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Section 1: 8-K (8-K)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 9, 2018
 
VEREIT, INC.
VEREIT OPERATING PARTNERSHIP, L.P.
(Exact name of Registrant as specified in its charter)
 
 
 
 
 
 
 
 
 
 
Maryland
 
001-35263
 
45-2482685
Delaware
 
333-197780
 
45-1255683
(State or other jurisdiction of incorporation)
 
       (Commission File Number)
 
(I.R.S. Employer Identification No.)
 
 
 
 
 
 
 
 
 
 
2325 E. Camelback Road, Suite 1100
Phoenix, AZ 85016
(Address of principal executive offices, including zip code)
 
 
(800) 606-3610
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
VEREIT, Inc.
 
VEREIT Operating Partnership, L.P.
Emerging growth company     o 

 
Emerging growth company     o 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   
VEREIT, Inc. ¨ VEREIT Operating Partnership, L.P. o
 







Item 7.01. Regulation FD Disclosure.
On May 9, 2018, VEREIT, Inc. (the “Company”) made available on the Investor Relations section of its website, http://ir.vereit.com/, a presentation describing the Company’s business and real estate portfolio. A copy of the presentation is attached hereto as Exhibit 99.1. The information set forth in this Item 7.01 and in the presentation, attached hereto as Exhibit 99.1, is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information set forth in this Item 7.01, including Exhibit 99.1, shall not be deemed incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, as amended, regardless of any general incorporation language in such filing.

Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No.
 
Description
99.1
 







SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, each registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
VEREIT, INC.
 
 
 
By:
/s/ Michael J. Bartolotta
 
Name:
Michael J. Bartolotta
 
Title:
Executive Vice President and Chief Financial Officer
 
VEREIT OPERATING PARTNERSHIP, L.P.
By: VEREIT, Inc., its sole general partner
 
 
 
By:
/s/ Michael J. Bartolotta
 
Name:
Michael J. Bartolotta
 
Title:
Executive Vice President and Chief Financial Officer

Date: May 9, 2018







Exhibit Index
Exhibit No.
 
Description
99.1
 



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Section 2: EX-99.1 (EXHIBIT 99.1)

ex991vereitinvestorrevie
Exhibit 99.1 Investor Review Q1 2018 1


 
About the Data INVESTOR REVIEW This data and other information described herein are as of and for the three months ended March 31, 2018, unless otherwise indicated. Future performance may not be consistent with past performance and is subject to change and inherent risks and uncertainties. This information should be read in conjunction with the financial statements and the Management's Discussion and Analysis of Financial Condition and Results of Operations 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, 2017 and Quarterly Report on Form 10-Q for the three months ended March 31, 2018. All data is as of March 31, 2018 and based on Annualized Rental Income (“ARI”), unless otherwise noted.   For definitions and reconciliations of the Company's non-GAAP measures and operating metrics, please view the Definitions & Reconciliations section of this presentation. 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 of other companies are the trademarks or service marks of such companies. 2 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Forward-Looking Statements INVESTOR REVIEW Information set forth herein (including information included or incorporated by reference herein) contains “forward-looking statements” (within the meaning of 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 regarding future events and VEREIT's future financial condition, results of operations and business, including its 2018 guidance. The forward-looking statements involve a number of assumptions, risks, uncertainties and other factors that could cause actual results to differ materially from those contained in the forward-looking statements. Generally, the words “expects,” “anticipates,”“assumes,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” "may," "will," "should," "could," "continues," variations of such words and similar expressions identify forward- looking statements. These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, most of which are difficult to predict and many of which are beyond VEREIT’s control. If a change occurs, VEREIT’s business, financial condition, liquidity and results of operations may vary materially from those expressed in or implied by the forward-looking statements. The following factors, among others, could cause actual results to differ 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; the developments disclosed herein; VEREIT’s ability to execute on and realize success from its business plan; VEREIT’s ability to meet its 2018 guidance; the unpredictability of the business plans and financial condition of VEREIT's tenants; risks associated with tenant, geographic and industry concentrations with respect to VEREIT's properties; the impact of impairment charges in respect of certain of VEREIT's properties or other assets; competition in the acquisition and disposition of properties and in the leasing of its properties; the inability to acquire, dispose of, or lease properties on advantageous terms; VEREIT could be subject to risks associated with bankruptcies or insolvencies of tenants or from tenant defaults generally; risks associated with pending government investigations and litigations related to VEREIT's previously disclosed audit committee investigation; 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 U.S. Securities and Exchange Commission (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. 3 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Contents INVESTOR REVIEW Company Overview 5 Portfolio Metrics & Analysis 11 Key Financial Highlights 23 Highlights & Guidance 27 Contact Information 30 Definitions & Reconciliations 31 4 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Company Overview Q1 2018 a DRAF ‹#› T


 
Company Snapshot COMPANY OVERVIEW VEREIT is an owner and operator of one of the largest and most diversified single-tenant real estate portfolios in the U.S. VEREIT focuses on single-tenant, net-lease real estate • Property types focused on retail, restaurant, office and industrial • Large, diversified platform including approximately $14.5 billion 4,100 properties and 95 million square feet Book Value of Total Assets • Long-term net-lease structure provides stable and predictable rent stream payments Retail1 Restaurants1 • Diverse portfolio across sectors, geographies and 2,112 Properties 1,707 Properties tenants • Provides equity capital to creditworthy corporations Industrial1 Office1 in return for long-term leases on their properties 151 Properties 84 Properties 1) Omits one Excluded Property, and nine properties that consist of billboards, land and parking lots. 6 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
VEREIT Is a Full-Service Real Estate Operating Company COMPANY OVERVIEW 7 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Corporate Governance COMPANY OVERVIEW VEREIT has established best-in-class corporate governance through the reconstitution of its Board of Directors and implementing significant improvements Board of Directors Corporate Governance • Hugh R. Frater - Non-Executive Chairman of VEREIT, Inc. • Opted-out of Maryland anti-takeover statutes ◦ Former Chairman and CEO, Berkadia • Majority voting for uncontested director elections • Glenn J. Rufrano - Director ◦ Chief Executive Officer, VEREIT, Inc. • Stockholder rights plan limits • David B. Henry - Independent Director • Proxy access ◦ Former Vice Chairman and CEO, Kimco Realty Corporation • Mary Hogan Preusse - Independent Director • Clawback policy for the potential recoupment of officer compensation ◦ Former Managing Director and Co-Head of Americas Real Estate APG Asset Management US • Richard J. Lieb - Independent Director ◦ Managing Director and Chairman of Real Estate Greenhill & Co., LLC • Mark S. Ordan - Independent Director ◦ Chief Executive Officer, Quality Care Properties, Inc. • Eugene A. Pinover - Independent Director ◦ Partner and Chair of Real Estate Practice, DLA Piper • Julie G. Richardson - Independent Director ◦ Former Partner and Managing Director, Providence Equity Partners 8 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
VEREIT Has a Best-in-Class Management Team COMPANY OVERVIEW Glenn J. Rufrano Paul McDowell Chief Executive Officer Executive Vice President and Chief Operating Officer • Since assuming role of CEO on April 1, 2015, has reconstituted Board of • Responsible for VEREIT’s asset management, property Directors, formalized new management team and implemented management, construction management, underwriting, credit business plan to guide the Company’s strategy analysis and leasing • Prior to VEREIT, was Chairman and CEO of O’Connor Capital Partners, a • Also serves on VEREIT investment committee, which reviews each real estate investment firm he co-founded in 1983 asset to ensure alignment with the Company’s objectives • From 2010 to 2013 was President and CEO of Cushman & Wakefield • Previously was founder of CapLease (NYSE:LSE), a net-lease REIT, • Previously held executive leadership roles at Centro Properties Group where he served as CEO from 2001-2014 and Chairman from and New Plan Excel Realty Trust 2007-2014 • Serves on Board of Ventas and previously served on Boards of General Growth Properties and Trizec Properties Thomas W. Roberts Michael J. Bartolotta Executive Vice President and Chief Investment Officer Executive Vice President and Chief Financial Officer • Oversees VEREIT’s real estate transaction activities for single-tenant • Oversees the accounting, external reporting, financial planning & analysis, retail, office and industrial and anchored shopping centers treasury and IT functions at VEREIT including acquisitions, sale-leaseback transactions, build-to-suits • Prior to joining VEREIT, served as EVP and CFO of Cushman & Wakefield and dispositions from 2012 to 2015 • Previously served as President and CEO of Opus West Corporation • Prior to Cushman, was CFO for EXOR, Inc., a leading European investment from 1993 to 2009, where he was responsible for design, company from 1991 to 2012, where he was involved in over 15 U.S. construction and development of more than 50 million square feet acquisitions and divestitures ranging in size from $20mm to $700+mm of commercial real estate • Served on Board of Directors of Cushman & Wakefield • Served as VP, Real Estate Development for Koll Company prior to Opus West Lauren Goldberg Executive Vice President, General Counsel and Secretary • Oversees the Company’s legal and regulatory affairs, compliance and risk management • Prior to joining VEREIT, served as EVP, General Counsel and the Chief Compliance Officer for Revlon, the global cosmetics company, where she was responsible for legal and regulatory affairs, served on senior operating committee and oversaw corporate governance • Previously served as SVP - Law for MacAndrews & Forbes, Inc., Assistant United States Attorney for the Southern District of New York, and as an associate with Stillman & Friedman P.C. and Fried, Frank, Harris, Shriver & Jacobson LLP • Law degree from Columbia Law School and undergraduate degree from the Wharton School, University of Pennsylvania 9 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Key Accomplishments COMPANY OVERVIEW Since April 2015, VEREIT has successfully implemented its business plan, enhanced its portfolio, de-levered its balance sheet and achieved investment-grade ratings • Glenn Rufrano was hired as CEO • Completed $1.14 billion of • Completed $745.6 million of • In Q1, completed $139.2 million of April 1, 2015 dispositions and $100.2 million of acquisitions and $574.9 million of acquisitions and $136.2 million of • Appointed Deloitte & Touche LLP as acquisitions; Achieved AFFO of $0.78 dispositions; Achieved $0.74 AFFO dispositions; Achieved $0.185 AFFO VEREIT’s independent registered per diluted share; Reduced debt by per diluted share, per diluted share, public accountant $1.7 billion; Reduced Net Debt to including $0.70 from continuing including $0.182 from continuing • Completed $1.4 billion of Normalized EBITDA from 7.0x to 5.7x operations; Reduced secured debt operations; Net Debt to Normalized dispositions; Achieved $0.84 AFFO • Raised approximately $702.5 million by $580 million; Net Debt to EBITDA ended at 5.7x per diluted share; Reduced debt by in public offering of common stock to Normalized EBITDA ended at 5.7x • Repurchased 6.4 million shares of $2.4 billion; Created $1.8 billion of further reduce debt • Received Investment Grade common stock at an average price of capacity on revolving line of credit; • Issued $1.0 billion of senior notes Corporate Ratings from S&P, $6.94 per share Reduced Net Debt to Normalized allowing the Company to refinance Moody’s and Fitch remained at • Simplified the Business by selling Cole EBITDA from 7.5x to 7.0x February 2017 bonds Investment Grade Capital. • Remediated all material weaknesses • S&P raised its rating of VEREIT's that existed as of December 31, 2014 corporate debt to 'BBB-' • Received an investment grade rating of ‘BBB-’ with a stable outlook from Fitch Ratings 10


 
Portfolio Metrics & Analysis Q1 2018 a DRAF ‹#› T


 
Key Portfolio Metrics PORTFOLIO As of 3/31/2018 Portfolio Property Type Office: 19.3% Operating Properties 4,063 Total Rentable Square Feet (in millions) 94.7 Retail: 41.4% Annualized Rental Income $1.2 Billion Industrial: 17.0% Economic Occupancy Rate 98.7% WALT (years) 9.3 Restaurant: 22.3% 3 Investment Grade 1 42.9% Lease Expiration (Annualized Rental Income Expiring as a % of Total Portfolio) Number of Tenants 650 Number of Industries 43 9.2% 9.0% 7.3% 7.2% 6.8% 6.7% Number of States 2 49 5.2% 3.9% Top 10 Tenant Concentration 28.6% 3.7% 1.6% Gross Real Estate Investments $15.5 Billion 8 9 0 1 2 3 4 5 6 7 1 1 2 2 2 2 2 2 2 2 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 1) Investment-grade tenants are those with an S&P credit rating of BBB- or higher or a Moody's credit rating of Baa3 or higher. The ratings may reflect those assigned by S&P or Moody's to the lease guarantor or the parent company, as applicable. 2) The Company’s properties are also located in Puerto Rico (3 properties) and Canada (1 property). 3) Restaurant category includes Casual Dining (13.7%) and Quick Service (8.8%). 12 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Geographically Diverse Portfolio PORTFOLIO Percentages based on Annualized Rental Income. 13 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Portfolio Diversification by Tenant PORTFOLIO Tenant Group % ARI Public /Private Ratings1 Tenant Group % ARI Public /Private Ratings1 • VEREIT owns and actively manages a Red Lobster 6.5% Private B- Northrop Grumman 0.8% Public BBB+ diversified credit portfolio of net-lease real Walgreens 3.7% Public BBB Academy Sports 0.8% Private CCC+ estate assets primarily comprised of Family Dollar 3.2% Public BBB- Stripes 0.7% Private NR single-tenant properties Dollar General 3.0% Public BBB Wal-Mart 0.7% Public AA • 48 tenants individually represent 0.5% or CVS 2.7% Public BBB Border Holdings, LLC 0.7% Private NR greater of ARI, comprising 58.6% of the FedEx 2.6% Public BBB Bi-Lo, LLC 2 0.7% Private D total portfolio. The remaining 602 tenants Albertson's 2.0% Private B Healthnow 0.7% Private BBB comprise 41.4% of the portfolio BJ's Wholesale Club 1.7% Private B- Apple American Group, LLC 0.7% Private NR • 25 of the 48 tenants are investment-grade L.A. Fitness 1.6% Private B+ Talbots 0.6% Private B- rated Petsmart 1.6% Private CCC+ GMRI, Inc 0.6% Public BBB • 28 of the 48 tenants are public companies Citizens Bank 1.5% Public A- Wendab Associates 0.6% Private NR Goodyear 1.4% Public BB Kohl's 0.6% Public BBB- Tractor Supply 1.4% Public NR Golden Corral 0.6% Private NR Amazon 1.2% Public AA- RSA Security 0.6% Private BB+ Advance Auto Parts 1.0% Public BBB- TJ Maxx 0.6% Public A+ Home Depot 1.0% Public A Sun Trust Bank 0.6% Public A- Lowe's 1.0% Public A- Rubbermaid 0.6% Public BBB- General Service 1.0% Private AA+ Administration General Mills 0.6% Public BBB Merrill Lynch 1.0% Private A+ Hanesbrands 0.5% Public BB AON 0.9% Public A- Rolls-Royce 0.5% Public NR Bed Bath & Beyond 0.9% Public BBB Cigna 0.5% Public A Best Buy 0.9% Public BBB Mattress Firm 0.5% Private NR Bloomin' Brands 0.8% Public BB Art Van Furniture 0.5% Private NR 1) Bold indicates investment grade. Ratings may reflect those of the Bass Pro Shops tenant, guarantor or a related parent company. 2) Excludes two (Cabela's) 0.8% Private B+ DaVita Dialysis 0.5% Public BB properties leased to Bi-Lo, LLC, guaranteed by Koninklijke Ahold, an investment grade rated entity. 14 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Property Type Analysis: Retail ARI reflects retail properties only and does not include restaurants, office and industrial. PORTFOLIO • Primarily single-tenant, freestanding retail properties with creditworthy tenants • Main retail traffic thoroughfare • Strong trade area demographics • Top 5 MSAs (13.6%): Chicago, IL; Dallas, TX; Atlanta, GA; Detroit, MI; Austin, TX Retail Portfolio 1 Tenant Diversification 2016 (% based on ARI of retail properties) Industry Occupancy Target % 2 Operating Properties 2,112 Cost Walgreens 9.0% 8.2% 8.0 - 10.0% Rentable Square Feet (in thousands) 34,368 Automotive Family Dollar 7.7% 6.0 - 8.0% Discount 6.9% Economic Occupancy Rate 98.5% Dollar General 7.2% 2.8% 2.0 - 4.0% Weighted Average Remaining Lease CVS 5.8% Grocery & Supermarket Term (in years) 9.5 Albertson's 4.9% 2.1% 2.0 - 4.0% Investment-Grade Tenants 53.3% Home & Garden L.A. Fitness 4.0% 5.1% 4.0 - 6.0% Flat leases 33.2% Pharmacy Citizens Bank 3.5% 3.8% N/A NNN leases 66.6% Other Tractor Supply 3.4% Annualized Rental Income 41.4% BJ's Wholesale Club 3.3% Advance Auto Parts 2.5% 1) Includes 10 anchored shopping centers, representing 1.7% of ARI. 2) Occupancy costs are calculated as rent per the lease terms, divided by property level sales for the year ended December 31, 2016. Property level sales data was collected for 78.4% of retail and restaurant properties required to provide sales reports, representing 39.9% of retail and restaurant properties owned for the entirety of the previous calendar year (percentages based on property count). Property level sales are based on sales reports provided by tenants of retail and restaurant properties. Data presented is for properties owned by the Company and for which the Company received sales data for the entirety of the previous calendar year. 15 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Property Type Analysis: Retail ARI reflects retail properties only and does not include restaurants, office and industrial. PORTFOLIO Diversified Retail Portfolio VEREIT's Single-Tenant Retail Advantages Industry Group % ARI • Dominated by off-price and necessity shopping Retail - Discount 7.6% • Approximately 64% of retail revenue derived from public companies Retail - Pharmacy 6.5% • Credit tenants on long-term leases with substantial capital investment (53.3% investment grade) Retail - Grocery & Supermarket 4.3% • Generally, no use restrictions or co-tenancy issues • Ability to target desired tenants and industries Retail - Home & Garden 3.1% Finance 2.6% Retail - Gas & Convenience 2.5% Retail - Motor Vehicle 2.2% Size, Diversity and Single Tenant Focus Protects Against Disruptors Retail - Sporting Goods 2.0% VEREIT's strategy of well-positioned single tenant properties in a diversified portfolio - made Entertainment & Recreation 1.8% optimum by our size - helps protect against a variety of cyclical and secular disruptors. In today's retail environment, one of the key disruptors is the evolution of e-commerce. Retailers who Retail - Warehouse Clubs 1.6% embrace e-commerce and have the resources to implement omnichannel distribution are Retail - Home Furnishings 1.6% proving successful. Fundamentals of retail should not be forgotten. Those who continue to Retail - Medical Services 1.0% provide true retail value - merchandise, price and service - will also thrive. Retail - Pet Supply 0.9% The core retail merchandise groups within our portfolio are dominated by discount; pharmacy; grocery; home and garden and convenience. A full listing is provided herein. Within each Retail - Department Stores 0.7% category, our focus is to create a portfolio that can service both omnichannel distribution while Retail - Electronics & Appliances 0.6% always considering the consumer experience. Rental 0.5% Ultimate credit protection is a function of multi-layer diversification. The prior pages present Retail - Specialty (Other) 0.5% information such as geographies, weighted average lease term and tenant margin analysis. The Retail - Hobby, Books & Music 0.4% following breakdown provides a deeper look into the retail tenant diversification of the VEREIT portfolio by merchandise category. Retail - Apparel & Jewelry 0.4% All Other 1 0.6% Total 41.4% 1) Includes 12 industries that each represent 0.2% or less. 16 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Property Type Analysis: Retail Category by Percent of Portfolio ARI ARI reflects retail properties only and does not include restaurants, office and industrial. PORTFOLIO Retail - Discount Retail - Grocery & Supermarket Retail - Home & Garden Finance Investment Investment Investment Investment Tenant % ARI Grade Tenant % ARI Grade Tenant % ARI Grade Tenant % ARI Grade ü Family Dollar 3.2% ü Albertson's 2.0% Tractor Supply 1.4% Citizens Bank 1.5% ü ü Dollar General 3.0% ü Kroger 0.4% Lowe's 1.0% ü Sun Trust Bank 0.6% Giant Eagle 0.2% US Bank 0.2% ü Wal-Mart 0.7% ü Home Depot 0.4% ü Harps Grocery 0.2% PLS Check Cashers 0.2% Dollar Tree 0.2% ü Bed Bath & ü Dahl's 0.2% Beyond 0.1% Sovereign Bank <0.1% ü Ross 0.1% ü Natural Grocers 0.1% Floor & Décor 0.1% Bank of America <0.1% ü Mills Fleet Farm 0.1% ü Koninklijke Pier 1 Imports <0.1% Synovus Bank <0.1% TJ Maxx 0.1% ü Ahold 0.1% Sherwin- ü PNC Bank <0.1% ü Marshall's 0.1% ü Bi-Lo, LLC 1 0.1% ü Williams <0.1% Community Bank <0.1% Five Below <0.1% Publix 0.1% Northern Tool & Fifth Third Bank <0.1% ü Cost Plus <0.1% ü Stop & Shop 0.1% ü Equipment <0.1% First Bank <0.1% Gabe's <0.1% Trader Joe's 0.1% Lumber ü ü Liquidators <0.1% Huntington Big Lots <0.1% ü Whole Foods 0.1% National Bank <0.1% ü Leslie's Pool & Savers <0.1% Food Lion 0.1% Spa <0.1% Region's Bank <0.1% ü Family Fare Shopko Total 3.1% Key Bank <0.1% ü Hometown <0.1% Supermarket 0.1% Travis Credit Total 7.6% Sprouts 0.1% Union <0.1% Fresh Thyme ü Retail - Pharmacy Farmers Market 0.1% TCF National Bank <0.1% ü Investment Glen's Market <0.1% Wells Fargo <0.1% Tenant % ARI Grade Price Rite <0.1% Scottrade <0.1% Walgreens 3.7% ü TitleMax of CVS 2.4% ü The Fresh Market <0.1% Georgia, Inc. <0.1% Rite Aid 0.4% Hy-Vee <0.1% Cashland <0.1% Total 6.5% Harris Teeter <0.1% ü Edward Jones <0.1% ü Food 4 Less <0.1% ü Chase Bank <0.1% Apple Market <0.1% Accomplishments Through People <0.1% Safeway Stores <0.1% Total 2.6% Total 4.3% NOTE: Amounts may not total due to rounding. 1) Represents two leases guaranteed by Koninklijke Ahold, an investment-grade rated entity. 17 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Property Type Analysis: Retail Category by Percent of Portfolio ARI ARI reflects retail properties only and does not include restaurants, office and industrial. PORTFOLIO Retail - Convenience Retail - Motor Vehicle Entertainment & Recreation Retail - Medical Services Investment Investment Investment Tenant % ARI Tenant % ARI Investment Grade Grade Tenant % ARI Grade Tenant % ARI Grade Stripes 0.7% Advance Auto Parts 1.0% ü ü L.A. Fitness 1.6% Fresenius Thorntons Oil 0.4% CarMax 0.3% 24 Hour Fitness 0.1% Medical Care 0.5% Kum & Go 0.4% Mister Car Wash 0.1% Anytime Fitness <0.1% DaVita Dialysis 0.3% Pantry Gas & Lube Stop 0.1% Total 1.8% Physicians Convenience 0.3% ü AutoZone 0.1% Immediate Care 0.1% RaceTrac 0.2% Retail - Warehouse Clubs ü Amita SuperAmerica 0.1% O'Reilly Auto Parts 0.1% Investment Healthcare 0.1% Tenant % ARI Grade Irving Oil 0.1% Americas's St. Luke's PowerSports, Inc. 0.1% BJ's Wholesale Urgent Care <0.1% Circle K 0.1% ü Club 1.4% Goodyear 0.1% Physicians WaWa 0.1% Sam's Club 0.3% ü ü Take 5 Oil Change 0.1% Dialysis <0.1% 7-Eleven <0.1% Total 1.6% Tire Kingdom <0.1% Dental Dream <0.1% Susser Road Monro Muffler <0.1% Ranger <0.1% Retail - Home Furnishings Aspen Dental <0.1% ü NTW / Big O Tires <0.1% Sunoco <0.1% Investment Smile Brands of Tennessee <0.1% MotoMart <0.1% National Tire & Tenant % ARI Grade Battery <0.1% Accelerated GetGo <0.1% Mattress Firm 0.5% Bridgestone Tire <0.1% Rehab <0.1% Total 2.5% Art Van Tires Plus <0.1% Cascade Furniture 0.5% Chiropractic <0.1% Jiffy Lube <0.1% At Home 0.4% ü Advanced Big O Tires <0.1% Garden Ridge 0.1% Dental Implant Total 2.2% and Denture Ashley Center, LLC <0.1% Furniture <0.1% Retail - Sporting Goods Dr. Elie El-Hage, Kirklands <0.1% D.D.S <0.1% Investment Tenant % ARI Grade Sleep Train <0.1% Total 1.0% Bass Pro Shops Sleep America <0.1% (Cabela's) 0.8% Total 1.6% Academy Sports 0.8% Retail - Pet Supply Dick's Sporting Investment Goods 0.2% Tenant % ARI Grade West Marine 0.2% Petsmart 0.9% Total 2.0% Petco 0.1% NOTE: Amounts may not total due to rounding. Total 0.9% 18 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Property Type Analysis: Retail Category by Percent of Portfolio ARI ARI reflects retail properties only and does not include restaurants, office and industrial. PORTFOLIO Retail - Department Stores Retail - Specialty (Other) Retail - Hobby, Books & Music Investment Investment Investment Tenant % ARI Grade Tenant % ARI Grade Tenant % ARI Grade Kohl's 0.6% ü Ulta Salon 0.1% Hobby Lobby 0.3% Beall's 0.1% Toys R Us 0.1% Michael's <0.1% Total 0.7% Coborn's Liquor Jo-Ann's <0.1% Store <0.1% Music & Arts Retail - Electronics & Appliances Babies R Us <0.1% Center <0.1% Investment Ca$h Wi$e <0.1% GameStop <0.1% Tenant % ARI Grade Party City <0.1% Total 0.4% Best Buy 0.6% ü BevMo! <0.1% CompUSA <0.1% The Vitamin Retail - Apparel & Jewelry Conn's <0.1% Shoppe <0.1% Investment Total 0.6% Lenscrafters <0.1% Tenant % ARI Grade Eyeglass World <0.1% Burlington 0.1% Rental Sally Beauty DSW 0.1% Investment Supply <0.1% Bob's Stores 0.1% Tenant % ARI Grade GNC <0.1% Aaron Rents 0.4% Duluth Trading 0.1% Austin Custom Charming Vanguard Car ü Winery <0.1% Rental 0.1% Charlie <0.1% Cigarettes Shoe Carnival <0.1% Sunbelt Rentals <0.1% Cheaper <0.1% Total 0.5% Lucky Star Tinder Box <0.1% Clothing <0.1% Total 0.5% Justice <0.1% Catherines <0.1% Men's Wearhouse <0.1% Maurice's <0.1% Total 0.4% NOTE: Amounts may not total due to rounding. 19 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Property Type Analysis: Restaurants PORTFOLIO • Single-tenant quick service, casual and family dining properties • Creditworthy tenants, including franchisors, operating strong national and regional brands • Main retail traffic thoroughfare • Strong trade area demographics • Top 5 MSAs (13.2%): Dallas, TX; Atlanta, GA; Chicago, IL; Detroit, MI; Houston, TX • According to Nation's Restaurant News, which publishes the top industry brands based on system-wide sales, 86% of our casual dining tenants and 79% of our quick service restaurants are ranked in the top 25 of their respective category. Tenant Diversification Restaurant Portfolio 2016 (% based on ARI of restaurant properties) Industry Occupancy Target % Operating Properties 1,707 Cost 1 Red Lobster 29.0% Casual Dining 6.6% 6.75 - 8.0% Rentable Square Feet (in thousands) 8,168 Bloomin' Brands 3.6% Quick Service 7.1% 7.5 - 8.5% Economic Occupancy Rate 94.5% Border Holdings, LLC 3.2% Weighted Average Remaining Lease Apple American Group, LLC 3.0% Term (in years) 12.8 GMRI, Inc 2.9% Investment-Grade Tenants 3.0% Wendab Associates 2.9% Flat leases 7.7% Golden Corral 2.8% NNN leases 99.4% Neighborhood Restaurant 2.2% Partners Florida, LLC Annualized Rental Income 22.3% Cracker Barrel 2.0% DineEquity Inc. 2.0% 1) Occupancy costs are calculated as rent per the lease terms, divided by property level sales for the year ended December 31, 2016. Property level sales data was collected for 78.4% of retail and restaurant properties required to provide sales reports, representing 39.9% of retail and restaurant properties owned for the entirety of the previous calendar year (percentages based on property count). Property level sales are based on sales reports provided by tenants of retail and restaurant properties. Data presented is for properties owned by the Company and for which the Company received sales data for the entirety of the previous calendar year. 20 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Property Type Analysis: Industrial PORTFOLIO • Property types include single-tenant distribution and warehouse facilities with creditworthy tenants • Essential and strategic locations with 87% dedicated to distribution or warehousing • Close proximity to ports, railways, major freeways and/or interstate highways • Top 5 MSAs (22.6%): Jacksonville, FL; New York, NY; Philadelphia, PA; Columbia, SC; Stockton, CA Industrial Portfolio Tenant Diversification (% based on ARI of industrial properties) Operating Properties 151 FedEx 15.4% Rentable Square Feet (in thousands) 39,366 Goodyear 8.0% Economic Occupancy Rate 100.0% Amazon 7.2% Weighted Average Remaining Lease Term (in years) 8.3 Bed Bath & Beyond 4.9% Investment-Grade Tenants 53.3% Bi-Lo, LLC 4.1% Flat leases 21.4% Rubbermaid 3.5% General Mills 3.4% NNN leases 53.3% Hanesbrands 3.2% Annualized Rental Income 17.0% TJ Maxx 3.0% Tiffany & Co. 2.8% 21 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Property Type Analysis: Office PORTFOLIO • Property types include single-tenant corporate headquarters and mission-critical business operations with creditworthy tenants • Strategic location with 34% serving as corporate headquarters and 66% focused on corporate operations • Strong 10-mile demographics and local business environment • Top 5 MSAs (36.4%): Chicago, IL; Dallas, TX; Boston, MA; Washington, DC; Trenton, NJ Office Portfolio Tenant Diversification (% based on ARI of office properties) Operating Properties 84 General Service Administration 5.1% Rentable Square Feet (in thousands) 12,764 Merrill Lynch 5.0% Economic Occupancy Rate 98.2% AON 4.9% Weighted Average Remaining Lease Term (in years) 5.8 Northrop Grumman 4.1% Petsmart 3.9% Investment-Grade Tenants 57.7% Healthnow 3.6% Flat leases 8.8% RSA Security 3.2% NNN leases 20.8% Rolls-Royce 2.7% Annualized Rental Income 19.3% Cigna 2.7% Exelis 2.5% 22 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Key Financial Highlights Q1 2018 a DRAF ‹#› T


 
Enhanced Balance Sheet and Credit Metrics KEY FINANCIALS Credit Metric Summary 3/31/2018 Adjusted Debt Outstanding ($bn) 6.0 Net Debt to Normalized EBITDA Annualized 5.65x Fixed Charge Coverage Ratio 3.10x Interest Coverage Ratio 4.10x Net Debt Leverage Ratio 38.6% Unencumbered Asset Ratio 73.0% Secured Debt Ratio 13.2% Total Unencumbered Assets ($bn) 11.3 24 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Capital Structure Overview Shares and dollars in thousands, expect per share values KEY FINANCIALS Capitalization Table Wtd. Avg. Q1-2018 Capitalization Maturity (Years) Rate (1) March 31, 2018 Diluted Shares and Units Outstanding 994,988 Stock Price 6.96 Implied Equity Market Capitalization $ 6,925,116 Series F Perpetual Preferred (2) 6.70% $ 1,070,853 Total Secured Debt (3) 4.0 4.90% $ 2,052,255 Revolving credit facility 0.2 3.67% 120,000 2018 Convertible Notes 0.3 3.00% 597,500 2019 Corporate Bonds 0.9 3.00% 750,000 2020 Convertible Notes 2.7 3.75% 402,500 2021 Corporate Bonds 3.2 4.13% 400,000 2024 Corporate Bonds 5.9 4.60% 500,000 2026 Corporate Bonds 8.2 4.88% 600,000 2027 Corporate Bonds 9.4 3.95% 600,000 Total Unsecured Debt 4.2 3.84% $ 3,970,000 Total Adjusted Debt Outstanding 4.1 4.20% $ 6,022,255 3/31/2018 Total Capitalization $ 14,018,224 Common Equity 49.5% Less: Cash and Cash Equivalents 28,435 Corporate bonds 20.3% Enterprise Value $ 13,989,789 Secured debt 14.6% Net Debt / Enterprise Value 42.8% Preferred Equity 7.6% Net Debt / Normalized EBITDA Annualized (4) 5.65x Net Debt + Preferred / Normalized EBITDA Annualized (4) 6.66x Convertible Notes 7.1% Fixed Charge Coverage 3.10x Revolving Credit Facility 0.9% Liquidity (5) $ 2,208,435 Fixed Rate 96.5% 1) Weighted-average interest rate for variable-rate debt represents the interest rate in effect as of March 31, 2018. 2) Balance Swapped to Fixed Rate 1.3% represents 42.8 million shares outstanding at March 31, 2018 multiplied by the liquidation preference of $25 per share. 3) Omits one mortgage note payable secured by an Excluded Property with Debt Outstanding of $16.2 million and an interest Variable Rate 2.2% rate of 9.48%. 4) Normalized EBITDA annualized includes continued and discontinued operations. 5) Liquidity represents cash and cash equivalents of $28.4 million and $2.2 billion available capacity on our revolving credit facility. 25 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Debt Maturity Profile Dollars in millions KEY FINANCIALS • Weighted average debt term is 4.1 years $2,500 • Weighted average interest rate is 4.20% $2,000 $1,500 $1,165 $973 $1,000 $797 $753 $668 $601 $601 $500 $315 $145 $1 $3 $0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Thereafter Mortgage Notes Payable (1) Unsecured Credit Facility (2) Corporate Bonds Convertible Notes 25% 19.3% 20% 16.2% 15% 13.2% 12.5% 11.1% 10.0% 10.0% 10% 5.2% 5% 2.4% —% 0.1% 0% 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Thereafter 1) Omits one mortgage note payable secured by an Excluded Property with Debt Outstanding of $16.2 million and an interest rate of 9.48%. 2) One-year extension option on 6/30/2018 unsecured credit facility is available at the Company's election, subject to no existing default, an extension fee and other customary provisions. 26 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Highlights & Guidance Q1 2018 a DRAF ‹#› T


 
Q1 2018 Highlights HIGHLIGHTS & GUIDANCE Continued Favorable Operating Results With Measured Capital Allocation and Balance Sheet Stability Q1 2018 Highlights • Net income of $32.5 million and net income per diluted share of $0.01, including net income of $29.0 million and a net income per diluted share of $0.01 for continuing operations • Achieved $0.185 AFFO per diluted share, including $0.182 from continuing operations • Completed $139.2 million of acquisitions and $136.2 million of dispositions • Repurchased 6.4 million shares of common stock at an average price of $6.94 per share • Decreased Debt from $6.07 billion to $6.01 billion; Net Debt decreased from $6.05 billion to $5.99 billion, or 38.6% Net Debt to Gross Real Estate Investments • Net Debt to Normalized EBITDA ended at 5.7x • Closed the sale of Cole Capital on February 1, 2018, simplifying the business model 28 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
2018 Guidance Consolidated Adjusted Funds From Operations per Diluted Share (Unaudited) HIGHLIGHTS & GUIDANCE Key Guidance Assumptions: • AFFO per diluted share guidance range between $0.70 and $0.72 • Dispositions totaling $300 million to $500 million at an average cash cap rate of 6.5% to 7.5% and acquisitions of $200 million to $300 million in excess of dispositions within the same cap rate range • Acquisitions will be funded through a combination of internal equity, debt capacity within our Net Debt to Normalized EBITDA target, and proceeds from the sale of Cole Capital • Real estate operations: ◦ Average occupancy above 98.0% ◦ Same-store rental growth in a range of 0.3% to 1.0% • The Company also expects to target balance sheet net debt to normalized EBITDA at approximately 6.0x 2018 Per Share Low High Diluted net income per share attributable to common stockholders (1)(2) $ 0.02 $ 0.03 Gain on disposition of real estate assets and interests in unconsolidated joint ventures, net (2) (0.02) (0.02) Depreciation and amortization of real estate assets 0.64 0.65 Impairment of real estate (2) 0.01 0.01 FFO attributable to common stockholders and limited partners per diluted share 0.65 0.67 Adjustments (2)(3) 0.05 0.05 AFFO attributable to common stockholders and limited partners per diluted share $ 0.70 $ 0.72 Notes: The estimated net income per diluted share is not a projection and is provided solely to satisfy the disclosure requirements of the U.S. Securities and Exchange Commission. (1) Includes impact of dividends to be paid to preferred shareholders and excludes the effect of non-controlling interests and gains or losses on the extinguishment of debt. Includes the impacts of discontinued operations, impairments and gains or losses on the sale of real estate assets and interests in unconsolidated joint ventures for the three months ended March 31, 2018. (2) Includes actual amounts for the three months ended March 31, 2018. (3) Includes (i) non-routine items such as acquisition-related costs, litigation and other non-routine costs, net of insurance recoveries, gains or losses on sale of investment securities or mortgage note receivables, legal settlements and insurance recoveries not in the ordinary course of business, (ii) certain non-cash items such as impairments of goodwill, straight-line rent, net of bad debt expense related to straight-line rent, net direct financing lease adjustments, gains or losses on derivatives, gains or losses on the extinguishment or forgiveness of debt, reserves for loan loss, 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 and (iii) the AFFO impact of Excluded Properties and related non-recourse mortgage notes. 29 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Contact Us CONTACT 800.606.3610 Registered Stockholders Follow Us Computershare (Transfer Agent) LinkedIn Phoenix P.O. Box 43078 www.linkedin.com/company/vereit 2325 East Camelback Road Providence, RI 02940 Suite 1100 Twitter Phoenix, AZ 85016 By overnight delivery twitter.com/vereitinc 602.778.6000 Computershare 250 Royal Street YouTube New York City Canton, MA 02021 https://www.youtube.com/channel/ 5 Bryant Park UCUNu7AUOolITuwpNhr2JEGg 23rd Floor Telephone inquiries New York, NY 10018 TFN 855.866.0787 Flickr 212.413.9100 (US, CA, Puerto Rico) https://www.flickr.com/ photos/143027056@N07/ TN 781.575.3100 Investor Relations (non-US) 877.405.2653 InvestorRelations@VEREIT.com Email web.queries@computershare.com 30 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Definitions & Reconciliations Q1 2018 a DRAF ‹#› T


 
Definitions INVESTOR REVIEW Annualized Rental Income is rental revenue under our leases on Operating Properties on Therefore, EBITDA and Normalized EBITDA should not be considered as an alternative a straight-line basis, which includes the effect of rent escalations and any tenant concessions, to net income, as computed in accordance with GAAP, or as an indicator of the such as free rent, and excludes any bad debt allowances and any contingent rent, such as Company's financial performance. The Company uses Normalized EBITDA as one percentage rent. Management uses Annualized Rental Income as a basis for tenant, industry measure of its operating performance when formulating corporate goals and and geographic concentrations and other metrics within the portfolio. Annualized Rental evaluating the effectiveness of the Company's strategies. Normalized EBITDA may not Income is not indicative of future performance. be comparable to similarly titled measures of other companies. Debt Outstanding and Adjusted Debt Outstanding are non-GAAP measures that Economic Occupancy Rate equals the sum of square feet leased (including month-to- represent the Company's outstanding principal debt balance, excluding certain GAAP month agreements) divided by Rentable Square Feet. adjustments, such as premiums and discounts, financing and issuance costs, and related accumulated amortization. Adjusted Debt Outstanding omits the outstanding principal Excluded Properties are properties for which (i) the related mortgage loan is in default, balance of mortgage notes secured by Excluded Properties. We believe that the presentation and (ii) management decides to transfer the properties to the lender in connection with of Debt Outstanding and Adjusted Debt Outstanding, which show our contractual debt settling the mortgage note obligation. obligations, provides useful information to investors to assess our overall liquidity, financial flexibility, capital structure and leverage. Debt Outstanding and Adjusted Debt Outstanding The Excluded Property during the three months ended and at March 31, 2018, was should not be considered as alternatives to the Company's consolidated debt balance as one vacant industrial property, comprising 307,275 square feet with Debt determined in accordance with GAAP or any other GAAP financial measures and should Outstanding of $16.2 million. only be considered together with, and as a supplement to, the Company's financial Fixed Charge Coverage Ratio is the sum of (i) Interest Expense, excluding non-cash information prepared in accordance with GAAP. amortization, (ii) secured debt principal amortization on Adjusted Debt Outstanding EBITDA and Normalized EBITDA Normalized EBITDA, as disclosed, represents EBITDA, or and (iii) dividends attributable to preferred shares divided by Normalized EBITDA. earnings before interest, taxes, depreciation and amortization, modified to exclude non- Management believes that Fixed Charge Coverage Ratio is a useful supplemental routine items such as acquisition-related expenses, litigation, merger and other non-routine measure of our ability to satisfy fixed financing obligations. transactions costs, net of insurance recoveries, gains or losses on disposition of real estate, held for sale loss on discontinued operations, net revenue or expense earned or incurred that is related to the services agreement we entered into with Cole Capital on February 1, 2018, gains or losses on sale of investment securities or mortgage notes receivable and legal settlements and insurance recoveries not in the ordinary course of business. We also exclude certain non-cash items such as impairments of goodwill and real estate 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 EBITDA provides investors with supplemental performance information that is consistent with the performance models and analysis used by management, and provides investors a view of the performance of our portfolio over time. 32 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Definitions INVESTOR REVIEW Funds from Operations ("FFO") and Adjusted Funds from Operations ("AFFO"): Due We omit the impact of the Excluded Properties and related non-recourse mortgage notes to certain unique operating characteristics of real estate companies, as discussed below, from FFO to calculate AFFO. Management believes that excluding these costs from FFO the National Association of Real Estate Investment Trusts, Inc. ("Nareit"), an industry trade provides investors with supplemental performance information that is consistent with the group, has promulgated a supplemental performance measure known as FFO, which we performance models and analysis used by management, and provides investors a view of believe to be an appropriate supplemental performance measure to reflect the operating the performance of our portfolio over time. AFFO allows for a comparison of the performance of a REIT. FFO is not equivalent to our net income or loss as determined performance of our operations with other publicly-traded REITs, as AFFO, or an equivalent under GAAP. measure, is routinely reported by publicly-traded REITs, and we believe often used by analysts and investors for comparison purposes. Nareit defines FFO as net income or loss computed in accordance with GAAP, excluding gains or losses from disposition of property, depreciation and amortization of real estate For all of these reasons, we believe FFO and AFFO, in addition to net income (loss), as defined assets and impairment write-downs on depreciable real estate including the pro rata share by GAAP, are helpful supplemental performance measures and useful in understanding the of adjustments for unconsolidated partnerships and joint ventures. We calculated FFO in various ways in which our management evaluates the performance of the Company over accordance with Nareit's definition described above. 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 In addition to FFO, we use AFFO as a non-GAAP supplemental financial performance to net income (loss) and are not intended to be used as a liquidity measure indicative of measure to evaluate the operating performance of the Company. AFFO, as defined by the cash flow available to fund our cash needs. Neither the SEC, Nareit, nor any other regulatory Company, excludes from FFO non-routine items such as acquisition-related expenses, body has evaluated the acceptability of the exclusions used to adjust FFO in order to litigation, merger and other non-routine costs, net of insurance recoveries, held for sale loss calculate AFFO and its use as a non-GAAP financial performance measure. on discontinued operations, net revenue or expense earned or incurred that is related to the services agreement we entered into with Cole Capital on February 1, 2018, gains or Gross Real Estate Investments represent total gross real estate and related assets of losses on sale of investment securities or mortgage notes receivable and legal settlements Operating Properties, including net investments in unconsolidated entities, investment in and insurance recoveries not in the ordinary course of business. We also exclude certain direct financing leases, investment securities backed by real estate and loans held for non-cash items such as impairments of goodwill and intangible assets, straight-line rent, investment, net of gross intangible lease liabilities. 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. 33 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Definitions INVESTOR REVIEW Interest Coverage Ratio equals Normalized EBITDA divided by Interest Expense, excluding Net Debt Leverage Ratio equals Net Debt divided by Gross Real Estate Investments. We non-cash amortization. Management believes that Interest Coverage Ratio is a useful believe that the presentation of Net Debt Leverage Ratio provides useful information to supplemental measure of our ability to service our debt obligations. investors because our management reviews Net Debt Leverage Ratio as part of its management of our overall liquidity, financial flexibility, capital structure and leverage. Interest Expense, excluding non-cash amortization is a non-GAAP measure that represents interest expense incurred on the outstanding principal balance of our debt. This Net Debt to Normalized EBITDA Annualized equals Net Debt divided by the current measure excludes (i) the amortization of deferred financing costs, premiums and discounts, quarter Normalized EBITDA multiplied by four. We believe that the presentation of Net Debt which is included in interest expense in accordance with GAAP, and (ii)the impact of to Normalized EBITDA Annualized provides useful information to investors because our Excluded Properties and related non-recourse mortgage notes. We believe that the management reviews Net Debt to Normalized EBITDA Annualized as part of its management presentation of Interest Expense, excluding non-cash amortization, which shows the of our overall liquidity, financial flexibility, capital structure and leverage. interest expense on our contractual debt obligations, provides useful information to Normalized EBITDA Annualized equals Normalized EBITDA, for the respective quarter, investors to assess our overall solvency and financial flexibility. Interest Expense, excluding multiplied by four. 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 Operating Properties refers to all properties owned by the Company except Excluded should only be considered together with and as a supplement to the Company's financial Properties as of the reporting date. information prepared in accordance with GAAP. Rentable Square Feet is leasable square feet of Operating Properties. Net Debt is a non-GAAP measure used to show the Company's Adjusted Debt Outstanding, less all cash and cash equivalents, including those related to discontinued operations. We Secured Debt Ratio equals secured Adjusted Debt Outstanding divided by Adjusted Debt believe that the presentation of Net Debt provides useful information to investors because Outstanding. our management reviews Net Debt as part of its management of our overall liquidity, Unencumbered Asset Ratio equals unencumbered Gross Real Estate Investments divided financial flexibility, capital structure and leverage. 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 of Operating Properties. 34 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Reconciliations (dollars in thousands) INVESTOR REVIEW EBITDA and Normalized EBITDA Three Months Ended 3/31/18 Net income $ 32,537 Adjustments: Interest expense 70,425 Depreciation and amortization 166,152 Benefit from income taxes (883) Proportionate share of adjustments for unconsolidated entities 619 EBITDA $ 268,850 Gain on disposition of real estate assets, including joint ventures, net (18,036) Impairments 6,036 Loss on disposition and held for sale loss on discontinued operations 2,009 Acquisition-related expenses 777 Litigation, merger and other non-routine costs, net of insurance recoveries 21,086 Gain on investments (5,638) Gain on derivative instruments, net (273) Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities 1,487 Net direct financing lease adjustments 539 Straight-line rent, net of bad debt expense related to straight-line rent (11,260) Other adjustments, net (488) Proportionate share of adjustments for unconsolidated entities (6) Adjustment for Excluded Properties 40 Normalized EBITDA $ 265,123 Normalized EBITDA from continuing operations $ 262,362 Normalized EBITDA from discontinued operations $ 2,761 35 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Reconciliations (in thousands, except share and per share data) INVESTOR REVIEW FFO Three Months Ended 3/31/2018 AFFO Three Months Ended 3/31/2018 Net income $ 32,537 FFO attributable to common stockholders and limited partners $ 168,192 Dividends on non-convertible preferred stock (17,973) Acquisition-related expenses 777 Gain on disposition of real estate assets, including joint ventures, net (18,036) Litigation, merger and other non-routine costs, net of insurance recoveries 21,086 Depreciation and amortization of real estate assets 165,182 Loss on disposition and held for sale loss on discontinued operations 2,009 Impairment of real estate 6,036 Gain on investments (5,638) Proportionate share of adjustments for unconsolidated entities 446 Gain on derivative instruments, net (273) FFO attributable to common stockholders and limited partners $ 168,192 Amortization of premiums and discounts on debt and investments, net (606) FFO Attributable to common stockholders and limited partners from Amortization of above-market lease assets and deferred lease incentives, net of continuing operations $ 164,691 amortization of below-market lease liabilities 1,487 FFO attributable to common stockholders and limited partners from Net direct financing lease adjustments 539 discontinued operations $ 3,501 Amortization and write-off of deferred financing costs 5,875 Weighted-average shares outstanding - basic 972,663,193 Deferred and other tax benefit (1,855) Limited Partner OP Units and effect of dilutive securities 24,110,249 Straight-line rent, net of bad debt expense related to straight-line rent (11,260) Weighted-average shares outstanding - diluted 996,773,442 Equity-based compensation 2,774 FFO attributable to common stockholders and limited partners per diluted Other adjustments, net 514 share $ 0.169 Proportionate share of adjustments for unconsolidated entities 12 FFO Attributable to common stockholders and limited partners from Adjustment for Excluded Properties 423 continuing operations per diluted share $ 0.165 AFFO attributable to common stockholders and limited partners $ 184,056 FFO attributable to common stockholders and limited partners from AFFO Attributable to common stockholders and limited partners from discontinued operations per diluted share $ 0.004 continuing operations $ 180,854 AFFO attributable to common stockholders and limited partners from discontinued operations $ 3,202 Weighted-average shares outstanding - basic 972,663,193 Limited Partner OP Units and effect of dilutive securities 24,110,249 Weighted-average shares outstanding - diluted 996,773,442 AFFO attributable to common stockholders and limited partners per diluted share $ 0.185 AFFO Attributable to common stockholders and limited partners from continuing operations per diluted share $ 0.182 AFFO attributable to common stockholders and limited partners from discontinued operations per diluted share $ 0.003 36


 
Reconciliations (dollars in thousands) INVESTOR REVIEW Financial and Operations Statistics and Ratios Three Months Ended 3/31/18 3/31/18 Debt Adjusted Debt Outstanding $ 6,022,255 Mortgage notes payable, net $ 2,078,593 Less: cash and cash equivalents 28,435 Corporate bonds, net 2,822,830 Net Debt 5,993,820 Normalized EBITDA annualized Convertible debt, net 987,071 1,060,492 Net Debt to Normalized EBITDA annualized ratio 5.65x Credit facility, net 120,000 Total debt - as reported 6,008,494 Net Debt $ 5,993,820 Adjustments: Gross Real Estate Investments 15,509,117 Deferred financing costs, net 44,969 Net Debt Leverage Ratio 38.6% Net premiums (15,008) Unencumbered Gross Real Estate Investments $ 11,325,512 Debt Outstanding $ 6,038,455 Gross Real Estate Investments 15,509,117 Debt Outstanding - Excluded Properties (16,200) Unencumbered Asset Ratio 73.0% Adjusted Debt Outstanding 6,022,255 Secured Debt Outstanding $ 2,052,255 Gross Real Estate Investments 15,509,117 Secured Debt Ratio 13.2% Interest Three Months Ended 3/31/18 Interest expense - as reported $ (70,425) Interest Expense, excluding non-cash amortization $ 64,741 Less Adjustments: Normalized EBITDA 265,123 Amortization of deferred financing costs and other non-cash charges (5,927) Interest Coverage Ratio 4.10x Amortization of net premiums 626 Interest Expense, excluding non-cash amortization $ 64,741 Interest Expense, excluding non-cash amortization - Excluded Properties (383) Secured debt principal amortization 2,676 Interest Expense, excluding non-cash amortization $ (64,741) Dividends attributable to preferred shares 17,973 Total fixed charges 85,390 Normalized EBITDA 265,123 Fixed Charge Coverage Ratio 3.10x 37 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
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