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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): November 6, 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)
 
________________________
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 November 6, 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: November 6, 2018







Exhibit Index
Exhibit No.
 
Description
99.1
 



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Section 2: EX-99.1 (EXHIBIT 99.1)

vereitinvestorreviewq320
Exhibit 99.1 Investor Review Q3 2018 1


 
About the Data INVESTOR REVIEW This data and other information described herein are as of and for the three months ended September 30, 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 September 30, 2018. All data is as of September 30, 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 are the trademarks or service marks of their respective companies. 2 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Forward-Looking Statements INVESTOR REVIEW Information set forth 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 plans, VEREIT's future financial condition, results of operations and business including the liquidity and flexibility of its balance sheet. 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 meet its updated 2018 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; the impact of impairment charges in respect of certain of VEREIT's properties, goodwill and intangible assets and other assets; unexpected costs or unexpected liabilities that may arise from potential dispositions, including related to 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 and in the leasing of its 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 pending government investigations and litigations related to VEREIT's previously disclosed audit committee investigation, including the expense of such investigations and litigation and any potential payments upon resolution; risks associated with VEREIT’s substantial indebtedness, including that it may affect its ability to pay dividends and the terms and restrictions within the agreements governing its 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 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 Q3 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 $15.4 billion 4,000 properties and 93.9 million square feet Gross Real Estate Investments • Long-term net-lease structure provides stable and predictable rent stream payments Retail1 Restaurants1 • Diverse portfolio across sectors, geographies and 2,120 Properties 1,657 Properties tenants • Provides equity capital to creditworthy corporations Industrial1 Office1 in return for long-term leases on their properties 152 Properties 83 Properties 1) Omits 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 ◦ Interim Chief Executive Officer of the Federal National Mortgage Association (Fannie Mae)  • Majority voting for uncontested director elections • Glenn J. Rufrano - Director • Stockholder rights plan limits ◦ Chief Executive Officer, VEREIT, Inc. • Proxy access • David B. Henry - Independent Director ◦ Former Vice Chairman and CEO, Kimco Realty Corporation • Clawback policy for the potential recoupment of officer • Mary Hogan Preusse - Independent Director 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 ◦ Former 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, portfolio management, business plan to guide the Company’s strategy underwriting, credit 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, a formerly publicly traded • Previously held executive leadership roles at Centro Properties Group net-lease REIT, where he served as CEO from 2001-2014 and and New Plan Excel Realty Trust Chairman from 2007-2014 • Previously served on the Boards of General Growth Properties, Trizec Properties and Ventas 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 • Through October 29, 2018,  completed April 1, 2015 dispositions and $100.2 million of acquisitions and $574.9 million of $345.5 million of acquisitions and $439.8 • Appointed Deloitte & Touche LLP as acquisitions; Achieved AFFO of $0.78 dispositions; Achieved $0.74 AFFO million of dispositions; Achieved $0.545 VEREIT’s independent registered per diluted share; Reduced debt by per diluted share, AFFO per diluted share during first nine public accountant $1.7 billion; Reduced Net Debt to including $0.70 from continuing months, including $0.542 from • Completed $1.4 billion of Normalized EBITDA from 7.0x to 5.7x operations; Reduced secured debt continuing operations; Net Debt to dispositions; Achieved $0.84 AFFO • Raised approximately $702.5 million by $580 million; Net Debt to Normalized 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 7.2 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 • Closed a new $2.9 billion unsecured that existed as of December 31, 2014 corporate debt to 'BBB-' credit facility to replace previous $2.3 • Received an investment grade rating billion revolving credit facility of ‘BBB-’ with a stable outlook from • Repaid $597.5 million of principal Fitch Ratings outstanding related to the 2018 convertible notes that came due on August 1, 2018 • Issued $550.0 million of 4.625% senior notes due 2025 • Settled pending litigation with 13 opt out plaintiffs for a total of $217.5 million 10


 
Portfolio Metrics & Analysis Q3 2018 a DRAF ‹#› T


 
Key Portfolio Metrics PORTFOLIO As of 9/30/2018 Portfolio Property Type Office: 19.4% Operating Properties 4,021 Total Rentable Square Feet (in millions) 93.9 Retail: 42.2% Annualized Rental Income $1.1 Billion Industrial: 16.7% Economic Occupancy Rate 99.1% WALT (years) 8.9 Restaurant: 21.7% 3 Investment Grade 1 42.7% Lease Expiration (Annualized Rental Income Expiring as a % of Total Portfolio) Number of Tenants 658 9.5% Number of Industries 42 8.7% 7.3% 6.9% 7.2% 7.0% 2 Number of States 49 5.3% Top 10 Tenant Concentration 28.2% 3.7% 3.5% Gross Real Estate Investments $15.4 Billion 0.6% 4 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 (13.2%) and Quick Service (8.8%). 4) Represents remaining three months of 2018. 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 5.9% Private B- Northrop Grumman 0.8% Public BBB diversified credit portfolio of net-lease real Walgreens 3.6% Public BBB Academy Sports 0.8% Private CCC+ estate assets primarily comprised of Family Dollar 3.3% Public BBB- At Home 0.8% Public B+ single-tenant properties Dollar General 3.0% Public BBB Border Holdings, LLC 0.7% Private NR • 48 tenants individually represent 0.5% or CVS 2.7% Public BBB Wal-Mart 0.7% Public AA greater of ARI, comprising 58.1% of the FedEx 2.7% Public BBB Healthnow 0.7% Private BBB total portfolio. The remaining 610 tenants Albertson's 2.0% Private B Apple American Group, LLC 0.7% Private NR comprise 41.9% of the portfolio BJ's Wholesale Club 1.7% Private B Bi-Lo, LLC 2 0.7% Private B- • 25 of the 48 tenants are investment-grade LA Fitness 1.7% Private B+ Talbots 0.6% Private B- rated PetSmart 1.6% Private CCC GMRI, Inc 0.6% Public BBB • 29 of the 48 tenants are public companies Citizens Bank 1.5% Public A- Kohl's 0.6% Public BBB- Goodyear 1.4% Public BB RSA Security 0.6% Private BB+ Tractor Supply 1.4% Public NR TJ Maxx 0.6% Public A+ Amazon 1.2% Public AA- Sun Trust Bank 0.6% Public A- Advance Auto Parts 1.1% Public BBB- Rubbermaid 0.6% Public BBB- Home Depot 1.0% Public A Golden Corral 0.6% Private NR Lowe's 1.0% Public A- General Mills 0.6% Public BBB General Service 1.0% Private AA+ Administration Wendab Associates 0.6% Private NR Merrill Lynch 1.0% Private A+ Rolls-Royce 0.6% Public NR AON 0.9% Public A- Hanesbrands 0.5% Public BB 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 (13.7%): Chicago, IL; Dallas, TX; Detroit, MI; Atlanta, GA; Austin, TX Retail Portfolio 1 Tenant Diversification 2016 (% based on ARI of retail properties) Industry Occupancy Target % 2 Operating Properties 2,120 Cost Walgreens 8.6% 8.2% 8.0 - 10.0% Rentable Square Feet (in thousands) 34,692 Automotive Family Dollar 7.8% 6.0 - 8.0% Discount 6.9% Economic Occupancy Rate 99.0% Dollar General 7.2% 2.8% 2.0 - 4.0% Weighted Average Remaining Lease CVS 5.6% Grocery & Supermarket Term (in years) 9.2 Albertson's 4.7% 2.1% 2.0 - 4.0% Investment-Grade Tenants 53.0% Home & Garden LA Fitness 4.1% 5.1% 4.0 - 6.0% Flat leases 32.1% Pharmacy Tractor Supply 3.4% 3.8% N/A NNN leases 66.3% Other Citizens Bank 3.3% Annualized Rental Income 42.2% 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 8.0% • Approximately 64% of retail revenue derived from public companies Retail - Pharmacy 6.4% • Credit tenants on long-term leases with substantial capital investment (53.0% 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 3.2% Retail - Gas & Convenience 2.7% Finance 2.6% Retail - Motor Vehicle 2.3% Size, Diversity and Single Tenant Focus Protects Against Disruptors Entertainment & Recreation 2.0% VEREIT's strategy of well-positioned single tenant properties in a diversified portfolio - made Retail - Sporting Goods 2.0% 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 - Home Furnishings 1.9% embrace e-commerce and have the resources to implement omnichannel distribution are Retail - Warehouse Clubs 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 - Hobby, Books & Music 0.5% information such as geographies, weighted average lease term and tenant margin analysis. The Retail - Specialty (Other) 0.3% following pages provide a deeper look into the retail tenant diversification of the VEREIT portfolio by merchandise category. All Other 1 0.7% Total 42.2% 1) Includes 13 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 Retail - Convenience Investment Investment Investment Investment Tenant % ARI Grade Tenant % ARI Grade Tenant % ARI Grade Tenant % ARI Grade Family Dollar 3.3% ü Albertson's 2.0% Tractor Supply 1.4% Thorntons Oil 0.4% Dollar General 3.0% ü Kroger 0.4% ü Lowe's 1.0% ü 7-Eleven 0.4% ü Wal-Mart 0.7% ü Giant Eagle 0.2% Home Depot 0.4% ü Kum & Go 0.4% Dollar Tree 0.2% ü Harps Grocery 0.2% Floor & Décor 0.1% Stripes 0.4% Ross 0.1% ü Dahl's 0.2% Bed Bath & ü Pantry Gas & Beyond 0.1% Convenience 0.3% Burlington 0.1% Natural Grocers 0.1% Pier 1 Imports <0.1% ü Giant 0.1% ü RaceTrac 0.2% TJ Maxx 0.1% ü ü 1 ü Sherwin- Mad Max 0.2% Marshalls 0.1% Bi-Lo, LLC 0.1% Williams <0.1% SuperAmerica 0.1% ü DSW 0.1% Publix 0.1% Northern Tool & Irving Oil 0.1% Bob's Stores 0.1% Stop & Shop 0.1% ü Equipment <0.1% Circle K 0.1% ü Big Lots <0.1% ü Trader Joe's 0.1% Lumber Liquidators <0.1% WaWa 0.1% Five Below <0.1% Whole Foods 0.1% ü ü Leslie's Pool & Marshall's Cost Plus <0.1% Food Lion 0.1% Spa <0.1% Convenience Gabe's <0.1% Family Fare Total 3.2% Stores <0.1% Supermarket 0.1% Savers <0.1% Road Ranger <0.1% Sprouts 0.1% Shopko MotoMart <0.1% Hometown <0.1% Fresh Thyme Farmers Market 0.1% GetGo <0.1% Total 8.0% Glen's Market <0.1% Total 2.7% Retail - Pharmacy Price Rite <0.1% Investment The Fresh Tenant % ARI Grade Market <0.1% Walgreens 3.6% ü Hy-Vee <0.1% CVS 2.4% ü Harris Teeter <0.1% ü Rite Aid 0.4% Food 4 Less <0.1% ü Total 6.4% Apple Market <0.1% Safeway Stores <0.1% 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 Finance Retail - Motor Vehicle Entertainment & Recreation Retail - Medical Services Investment Investment Investment Investment Tenant % ARI Grade Tenant % ARI Grade Tenant % ARI Grade Tenant % ARI Grade Citizens Bank 1.4% ü Advance Auto Parts 1.1% ü LA Fitness 1.7% Fresenius ü Medical Care 0.5% Sun Trust Bank 0.6% ü CarMax 0.3% 24 Hour Fitness 0.1% DaVita Dialysis 0.3% US Bank 0.2% ü Mister Car Wash 0.2% Regal Cinemas 0.1% Physicians PLS Check Cashers 0.2% Take 5 Oil Change 0.2% Chuze Fitness 0.1% Immediate Care 0.1% ü ü Sovereign Bank <0.1% AutoZone 0.1% Anytime Fitness <0.1% Amita First Bank <0.1% ü O'Reilly Auto Parts 0.1% ü Total 2.0% Healthcare 0.1% Bank of America <0.1% ü America's St. Luke's PowerSports, Inc. 0.1% Urgent Care <0.1% Synovus Bank <0.1% Retail - Home Furnishings Goodyear 0.1% Physicians PNC Bank <0.1% ü Investment Dialysis <0.1% Tire Kingdom <0.1% Tenant % ARI Grade Fifth Third Bank <0.1% ü Dental Dream <0.1% ü National Tire & At Home 0.8% Huntington Battery <0.1% Aspen Dental <0.1% National Bank <0.1% Mattress Firm 0.5% Big O Tires <0.1% Castle Dental <0.1% Region's Bank <0.1% ü Art Van Monro Muffler <0.1% Furniture 0.5% Cascade Key Bank <0.1% ü Chiropractic <0.1% Bridgestone Tire <0.1% Ashley Travis Credit Furniture <0.1% Accelerated Union <0.1% Tires Plus <0.1% Rehab <0.1% Kirklands <0.1% TCF National Bank <0.1% ü Tire Warehouse <0.1% Lifetime Sleep Train <0.1% Wells Fargo <0.1% ü Jiffy Lube <0.1% Dentistry of Sleep America <0.1% Chickasha <0.1% TitleMax <0.1% Total 2.3% Total 1.9% Dr. Elie El-Hage, Community Bank <0.1% D.D.S <0.1% Retail - Sporting Goods Cashland <0.1% Total 1.0% Retail - Warehouse Clubs Investment Edward Jones <0.1% Tenant % ARI Grade Investment ü Tenant % ARI Grade Retail - Pet Supply Chase Bank <0.1% Bass Pro Shops Accomplishments (Cabela's) 0.8% BJ's Wholesale Investment Club 1.4% Tenant % ARI Grade Through People <0.1% Academy Sports 0.8% Sam's Club 0.3% ü PetSmart 0.9% Total 2.6% Dick's Sporting Goods 0.2% Total 1.6% Petco 0.1% West Marine 0.2% Total 0.9% Total 2.0% NOTE: Amounts may not total due to rounding. 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 Rental Retail - Specialty (Other) Investment Investment Investment Tenant % ARI Grade Tenant % ARI Grade Tenant % ARI Grade Kohl's 0.6% ü Aaron Rents 0.4% Ulta Salon 0.1% Beall's 0.1% Vanguard Car ü Coborn's Liquor Rental 0.1% Store 0.1% Total 0.7% Sunbelt Rentals <0.1% Binny's Beverage Total 0.5% Depot <0.1% Retail - Electronics & Appliances Retail - Hobby, Books & Music Party City <0.1% Investment Investment BevMo! <0.1% Tenant % ARI Grade Tenant % ARI Grade Lenscrafters <0.1% ü Best Buy 0.6% Hobby Lobby 0.4% The Vitamin CompUSA <0.1% Michael's 0.1% Shoppe <0.1% Conn's <0.1% Jo-Ann's <0.1% Eyeglass World <0.1% Total 0.6% Music & Arts Sally Beauty Center <0.1% Supply <0.1% GameStop <0.1% GNC <0.1% Total 0.5% Austin Custom Winery <0.1% Cigarettes Cheaper <0.1% Spirit Halloween <0.1% Halloween Express <0.1% Total 0.3% 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%): Atlanta, GA; Dallas, TX; Chicago, IL; Houston, TX; Tampa, FL • According to Nation's Restaurant News, which publishes the top industry brands based on system-wide sales, 84% 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 1,657 Cost 1 Red Lobster 27.4% Casual Dining 6.6% 6.75 - 8.0% Rentable Square Feet (in thousands) 7,825 Bloomin' Brands 3.7% Quick Service 7.1% 7.5 - 8.5% Economic Occupancy Rate 96.2% Border Holdings, LLC 3.3% Weighted Average Remaining Lease Apple American Group, LLC 3.1% Term (in years) 12.3 GMRI, Inc 2.9% Investment-Grade Tenants 3.1% Golden Corral 2.7% Flat leases 7.8% Wendab Associates 2.7% NNN leases 99.5% Neighborhood Restaurant 2.3% Partners Florida, LLC Annualized Rental Income 21.7% Cracker Barrel 2.1% Wendy's Company 2.1% 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 88% dedicated to distribution or warehousing • Close proximity to ports, railways, major freeways and/or interstate highways • Top 5 MSAs (22.1%): Jacksonville, FL; New York, NY; Philadelphia, PA; Columbia, SC; Chicago, IL Industrial Portfolio Tenant Diversification (% based on ARI of industrial properties) Operating Properties 152 FedEx 15.8% Rentable Square Feet (in thousands) 38,541 Goodyear 8.2% Economic Occupancy Rate 100.0% Amazon 7.4% Weighted Average Remaining Lease Term (in years) 7.8 Bed Bath & Beyond 5.1% Investment-Grade Tenants 54.4% Bi-Lo, LLC 3.9% Flat leases 21.4% Rubbermaid 3.6% General Mills 3.5% NNN leases 51.8% Hanesbrands 3.2% Annualized Rental Income 16.7% TJ Maxx 3.0% Tiffany & Co. 2.9% 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 (36.6%): Chicago, IL; Dallas, TX; Boston, MA; Washington, DC; Trenton, NJ Office Portfolio Tenant Diversification (% based on ARI of office properties) Operating Properties 83 General Service Administration 5.0% Rentable Square Feet (in thousands) 12,798 Merrill Lynch 5.0% Economic Occupancy Rate 98.3% AON 4.9% Weighted Average Remaining Lease Term (in years) 5.4 Northrop Grumman 4.1% PetSmart 3.9% Investment-Grade Tenants 54.7% Healthnow 3.5% Flat leases 9.6% RSA Security 3.1% NNN leases 21.3% Rolls-Royce 2.9% Annualized Rental Income 19.4% Cigna 2.7% Peraton 2.5% 22 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Key Financial Highlights Q3 2018 a DRAF ‹#› T


 
Enhanced Balance Sheet and Credit Metrics KEY FINANCIALS Credit Metric Summary 9/30/2018 Principal Outstanding ($bn) 6.0 Net Debt to Normalized EBITDA Annualized 5.70x Fixed Charge Coverage Ratio 2.99x Interest Coverage Ratio 3.93x Net Debt Leverage Ratio 38.7% Unencumbered Asset Ratio 74.8% Secured Debt Ratio 12.5% Total Unencumbered Assets ($bn) 11.5 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. Q3-2018 Capitalization Maturity September 30, (Years) Rate (1) 2018 Diluted shares outstanding 994,354 Stock price $ 7.26 Implied Equity Market Capitalization $ 7,219,010 Series F Perpetual Preferred (2) 6.70% $ 1,073,025 Total secured debt 3.7 4.93% $ 1,929,607 Revolving credit facility (5) 3.6 3.44% 793,000 2019 corporate bonds 0.4 3.00% 750,000 2020 convertible notes 2.2 3.75% 402,500 2021 corporate bonds 2.7 4.13% 400,000 2024 corporate bonds 5.4 4.60% 500,000 2026 corporate bonds 7.7 4.88% 600,000 2027 corporate bonds 8.9 3.95% 600,000 Total unsecured debt 4.4 3.89% $ 4,045,500 Total Adjusted Principal Outstanding 4.2 4.22% $ 5,975,107 Total Capitalization $ 14,267,142 9/30/2018 Less: Cash and cash equivalents 25,264 Common Equity 50.7% Enterprise Value $ 14,241,878 Corporate bonds 19.9% Net Debt / Enterprise Value 41.8% Secured debt 13.5% Net Debt/Normalized EBITDA Annualized (3) (5) 5.70x Preferred Equity 7.5% Net Debt + Preferred/Normalized EBITDA Annualized (3) 6.72x Fixed Charge Coverage Ratio 2.99x Revolving Credit Facility 5.6% Liquidity (4) (5) $ 2,132,264 Convertible Notes 2.8% (1) Weighted average interest rate for variable rate debt represents the interest rate in effect as of September 30, 2018. (2) Balance represents 42.8 million shares of Series F Preferred Stock (and 42.8 million corresponding general partner Series F Preferred Units) and 86,874 limited partner Series F Preferred Units outstanding at September 30, 2018, multiplied by the liquidation preference of $25 per share. (3) Normalized EBITDA annualized includes continued and discontinued operations. (4) Liquidity represents cash and cash equivalents of $25.3 million, $1.2 billion available capacity on our revolving credit facility and $900.0 (5) million available on our delayed-draw term loan. Fixed Rate 85.6% (5) On October 16, 2018, the Company closed a senior note offering, consisting of $550.0 million aggregate principal amount of the operating partnership’s 4.625% senior notes due 2025, for net proceeds of $541.3 million. Assuming this transaction had closed on September 30, 2018, (i) Swapped to Fixed Rate 0.9% fixed rate and variable rate debt would represent 94.7% and 4.4% of Adjusted Principal Outstanding, respectively, (ii) the outstanding balance (5) under the revolving credit facility would have been $251.7 million, (iii) Net Debt/Normalized EBITDA Annualized would have been 5.71x and (iv) Variable Rate 13.5% liquidity would have been $2.7 billion. 25 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Debt Maturity Profile Dollars in millions KEY FINANCIALS • Weighted average debt term is 4.2 years $2,500 • Weighted average interest rate is 4.22% $2,000 $1,500 $1,108 $1,165 $1,000 $927 $753 $668 $601 $601 $500 $145 $2 $1 $4 $0 2018 (1) 2019 2020 2021 2022 2023 2024 2025 2026 2027 Thereafter Mortgage Notes Payable Unsecured Credit Facility (2) Corporate Bonds Convertible Notes 25% 19.5% 20% 18.5% 15.5% 15% 12.6% 11.2% 10.1% 10.1% 10% 5% 2.4% —% —% 0.1% 0% 2018 (1) 2019 2020 2021 2022 2023 2024 2025 2026 2027 Thereafter (1) Represents remaining three months of 2018. (2) On October 16, 2018, the Company closed a senior note offering, consisting of $550.0 million aggregate principal amount of the operating partnership’s 4.625% senior notes due 2025. The net proceeds of $541.3 million were used to repay borrowings under the credit facility. 26 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Highlights & Guidance Q3 2018 a DRAF ‹#› T


 
Q3 2018 Highlights HIGHLIGHTS & GUIDANCE Continues to Maintain Liquid and Flexible Balance Sheet Increases Duration With $550 Million Bond Issuance in October Q3 2018 Highlights • Net loss of $(73.9) million and net loss per diluted share of $(0.09) • Achieved $0.18 AFFO per diluted share • Completed $98.6 million of acquisitions and $191.0 million of dispositions • Decreased Debt from $6.04 billion to $5.95 billion; Net Debt decreased from $6.05 billion to $5.95 billion, or 38.7% Net Debt to Gross Real Estate Investments • Net Debt to Normalized EBITDA decreased from 5.8x to 5.7x • Company narrows 2018 AFFO per diluted share guidance range from $0.70 - $0.72 to $0.71 - $0.72 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 $0.71 and $0.72 • Acquisitions and Dispositions each totaling $300 million to $500 million at an average cash cap rate of 6.5% to 7.5% • 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 loss per share attributable to common stockholders and limited partners (1)(2) $ (0.17) $ (0.16) Gain on disposition of real estate assets, net (2) (0.07) (0.07) Depreciation and amortization of real estate assets (2) 0.64 0.64 Impairment of real estate (2) 0.04 0.04 FFO attributable to common stockholders and limited partners per diluted share $ 0.44 $ 0.45 Adjustments (3) 0.27 0.27 AFFO attributable to common stockholders and limited partners per diluted share $ 0.71 $ 0.72 Notes: The estimated net loss 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 nine months ended September 30, 2018. (2) Includes actual amounts for the nine months ended September 30, 2018. (3) Includes (i) non-routine items such as acquisition-related expenses, 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/[email protected]/ TN 781.575.3100 Investor Relations (non-US) 877.405.2653 [email protected] Email [email protected] 30 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Definitions & Reconciliations Q3 2018 a DRAF ‹#› T


 
Definitions INVESTOR REVIEW Annualized Rental Income is rental revenue under our leases on Operating Properties on Economic Occupancy Rate equals the sum of square feet leased (including month-to- a straight-line basis, which includes the effect of rent escalations and any tenant concessions, month agreements) divided by Rentable Square Feet. such as free rent, and excludes any bad debt allowances and any contingent rent, such as Excluded Properties are properties for which (i) the related mortgage loan is in default, percentage rent. Management uses Annualized Rental Income as a basis for tenant, industry and (ii) management decides to transfer the properties to the lender in connection with and geographic concentrations and other metrics within the portfolio. Annualized Rental settling the mortgage note obligation. Income is not indicative of future performance. During the three months ended September 30, 2018 and at September 30, 2018 there EBITDA and Normalized EBITDA Normalized EBITDA, as disclosed, represents EBITDA, or were no Excluded Properties. earnings before interest, taxes, depreciation and amortization, modified to exclude non- routine items such as acquisition-related expenses, litigation and other non-routine costs, Fixed Charge Coverage Ratio is the sum of (i) Interest Expense, excluding non-cash net of insurance recoveries, gains or losses on disposition of real estate, held for sale loss on amortization, (ii) secured debt principal amortization on Adjusted Principal discontinued operations, net revenue or expense earned or incurred that is related to the Outstanding and (iii) dividends attributable to preferred shares divided by Normalized services agreement we entered into with Cole Capital on February 1, 2018, gains or losses EBITDA. Management believes that Fixed Charge Coverage Ratio is a useful on sale of investment securities or mortgage notes receivable and legal settlements and supplemental measure of our ability to satisfy fixed financing obligations. 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. Therefore, EBITDA and Normalized EBITDA should not be considered as an alternative to net income, as computed in accordance with GAAP, or as an indicator of the Company's financial performance. The Company uses Normalized EBITDA as one measure of its operating performance when formulating corporate goals and evaluating the effectiveness of the Company's strategies. Normalized EBITDA may not be comparable to similarly titled measures of other companies. 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 and other non-routine costs, net of insurance recoveries, held for sale loss on calculate AFFO and its use as a non-GAAP financial performance measure. 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 Gross Real Estate Investments represent total gross real estate and related assets of on sale of investment securities or mortgage notes receivable and legal settlements and Operating Properties, including net investments in unconsolidated entities and equity insurance recoveries not in the ordinary course of business. We also exclude certain non- investments in the Cole REITs, investment in direct financing leases, investment securities cash items such as impairments of goodwill and intangible assets, straight-line rent, net of backed by real estate and loans held for investment, net of gross intangible lease liabilities. bad debt expense related to straight line rent, net direct financing lease adjustments, gains We believe that the presentation of Gross Real Estate Investments, which shows our total or losses on derivatives, reserves for loan loss, gains or losses on the extinguishment or investments in real estate and related assets, in connection with Net Debt provides useful forgiveness of debt, non-current portion of the tax benefit or expense, equity-based information to investors to assess our overall financial flexibility, capital structure and compensation and amortization of intangible assets, deferred financing costs, premiums leverage. Gross Real Estate Investments should not be considered as an alternative to the and discounts on debt and investments, above-market lease assets and below-market lease Company's real estate investments balance as determined in accordance with GAAP or any liabilities. 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. 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. 33 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Definitions INVESTOR REVIEW Interest Expense, excluding non-cash amortization is a non-GAAP measure that Principal Outstanding and Adjusted Principal Outstanding are non-GAAP measures that represents interest expense incurred on the outstanding principal balance of our debt. This represent the Company's outstanding principal debt balance, excluding certain GAAP measure excludes (i) the amortization of deferred financing costs, premiums and discounts, adjustments, such as premiums and discounts, financing and issuance costs, and related which is included in interest expense in accordance with GAAP, and (ii)the impact of accumulated amortization. Adjusted Principal Outstanding omits the outstanding principal Excluded Properties and related non-recourse mortgage notes. We believe that the balance of mortgage notes secured by Excluded Properties. We believe that the presentation presentation of Interest Expense, excluding non-cash amortization, which shows the of Principal Outstanding and Adjusted Principal Outstanding, which show our contractual interest expense on our contractual debt obligations, provides useful information to debt obligations, provides useful information to investors to assess our overall liquidity, investors to assess our overall solvency and financial flexibility. Interest Expense, excluding financial flexibility, capital structure and leverage. Principal Outstanding and Adjusted non-cash amortization should not be considered as an alternative to the Company's interest Principal Outstanding should not be considered as alternatives to the Company's expense as determined in accordance with GAAP or any other GAAP financial measures and consolidated debt balance as determined in accordance with GAAP or any other GAAP should only be considered together with and as a supplement to the Company's financial financial measures and should only be considered together with, and as a supplement to, information prepared in accordance with GAAP. 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 Rentable Square Feet is leasable square feet of Operating Properties. Outstanding, less all cash and cash equivalents, including those related to discontinued Secured Debt Ratio equals secured Adjusted Principal Outstanding divided by Gross Real operations. We believe that the presentation of Net Debt provides useful information to Estate Investments. investors because our management reviews Net Debt as part of its management of our overall liquidity, financial flexibility, capital structure and leverage. Unencumbered Asset Ratio equals unencumbered Gross Real Estate Investments divided by Gross Real Estate Investments. Management believes that Unencumbered Asset Ratio is Net Debt Leverage Ratio equals Net Debt divided by Gross Real Estate Investments. We a useful supplemental measure of our overall liquidity and leverage. 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 Weighted Average Remaining Lease Term is the number of years remaining on each management of our overall liquidity, financial flexibility, capital structure and leverage. respective lease, weighted based on Annualized Rental Income of Operating Properties. Net Debt to Normalized EBITDA Annualized equals Net Debt divided by the current 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. Normalized EBITDA Annualized equals Normalized EBITDA, for the respective quarter, multiplied by four. Operating Properties refers to all properties owned by the Company except Excluded Properties as of the reporting date. 34 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Reconciliations (in thousands, except share and per share data) INVESTOR REVIEW FFO Three Months Nine Months Ended Ended Year Ended December 31, September 30, September 30, 2018 2018 2017 2016 2015 Net (loss) income $ (73,942) $ (115,872) $ 32,378 $ (200,824) $ (323,492) Dividends on non-convertible preferred stock (17,973) (53,919) (71,892) (71,892) (71,892) (Gain) loss on disposition of real estate assets, including joint ventures, net (45,226) (69,083) (61,536) (55,722) 65,582 Depreciation and amortization of real estate assets 156,527 485,260 703,133 756,315 817,469 Impairment of real estate 18,382 36,082 50,548 182,820 91,755 Proportionate share of adjustments for unconsolidated entities 287 1,022 477 2,719 5,744 FFO attributable to common stockholders and limited partners $ 38,055 $ 283,490 $ 653,108 $ 613,416 $ 585,166 FFO attributable to common stockholders and limited partners from continuing operations 38,055 279,765 672,225 737,353 769,666 FFO attributable to common stockholders and limited partners from discontinued operations — 3,725 (19,117) (123,937) (184,500) 35 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Reconciliations (in thousands, except share and per share data) INVESTOR REVIEW AFFO Three Months Nine Months Year Ended December 31, Ended September Ended September 30, 2018 30, 2018 2017 2016 2015 FFO attributable to common stockholders and limited partners $ 38,055 $ 283,490 $ 653,108 $ 613,416 $ 585,166 Acquisition-related expenses 810 2,496 3,402 1,321 6,243 Litigation, merger and other non-routine costs, net of insurance recoveries 138,595 266,768 51,762 3,884 33,628 Impairment of goodwill and intangible assets — — — 120,931 213,339 Loss on disposition and held for sale loss on discontinued operations — 1,785 20,027 — — Reserve for loan loss — — — — 15,300 Legal settlements — — — — (1,250) Loss (gain) on investments 3,336 (2,302) (65) — (65) (Gain) loss on derivative instruments, net (69) (447) (2,976) 1,191 1,460 Amortization of premiums and discounts on debt and investments, net (1,123) (2,332) (4,616) (14,693) (19,183) Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities 1,058 3,233 5,366 5,396 4,522 Net direct financing lease adjustments 483 1,525 2,093 2,264 2,037 Amortization and write-off of deferred financing costs 3,926 15,451 24,536 28,063 33,998 Amortization of management contracts — — 14,514 26,171 25,903 Deferred and other tax (benefit) expense — (1,855) 8,671 (10,136) (52,242) (Gain) loss on extinguishment and forgiveness of debt, net (90) (5,339) (18,373) 771 (4,812) Straight-line rent, net of bad debt expense related to straight-line rent (8,720) (31,382) (44,903) (54,190) (82,398) Equity-based compensation 3,003 9,493 16,751 10,728 14,500 Other adjustments, net (726) 354 2,566 5,296 3,840 Proportionate share of adjustments for unconsolidated entities (9) (24) 378 1,044 2,072 Adjustment for Excluded Properties — 465 6,528 — — AFFO attributable to common stockholders and limited partners $ 178,529 $ 541,379 $ 738,769 $ 741,457 $ 782,058 AFFO attributable to common stockholders and limited partners from continuing operations 178,529 538,177 702,556 723,354 770,567 AFFO attributable to common stockholders and limited partners from discontinued operations — 3,202 36,213 18,103 11,491 Weighted-average shares outstanding - basic 967,798,401 969,521,946 974,098,652 931,422,844 903,360,763 Limited Partner OP Units and effect of dilutive securities 24,125,616 23,894,095 24,059,312 24,626,646 26,013,303 Weighted-average shares outstanding - diluted 991,924,017 993,416,041 998,157,964 956,049,490 929,374,066 AFFO attributable to common stockholders and limited partners per diluted share $ 0.180 $ 0.545 $ 0.740 $ 0.776 $ 0.841 AFFO attributable to common stockholders and limited partners from continuing operations per diluted share 0.180 0.542 0.704 0.757 0.829 AFFO attributable to common stockholders and limited partners from discontinued operations per diluted share — 0.003 0.036 0.019 0.012 36 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Reconciliations (dollars in thousands) INVESTOR REVIEW EBITDA and Normalized EBITDA Three Months Ended September 30, December 31, 2017 December 31, 2016 December 31, 2015 December 31, 2014 2018 Net loss $ (73,942) $ (33,092) $ (118,223) $ (192,231) $ (360,427) Adjustments: Interest expense 69,310 70,694 74,613 82,591 126,157 Depreciation and amortization 157,181 177,329 191,360 202,415 226,272 Provision for (benefit from) income taxes 1,141 11,843 (5,075) (41,127) (26,571) Proportionate share of adjustments for unconsolidated entities 286 756 1,299 1,978 3,402 EBITDA $ 153,976 $ 227,530 $ 143,974 $ 53,626 $ (31,167) (Gain) loss on disposition of real estate assets, net (45,226) (7,104) 199 9,727 1,263 Impairments 18,382 19,691 127,537 219,753 406,136 Held for sale loss on discontinued operations — 20,027 — — — Reserve for loan loss — — — 15,300 — Acquisition-related expenses 810 1,120 948 734 4,324 Litigation, merger and other non-routine costs, net of insurance recoveries 138,595 14,969 1,512 (7,691) 24,333 Loss on investments 3,336 — — — — (Gain) loss on derivative instruments, net (69) (266) (2,095) (677) 172 Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities 1,058 1,148 1,220 1,299 1,475 (Gain) loss on extinguishment and forgiveness of debt, net (90) 318 (980) 490 605 Net direct financing lease adjustments 483 517 544 544 448 Straight-line rent, net of bad debt expense related to straight-line rent (8,720) (11,281) (13,163) (17,589) (25,367) Legal settlements — — — — (60,000) Program development costs write-off — 1,343 11,054 11,295 13,109 Other adjustments, net (1,442) 1,247 (107) (122) 335 Proportionate share of adjustments for unconsolidated entities (9) (1,721) 725 (15) 1,086 Adjustment for Excluded Properties — 172 — — — Normalized EBITDA $ 261,084 $ 267,710 $ 271,368 $ 286,674 $ 336,752 Normalized EBITDA Annualized $ 1,044,336 $ 1,070,840 $ 1,085,472 $ 1,146,696 $ 1,347,008 37 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Reconciliations (dollars in thousands) INVESTOR REVIEW Debt and Net Debt to Normalized EBITDA September 30, 2018 June 30, 2018 December 31, 2017 December 31, 2016 December 31, 2015 December 31, 2014 Mortgage notes payable and other debt, net $ 1,936,586 $ 2,031,171 $ 2,082,692 $ 2,671,106 $ 3,111,985 $ 3,773,922 Corporate bonds, net 2,825,541 2,824,176 2,821,494 2,226,224 2,536,333 2,531,081 Convertible debt, net 393,961 989,901 984,258 973,340 962,894 952,856 Credit facility, net 793,000 195,000 185,000 496,578 1,448,590 3,167,919 Total debt - as reported $ 5,949,088 $ 6,040,248 $ 6,073,444 $ 6,367,248 $ 8,059,802 $ 10,425,778 Adjustments: Deferred financing costs, net 39,085 41,672 48,232 55,660 62,674 88,002 Net premiums (13,066) (14,327) (15,638) (22,012) (39,131) (44,659) Principal Outstanding $ 5,975,107 $ 6,067,593 $ 6,106,038 $ 6,400,896 $ 8,083,345 $ 10,469,121 Principal Outstanding - Excluded Properties — — (16,200) — — — Adjusted Principal Outstanding $ 5,975,107 $ 6,067,593 $ 6,089,838 $ 6,400,896 $ 8,083,345 $ 10,469,121 Less: cash and cash equivalents 25,264 18,434 36,374 256,452 69,103 416,711 Net Debt $ 5,949,843 $ 6,049,159 $ 6,053,464 $ 6,144,444 $ 8,014,242 $ 10,052,410 Normalized EBITDA annualized 1,044,336 1,037,548 1,070,840 1,085,472 1,146,696 1,347,008 Net Debt to Normalized EBITDA annualized ratio 5.70x 5.83x 5.65x 5.66x 6.99x 7.46x 38 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
Reconciliations (dollars in thousands) INVESTOR REVIEW Interest Three Months Ended September 30, September 30, 2018 2018 Interest expense - as reported $ (69,310) Net Debt $ 5,949,843 Less Adjustments: Gross Real Estate Investments 15,385,925 Amortization of deferred financing costs and other non-cash Net Debt Leverage Ratio 38.7% charges (4,003) Amortization of net premiums 1,138 Unencumbered Gross Real Estate Investments $ 11,507,837 Interest Expense, excluding non-cash amortization $ (66,445) Gross Real Estate Investments 15,385,925 Unencumbered Asset Ratio 74.8% Secured Principal Outstanding $ 1,929,607 Gross Real Estate Investments 15,385,925 Secured Debt Ratio 12.5% Financial and Operations Three Months Statistics and Ratios Ended September 30, 2018 September 30, 2018 Interest Expense, excluding non-cash amortization $ 66,445 Total real estate investments, at cost - as reported $ 15,519,689 Normalized EBITDA 261,084 Adjustments: Interest Coverage Ratio 3.93x Investment in unconsolidated entities 34,293 Investment in Cole REITs 7,844 Interest Expense, excluding non-cash amortization $ 66,445 Gross assets held for sale 30,014 Secured debt principal amortization 3,007 Investment in direct financing leases, net 14,082 Dividends attributable to preferred shares 17,973 Investment securities, at fair value 26,282 Mortgage notes receivable, net 18,757 Total fixed charges 87,425 Gross below market leases (265,036) Normalized EBITDA 261,084 Gross Real Estate Investments $ 15,385,925 Fixed Charge Coverage Ratio 2.99x 39 www.VEREIT.com | NYSE: VER | © 2018 VEREIT, Inc.


 
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