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Section 1: 10-Q (10-Q)

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

FORM 10-Q
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2019
 
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from _________ to __________
Commission file numbers: 001-35263 and 333-197780
VEREIT, Inc.
VEREIT Operating Partnership, L.P.
(Exact name of registrant as specified in its charter)
Maryland (VEREIT, Inc.)
 
45-2482685
Delaware (VEREIT Operating Partnership, L.P.)
 
45-1255683
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
 
 
2325 E. Camelback Road, 9th Floor, Phoenix, AZ
 
85016
(Address of principal executive offices)
 
(Zip Code)
(800) 606-3610
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. VEREIT, Inc. Yes x No o VEREIT Operating Partnership, L.P. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). VEREIT, Inc. Yes x No o VEREIT Operating Partnership, L.P. Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
VEREIT, Inc.
Large accelerated filer
x
 
Accelerated filer
o
 
Non-accelerated filer
o
 
 
 
 
 
 
 
 
 
Smaller reporting company
o
 
Emerging growth company
o
 
 
VEREIT Operating Partnership, L.P.
Large accelerated filer
o
 
Accelerated filer
o
 
Non-accelerated filer
x
 
 
 
 
 
 
 
 
 
Smaller reporting 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 pursuant to Section 13(a) of the Exchange Act. VEREIT, Inc. ¨ VEREIT Operating Partnership, L.P. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
VEREIT, Inc. Yes o No x VEREIT Operating Partnership, L.P. Yes o No x
 
 
 
 
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
Title of each class:
Trading symbol(s):
Name of each exchange on which registered:
Common Stock, $0.01 par value per share (VEREIT, Inc.)
VER
New York Stock Exchange
6.70% Series F Cumulative Redeemable Preferred Stock, $0.01 par value per share (VEREIT, Inc.)
VER PF
New York Stock Exchange
There were 973,307,068 shares of common stock of VEREIT, Inc. outstanding as of May 3, 2019.




EXPLANATORY NOTE

This report combines the Quarterly Reports on Form 10-Q for the three months ended March 31, 2019 of VEREIT, Inc., a Maryland corporation, and VEREIT Operating Partnership, L.P., a Delaware limited partnership, of which VEREIT, Inc. is the sole general partner. Unless otherwise indicated or unless the context requires otherwise, all references in this report to “we,” “us,” “our,” “VEREIT,” the “Company” or the “General Partner” mean VEREIT, Inc. together with its consolidated subsidiaries, including VEREIT Operating Partnership, L.P., and all references to the “Operating Partnership” or “OP” mean VEREIT Operating Partnership, L.P. together with its consolidated subsidiaries.
As the sole general partner of VEREIT Operating Partnership, L.P., VEREIT, Inc. has the full, exclusive and complete responsibility for the Operating Partnership’s day-to-day management and control.
We believe combining the Quarterly Reports on Form 10-Q of VEREIT, Inc. and VEREIT Operating Partnership, L.P. into this single report results in the following benefits:
enhancing investors’ understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;
eliminating duplicative disclosure and providing a more streamlined and readable presentation since a substantial portion of the disclosure applies to both the Company and the Operating Partnership; and
creating time and cost efficiencies through the preparation of one combined report instead of two separate reports.
There are a few differences between the Company and the Operating Partnership, which are reflected in the disclosure in this report. We believe it is important to understand the differences between the Company and the Operating Partnership in the context of how we operate as an interrelated consolidated company. VEREIT, Inc. is a real estate investment trust whose only material asset is its ownership of partnership interests of the Operating Partnership. As a result, VEREIT, Inc. does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing equity or debt from time to time and guaranteeing certain unsecured debt of the Operating Partnership and certain of its subsidiaries. The Operating Partnership holds substantially all of the assets of the Company and holds the ownership interests in the Company’s joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for net proceeds from public equity or debt issuances by VEREIT, Inc., which are generally contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generates the capital required by the Company’s business through the Operating Partnership’s operations, by the Operating Partnership’s direct or indirect incurrence of indebtedness or through the issuance of partnership units. To help investors understand the significant differences between VEREIT, Inc. and the Operating Partnership, there are separate sections in this report that separately discuss VEREIT, Inc. and the Operating Partnership, including the consolidated financial statements and certain notes to the consolidated financial statements as well as separate disclosures in Item 4. Controls and Procedures and Exhibit 31 and Exhibit 32 certifications. As general partner with control of the Operating Partnership, VEREIT, Inc. consolidates the Operating Partnership for financial reporting purposes. Therefore, the assets and liabilities of VEREIT, Inc. and VEREIT Operating Partnership, L.P. are the same on their respective consolidated financial statements. The separate discussions of VEREIT, Inc. and VEREIT Operating Partnership, L.P. in this report should be read in conjunction with each other to understand the results of the Company on a consolidated basis and how management operates the Company.



VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.
For the quarterly period ended March 31, 2019

 
Page



Table of Contents
VEREIT, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except for share and per share data) (Unaudited)

PART I — FINANCIAL INFORMATION
Item 1. Unaudited Financial Statements
 
 
March 31, 2019
 
December 31, 2018
ASSETS
 
 
 
 
Real estate investments, at cost:
 
 
 
 
Land
 
$
2,824,666

 
$
2,843,212

Buildings, fixtures and improvements
 
10,741,995

 
10,749,228

Intangible lease assets
 
2,003,825

 
2,012,399

Total real estate investments, at cost
 
15,570,486

 
15,604,839

Less: accumulated depreciation and amortization
 
3,544,252

 
3,436,772

Total real estate investments, net
 
12,026,234

 
12,168,067

Operating lease right-of-use assets
 
224,859

 

Investment in unconsolidated entities
 
35,790

 
35,289

Cash and cash equivalents
 
12,788

 
30,758

Restricted cash
 
18,517

 
22,905

Rent and tenant receivables and other assets, net
 
361,641

 
366,092

Goodwill
 
1,337,773

 
1,337,773

Real estate assets held for sale, net
 
36,022

 
2,609

Total assets
 
$
14,053,624


$
13,963,493

 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
Mortgage notes payable, net
 
$
1,918,826

 
$
1,922,657

Corporate bonds, net
 
2,619,956

 
3,368,609

Convertible debt, net
 
395,823

 
394,883

Credit facility, net
 
1,089,725

 
401,773

Below-market lease liabilities, net
 
166,708

 
173,479

Accounts payable and accrued expenses
 
141,126

 
145,611

Deferred rent and other liabilities
 
70,220

 
69,714

Distributions payable
 
190,246

 
186,623

Operating lease liabilities
 
228,120

 

Total liabilities
 
6,820,750


6,663,349

Commitments and contingencies (Note 10)
 

 


Preferred stock, $0.01 par value, 100,000,000 shares authorized and 42,871,246 and 42,834,138 issued and outstanding as of March 31, 2019 and December 31, 2018, respectively
 
429

 
428

Common stock, $0.01 par value, 1,500,000,000 shares authorized and 971,576,377 and 967,515,165 issued and outstanding as of March 31, 2019 and December 31, 2018, respectively
 
9,716

 
9,675

Additional paid-in-capital
 
12,645,148

 
12,615,472

Accumulated other comprehensive loss
 
(12,202
)
 
(1,280
)
Accumulated deficit
 
(5,550,574
)
 
(5,467,236
)
Total stockholders’ equity
 
7,092,517

 
7,157,059

Non-controlling interests
 
140,357

 
143,085

Total equity
 
7,232,874

 
7,300,144

Total liabilities and equity
 
$
14,053,624


$
13,963,493


The accompanying notes are an integral part of these statements.

4

Table of Contents
VEREIT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for per share data) (Unaudited)

 
 
Three Months Ended March 31,
 
 
2019
 
2018
Rental revenue
 
$
316,843

 
$
315,074

Operating expenses:
 
 
 
 
Acquisition-related
 
985

 
777

Insurance recoveries, net of litigation and non-routine costs
 
(21,492
)
 
21,740

Property operating
 
32,378

 
30,565

General and administrative
 
14,846

 
15,240

Depreciation and amortization
 
136,555

 
166,152

Impairments
 
11,988

 
6,036

Restructuring
 
9,076

 

Total operating expenses
 
184,336


240,510

Other (expenses) income:
 
 
 
 
Interest expense
 
(71,254
)
 
(70,425
)
Other (loss) income, net
 
(402
)
 
7,709

Equity in income and gain on disposition of unconsolidated entities
 
500

 
1,065

Gain on disposition of real estate and real estate assets held for sale, net
 
10,831

 
17,335

Total other expenses, net
 
(60,325
)

(44,316
)
Income before taxes
 
72,182


30,248

Provision for income taxes
 
(1,211
)
 
(1,212
)
Income from continuing operations
 
70,971


29,036

Income from discontinued operations, net of income taxes
 

 
3,501

Net income
 
70,971

 
32,537

Net income attributable to non-controlling interests (1)
 
(1,667
)
 
(742
)
Net income attributable to the General Partner
 
$
69,304


$
31,795

 
 
 
 
 
Basic and diluted net income per share from continuing operations attributable to common stockholders
 
$
0.05

 
$
0.01

Basic and diluted net income per share from discontinued operations attributable to common stockholders
 
$

 
$
0.00

Basic and diluted net income per share attributable to common stockholders
 
$
0.05

 
$
0.01

_______________________________________________
(1)
Represents income attributable to limited partners and a consolidated joint venture partner.

The accompanying notes are an integral part of these statements.

5

Table of Contents
VEREIT, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands) (Unaudited)

 
 
Three Months Ended March 31,
 
 
2019
 
2018
Net income
 
$
70,971

 
$
32,537

Other comprehensive loss:
 
 
 
 
Unrealized loss on interest rate derivatives
 
(11,286
)
 

Reclassification of previous unrealized loss on interest rate derivatives into net income
 
97

 
105

Unrealized loss on investment securities, net
 

 
(837
)
Total other comprehensive loss
 
(11,189
)

(732
)
 
 
 
 
 
Total comprehensive income
 
59,782

 
31,805

Comprehensive income attributable to non-controlling interests (1)
 
(1,400
)
 
(725
)
Total comprehensive income attributable to the General Partner
 
$
58,382

 
$
31,080

_______________________________________________
(1)
Represents comprehensive income attributable to limited partners and a consolidated joint venture partner.

The accompanying notes are an integral part of these statements.

6

Table of Contents
VEREIT, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands, except for share data) (Unaudited)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred Stock
 
Common Stock
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number
of Shares
 
Par
Value
 
Number
of Shares
 
Par
Value
 
Additional Paid-In Capital
 
Accumulated Other Comprehensive Income
 
Accumulated
Deficit
 
Total Stock-holders’ Equity
 
Non-Controlling Interests
 
Total Equity
Balance, January 1, 2019
 
42,834,138

 
$
428

 
967,515,165

 
$
9,675

 
$
12,615,472

 
$
(1,280
)
 
$
(5,467,236
)
 
$
7,157,059

 
$
143,085

 
$
7,300,144

Issuance of Common Stock, net
 

 

 
3,309,808

 
33

 
27,511

 

 

 
27,544

 

 
27,544

Conversion of OP Units to Common Stock
 

 

 

 

 
(26
)
 

 

 
(26
)
 
26

 

Conversion of Series F Preferred Units to Series F Preferred Stock
 
37,108

 
1

 

 

 
922





 
923

 
(923
)
 

Repurchases of Common Stock to settle tax obligation
 

 

 
(199,083
)
 
(2
)
 
(1,593
)
 

 

 
(1,595
)
 

 
(1,595
)
Equity-based compensation, net
 

 

 
950,487

 
10

 
2,862

 

 

 
2,872

 

 
2,872

Contributions from non-controlling interest holders
 

 

 

 

 

 

 

 

 
64

 
64

Distributions declared on Common Stock —
$0.1375 per common share
 

 

 

 

 

 

 
(133,480
)
 
(133,480
)
 

 
(133,480
)
Distributions to non-controlling interest holders
 

 

 

 

 

 

 

 

 
(3,262
)
 
(3,262
)
Dividend equivalents on awards granted under the Equity Plan
 

 

 

 

 

 

 
(1,222
)
 
(1,222
)
 

 
(1,222
)
Distributions to preferred shareholders and unitholders
 

 

 

 

 

 

 
(17,940
)
 
(17,940
)
 
(33
)
 
(17,973
)
Net income
 

 

 

 

 

 

 
69,304

 
69,304

 
1,667

 
70,971

Other comprehensive loss
 

 

 

 

 

 
(10,922
)
 

 
(10,922
)
 
(267
)
 
(11,189
)
Balance, March 31, 2019
 
42,871,246


$
429


971,576,377


$
9,716


$
12,645,148


$
(12,202
)

$
(5,550,574
)

$
7,092,517


$
140,357


$
7,232,874

 
 
Preferred Stock
 
Common Stock
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number
of Shares
 
Par
Value
 
Number
of Shares
 
Par
Value
 
Additional Paid-In Capital
 
Accumulated Other Comprehensive Loss
 
Accumulated
Deficit
 
Total Stock-holders’ Equity
 
Non-Controlling Interests
 
Total Equity
Balance, January 1, 2018
 
42,834,138

 
$
428

 
974,208,583

 
$
9,742

 
$
12,654,258

 
$
(3,569
)
 
$
(4,776,581
)
 
$
7,884,278

 
$
158,598

 
$
8,042,876

Repurchases of Common Stock under share repurchase programs
 

 

 
(6,399,666
)
 
(64
)
 
(44,521
)
 

 

 
(44,585
)
 

 
(44,585
)
Repurchases of Common Stock to settle tax obligation
 

 

 
(230,436
)
 
(2
)
 
(1,658
)
 

 

 
(1,660
)
 

 
(1,660
)
Equity-based compensation, net
 

 

 
576,005

 
5

 
2,927

 

 

 
2,932

 

 
2,932

Distributions declared on Common Stock —
$0.1375 per common share
 

 

 

 

 

 

 
(133,104
)
 
(133,104
)
 

 
(133,104
)
Distributions to non-controlling interest holders
 

 

 

 

 

 

 

 

 
(3,264
)
 
(3,264
)
Dividend equivalents on awards granted under the Equity Plan
 

 

 

 

 

 

 
(522
)
 
(522
)
 

 
(522
)
Distributions to preferred shareholders and unitholders
 

 

 

 

 

 

 
(17,937
)
 
(17,937
)
 
(36
)
 
(17,973
)
Net income
 

 

 

 

 

 

 
31,795

 
31,795

 
742

 
32,537

Other comprehensive loss
 

 

 

 

 

 
(715
)
 

 
(715
)
 
(17
)
 
(732
)
Balance, March 31, 2018
 
42,834,138


$
428


968,154,486

 
$
9,681

 
$
12,611,006

 
$
(4,284
)
 
$
(4,896,349
)

$
7,720,482


$
156,023


$
7,876,505


7

Table of Contents
VEREIT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)

 
 
Three Months Ended March 31,
 
 
2019
 
2018
Cash flows from operating activities:
 
 
 
 

Net income
 
$
70,971

 
$
32,537

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
139,394

 
172,458

Gain on real estate assets, net
 
(10,831
)
 
(18,036
)
Impairments
 
11,988

 
6,036

Equity-based compensation
 
2,872

 
2,927

Equity in income of unconsolidated entities and gain on joint venture
 
(500
)
 
(364
)
Distributions from unconsolidated entities
 

 
936

Loss (Gain) on investments
 
470

 
(5,638
)
Loss (Gain) on derivative instruments
 
34

 
(273
)
Non-cash restructuring expense
 
4,018

 

Changes in assets and liabilities:
 
 
 
 
Investment in direct financing leases
 
409

 
538

Rent and tenant receivables, operating lease right-of-use and other assets, net
 
(7,160
)
 
(23,344
)
Assets held for sale classified as discontinued operations
 

 
(2,490
)
Accounts payable and accrued expenses
 
(2,415
)
 
(7,653
)
Deferred rent, operating lease and other liabilities
 
(15,216
)
 
6,158

Due to affiliates
 

 
(66
)
Liabilities related to discontinued operations
 

 
(13,861
)
Net cash provided by operating activities
 
194,034

 
149,865

Cash flows from investing activities:
 
 
 
 
Investments in real estate assets
 
(81,065
)
 
(139,882
)
Capital expenditures and leasing costs
 
(7,498
)
 
(4,993
)
Real estate developments
 
(3,232
)
 
(1,899
)
Principal repayments received on investment securities and mortgage notes receivable
 
62

 
4,615

Return of investment from unconsolidated entities
 

 
386

Proceeds from disposition of real estate and joint venture
 
60,496

 
122,526

Proceeds from disposition of discontinued operations
 

 
123,925

Investment in leasehold improvements and other assets
 
(177
)
 
(85
)
Deposits for real estate assets
 
(900
)
 
(4,000
)
Proceeds from sale of investments and other assets
 
8,199

 
1,351

Uses and refunds of deposits for real estate assets
 
1,240

 
5,120

Proceeds from the settlement of property-related insurance claims
 
32

 
269

Line of credit advances to Cole REITs
 

 
(2,200
)
Line of credit repayments from Cole REITs
 

 
3,800

Net cash (used in) provided by investing activities
 
(22,843
)
 
108,933

Cash flows from financing activities:
 
 
 
 
Proceeds from mortgage notes payable
 

 
89

 Payments on mortgage notes payable and other debt, including debt extinguishment costs
 
(2,426
)
 
(2,676
)
Proceeds from credit facility
 
899,000

 
380,000

Payments on credit facility
 
(207,000
)
 
(445,000
)
Payments on corporate bonds, including extinguishment costs
 
(750,000
)
 

Payments of deferred financing costs
 
(172
)
 

Repurchases of Common Stock under the Share Repurchase Programs
 

 
(44,585
)
Repurchases of Common Stock to settle tax obligations
 
(1,595
)
 
(1,659
)
 Proceeds from the issuance of Common Stock, net of underwriters’ discount
 
20,894

 

Contributions from non-controlling interest holders
 
64

 

Distributions paid
 
(152,314
)
 
(152,519
)
Net cash used in financing activities
 
(193,549
)
 
(266,350
)
Net change in cash and cash equivalents and restricted cash
 
(22,358
)
 
(7,552
)
 
 
 
 
 

8

Table of Contents
VEREIT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(In thousands)


 
 
Three Months Ended March 31,
 
 
2019
 
2018
Cash and cash equivalents and restricted cash, beginning of period
 
$
53,663

 
$
64,036

Less: cash and cash equivalents of discontinued operations
 

 
(2,198
)
Cash and cash equivalents and restricted cash from continuing operations, beginning of period
 
53,663

 
61,838

 
 
 
 
 
Cash and cash equivalents and restricted cash from continuing operations, end of period
 
$
31,305

 
$
56,484

Reconciliation of Cash and Cash Equivalents and Restricted Cash
 
 
 
 
Cash and cash equivalents at beginning of period
 
$
30,758

 
$
34,176

Restricted cash at beginning of period
 
22,905

 
27,662

Cash and cash equivalents and restricted cash at beginning of period
 
53,663

 
61,838

 
 
 
 
 
Cash and cash equivalents at end of period
 
12,788

 
28,435

Restricted cash at end of period
 
18,517

 
28,049

Cash and cash equivalents and restricted cash at end of period
 
$
31,305

 
$
56,484


The accompanying notes are an integral part of these statements.

9

Table of Contents
VEREIT OPERATING PARTNERSHIP, L.P.
CONSOLIDATED BALANCE SHEETS
(In thousands, except for unit data) (Unaudited)

 
 
March 31, 2019
 
December 31, 2018
ASSETS
 
 
 
 
Real estate investments, at cost:
 
 
 
 
Land
 
$
2,824,666

 
$
2,843,212

Buildings, fixtures and improvements
 
10,741,995

 
10,749,228

Intangible lease assets
 
2,003,825

 
2,012,399

Total real estate investments, at cost
 
15,570,486


15,604,839

Less: accumulated depreciation and amortization
 
3,544,252

 
3,436,772

Total real estate investments, net
 
12,026,234


12,168,067

Operating lease right-of-use assets
 
224,859

 

Investment in unconsolidated entities
 
35,790

 
35,289

Cash and cash equivalents
 
12,788

 
30,758

Restricted cash
 
18,517

 
22,905

Rent and tenant receivables and other assets, net
 
361,641

 
366,092

Goodwill
 
1,337,773

 
1,337,773

Real estate assets held for sale, net
 
36,022

 
2,609

Total assets
 
$
14,053,624


$
13,963,493

 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 

Mortgage notes payable, net
 
$
1,918,826

 
$
1,922,657

Corporate bonds, net
 
2,619,956

 
3,368,609

Convertible debt, net
 
395,823

 
394,883

Credit facility, net
 
1,089,725

 
401,773

Below-market lease liabilities, net
 
166,708

 
173,479

Accounts payable and accrued expenses
 
141,126

 
145,611

Deferred rent and other liabilities
 
70,220

 
69,714

Distributions payable
 
190,246

 
186,623

Operating lease liabilities
 
228,120

 

Total liabilities
 
6,820,750


6,663,349

Commitments and contingencies (Note 10)
 


 


General Partner's preferred equity, 42,871,246 and 42,834,138 General Partner Series F Preferred Units issued and outstanding as of March 31, 2019 and December 31, 2018, respectively
 
693,308

 
710,325

General Partner's common equity, 971,576,377 and 967,515,165 General Partner OP Units issued and outstanding as of March 31, 2019 and December 31, 2018, respectively
 
6,399,209

 
6,446,734

Limited Partner's preferred equity, 49,766 and 86,874 Limited Partner Series F Preferred Units issued and outstanding as of March 31, 2019 and December 31, 2018, respectively
 
1,927

 
2,883

Limited Partner's common equity, 23,715,908 Limited Partner OP Units issued and outstanding as of each of March 31, 2019 and December 31, 2018
 
137,123

 
138,931

Total partners’ equity
 
7,231,567


7,298,873

Non-controlling interests
 
1,307

 
1,271

Total equity
 
7,232,874


7,300,144

Total liabilities and equity
 
$
14,053,624


$
13,963,493


The accompanying notes are an integral part of these statements.

10

Table of Contents
VEREIT OPERATING PARTNERSHIP, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for per unit data) (Unaudited)

 
 
Three Months Ended March 31,
 
 
2019
 
2018
Rental revenue
 
$
316,843

 
$
315,074

Operating expenses:
 
 
 
 
Acquisition-related
 
985

 
777

Insurance recoveries, net of litigation and non-routine costs
 
(21,492
)
 
21,740

Property operating
 
32,378

 
30,565

General and administrative
 
14,846

 
15,240

Depreciation and amortization
 
136,555

 
166,152

Impairments
 
11,988

 
6,036

Restructuring
 
9,076

 

Total operating expenses
 
184,336


240,510

Other (expenses) income:
 
 
 
 
Interest expense
 
(71,254
)
 
(70,425
)
Other (loss) income, net
 
(402
)
 
7,709

Equity in income and gain on disposition of unconsolidated entities
 
500

 
1,065

Gain on disposition of real estate and real estate assets held for sale, net
 
10,831

 
17,335

Total other expenses, net
 
(60,325
)

(44,316
)
Income before taxes
 
72,182


30,248

Provision for income taxes
 
(1,211
)
 
(1,212
)
Income from continuing operations
 
70,971

 
29,036

Income from discontinued operations, net of income taxes
 

 
3,501

Net income
 
70,971


32,537

Net loss attributable to non-controlling interests (1)
 
28

 
40

Net income attributable to the OP
 
$
70,999