financing obligations.
Flat Lease is a lease that requires equal rent payments, with no increases, throughout the initial term of the lease agreement. A Flat Lease may include a period of free rent at the beginning or end of the lease.
Funds from Operations ("FFO") and Adjusted Funds from Operations ("AFFO")
Due to certain unique operating characteristics of real estate companies, as discussed below, Nareit has promulgated a supplemental performance measure known as FFO, which we believe to be an appropriate supplemental performance measure to reflect the operating performance of a REIT. FFO is not equivalent to our net income or loss as determined under GAAP.
Nareit defines FFO as net income or loss computed in accordance with GAAP adjusted for gains or losses from disposition of property, depreciation and amortization of real estate assets, impairment write-downs on real estate, and our pro rata share of FFO adjustments related to unconsolidated partnerships and joint ventures. We calculate FFO in accordance with Nareit's definition described above.
In addition to FFO, we use 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 expenses, litigation and non-routine costs, net, loss on disposition of discontinued operations, net revenue or expense earned or incurred that is related to the services agreement, gains or losses on sale of investment securities or mortgage notes receivable, payments on fully reserved loan receivables and restructuring expenses. We also exclude certain non-cash items such as impairments of goodwill and intangible assets, straight-line rent, net of bad debt expense related to straight-line rent, net direct financing lease adjustments, gains or losses on derivatives, reserves for loan loss, gains or losses on the extinguishment or forgiveness of debt, non-current portion of the tax benefit or expense, equity-based compensation and amortization of intangible assets, deferred financing costs, premiums and discounts on debt and investments, above-market lease assets and below-market lease liabilities. We omit the impact of the Excluded Properties and related non-recourse mortgage notes from FFO to calculate AFFO. 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. AFFO allows for a comparison of the performance of our operations with other publicly-traded REITs, as AFFO, or an equivalent measure, is routinely reported by publicly-traded REITs, and we believe often used by analysts and investors for comparison purposes.
For all of these reasons, we believe FFO and AFFO, in addition to net income (loss), 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 income (loss) and are not intended to be used as a liquidity measure indicative of cash flow available to fund our cash needs. Neither the SEC, Nareit, nor any other regulatory body has evaluated the acceptability of the exclusions used to adjust FFO in order to calculate AFFO and its use as a non-GAAP financial performance measure.
 
 
Year Ended December 31,
 
 
2019
 
2018
Net loss
 
$
(307,106
)
 
$
(88,030
)
Dividends on non-convertible preferred stock
 
(68,488
)
 
(71,892
)
Gain on disposition of real estate assets, including joint ventures, net
 
(292,654
)
 
(95,034
)
Depreciation and amortization of real estate assets
 
480,064

 
637,097

Impairment of real estate
 
47,091

 
54,647

Proportionate share of adjustments for unconsolidated entities
 
2,721

 
1,278

FFO attributable to common stockholders and limited partners
 
$
(138,372
)
 
$
438,066

FFO attributable to common stockholders and limited partners from continuing operations
 
(138,372
)
 
434,371

FFO attributable to common stockholders and limited partners from discontinued operations
 

 
3,695

 
 
 
 
 


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Q4 2019 SUPPLEMENTAL INFORMATION
 
Definitions (cont.)
(unaudited, in thousands, except share and per share data)
 


Weighted-average shares outstanding - basic
 
998,139,969

 
969,092,268

Effect of weighted-average Limited Partner OP Units and dilutive securities
 
20,094,822

 
24,145,875

Weighted-average shares outstanding - diluted (1)
 
1,018,234,791

 
993,238,143

 
 
 
 
 
FFO attributable to common stockholders and limited partners per diluted share
 
$
(0.136
)
 
$
0.441

FFO attributable to common stockholders and limited partners from continuing operations per diluted share
 
(0.136
)
 
0.437

FFO attributable to common stockholders and limited partners from discontinued operations per diluted share
 

 
0.004

 
 
 
 
 
Acquisition-related expenses
 
4,337

 
3,632

Litigation and non-routine costs, net
 
815,422

 
290,309

Loss on disposition of discontinued operations
 

 
1,815

Payments received on fully reserved loans
 
(133
)
 
(4,792
)
Loss (gain) on investments
 
493

 
(4,092
)
Loss (gain) on derivative instruments, net
 
58

 
(355
)
Amortization of premiums and discounts on debt and investments, net
 
(5,312
)
 
(3,486
)
Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities
 
2,538

 
4,178

Net direct financing lease adjustments
 
1,617

 
2,023

Amortization and write-off of deferred financing costs
 
15,464

 
19,166

Deferred and other tax benefit (2)
 

 
(1,855
)
Loss (gain) on extinguishment and forgiveness of debt, net
 
17,910

 
(5,360
)
Straight-line rent, net of bad debt expense related to straight-line rent (3)
 
(28,032
)
 
(39,723
)
Equity-based compensation
 
12,251

 
12,417

Restructuring expenses
 
10,505

 

Other adjustments, net
 
(773
)
 
1,446

Proportionate share of adjustments for unconsolidated entities
 
(1,005
)
 
36

Adjustment for Excluded Properties
 
(33
)
 
465

AFFO attributable to common stockholders and limited partners
 
$
706,935

 
$
713,890

AFFO attributable to common stockholders and limited partners from continuing operations
 
706,935

 
710,688

AFFO attributable to common stockholders and limited partners from discontinued operations
 

 
3,202

 
 
 
 
 
Weighted-average shares outstanding - basic
 
998,139,969

 
969,092,268

Effect of weighted-average Limited Partner OP Units and dilutive securities
 
20,094,822

 
24,145,875

Weighted-average shares outstanding - diluted (1)
 
1,018,234,791

 
993,238,143

 
 
 
 
 
AFFO attributable to common stockholders and limited partners per diluted share
 
$
0.694

 
$
0.719

AFFO attributable to common stockholders and limited partners from continuing operations per diluted share
 
0.694

 
0.716

AFFO attributable to common stockholders and limited partners from discontinued operations per diluted share
 

 
0.003

(1)
Weighted-average shares for all periods presented exclude the effect of the convertible debt as the Company would expect to settle the debt in cash and any shares underlying restricted stock units that are not issuable based on the Company’s level of achievement of certain performance targets through the respective reporting period.
(2)
This adjustment represents the non-current portion of the benefit from income taxes in order to show only the current portion of the benefit from income taxes as an impact to AFFO.
(3)
Upon adoption of ASC 842 in Q1 2019, the Company recognizes all changes in the collectability assessment for an operating lease as an adjustment to rental revenue and does not record bad debt expense for uncollectible accounts.

GAAP is an abbreviation for generally accepted accounting principles in the United States.
Gross Lease is a lease under which the landlord is responsible for all expenses associated with the property (e.g., real estate taxes, insurance, maintenance and repairs).


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Q4 2019 SUPPLEMENTAL INFORMATION
 
Definitions (cont.)
(unaudited, in thousands, except share and per share data)
 


Gross Real Estate Investments represent total gross real estate and related assets of Operating Properties, equity investments in the Cole REITs, investment in direct financing leases, investment securities backed by real estate and mortgage notes receivable, and the Company's pro rata share of such amounts related to properties owned by unconsolidated joint ventures, net of gross intangible lease liabilities. As discussed in the About the Data section, prior to April 1, 2019, gross real estate investments included net investments in unconsolidated entities, not the Company's pro rata share of unconsolidated joint ventures' Gross Real Estate Investments. We believe that the presentation of Gross Real Estate Investments, which shows our total investments in real estate and related assets, in connection with Net Debt, provides useful information to investors to assess our overall financial flexibility, capital structure and leverage. Gross Real Estate Investments should not be considered as an alternative to the Company's real estate investments balance as determined in accordance with GAAP or any other GAAP financial measures and should only be considered together with, and as a supplement to, the Company's financial information prepared in accordance with GAAP.
The following table shows a reconciliation of Gross Real Estate Investments to the amounts presented in accordance with GAAP on the balance sheet for the periods presented (dollar amounts in thousands):
 
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
Total real estate investments, at cost - as reported
 
$
14,843,870

 
$
14,925,539

 
$
15,043,975

 
$
15,570,486

 
$
15,604,839

Adjustments:
 
 
 
 
 
 
 
 
 
 
Investment in unconsolidated entities
 

 

 

 
35,790

 
35,289

Investment in Cole REITs
 
7,552

 
7,552

 
7,552

 
7,552

 
7,844

Gross assets held for sale
 
36,210

 
91,444

 
28,312

 
45,064

 
3,020

Investment in direct financing leases, net
 
9,341

 
9,914

 
10,323

 
10,735

 
13,254

Mortgage notes receivable, net
 

 

 
1,687

 
1,713

 
10,164

Gross intangible lease liabilities
 
(242,898
)

(244,908
)

(246,135
)

(259,976
)

(263,384
)
Unconsolidated joint ventures' pro rata share
 
121,873

 
121,567

 
121,295

 

 

Gross Real Estate Investments - Excluded Properties
 




(16,700
)




Gross Real Estate Investments
 
$
14,775,948


$
14,911,108


$
14,950,309


$
15,411,364


$
15,411,026

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.
Industry is derived from the North American Industry Classification System, NAICS, which is a system used by federal statistical agencies to classify business establishments, for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy.
Interest Coverage Ratio equals Normalized EBITDA divided by Interest Expense, excluding non-cash amortization. Management believes that Interest Coverage Ratio is a useful supplemental measure of our ability to service our debt obligations.
Interest Expense, excluding non-cash amortization is a non-GAAP measure that represents interest expense incurred on the outstanding principal balance of our debt and the Company's pro rata share of the unconsolidated joint ventures' outstanding principal balance. This measure excludes (i) the amortization of deferred financing costs, premiums and discounts, which is included in interest expense in accordance with GAAP, and (ii) the impact of Excluded Properties and related non-recourse mortgage notes. We believe that the presentation of Interest Expense, excluding non-cash amortization, which shows the interest expense on our contractual debt obligations, provides useful information to investors to assess our overall solvency and financial flexibility. Interest Expense, excluding non-cash amortization should not be considered as an alternative to the Company's interest expense as determined in accordance with GAAP or any other GAAP financial measures and should only be considered together with and as a supplement to the Company's financial information prepared in accordance with GAAP.
The following table shows a reconciliation of Interest Expense, excluding non-cash amortization to interest expense presented in accordance with GAAP on the statements of operations for the periods presented (dollar amounts in thousands):


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Q4 2019 SUPPLEMENTAL INFORMATION
 
Definitions (cont.)
(unaudited, in thousands, except share and per share data)
 


 
 
Three Months Ended
 
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
Interest expense - as reported
 
$
(69,628
)
 
$
(67,889
)
 
$
(69,803
)
 
$
(71,254
)
 
$
(70,832
)
Adjustments:
 
 
 
 
 
 
 
 
 
 
Amortization of deferred financing costs and other non-cash charges
 
(5,395
)
 
(3,254
)
 
(3,348
)
 
(3,546
)
 
(3,813
)
Amortization of net premiums
 
1,569

 
1,114

 
1,397

 
1,328

 
1,295

Unconsolidated joint ventures' pro rata share
 
(490
)
 
(490
)
 
(171
)
 

 

Interest Expense, excluding non-cash amortization - Excluded Properties
 

 
(16
)
 
(208
)
 

 

Interest Expense, excluding non-cash amortization
 
$
(66,292
)

$
(66,223
)

$
(67,815
)

$
(69,036
)

$
(68,314
)
Investment-Grade Tenants are those with a Standard & Poor’s credit rating of BBB- or higher or a Moody’s credit rating of Baa3 or higher.  The ratings may reflect those assigned by Standard & Poor’s or Moody’s to the lease guarantor or the parent company, as applicable.
Leased Square Feet is Rentable Square Feet leased (including month-to-month agreements).
Metropolitan Statistical Area (MSA) is a large metropolitan area represented by a large group of zip codes, as defined by Real Capital Analytics.
Modified Gross Lease is a lease under which the landlord is responsible for most expenses associated with the property (e.g., real estate taxes, insurance, maintenance and repairs), but passes through some operating expenses to the tenant.
Net Debt, Principal Outstanding and Adjusted Principal Outstanding 
Principal Outstanding is a non-GAAP measure that represents the Company's outstanding principal debt balance, excluding certain GAAP adjustments, such as premiums and discounts, financing and issuance costs, and related accumulated amortization. Adjusted Principal Outstanding includes the Company's pro rata share of the unconsolidated joint ventures' outstanding principal debt balance and omits the outstanding principal balance of mortgage notes secured by Excluded Properties. We believe that the presentation of Principal Outstanding and Adjusted Principal Outstanding, which show our contractual debt obligations, provides useful information to investors to assess our overall financial flexibility, capital structure and leverage. Principal Outstanding and Adjusted Principal Outstanding should not be considered as alternatives to the Company's consolidated debt balance as determined in accordance with GAAP or any other GAAP financial measures and should only be considered together with, and as a supplement to, the Company's financial information prepared in accordance with GAAP.
Net Debt is a non-GAAP measure used to show the Company's Adjusted Principal Outstanding, less all cash and cash equivalents and the Company's pro rata share of unconsolidated joint ventures' cash and cash equivalents. As discussed in the About the Data section, Net Debt at September 30, 2019 includes the impact of the amounts payable in cash pursuant to the Class Action Settlement. 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.
The following table shows a reconciliation of Net Debt, Principal Outstanding and Adjusted Principal Outstanding to the amounts presented in accordance with GAAP on the balance sheet for the periods presented (dollar amounts in thousands):


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Q4 2019 SUPPLEMENTAL INFORMATION
 
Definitions (cont.)
(unaudited, in thousands, except share and per share data)
 


 
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
Mortgage notes payable, net
 
$
1,528,134

 
$
1,717,817

 
$
1,745,331

 
$
1,918,826

 
$
1,922,657

Corporate bonds, net
 
2,813,739

 
2,622,320

 
2,621,130

 
2,619,956

 
3,368,609

Convertible debt, net
 
318,183

 
397,726

 
396,766

 
395,823

 
394,883

Credit facility, net
 
1,045,669

 
895,351

 
895,033

 
1,089,725

 
401,773

Total debt - as reported
 
5,705,725

 
5,633,214

 
5,658,260

 
6,024,330

 
6,087,922

Deferred financing costs, net
 
39,721

 
39,807

 
42,085

 
44,602

 
42,763

Net discounts (premiums)
 
5,413

 
(4,322
)
 
(5,435
)
 
(6,726
)
 
(8,053
)
Principal Outstanding
 
5,750,859

 
5,668,699

 
5,694,910

 
6,062,206

 
6,122,632

Unconsolidated joint ventures' pro rata share
 
53,850

 
53,850

 
53,850

 

 

Principal Outstanding - Excluded Properties
 

 

 
(19,525
)
 

 

Adjusted Principal Outstanding
 
$
5,804,709

 
$
5,722,549

 
$
5,729,235

 
$
6,062,206

 
$
6,122,632

Cash and cash equivalents
 
(12,921
)
 
(1,029,315
)
 
(211,510
)
 
(12,788
)
 
(30,758
)
Pro rata share of unconsolidated joint ventures' cash and cash equivalents
 
(1,480
)
 
(1,046
)
 
(2,920
)
 

 

Amounts payable in cash pursuant to the Class Action Settlement
 


966,315

 

 

 

Net Debt
 
$
5,790,308


$
5,658,503


$
5,514,805

 
$
6,049,418

 
$
6,091,874

Net Debt Leverage Ratio equals Net Debt divided by Gross Real Estate Investments. We believe that the presentation of Net Debt Leverage Ratio provides useful information to investors because our management reviews Net Debt Leverage Ratio as part of its management of our overall liquidity, financial flexibility, capital structure and leverage.
Net Debt to Normalized EBITDA Annualized equals Net Debt divided by the respective quarter Normalized EBITDA multiplied by four. We believe that the presentation of Net Debt to Normalized EBITDA Annualized provides useful information to investors because our management reviews Net Debt to Normalized EBITDA Annualized as part of its management of our overall liquidity, financial flexibility, capital structure and leverage.
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 revenue less property operating expenses and excludes impairment, depreciation and amortization, general and administrative expenses, acquisition-related expenses, litigation and non-routine costs, net and restructuring 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. Cash NOI includes the pro rata share of such amounts from properties owned by unconsolidated joint ventures and omits the Cash NOI impact of Excluded Properties. 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 operating income. Further, NOI and Cash NOI may not be comparable to similarly titled measures of other companies.
The following table shows the calculation of NOI and Cash NOI for the periods presented (dollar amounts in thousands):


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Q4 2019 SUPPLEMENTAL INFORMATION
 
Definitions (cont.)
(unaudited, in thousands, except share and per share data)
 


 
 
Three Months Ended
 
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
Rental revenue
 
$
305,363

 
$
302,985

 
$
312,043

 
$
316,843

 
$
313,263

Less total operating expenses
 
(196,373
)
 
(998,366
)
 
(172,755
)
 
(184,336
)
 
(246,079
)
Acquisition-related expenses
 
1,168

 
1,199

 
985

 
985

 
1,136

Litigation and non-routine costs, net
 
8,659

 
832,024

 
(3,769
)
 
(21,492
)
 
23,541

General and administrative
 
16,966

 
14,483

 
16,416

 
14,846

 
17,220

Depreciation and amortization
 
112,307

 
115,111

 
118,022

 
136,555

 
153,050

Impairment of real estate
 
22,851

 
3,944

 
8,308

 
11,988

 
18,565

Restructuring expenses
 
356

 
783

 
290

 
9,076

 

NOI
 
271,297

 
272,163

 
279,540

 
284,465

 
280,696

Straight-line rent, net of bad debt expense related to straight-line rent
 
(7,107
)
 
(5,470
)
 
(8,043
)
 
(7,412
)
 
(8,341
)
Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities
 
504

 
692

 
611

 
731

 
945

Net direct financing lease adjustments
 
387

 
411

 
410

 
409

 
498

Unconsolidated joint ventures' pro rata share
 
1,920

 
1,817

 
1,176

 

 

Cash NOI - Excluded Properties
 
3

 
(54
)
 
(203
)
 

 

 Cash NOI
 
$
267,004

 
$
269,559

 
$
273,491

 
$
278,193

 
$
273,798

Normalized Cash NOI equals our Cash NOI for our most recently reported quarter and eliminates the Cash NOI for properties acquired or developments completed during the most recently reported quarter and replaces Cash NOI for the partial period with an amount estimated to be equivalent to Cash NOI for the full period. Additionally, Normalized Cash NOI eliminates the Cash NOI contributed by properties disposed of during the most recently reported period. It is management's view that Normalized Cash NOI provides investors relevant and useful information because it reflects only the Cash NOI of properties owned as of the most recent reporting period. Normalized Cash NOI should not be considered as an alternative to operating income.
Normalized EBITDA Annualized equals Normalized EBITDA, for the respective quarter, multiplied by four.
Operating Properties refers to all properties owned and consolidated by the Company except Excluded Properties as of the reporting date.
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.
Rentable Square Feet is leasable square feet of Operating Properties and the Company's pro rata share of leasable square feet of properties owned by unconsolidated joint ventures. Rentable Square Feet at December 31, 2019, September 30, 2019, June 30, 2019, and March 31, 2019 excludes the square feet of one redevelopment property.
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).
Unencumbered Asset Ratio equals unencumbered Gross Real Estate Investments divided by Gross Real Estate Investments. Management believes that Unencumbered Asset Ratio is a useful supplemental measure of our overall liquidity and leverage.
Weighted Average Remaining Lease Term is the number of years remaining on each respective lease, weighted based on Annualized Rental Income.


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