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Section 1: 8-K (8-K)

ver-20201105
000150738500015280598-K11/5/2020falsefalse2325 E. Camelback Road, 9th FloorPhoenix,AZ85016800606-361000015073852020-11-052020-11-050001507385ver:VEREITOperatingPartnershipL.P.Member2020-11-052020-11-050001507385us-gaap:CommonStockMemberexch:XNYS2020-11-052020-11-050001507385us-gaap:SeriesFPreferredStockMemberexch:XNYS2020-11-052020-11-05

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 5, 2020
VEREIT, INC.
VEREIT OPERATING PARTNERSHIP, L.P.
(Exact name of Registrant as specified in its charter)
Maryland001-3526345-2482685
Delaware333-19778045-1255683
(State or other jurisdiction of incorporation)       (Commission File Number)(I.R.S. Employer Identification No.)
2325 E. Camelback Road, 9th Floor
Phoenix,AZ85016
(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:

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

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

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

     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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.)VERNew York Stock Exchange
6.70% Series F Cumulative Redeemable Preferred Stock $0.01 par value per share (VEREIT, Inc.)VER PRFNew York Stock Exchange
 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    
Emerging growth company    
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 2.02. Results of Operations and Financial Condition.
On November 5, 2020, VEREIT, Inc. together with its operating partnership, VEREIT Operating Partnership, L.P. (collectively, the “Company”) furnished the following documents: (i) a press release relating to its third quarter financial results and related matters, attached hereto as Exhibit 99.1; and (ii) supplemental information for the quarter ended September 30, 2020, attached hereto as Exhibit 99.2. The information set forth in this Item 2.02 and in the attached Exhibits 99.1 and 99.2 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 2.02, including Exhibits 99.1 and 99.2, shall not be deemed incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933 (the “Securities Act”), as amended, regardless of any general incorporation language in such filing.
Item 7.01 Regulation FD Disclosure.
On November 5, 2020, 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 99.3. The information set forth in this Item 7.01 and in the attached Exhibit 99.3 is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that Section. The information set forth in this Item 7.01, including Exhibit 99.3, shall not be deemed incorporated by reference into any filing under the Exchange Act or the Securities Act regardless of any general incorporation language in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
99.1 
99.2 
99.3
104Cover Page Interactive Data File (embedded within the Inline XBRL document).




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 5, 2020


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Section 2: EX-99.1 (EX-99.1)

Document

Exhibit 99.1
405874172_rgbhorzvereitlogo093018a091.jpg
FOR IMMEDIATE RELEASE

VEREIT® Announces Third Quarter 2020 Operating Results
Rent Collection for the Quarter of 94% Which Increased to 97% for October
Acquired $300 Million of 6.7% Preferred Stock and Improved Debt Metrics

Phoenix, AZ, November 5, 2020 -- VEREIT, Inc. (NYSE: VER) (“VEREIT” or the “Company”) announced today its operating results for the three months ending September 30, 2020.

Third Quarter 2020 Financial and Operating Highlights
Net income of $98.0 million and net income per diluted share of $0.08; Total debt - as reported decreased from $6.0 billion to $5.9 billion
Achieved $0.15 AFFO per diluted share
Rent collection for the quarter of 94% which increased to 97% for October
Invested $488.9 million of capital year-to-date, including $300.0 million allocated to the redemption of the Company’s 6.7% Series F preferred stock in the third quarter and $188.9 million of property acquisitions
Acquired $246.8 million in the third quarter for the industrial partnership and $33.1 million for the office partnership earlier in the year
Dispositions totaled $357.7 million year-to-date, including the Company’s share of dispositions contributed to the office partnership of $110.0 million, with $158.3 million in the third quarter
Adjusted Principal Outstanding decreased from $6.1 billion to $6.0 billion and Net Debt was unchanged at $5.8 billion, or 39.9% Net Debt to Gross Real Estate Investments
Net Debt to Normalized EBITDA decreased from 6.08x to 5.76x

Third Quarter 2020 Financial Results

Total Revenues
Total revenues for the quarter ended September 30, 2020 decreased $8.0 million to $295.3 million as compared to total revenues of $303.3 million for the same quarter in 2019.

Net Income (Loss) and Net Income (Loss) Attributable to Common Stockholders per Diluted Share
Net income for the quarter ended September 30, 2020 increased $839.5 million to $98.0 million as compared to a net loss of $(741.5) million for the same quarter in 2019, and net income per diluted share increased $0.84 to $0.08 for the quarter ended September 30, 2020, as compared to a net loss per diluted share of $(0.76) for the same quarter in 2019.

Normalized EBITDA
Normalized EBITDA for the quarter ended September 30, 2020 decreased $11.4 million to $252.9 million as compared to Normalized EBITDA of $264.3 million for the same quarter in 2019.

Funds From Operations Attributable to Common Stockholders and Limited Partners (“FFO”) and FFO per Diluted Share
FFO for the quarter ended September 30, 2020 increased $828.3 million to $171.2 million, as compared to $(657.1) million for the same quarter in 2019, and FFO per diluted share increased $0.82 to $0.16 for the quarter ended September 30, 2020, as compared to FFO per diluted share of $(0.66) for the same quarter in 2019.

Adjusted FFO Attributable to Common Stockholders and Limited Partners (“AFFO”) and AFFO per Diluted Share
AFFO for the quarter ended September 30, 2020 decreased $11.1 million to $166.5 million, as compared to $177.6 million for the same quarter in 2019, and AFFO per diluted share decreased $0.03 to $0.15 for the quarter ended September 30, 2020, as compared to $0.18 for the same quarter in 2019.


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Due to the effects of the COVID-19 pandemic, AFFO for the third quarter includes deferred rent of $3.9 million and the negative impacts from $6.5 million of abatement amendments, of which $5.9 million relate to third quarter rent and $0.6 million to second quarter rent, and $9.2 million of reserved rent.

Balance Sheet and Liquidity
As of the end of the third quarter, the Company had corporate liquidity of approximately $1.7 billion, comprised of $207.3 million in cash and cash equivalents and $1.5 billion of availability under its credit facility. In addition, secured debt was reduced by $62.4 million in the third quarter, bringing the total amount reduced for the year to $195.0 million.

Capital Market Activity
The Company redeemed $300.0 million of VEREIT’s 6.7% Series F preferred stock with $150.0 million completed on July 22, 2020 and $150.0 million completed on September 20, 2020. This leaves approximately $473.0 million outstanding.
The Company repurchased $27.6 million of its 3.75% Convertible Senior Notes due December 2020, including $8.7 million subsequent to the third quarter. This brings the total repurchased for the year to $77.8 million, of which $244.0 million principal amount is remaining and liquidity available noted above can be utilized for repayment at maturity.
During the quarter and subsequent to September 30, 2020, the Company issued 13.8 million shares at a weighted average price of $6.82 for gross proceeds of $93.8 million under its “at the market” equity offering program.

Consolidated Financial Statistics
Financial Statistics as of the quarter ended September 30, 2020 are as follows: Net Debt to Normalized EBITDA of 5.76x, Fixed Charge Coverage Ratio of 3.3x, Unencumbered Asset Ratio of 81.6%, Net Debt to Gross Real Estate Investments of 39.9%, and Weighted Average Debt Term of 4.6 years.

Reverse Stock Split
On November 5, 2020, VEREIT announced a one-for-five reverse stock split of its common stock, par value $0.01 per share (“Common Stock”) which is expected to be effective after markets close on December 17, 2020 and whereby every five shares of VEREIT's issued and outstanding shares of Common Stock, $0.01 par value per share, will be converted into one share of Common Stock, $0.01 par value per share. VEREIT’s Common Stock will be assigned a new CUSIP number and is expected to begin trading on the New York Stock Exchange (“NYSE”) on a post-split basis beginning December 18, 2020. Fractional shares resulting from the reverse stock split will be paid in cash based on the trailing average closing price of VEREIT’s Common Stock on the NYSE for a period of three days prior to the effective date. The reverse stock split will affect all record holders of VEREIT’s Common Stock uniformly and will not affect any record holder’s percentage ownership interest, except for de minimis changes as a result of the elimination of fractional shares. The reverse stock split will reduce the number of shares of Common Stock outstanding but will not affect the number of VEREIT’s authorized shares of Common Stock.

Common Stock Dividend Information
On November 4, 2020, the Company’s Board of Directors declared a quarterly dividend for the fourth quarter of 2020 of $0.077 per share consistent with last quarter’s dividend. The dividend will be paid on January 15, 2021 to common stockholders of record as of December 31, 2020 and will be $0.385 per share after accounting for the expected one-for-five reverse stock split. The Board of Directors has not made any decisions with respect to its dividend policy beyond the fourth quarter and will continue to monitor the current environment.

Management Commentary
Glenn J. Rufrano, Chief Executive Officer, stated, “We have improved operations on many fronts: collections for October were 97%, Net Debt to EBITDA decreased from 6.08x to 5.76x and rent relief was down from Q2 to Q3. Early renewal leasing, with 2.5 million square feet this year, was a catalyst to our Q3 office dispositions while also reducing future exposures. Capital allocation this quarter focused on reducing our preferred stock by $300 million and will be expanded to include properties chosen to provide stability and growth.”

Real Estate Portfolio
As of September 30, 2020, the Company’s portfolio consisted of 3,820 properties with total portfolio occupancy of 98.5%, investment grade tenancy of 37.7% and a weighted-average remaining lease term of 8.4 years.


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Real Estate Leasing Activity
During the quarter, the Company entered into 76 new and renewal leases on approximately 1.5 million square feet, 1.7% of the portfolio. Leasing activity included 0.3 million square feet of early renewals. This activity does not include pandemic related amendments.

Industrial Partnership Acquisitions
During the quarter ended September 30, 2020, the Company closed on an external property acquisition for $246.8 million of which the Company’s cash contribution to the purchase amount was $18.7 million.
Dispositions
During the quarter ended September 30, 2020, the Company disposed of 16 properties for an aggregate sales price of $158.3 million. Of the total disposition amount, $150.0 million was used in the total weighted average cash cap rate calculation of 6.1%, including $2.1 million in net sales of Red Lobster restaurants. The gain on third quarter sales was approximately $42.9 million.

Tenant Credit Updates
During the third quarter, Thai Union Group PCL (BKK:TU) (“Thai Union”), an investor group led by international restaurant executives, and Red Lobster Management acquired the remaining 51% of Red Lobster from Golden Gate Capital. Red Lobster remains headquartered in Orlando led by the current CEO Kim Loopdrup and the management team. With more than 40 years of industry experience, Thai Union is a leading, publicly-traded global seafood supplier with an enterprise value of approximately $4 billion and the transaction deepens Thai Union's more than 20-year commitment to Red Lobster. Given Thai Union's size, financial flexibility, large investment and integrated relationship as both a supplier and equity investor, the credit markets reacted positively to the transaction.

On October 21, 2020, Tractor Supply received public issuer ratings of BBB from S&P Global Ratings and Baa1 from Moody’s Investors Service. Inclusive of these new ratings, VEREIT’s investment grade tenancy increases from 37.7% to 39.2% and from 46.4% to 49.7% within retail.

COVID-19 Company Update
As of October 23, 2020, VEREIT had received rent of approximately 92% for July, 94% for August, and 95% for September, bringing third quarter collection to 94%. Of the uncollected rent balance for the third quarter, the Company has entered into deferral agreements representing 1.4% of third quarter rents, and blend and extend abatements representing 2.1% of third quarter rents.

In addition, as of October 23, 2020, VEREIT had received rent of approximately 97% for October, which includes approximately 2% to be paid in arrears by a Government agency tenant. Of the uncollected rent balance for October, the Company has entered into rent deferral agreements representing 0.02% of October rents and an immaterial amount of abatements.

The property type breakdown for rent collection is as follows:
Property TypeJulAugSeptOct
Total Retail97%97%98%98%
Casual Dining61%75%73%91%
Quick Service90%90%91%89%
Total Restaurant74%82%81%90%
Total Office97%97%98%98%
Total Industrial95%99%100%100%
Further rent collection and relief request details can be found in our investor presentation filed today.

2020 Guidance
The Company expects its 2020 AFFO per diluted share to approximate $0.62 or $3.10 adjusting for the expected one-for-five reverse stock split. See reconciliation to net income per share at the end of this release.


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Subsequent Events

Acquisitions
From October 1, 2020 through October 30, 2020, acquisitions totaled $32.8 million including a mezzanine position for
an investment-grade distribution facility. Acquisitions year-to-date through October 30, 2020, totaled $188.9 million.

Dispositions
From October 1, 2020 through October 30, 2020, dispositions totaled $0.2 million. Dispositions year-to-date through October 30, 2020, totaled $357.7 million including the Company’s share of dispositions contributed to the office partnership of $110.0 million.


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Audio Webcast and Call Details
The live audio webcast will be available, beginning at 1:30 p.m. ET on Thursday, November 5, 2020, on the Company's Investor Relations website at: http://ir.vereit.com/. The dial-in information is as follows: (844) 746-0748 (domestic) or (412) 317-5274 (international).  Participants should log in 10-15 minutes early.

Approximately one hour following the call, a replay of the webcast will be available at the link above and archived for up to 12 months. A telephone replay of the conference call can also be accessed by dialing (877) 344-7529 (domestic) or (412) 317-0088 (international), passcode 10148276. The telephone replay will be available until November 19, 2020.

About the Company
VEREIT is a full-service real estate operating company which owns and manages one of the largest portfolios of single-tenant commercial properties in the U.S. The Company has total real estate investments of $14.6 billion including approximately 3,800 properties and 88.9 million square feet. VEREIT’s business model provides equity capital to creditworthy corporations in return for long-term leases on their properties. VEREIT is a publicly traded Maryland corporation listed on the New York Stock Exchange. VEREIT uses, and intends to continue to use, its Investor Relations website, which can be found at www.VEREIT.com, as a means of disclosing material nonpublic information and for complying with its disclosure obligations under Regulation FD. Additional information about VEREIT can be found through social media platforms such as Twitter and LinkedIn.

Media Contact
Parke Chapman
Rubenstein Associates
212.843.8489 | pchapman@rubenstein.com

Investor Contact
Bonni Rosen, Senior Vice President, Investor Relations                
VEREIT            
877.405.2653| BRosen@VEREIT.com
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About the Data
Rent collection percentages disclosed are based on contractual rent and recoveries paid by tenants to cover estimated tax, insurance and common area maintenance expenses, including the Company's pro rata share of such amounts related to properties owned by unconsolidated joint ventures. Percentages are calculated using a denominator that reflects pre-COVID-19 rents that has not been adjusted for any rent relief granted. Amounts exclude any tenants in bankruptcy prior to the pandemic.

In the second quarter of 2020, the Company updated its definition of Normalized EBITDA to include the impact of straight-line rent, in order to be consistent with peer companies. The Company recast the data presented for prior periods, including ratios impacted by the change.

Descriptions of FFO and AFFO, EBITDA and Normalized EBITDA, Principal Outstanding and Adjusted Principal Outstanding, Net Debt, Interest Expense, Excluding Non-Cash Amortization, Fixed Charge Coverage Ratio, Net Debt to Normalized EBITDA Annualized Ratio, Net Debt Leverage Ratio, and Unencumbered Asset Ratio are provided below. Refer to the subsequent tables for reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measure and the calculations of these financial ratios.
Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”) and Normalized EBITDA
Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts, Inc. (“Nareit”) has promulgated a supplemental performance measure known as Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate. Nareit defines EBITDAre as net income or loss computed in accordance with GAAP, adjusted for interest expense, income tax expense (benefit), depreciation and amortization, impairment write-downs on real estate, gains or losses from disposition of property and our pro rata share of EBITDAre adjustments related to unconsolidated partnerships and joint ventures. We calculated EBITDAre in accordance with Nareit's definition described above.
In addition to EBITDAre, we use Normalized EBITDA as a non-GAAP supplemental performance measure to evaluate the operating performance of the Company. Normalized EBITDA, as defined by the Company, represents EBITDAre, modified to exclude non-routine items such as acquisition-related expenses, litigation and non-routine costs, net, net revenue or expense earned or incurred that is related to the services agreement associated with a discontinued operation, gains or losses on sale of investment securities or mortgage notes receivable, payments on fully reserved loan receivables and restructuring expenses. We also exclude certain non-cash items such as impairments of goodwill and intangible assets, gains or losses on derivatives, gains or losses on the extinguishment or forgiveness of debt, write-off of program development costs, and amortization of intangibles, above-market lease assets and below-market lease liabilities. Normalized EBITDA omits the Normalized EBITDA impact of Excluded Properties. Management believes that excluding these costs from EBITDAre provides investors with supplemental performance information that is consistent with the performance models and analysis used by management, and provides investors a view of the performance of our portfolio over time. Therefore, EBITDAre and Normalized EBITDA should not be considered as an alternative to net income, as computed in accordance with GAAP. 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. EBITDAre and Normalized EBITDA may not be comparable to similarly titled measures of other companies.
Excluded Properties
Excluded Properties are properties for which (i) the related mortgage loan is in default, and (ii) management decides to transfer the properties to the lender in connection with settling the mortgage note obligation. Certain non-GAAP measures and operating metrics omit the impact of such properties for the month beginning with the date that such criteria are met and ending with the disposition date, in order to better reflect the ongoing operations of the Company.
At and during the three months ended September 30, 2020, June 30, 2020, and September 30, 2019 there were no Excluded Properties.
Fixed Charge Coverage Ratio
Fixed Charge Coverage Ratio is the sum of (i) Interest Expense, excluding non-cash amortization, (ii) secured debt principal amortization on Adjusted Principal Outstanding and (iii) dividends attributable to preferred shares divided by Normalized EBITDA. Management believes that Fixed Charge Coverage Ratio is a useful supplemental measure of our ability to satisfy fixed financing obligations.
Fixed Rate Debt
Fixed Rate Debt includes variable rate debt effectively fixed through the use of interest rate swap agreements.
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Funds from Operations (“FFO”) and Adjusted Funds from Operations (“AFFO”)
Due to certain unique operating characteristics of real estate companies, as discussed below, Nareit, an industry trade group, has promulgated a supplemental performance measure known as FFO, which we believe to be an appropriate supplemental performance measure to reflect the operating performance of a REIT. FFO is not equivalent to our net income or loss as determined under U.S. GAAP.
Nareit defines FFO as net income or loss computed in accordance with U.S. GAAP adjusted for gains or losses from disposition of property, depreciation and amortization of real estate assets, impairment write-downs on real estate, and our pro rata share of FFO adjustments related to unconsolidated partnerships and joint ventures. We calculate FFO in accordance with Nareit’s definition described above.
In addition to FFO, we use AFFO as a non-GAAP supplemental financial performance measure to evaluate the operating performance of the Company. AFFO, as defined by the Company, excludes from FFO non-routine items such as acquisition-related expenses, litigation and non-routine costs, net, net revenue or expense earned or incurred that is related to the services agreement associated with a discontinued operation, gains or losses on sale of investment securities or mortgage notes receivable, payments on fully reserved loan receivables and restructuring expenses. We also exclude certain non-cash items such as impairments of goodwill and intangible assets, straight-line rent, net direct financing lease adjustments, gains or losses on derivatives, reserves for loan loss, gains or losses on the extinguishment or forgiveness of debt, non-current portion of the tax benefit or expense, equity-based compensation and amortization of intangible assets, deferred financing costs, premiums and discounts on debt and investments, above-market lease assets and below-market lease liabilities. We omit the impact of the Excluded Properties and related non-recourse mortgage notes from FFO to calculate AFFO. Management believes that excluding these costs from FFO provides investors with supplemental performance information that is consistent with the performance models and analysis used by management, and provides investors a view of the performance of our portfolio over time. AFFO allows for a comparison of the performance of our operations with other publicly-traded REITs, as AFFO, or an equivalent measure, is routinely reported by publicly-traded REITs, and we believe often used by analysts and investors for comparison purposes.
For all of these reasons, we believe FFO and AFFO, in addition to net income (loss), as defined by U.S. GAAP, are helpful supplemental performance measures and useful in understanding the various ways in which our management evaluates the performance of the Company over time. However, not all REITs calculate FFO and AFFO the same way, so comparisons with other REITs may not be meaningful. FFO and AFFO should not be considered as alternatives to net income (loss) and are not intended to be used as a liquidity measure indicative of cash flow available to fund our cash needs. Neither the SEC, Nareit, nor any other regulatory body has evaluated the acceptability of the exclusions used to adjust FFO in order to calculate AFFO and its use as a non-GAAP financial performance measure.
Gross Real Estate Investments
Gross Real Estate Investments represent total gross real estate and related assets of Operating Properties, equity investments in the Cole REITs, investment in direct financing leases, investment securities backed by real estate and mortgage notes receivable, and the Company's pro rata share of such amounts related to properties owned by unconsolidated joint ventures, net of gross intangible lease liabilities. We believe that the presentation of Gross Real Estate Investments, which shows our total investments in real estate and related assets, in connection with Net Debt, provides useful information to investors to assess our overall financial flexibility, capital structure and leverage. Gross Real Estate Investments should not be considered as an alternative to the Company's real estate investments balance as determined in accordance with GAAP or any other GAAP financial measures and should only be considered together with, and as a supplement to, the Company's financial information prepared in accordance with GAAP.
Interest Expense, Excluding Non-Cash Amortization
Interest Expense, excluding non-cash amortization is a non-GAAP measure that represents interest expense incurred on the outstanding principal balance of our debt and the Company's pro rata share of the unconsolidated joint ventures' outstanding principal balance. This measure excludes (i) the amortization of deferred financing costs, premiums and discounts, which is included in interest expense in accordance with GAAP, and (ii) the impact of Excluded Properties and related non-recourse mortgage notes. We believe that the presentation of Interest Expense, excluding non-cash amortization, which shows the interest expense on our contractual debt obligations, provides useful information to investors to assess our overall solvency and financial flexibility. Interest Expense, excluding non-cash amortization should not be considered as an alternative to the Company's interest expense as determined in accordance with GAAP or any other GAAP financial measures and should only be considered together with and as a supplement to the Company's financial information prepared in accordance with GAAP.
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Net Debt Leverage Ratio
Net Debt Leverage Ratio equals Net Debt divided by Gross Real Estate Investments. We believe that the presentation of Net Debt Leverage Ratio provides useful information to investors because our management reviews Net Debt Leverage Ratio as part of its management of our overall liquidity, financial flexibility, capital structure and leverage.
Net Debt, Principal Outstanding and Adjusted Principal Outstanding 
Principal Outstanding is a non-GAAP measure that represents the Company's outstanding principal debt balance, excluding certain GAAP adjustments, such as premiums and discounts, financing and issuance costs, and related accumulated amortization. Adjusted Principal Outstanding includes the Company's pro rata share of the unconsolidated joint ventures' outstanding principal debt balance. We believe that the presentation of Principal Outstanding and Adjusted Principal Outstanding, which show our contractual debt obligations, provides useful information to investors to assess our overall financial flexibility, capital structure and leverage. Principal Outstanding and Adjusted Principal Outstanding should not be considered as alternatives to the Company's consolidated debt balance as determined in accordance with GAAP or any other GAAP financial measures and should only be considered together with, and as a supplement to, the Company's financial information prepared in accordance with GAAP.
Net Debt is a non-GAAP measure used to show the Company's Adjusted Principal Outstanding, less all cash and cash equivalents and the Company's pro rata share of unconsolidated joint ventures' cash and cash equivalents. We believe that the presentation of Net Debt provides useful information to investors because our management reviews Net Debt as part of its management of our overall liquidity, financial flexibility, capital structure and leverage.
Net Debt to Normalized EBITDA Annualized Ratio
Net Debt to Normalized EBITDA Annualized (“Net Debt to Normalized EBITDA”) equals Net Debt divided by the respective quarter Normalized EBITDA multiplied by four. We believe that the presentation of Net Debt to Normalized EBITDA Annualized provides useful information to investors because our management reviews Net Debt to Normalized EBITDA Annualized as part of its management of our overall liquidity, financial flexibility, capital structure and leverage.
Net Debt to Normalized EBITDA Adjusted for Abated Rent Annualized Ratio
Net Debt to Normalized EBITDA Adjusted for Abated Rent Annualized equals Net Debt divided by the respective quarter Normalized EBITDA Adjusted for Abated Rent multiplied by four. Management believes that Net Debt to Normalized EBITDA Adjusted for Abated Rent Annualized is useful to investors because the period for which rent is abated is less than 12 months and therefore should not be annualized.
Unencumbered Asset Ratio
Unencumbered Asset Ratio equals unencumbered Gross Real Estate Investments divided by Gross Real Estate Investments. Management believes that Unencumbered Asset Ratio is a useful supplemental measure of our overall liquidity and leverage.
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Forward-Looking Statements
Information set forth herein contains “forward-looking statements” which reflect the Company’s expectations and projections regarding future events and plans, the Company’s future financial condition, results of operations, liquidity and business, including leasing, acquisitions, dispositions, rent receipts, rent relief requests, and rent relief granted, debt levels, maturities and refinancings, the expected reverse stock split, the payment of future dividends and the impact of COVID-19 on the Company’s business. Generally, the words “anticipates,” “assumes,” “believes,” “continues,” “could,” “estimates,” “expects,” “goals,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “targets,” “will,” variations of such words and similar expressions identify forward-looking statements. These forward-looking statements are based on information currently available and involve a number of known and unknown assumptions and risks, uncertainties and other factors, which are difficult to predict and beyond the Company’s control, that could cause actual events and plans or could cause the Company’s business, financial condition, liquidity and results of operations to differ materially from those expressed or implied in the forward-looking statements. Further, information regarding historical rent collections should not serve as an indication of future rent collections.
The following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: the Company’s ability to meet its 2020 guidance; the duration and extent of the impact of COVID-19 on our business and the businesses of our tenants (including their ability to timely make rental payments) and the economy generally; federal, state or local legislation or regulation that could impact the timely payment of rent by tenants in light of COVID-19; the Company’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 the Company’s properties; risks accompanying the management of its industrial and office partnerships; the impact of impairment charges in respect of certain of the Company’s properties; unexpected costs or liabilities that may arise from potential dispositions, including related to limited partnership, tenant-in-common and Delaware statutory trust real estate programs and the Company’s management with respect to such programs; competition in the acquisition and disposition of properties and in the leasing of its properties including that the Company may be unable to acquire, dispose of, or lease properties on advantageous terms or at all; risks associated with bankruptcies or insolvencies of tenants, from tenant defaults generally or from the unpredictability of the business plans and financial condition of the Company’s tenants, which are heightened as a result of the COVID-19 pandemic; the Company’s ability to access capital markets (including on attractive terms) as a result of the impact of COVID-19; risks associated with the Company’s substantial indebtedness, including that such indebtedness may affect the Company’s ability to pay dividends and that the terms and restrictions within the agreements governing the Company’s indebtedness may restrict its borrowing and operating flexibility; the ability to retain or hire key personnel; and the continuation or deterioration of current market conditions. Additional factors that may affect future results are contained in the Company’s filings with the SEC, which are available at the SEC’s website at www.sec.gov. The Company 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.




9


VEREIT, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except for share and per share data) (Unaudited)
September 30,
2020
June 30,
2020
ASSETS
Real estate investments, at cost:
Land$2,691,122 $2,705,149 
Buildings, fixtures and improvements10,046,076 10,117,636 
Intangible lease assets1,872,899 1,891,831 
Total real estate investments, at cost14,610,097 14,714,616 
Less: accumulated depreciation and amortization3,829,368 3,756,132 
Total real estate investments, net10,780,729 10,958,484 
Operating lease right-of-use assets205,346 208,037 
Investment in unconsolidated entities100,339 86,300 
Cash and cash equivalents207,321 278,883 
Restricted cash14,955 21,203 
Rent and tenant receivables and other assets, net391,239 382,409 
Goodwill1,337,773 1,337,773 
Real estate assets held for sale, net1,896 48,093 
Total assets$13,039,598 $13,321,182 
LIABILITIES AND EQUITY
Mortgage notes payable, net$1,330,174 $1,393,652 
Corporate bonds, net3,406,389 3,404,935 
Convertible debt, net252,077 270,152 
Credit facility, net896,630 896,314 
Below-market lease liabilities, net124,009 130,208 
Accounts payable and accrued expenses112,101 112,551 
Derivative, deferred rent and other liabilities162,952 161,538 
Distributions payable85,420 85,231 
Operating lease liabilities214,102 215,322 
Total liabilities6,583,854 6,669,903 
Series F preferred stock
189 309 
Common stock
10,913 10,779 
Additional paid-in capital13,048,678 13,256,288 
Accumulated other comprehensive loss
(97,008)(106,109)
Accumulated deficit(6,514,171)(6,517,303)
Total stockholders’ equity6,448,601 6,643,964 
Non-controlling interests7,143 7,315 
Total equity6,455,744 6,651,279 
Total liabilities and equity
$13,039,598 $13,321,182 
10


VEREIT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for per share data) (Unaudited)
Three Months Ended September 30,
20202019
Revenues:
Rental$293,692 $302,985 
Fees from managed partnerships1,586 316 
Total revenues295,278 303,301 
Operating expenses:
Acquisition-related1,050 1,199 
Litigation and non-routine costs, net105 832,024 
Property operating31,400 30,822 
General and administrative14,774 14,483 
Depreciation and amortization109,191 115,111 
Impairments16,397 3,944 
Restructuring— 783 
Total operating expenses172,917 998,366 
Other (expense) income:
Interest expense(66,935)(67,889)
Loss on extinguishment and forgiveness of debt, net61 975 
Other income, net73 2,421 
Equity in income of unconsolidated entities663 677 
Gain on disposition of real estate and real estate assets held for sale, net42,814 18,520 
Total other expenses, net(23,324)(45,296)
Income before taxes99,037 (740,361)
Provision for income taxes(1,054)(1,168)
Net income97,983 (741,529)
Net income attributable to non-controlling interests(51)15,089 
Net income attributable to the General Partner
$97,932 $(726,440)
Basic and diluted net income per share attributable to common stockholders
$0.08 $(0.76)
Distributions declared per common share
$0.0770 $0.1375 




11


VEREIT, INC.
EBITDAre AND NORMALIZED EBITDA
(In thousands) (Unaudited)
Three Months Ended
September 30,
2020
June 30,
2020
September 30,
2019
Net income$97,983 $54,239 $(741,529)
 Adjustments:
Interest expense66,935 65,613 67,889 
Depreciation and amortization109,191 110,599 115,111 
Provision for income taxes1,054 1,053 1,168 
Proportionate share of adjustments for unconsolidated entities
2,451 1,775 1,337 
Gain on disposition of real estate assets, net(42,814)(8,795)(18,520)
Impairments of real estate16,397 12,094 3,944 
EBITDAre$251,197 $236,578 $(570,600)
Acquisition-related expenses1,050 1,169 1,199 
Litigation and non-routine costs, net105 (118)832,024 
(Gain) loss on investments(76)142 28 
Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities
393 788 692 
(Gain) loss on extinguishment and forgiveness of debt, net(61)200 (975)
Net direct financing lease adjustments 381 372 411 
Restructuring expenses
— — 783 
Other adjustments, net
(8)54 724 
 Proportionate share of adjustments for unconsolidated entities
(48)(706)97 
Adjustment for Excluded Properties
— — (57)
Normalized EBITDA $252,933 $238,479 $264,326 
Normalized EBITDA annualized$1,011,732 $953,916 $1,057,304 


















12


VEREIT, INC.
FUNDS FROM OPERATIONS
(In thousands, except for share and per share data) (Unaudited)
Three Months Ended September 30,
20202019
Net income$97,983 $(741,529)
Dividends on non-convertible preferred stock (10,771)(16,578)
Gain on disposition of real estate assets, net(42,814)(18,520)
Depreciation and amortization of real estate assets 108,803 114,695 
Impairment of real estate 16,397 3,944 
Proportionate share of adjustments for unconsolidated entities
1,635 841 
FFO attributable to common stockholders and limited partners$171,233 $(657,147)
Weighted-average shares outstanding - basic1,083,687,807 978,982,729 
Effect of weighted-average Limited Partner OP Units and dilutive securities1,450,569 23,916,923 
Weighted-average shares outstanding - diluted1,085,138,376 1,002,899,652 
FFO attributable to common stockholders and limited partners per diluted share$0.158 $(0.655)



















13


VEREIT, INC.
ADJUSTED FUNDS FROM OPERATIONS
(In thousands, except for share and per share data) (Unaudited)
Three Months Ended September 30,
20202019
FFO attributable to common stockholders and limited partners
$171,233 $(657,147)
Acquisition-related expenses1,050 1,199 
Litigation and non-routine costs, net105 832,024 
Loss on investments
(76)28 
Amortization of premiums and discounts on debt and investments, net
(201)(1,177)
Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities
393 692 
Net direct financing lease adjustments381 411 
Amortization and write-off of deferred financing costs3,114 3,319 
Loss on extinguishment and forgiveness of debt, net(61)(975)
Straight-line rent(12,595)(5,470)
Equity-based compensation2,991 2,924 
Restructuring expenses— 783 
Other adjustments, net379 1,138 
Proportionate share of adjustments for unconsolidated entities
(166)(128)
Adjustment for Excluded Properties— (41)
AFFO attributable to common stockholders and limited partners$166,547 $177,580 
Weighted-average shares outstanding - basic1,083,687,807 978,982,729 
Effect of weighted-average Limited Partner OP Units and dilutive securities1,450,569 23,916,923 
Weighted-average shares outstanding - diluted1,085,138,376 1,002,899,652 
AFFO attributable to common stockholders and limited partners per diluted share$0.153 $0.177 













14


VEREIT, INC.
FINANCIAL AND OPERATIONS STATISTICS AND RATIOS
(Dollars in thousands) (Unaudited)
Three Months Ended
September 30,
2020
Interest expense - as reported$66,935 
Adjustments:
Amortization of deferred financing costs and other non-cash charges(3,212)
Amortization of net premiums299 
Proportionate share of amounts for unconsolidated entities(691)
Interest Expense, Excluding Non-Cash Amortization$64,713 
Three Months Ended
September 30,
2020
Interest Expense, Excluding Non-Cash Amortization$64,713 
Secured debt principal amortization834 
Dividends attributable to preferred shares
10,771 
Total fixed charges76,318 
Normalized EBITDA252,933 
Fixed Charge Coverage Ratio3.31x
September 30,
2020
June 30,
2020
Mortgage notes payable, net$1,330,174 $1,393,652 
Corporate bonds, net3,406,389 3,404,935 
Convertible debt, net252,077 270,152 
Credit facility, net896,630 896,314 
Total debt - as reported5,885,270 5,965,053 
Deferred financing costs, net39,204 41,152 
Net discounts (premiums)12,343 11,860 
Principal Outstanding5,936,817 6,018,065 
Proportionate share of amounts for unconsolidated entities 106,516 68,360 
Adjusted Principal Outstanding$6,043,333 $6,086,425 
Cash and cash equivalents(207,321)(278,883)
Pro rata share of unconsolidated joint ventures’ cash and cash equivalents(3,776)(3,433)
Net Debt $5,832,236 $5,804,109 
15


September 30,
2020
Total real estate investments, at cost - as reported$14,610,097 
Adjustments:
Investment in Cole REITs6,943 
Gross assets held for sale2,379 
Investment in direct financing leases, net8,198 
Mortgage notes receivable, net15,727 
Gross below market leases(227,165)
Proportionate share of amounts for unconsolidated entities 205,678 
Gross Real Estate Investments$14,621,857 
September 30,
2020
June 30,
2020
Net Debt $5,832,236 $5,804,109 
Normalized EBITDA Annualized1,011,732 953,916 
Net Debt to Normalized EBITDA Annualized Ratio5.76x6.08x

September 30,
2020
Net Debt $5,832,236 
Gross Real Estate Investments14,621,857 
Net Debt Leverage Ratio39.9 %
Unencumbered Gross Real Estate Investments$11,936,645 
Gross Real Estate Investments14,621,857 
Unencumbered asset ratio81.6 %

16


VEREIT, INC.
ADJUSTED FUNDS FROM OPERATIONS PER DILUTED SHARE - 2020 GUIDANCE
(Unaudited)

The Company expects its 2020 AFFO per diluted share to approximate $0.62 or $3.10 adjusting for the expected one-for-five reverse stock split.

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.
2020
Diluted net income per share attributable to common stockholders and limited partners (1)
$0.24 
Gain on disposition of real estate assets, net (2)
(0.07)
Depreciation and amortization of real estate assets (2)
0.41 
Impairment of real estate (2)
0.03 
FFO attributable to common stockholders and limited partners per diluted share0.61 
Adjustments (3)
0.01 
AFFO attributable to common stockholders and limited partners per diluted share$0.62 
_____________________________________
(1)Includes impact of dividends to be paid to preferred shareholders.
(2)Includes actual amounts for the nine months ended September 30, 2020.
(3)Includes (i) non-routine items such as acquisition-related expenses, litigation and other non-routine costs, net, and (ii) certain non-cash items such as straight-line rent, net direct financing lease adjustments, equity-based compensation and amortization of intangible assets, deferred financing costs, premiums and discounts on debt , above-market lease assets and below-market lease liabilities.
17
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Section 3: EX-99.2 (EX-99.2)

Document
Exhibit 99.2
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Q3 2020 SUPPLEMENTAL INFORMATION
VEREIT Supplemental Information
September 30, 2020
SectionPage
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Company Overview
Quarterly Financial Summary
Financial and Operations Statistics and Ratios
Key Balance Sheet Metrics and Capital Structure
Balance Sheets
Statements of Operations
Funds From Operations (FFO)
Adjusted Funds From Operations (AFFO)
EBITDAre and Normalized EBITDA
Net Operating Income
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Same Store Contract Rental Revenue
Debt and Preferred Equity Summary
Credit Facility and Corporate Bond Covenants
Acquisitions and Dispositions
Diversification Statistics
Top 10 Concentrations
Tenants Comprising Over 1% of Annualized Rental Income
Tenant Industry Diversification
Property Geographic Diversification
Lease Expirations
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Lease Summary
Property Type Diversification and Rent Coverage
Unconsolidated Joint Venture Investment Summary
Definitions
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See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 2



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Q3 2020 SUPPLEMENTAL INFORMATION
About the Data
This data and other information described herein are as of and for the three months ended September 30, 2020, unless otherwise indicated. Certain balances have been reclassified to conform with the current period's presentations, including partnership fees earned from services provided to our unconsolidated joint ventures, which were previously included in other income, net. Future performance may not be consistent with past performance and is subject to change and inherent risks and uncertainties. This information should be read in conjunction with the financial statements and the Management's Discussion and Analysis of Financial Condition and Results of Operations sections contained in VEREIT, Inc.'s (the "Company," "VEREIT," "us," "our" and "we") Annual Report on Form 10-K for the year ended December 31, 2019 and Quarterly Reports on Form 10-Q for the periods ended September 30, 2020, June 30, 2020, March 31, 2020, and September 30, 2019.
The novel coronavirus ("COVID-19") pandemic has impacted all states where our tenants operate their businesses or where our properties are located, and measures taken to prevent or remediate COVID-19, including “shelter-in-place” or “stay-at-home” orders, other quarantine mandates and restrictions on the operations of certain types of businesses issued by local, state or federal authorities, have had an adverse effect on our business and the businesses of our tenants. While our business was not materially impacted during the nine months ended September 30, 2020 from the COVID-19 pandemic, our rent collection was impacted and for the third quarter was 94% of rental revenue. The full extent of the future impact of the COVID-19 pandemic on our business, financial condition, liquidity and results of operations is uncertain.
In the second quarter of 2020, the Company updated its definition of Normalized EBITDA to include the impact of straight-line rent, in order to be consistent with peer companies. The Company recast the data presented for prior periods, including ratios impacted by the change.
In the third quarter of 2019, the Company entered into agreements to settle certain outstanding litigation, including the class action litigation, In re American Realty Capital Properties, Inc. Litigation, No. 1:15-mc-00040 (AKH) (the “Class Action”). In accordance with the terms of the stipulation of settlement and settlement contemplated therein for the Class Action (the "Class Action Settlement"), certain defendants agreed to pay in the aggregate $1.025 billion, comprised of contributions from the Company’s former external manager and its principals (together, the “Former Manager”) totaling $225.0 million, $12.5 million from the Company’s former Chief Financial Officer (the “Former CFO”), $49.0 million from the Company’s former auditor, and the balance of $738.5 million from the Company. The contribution from the Company’s Former Manager and Former CFO was satisfied with a combination of (i) limited partner OP Units held by the Former Manager and Former CFO, (ii) amounts due related to dividends on certain of such limited partner OP Units previously withheld from distribution, (iii) the value of substantially all of the limited partner OP Units and dividends surrendered to the Company in July 2019 as a result of a settlement by the Former Manager with the U.S. Securities and Exchange Commission (the "SEC"), and (iv) cash paid by the Former Manager and Former CFO. Pursuant to the Class Action Settlement, on October 15, 2019, the Company funded $966.3 million in connection therewith, which includes the Company's contribution of $738.5 million and cash contributed by the Company to the Class Action Settlement fund for the surrendered limited partner OP Units and amounts due related to the previously withheld dividends. The Company determined that Net Debt (as defined herein) as of September 30, 2019 should include the amounts payable in cash pursuant to the Class Action Settlement. Management believed that including the impact of the payables in Net Debt provided useful information to investors to assess our liquidity, financial flexibility, capital structure and leverage, as the Company maintained a high cash balance at September 30, 2019 with the intent to use the cash to fund the Class Action Settlement. The Company also entered into settlement agreements and releases to settle the remaining opt out actions and paid $27.0 million during the three months ended September 30, 2019 in connection therewith, which when aggregated with the Company's contribution to the Class Action Settlement was a total cost to the Company of approximately $765.5 million in the third quarter of 2019.


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



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Q3 2020 SUPPLEMENTAL INFORMATION
Forward-Looking Statements
Information set forth herein contains “forward-looking statements” which reflect the Company's expectations and projections regarding future events and plans, the Company's future financial condition, results of operations, liquidity and business, including leasing, acquisitions, dispositions, rent receipts, rent relief requests and rent relief granted, debt levels, maturities and refinancings, the expected reverse stock split, the payment of future dividends and the impact of COVID-19 on the Company's business. Generally, the words "anticipates," "assumes," "believes," "continues," "could," "estimates," "expects," "goals," "intends," "may," "plans," "projects," "seeks," "should," "targets," "will," variations of such words and similar expressions identify forward-looking statements. These forward-looking statements are based on information currently available and involve a number of known and unknown assumptions and risks, uncertainties and other factors, which are difficult to predict and beyond the Company's control, that could cause actual events and plans or could cause the Company's business, financial condition, liquidity and results of operations to differ materially from those expressed or implied in the forward-looking statements. Further, information regarding historical rent collections should not serve as an indication of future rent collections.

The following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: the Company's ability to meet its 2020 guidance; the duration and extent of the impact of COVID-19 on our business and the businesses of our tenants (including their ability to timely make rental payments) and the economy generally; federal, state, or local legislation or regulation that could impact the timely payment of rent by tenants in light of COVID-19; the Company'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 the Company's properties; risks accompanying the management of its industrial and office partnerships; the impact of impairment charges in respect of certain of the Company's properties; unexpected costs or liabilities that may arise from potential dispositions, including related to limited partnership, tenant-in-common and Delaware statutory trust real estate programs and the Company's management with respect to such programs; competition in the acquisition and disposition of properties and in the leasing of its properties including that the Company may be unable to acquire, dispose of, or lease properties on advantageous terms or at all; risks associated with bankruptcies or insolvencies of tenants, from tenant defaults generally or from the unpredictability of the business plans and financial condition of the Company's tenants, which are heightened as a result of the COVID-19 pandemic; the Company's ability to access capital markets (including on attractive terms) as a result of the impact of COVID-19; risks associated with the Company's substantial indebtedness, including that such indebtedness may affect the Company's ability to pay dividends and that the terms and restrictions within the agreements governing the Company's indebtedness may restrict its borrowing and operating flexibility; the ability to retain or hire key personnel; and the continuation or deterioration of current market conditions. Additional factors that may affect future results are contained in the Company's filings with the SEC, which are available at the SEC’s website at www.sec.gov. The Company disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of changes in underlying assumptions or factors, new information, future events or otherwise, except as required by law.



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



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Q3 2020 SUPPLEMENTAL INFORMATION
Company Overview
(unaudited)
VEREIT is a real estate company incorporated in Maryland on December 2, 2010, which has elected to be taxed as a real estate investment trust ("REIT") for U.S. federal income tax purposes.

VEREIT is a full-service real estate operating company which owns and manages one of the largest portfolios of single-tenant commercial properties in the U.S. VEREIT's business model provides equity capital to creditworthy corporations in return for long-term leases on their properties. The Company targets properties that are strategically located and essential to the business operations of the tenant, as well as retail properties that offer necessity- and value-oriented products or services. At September 30, 2020, approximately 37.7% of the Company's Annualized Rental Income was earned from Investment-Grade Tenants, Economic Occupancy Rate was 98.5% and the Weighted Average Remaining Lease Term was 8.4 years.

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




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



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Q3 2020 SUPPLEMENTAL INFORMATION
Company Overview (cont.)
Senior ManagementBoard of Directors
Glenn J. Rufrano, Chief Executive OfficerHugh R. Frater, Non-Executive Chairman
Michael J. Bartolotta, Executive Vice President and Chief Financial OfficerDavid B. Henry, Independent Director
Lauren Goldberg, Executive Vice President, General Counsel and SecretaryMary Hogan Preusse, Independent Director
Paul H. McDowell, Executive Vice President and Chief Operating OfficerRichard J. Lieb, Independent Director
Thomas W. Roberts, Executive Vice President and Chief Investment OfficerEugene A. Pinover, Independent Director
Gavin B. Brandon, Senior Vice President and Chief Accounting OfficerJulie G. Richardson, Independent Director
Glenn J. Rufrano, Chief Executive Officer and Director

Corporate Offices and Contact Information
2325 E. Camelback Road, 9th Floor19 West 44th Street, Suite 1401
Phoenix, AZ 85016New York, NY 10036
800-606-3610212-413-9100
www.VEREIT.com
 
Trading Symbols: VER, VER PRF
 
Stock Exchange Listing: New York Stock Exchange
 
Transfer Agent
Computershare Trust Company, N.A.
462 South 4th Street, Suite 1600
Louisville, KY 40202
855-866- 0787




See the Definitions section for a description of the Company's non-GAAP and operating metrics.
VEREIT, Inc. | WWW.VEREIT.COM | 6



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Q3 2020 SUPPLEMENTAL INFORMATION
Quarterly Financial Summary
(unaudited, dollars in thousands, except share and per share amounts)
The following table summarizes the Company's quarterly financial results and portfolio metrics. Data presented represents continuing operations.
Three Months Ended
Financial ResultsSeptember 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Total revenues$295,278 $278,997 $299,182 $305,685 $303,301 
Net income (loss)$97,983 $54,239 $86,863 $71,168 $(741,529)
Basic and diluted net income (loss) per share attributable to common stockholders and limited partners $0.08 $0.04 $0.07 $0.05 $(0.76)
Normalized EBITDA$252,933 $238,479 $257,231 $261,538 $264,326 
FFO attributable to common stockholders and limited partners$171,233 $155,943 $181,822 $149,433 $(657,147)
FFO attributable to common stockholders and limited partners per diluted share
$0.158 $0.144 $0.168 $0.139 $(0.655)
AFFO attributable to common stockholders and limited partners$166,547 $161,083 $180,974 $173,853 $177,580 
AFFO attributable to common stockholders and limited partners per diluted share$0.153 $0.149 $0.168 $0.161 $0.177 
Dividends declared per common share$0.0770 $0.0770 $0.1375 $0.1375 $0.1375 
Weighted-average shares outstanding - diluted1,085,138,376 1,079,553,066 1,079,751,240 1,077,647,052 1,002,899,652 
Portfolio Metrics
Operating Properties3,820 3,836 3,853 3,858 3,926 
Rentable Square Feet (in thousands)88,869 88,947 89,539 89,491 90,704 
Economic Occupancy Rate98.5 %98.8 %99.1 %99.1 %99.0 %
Weighted Average Remaining Lease Term (years)8.4 8.5 8.3 8.3 8.4 
Investment-Grade Tenants (1) (2)
37.7 %37.0 %36.7 %38.6 %39.5 %
___________________________________
(1)The weighted-average credit rating of our investment-grade tenants was BBB+ as of September 30, 2020.
(2)On October 21, 2020, Tractor Supply received an investment-grade rating (previously not rated). Including Tractor Supply's Annualized Rental Income, approximately 39.2% of the Company's Annualized Rental Income at September 30, 2020 would have been earned from Investment-Grade Tenants.


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



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Q3 2020 SUPPLEMENTAL INFORMATION
Financial and Operations Statistics and Ratios
(unaudited, dollars in thousands)
Three Months Ended
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Interest Coverage Ratio
Interest Expense, excluding non-cash amortization (1)
$64,713 $63,636 $63,123 $66,292 $66,223 
Normalized EBITDA (2)
252,933 238,479 257,231 261,538 264,326 
Interest Coverage Ratio
3.91x3.75x4.08x3.95x3.99x
Fixed Charge Coverage Ratio
Interest Expense, excluding non-cash amortization (1)
$64,713 $63,636 $63,123 $66,292 $66,223 
Secured debt principal amortization834 861 1,071 2,360 2,326 
Dividends attributable to preferred shares
10,771 12,948 12,948 15,964 16,578 
Total fixed charges
76,318 77,445 77,142 84,616 85,127 
Normalized EBITDA (2)
252,933 238,479 257,231 261,538 264,326 
Fixed Charge Coverage Ratio3.31x3.08x3.33x3.09x3.11x
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Net Debt Ratios
Net Debt (3)
$5,832,236 $5,804,109 $5,815,734 $5,790,308 $5,658,503 
Normalized EBITDA annualized
1,011,732 953,916 1,028,924 1,046,152 1,057,304 
Net Debt to Normalized EBITDA annualized ratio
5.76x6.08x5.65x5.53x5.35x
Net Debt (3)
$5,832,236 $5,804,109 $5,815,734 $5,790,308 $5,658,503 
Gross Real Estate Investments (3)
14,621,857 14,704,629 14,781,956 14,775,948 14,911,108 
Net Debt Leverage Ratio
39.9 %39.5 %39.3 %39.2 %37.9 %
Unencumbered Assets/Real Estate Assets
Unencumbered Gross Real Estate Investments$11,936,645 $11,933,717 $12,005,190 $11,681,648 $11,374,138 
Gross Real Estate Investments (3)
14,621,857 14,704,629 14,781,956 14,775,948 14,911,108 
Unencumbered Asset Ratio81.6 %81.2 %81.2 %79.1 %76.3 %
___________________________________
(1)Refer to the Statements of Operations section for interest expense calculated in accordance with GAAP and to the Definitions section for the required reconciliation to the most directly comparable GAAP financial measure.
(2)Refer to the Statements of Operations section for net income calculated in accordance with GAAP and to the EBITDAre and Normalized EBITDA section for the required reconciliation to the most directly comparable GAAP financial measure.
(3)Refer to the Balance Sheets section for total debt and real estate investments, at cost calculated in accordance with GAAP and to the Definitions section for the required reconciliation to the most directly comparable GAAP financial measure. As discussed in the About the Data section, Net Debt as of September 30, 2019 includes the amounts payable in cash pursuant to the Class Action Settlement paid on October 15, 2019.





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



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Q3 2020 SUPPLEMENTAL INFORMATION
Key Balance Sheet Metrics and Capital Structure
(unaudited, dollars and shares in thousands, except per share amounts)




405874172_chart-4d611288101947928b11a.jpg
Common equity52.1%
Corporate bonds25.3%
Mortgage notes payable9.8%
Credit facility term loan6.6%
Preferred equity3.5%
Convertible notes1.9%
Proportionate share of amounts for unconsolidated entities0.8%

                            

Fixed vs. Variable Rate Debt
Fixed 84.5 %
Swapped to Fixed14.9 %
Variable0.6 %
VEREIT Capitalization Table
Wtd. Avg. Maturity
(Years)
Rate (1)
September 30, 2020
Diluted shares outstanding1,095,460 
Stock price$6.50 
Implied Equity Market Capitalization$7,120,490 
Series F Perpetual Preferred (2)
6.70 %$473,025 
Mortgage notes payable
2.34.99 %1,334,098 
Proportionate share of amounts for unconsolidated entities4.42.95 %106,516 
Total secured debt
2.54.84 %$1,440,614 
Credit facility term loan
2.63.59 %900,000 
2020 convertible notes
0.23.75 %252,719 
2024 corporate bonds3.44.60 %500,000 
2025 corporate bonds5.14.63 %550,000 
2026 corporate bonds
5.74.88 %600,000 
2027 corporate bonds6.93.95 %600,000 
2028 corporate bonds7.33.40 %600,000 
2029 corporate bonds9.23.10 %600,000 
Total unsecured debt
5.33.96 %$4,602,719 
Total Adjusted Principal Outstanding4.64.17 %$6,043,333 
Total Capitalization$13,636,848 
Less: Cash and cash equivalents207,321 
Less: Pro rata share of unconsolidated joint ventures' cash and cash equivalents
3,776 
Enterprise Value$13,425,751 
Net Debt/Enterprise Value43.4 %
Net Debt/Normalized EBITDA Annualized5.76x
Net Debt + Preferred (2)/Normalized EBITDA Annualized
6.23x
Fixed Charge Coverage Ratio3.31x
Liquidity (3)
$1,703,337 
___________________________________
(1)Weighted average interest rate for variable rate debt represents the interest rate in effect as of September 30, 2020.
(2)Balance represents 18.9 million shares of Series F Preferred Stock (and 18.9 million corresponding general partner Series F Preferred Units) and 49,766 limited partner Series F Preferred Units outstanding at September 30, 2020, multiplied by the liquidation preference of $25 per share.
(3)Liquidity represents cash and cash equivalents of $207.3 million and approximately $1.5 billion available capacity on our $1.5 billion revolving credit facility. Available capacity on our revolving credit facility is reduced by letters of credit outstanding of $4.0 million at September 30, 2020.



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



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Q3 2020 SUPPLEMENTAL INFORMATION
Balance Sheets
(unaudited, in thousands)
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Assets
Real estate investments, at cost:
Land$2,691,122 $2,705,149 $2,715,625 $2,738,679 $2,728,560 
Buildings, fixtures and improvements10,046,076 10,117,636 10,135,933 10,200,550 10,287,047 
Intangible lease assets1,872,899 1,891,831 1,899,900 1,904,641 1,909,932 
Total real estate investments, at cost14,610,097 14,714,616 14,751,458 14,843,870 14,925,539 
Less: accumulated depreciation and amortization3,829,368 3,756,132 3,659,980 3,594,247 3,559,403 
Total real estate investments, net10,780,729 10,958,484 11,091,478 11,249,623 11,366,136 
Operating lease right-of-use assets205,346 208,037 211,187 215,227 218,393 
Investment in unconsolidated entities100,339 86,300 78,718 68,825 69,025 
Cash and cash equivalents207,321 278,883 600,945 12,921 1,029,315 
Restricted cash14,955 21,203 18,720 20,959 20,742 
Rent and tenant receivables and other assets, net391,239 382,409 345,103 348,395 347,455 
Goodwill1,337,773 1,337,773 1,337,773 1,337,773 1,337,773 
Real estate assets held for sale, net1,896 48,093 88,513 26,957 66,684 
Total assets$13,039,598 $13,321,182 $13,772,437 $13,280,680 $14,455,523 
Liabilities and Equity
Mortgage notes payable, net$1,330,174 $1,393,652 $1,405,701 $1,528,134 $1,717,817 
Corporate bonds, net3,406,389 3,404,935 2,814,474 2,813,739 2,622,320 
Convertible debt, net252,077 270,152 319,120 318,183 397,726 
Credit facility, net896,630 896,314 1,767,306 1,045,669 895,351 
Below-market lease liabilities, net124,009 130,208 134,410 143,583 147,997 
Accounts payable and accrued expenses112,101 112,551 125,358 126,320 1,125,703 
Derivative, deferred rent and other liabilities162,952 161,538 146,893 90,349 101,828 
Distributions payable85,420 85,231 150,493 150,364 201,451 
Operating lease liabilities214,102 215,322 217,567 221,061 223,288 
Total liabilities6,583,854 6,669,903 7,081,322 6,437,402 7,433,481 
Series F preferred stock
189 309 309 309 389 
Common stock
10,913 10,779 10,778 10,768 10,677 
Additional paid-in capital13,048,678 13,256,288 13,252,447 13,251,962 13,360,675 
Accumulated other comprehensive loss
(97,008)(106,109)(104,217)(27,670)(47,886)
Accumulated deficit(6,514,171)(6,517,303)(6,475,568)(6,399,626)(6,306,590)
Total stockholders' equity6,448,601 6,643,964 6,683,749 6,835,743 7,017,265 
Non-controlling interests7,143 7,315 7,366 7,535 4,777 
Total equity6,455,744 6,651,279 6,691,115 6,843,278 7,022,042 
Total liabilities and equity
$13,039,598 $13,321,182 $13,772,437 $13,280,680 $14,455,523 



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



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Q3 2020 SUPPLEMENTAL INFORMATION
Statements of Operations
(unaudited, in thousands, except per share data)
Three Months Ended
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Revenues:
Rental$293,692 $278,576 $298,586 $305,363 $302,985 
Fees from managed partnerships1,586 421 596 322 316 
Total revenues295,278 278,997 299,182 305,685 303,301 
Operating expenses:
Acquisition-related1,050 1,169 1,523 1,168 1,199 
Litigation and non-routine costs, net
105 (118)(8,564)8,659 832,024 
Property operating31,400 29,098 30,490 34,066 30,822 
General and administrative 14,774 16,120 15,056 16,966 14,483 
Depreciation and amortization109,191 110,599 124,080 112,307 115,111 
Impairments16,397 12,094 8,380 22,851 3,944 
Restructuring— — — 356 783 
Total operating expenses172,917 168,962 170,965 196,373 998,366 
Other income (expense):
Interest expense(66,935)(65,613)(64,696)(69,628)(67,889)
Gain (loss) on extinguishment and forgiveness of debt, net61 (200)(1,280)(17,413)975 
Other income, net
73 778 175 7,139 2,421 
Equity in income of unconsolidated entities
663 1,497 246 936 677 
Gain on disposition of real estate and held for sale assets, net
42,814 8,795 25,249 41,541 18,520 
Total other (expenses) income, net(23,324)(54,743)(40,306)(37,425)(45,296)
Income (loss) before taxes99,037 55,292 87,911 71,887 (740,361)
Provision for income taxes
(1,054)(1,053)(1,048)(719)(1,168)
Net income (loss)97,983 54,239 86,863 71,168 (741,529)
Net (income) loss attributable to non-controlling interests
(51)(31)(55)(43)15,089 
Net income (loss) attributable to the General Partner
$97,932 $54,208 $86,808 $71,125 $(726,440)
Basic and diluted net income (loss) per share attributable to common stockholders and limited partners
$0.08 $0.04 $0.07 $0.05 $(0.76)



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



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Q3 2020 SUPPLEMENTAL INFORMATION
Funds From Operations (FFO)
(unaudited, in thousands, except share and per share data)
Three Months Ended
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Net income (loss)
$97,983 $54,239 $86,863 $71,168 $(741,529)
Dividends on Series F Preferred Stock
(10,771)(12,948)(12,948)(15,964)(16,578)
Gain on disposition of real estate assets, net
(42,814)(8,795)(25,249)(41,541)(18,520)
Depreciation and amortization of real estate assets
108,803 110,207 123,645 111,892 114,695 
Impairment of real estate
16,397 12,094 8,380 22,851 3,944 
Proportionate share of adjustments for unconsolidated entities
1,635 1,146 1,131 1,027 841 
FFO attributable to common stockholders and limited partners
$171,233 $155,943 $181,822 $149,433 $(657,147)
Weighted-average shares outstanding - basic1,083,687,807 1,078,366,566 1,077,937,799 1,070,625,899 978,982,729 
Effect of weighted-average Limited Partner OP Units and dilutive securities (1)
1,450,569 1,186,500 1,813,441 7,021,153 23,916,923 
Weighted-average shares outstanding - diluted (2)
1,085,138,376 1,079,553,066 1,079,751,240 1,077,647,052 1,002,899,652 
FFO attributable to common stockholders and limited partners per diluted share (3)
$0.158 $0.144 $0.168 $0.139 $(0.655)
___________________________________
(1)In connection with the Class Action Settlement, the Former Manager and Former CFO surrendered 19.9 million limited partner OP Units that were canceled during the three months ended December 31, 2019. Dilutive securities include unvested restricted stock units and stock options.
(2)Weighted-average shares for all periods presented exclude the effect of the convertible debt as the Company would expect to settle the debt in cash and any shares underlying restricted stock units that are not issuable based on the Company’s level of achievement of certain performance targets through the respective reporting period.
(3)Refer to the Statements of Operations section for basic and diluted net income (loss) per share attributable to common stockholders and limited partners.



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



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Q3 2020 SUPPLEMENTAL INFORMATION
Adjusted Funds From Operations (AFFO)
(unaudited, in thousands, except share and per share data)
Three Months Ended
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
FFO attributable to common stockholders and limited partners
$171,233 $155,943 $181,822 $149,433 $(657,147)
Acquisition-related expenses
1,050 1,169 1,523 1,168 1,199 
Litigation and non-routine costs, net
105 (118)(8,564)8,659 832,024 
Payments received on fully reserved loans
— — — (133)— 
(Gain) loss on investments(76)142 541 — 28 
Amortization of premiums and discounts on debt and investments, net
(201)(362)(689)(1,479)(1,177)
Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities
393 788 748 504 692 
Net direct financing lease adjustments
381 372 365 387 411 
Amortization and write-off of deferred financing costs
3,114 2,898 2,841 5,305 3,319 
(Gain) loss on extinguishment and forgiveness of debt, net(61)200 1,280 17,413 (975)
Straight-line rent
(12,595)(3,404)(2,054)(7,107)(5,470)
Equity-based compensation
2,991 3,857 2,602 2,934 2,924 
Restructuring expenses
— — — 356 783 
Other adjustments, net
379 441 228 (3,097)1,138 
Proportionate share of adjustments for unconsolidated entities
(166)(843)331 (493)(128)
Adjustment for Excluded Properties
— — — (41)
AFFO attributable to common stockholders and limited partners (1) (2)
$166,547 $161,083 $180,974 $173,853 $177,580 
Weighted-average shares outstanding - basic
1,083,687,807 1,078,366,566 1,077,937,799 1,070,625,899 978,982,729 
Effect of weighted-average Limited Partner OP Units and dilutive securities (3)
1,450,569 1,186,500 1,813,441 7,021,153 23,916,923 
Weighted-average shares outstanding - diluted (4)
1,085,138,376 1,079,553,066 1,079,751,240 1,077,647,052 1,002,899,652 
AFFO attributable to common stockholders and limited partners per diluted share (5)
$0.153 $0.149 $0.168 $0.161 $0.177 
___________________________________
(1)AFFO for the three months ended September 30, 2020 and June 30, 2020, includes rental revenue that represents deferred rent of $3.9 million and $12.8 million related to deferral agreements executed through October 23, 2020, which qualify for the COVID-19 Lease Concessions Relief. As of October 23, 2020, the Company had collected $1.1 million of deferred rent.
(2)AFFO for the three months ended September 30, 2020, was negatively impacted by (i) abatements of $6.5 million, of which $5.9 million is third quarter rental revenue pursuant to lease amendments executed through September 30, 2020 and $0.6 million is second quarter rental revenue pursuant to lease amendments executed from July 1, 2020 through September 30, 2020, and (ii) a reduction to rental revenue of $9.2 million that was related to the impact of the COVID-19 pandemic, of which $5.1 million represented an increase to the general allowance and $4.1 million represented amounts not probable of collection at September 30, 2020 and such rental revenue will be recognized as cash is received. AFFO for the three months ended June 30, 2020, was negatively impacted by (i) $11.2 million of abated rental revenue pursuant to lease amendments executed through June 30, 2020, which increased the weighted average lease term for the related properties and (ii) a reduction to rental revenue of $4.7 million that was related to the impact of the COVID-19 pandemic, of which $0.9 million represented an increase to the general allowance for rental revenue that the Company believes it may abate as a result of lease amendments and $3.8 million represented amounts not probable of collection at June 30, 2020 and such rental revenue will be recognized as cash is received.
(3)In connection with the Class Action Settlement, the Former Manager and Former CFO surrendered 19.9 million limited partner OP Units that were canceled during the three months ended December 31, 2019. Dilutive securities include unvested restricted stock units and stock options.
(4)Weighted-average shares for all periods presented exclude the effect of the convertible debt as the Company would expect to settle the debt in cash and any shares underlying restricted stock units that are not issuable based on the Company’s level of achievement of certain performance targets through the respective reporting period.
(5)Refer to the Statements of Operations section for basic and diluted net income (loss) per share attributable to common stockholders and limited partners.


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



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Q3 2020 SUPPLEMENTAL INFORMATION
EBITDAre and Normalized EBITDA
(unaudited, in thousands)
Three Months Ended
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
 Net income (loss)
$97,983 $54,239 $86,863 $71,168 $(741,529)
 Adjustments:
Interest expense
66,935 65,613 64,696 69,628 67,889 
Depreciation and amortization
109,191 110,599 124,080 112,307 115,111 
Provision for income taxes
1,054 1,053 1,048 719 1,168 
Proportionate share of adjustments for unconsolidated entities
2,451 1,775 1,761 1,603 1,337 
Gain on disposition of real estate assets, net
(42,814)(8,795)(25,249)(41,541)(18,520)
Impairment of real estate
16,397 12,094 8,380 22,851 3,944 
EBITDAre
$251,197 $236,578 $261,579 $236,735 $(570,600)
Payments received on fully reserved loans
— — — (133)— 
Acquisition-related expenses
1,050 1,169 1,523 1,168 1,199 
Litigation and non-routine costs, net105 (118)(8,564)8,659 832,024 
(Gain) loss on investments(76)142 541 — 28 
Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities
393 788 748 504 692 
(Gain) loss on extinguishment and forgiveness of debt, net(61)200 1,280 17,413 (975)
Net direct financing lease adjustments
381 372 365 387 411 
Restructuring expenses
— — — 356 783 
Other adjustments, net
(8)54 (205)(3,511)724 
 Proportionate share of adjustments for unconsolidated entities
(48)(706)(36)(43)97 
Adjustment for Excluded Properties
— — — (57)
Normalized EBITDA (1) (2)
$252,933 $238,479 $257,231 $261,538 $264,326 
___________________________________
(1)Normalized EBITDA for the three months ended September 30, 2020 and June 30, 2020, includes rental revenue that represents deferred rent of $3.9 million and $12.8 million related to deferral agreements executed through October 23, 2020, which qualify for the COVID-19 Lease Concessions Relief. As of October 23, 2020, the Company had collected $1.1 million of deferred rent.
(2)During the three months ended September 30, 2020, the Company abated $6.5 million of rental revenue, of which $5.9 million is third quarter rental revenue pursuant to lease amendments executed through September 30, 2020 and $0.6 million is second quarter rental revenue pursuant to lease amendments executed from July 1, 2020 through September 30, 2020. In accordance with ASC 842, the Company recorded $5.7 million as straight-line rent in the three months ended September 30, 2020 and reduced rental income by $0.8 million related to the lease amendments. Normalized EBITDA was also negatively impacted by a reduction to rental revenue of $10.2 million that was related to the impact of the COVID-19 pandemic, of which $5.1 million represented an increase to the general allowance and $4.1 million represented amounts not probable of collection at September 30, 2020 and such rental revenue will be recognized as cash is received, and $1.0 million was for straight-line rent receivables. Normalized EBITDA for the three months ended June 30, 2020, was negatively impacted by (i) $11.2 million of abated rental revenue pursuant to lease amendments executed through June 30, 2020, which increased the weighted average lease term for the related properties and (ii) a reduction to rental revenue of $8.4 million that was related to the impact of the COVID-19 pandemic, of which $0.9 million represented an increase to the general allowance for rental revenue that the Company believes it may abate as a result of lease amendments and $3.8 million represented amounts not probable of collection at June 30, 2020 and such rental revenue will be recognized as cash is received, and $3.7 million was for straight-line rent receivables.



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


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Q3 2020 SUPPLEMENTAL INFORMATION

Net Operating Income
(unaudited, dollars in thousands)
NOI and Cash NOI
Three Months Ended
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
 Rental revenue - as reported (1)
$293,692 $278,576 $298,586 $305,363 $302,985 
 Property operating expense - as reported(31,400)(29,098)(30,490)(34,066)(30,822)
NOI262,292 249,478 268,096 271,297 272,163 
 Adjustments:
Straight-line rent
(12,595)(3,404)(2,054)(7,107)(5,470)
Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities
393 788 748 504 692 
Net direct financing lease adjustments
381 372 365 387 411 
Proportionate share of amounts for unconsolidated entities2,876 2,475 2,404 1,920 1,817 
Adjustment for Excluded Properties— — — (54)
 Cash NOI (2) (3)
$253,347 $249,709 $269,559 $267,004 $269,559 
___________________________________
(1)Rental revenue includes percentage rent of $1.0 million, $1.4 million, $1.4 million, $1.4 million and $0.9 million for the three months ended September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019, and September 30, 2019, respectively.
(2)Cash NOI for the three months ended September 30, 2020 and June 30, 2020, includes rental revenue that represents deferred rent of $3.9 million and $12.8 million related to deferral agreements executed through October 23, 2020, which qualify for the COVID-19 Lease Concessions Relief. As of October 23, 2020, the Company had collected $1.1 million of deferred rent.
(3)Cash NOI for the three months ended September 30, 2020, was negatively impacted by (i) abatements of $6.5 million, of which $5.9 million is third quarter rental revenue pursuant to lease amendments executed through September 30, 2020 and $0.6 million is second quarter rental revenue pursuant to lease amendments executed from July 1, 2020 through September 30, 2020, and (ii) a reduction to rental revenue of $9.2 million that was related to the impact of the COVID-19 pandemic, of which $5.1 million represented an increase to the general allowance and $4.1 million represented amounts not probable of collection at September 30, 2020 and such rental revenue will be recognized as cash is received. Cash NOI for the three months ended June 30, 2020, was negatively impacted by (i) $11.2 million of abated rental revenue pursuant to lease amendments executed through June 30, 2020, which increased the weighted average lease term for the related properties and (ii) a reduction to rental revenue of $4.7 million that was related to the impact of the COVID-19 pandemic, of which $0.9 million represented an increase to the general allowance for rental revenue that the Company believes it may abate as a result of lease amendments and $3.8 million represented amounts not probable of collection at June 30, 2020 and such rental revenue will be recognized as cash is received.

Normalized Cash NOI
Three Months Ended
September 30, 2020
Cash NOI$253,347 
Adjustments for intra-quarter acquisitions and dispositions (1)
(4,832)
Normalized Cash NOI$248,515 
___________________________________
(1)The adjustment eliminates Cash NOI for properties acquired, including those acquired by unconsolidated joint ventures, and replaces Cash NOI for the partial period with an amount estimated to be equivalent to Cash NOI for the full period. The adjustment also eliminates Cash NOI for properties disposed of during the three months ended September 30, 2020.


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


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Q3 2020 SUPPLEMENTAL INFORMATION

Same Store Contract Rental Revenue
(unaudited, dollars in thousands)

The Company reviews the stabilized operating results from properties that we refer to as "same store." In determining the same store property pool, we include Operating Properties and properties owned by unconsolidated joint ventures that were owned for the entirety of both the current and prior reporting periods, except for development or redevelopment properties. The following tables show the Company's same store portfolio statistics, which for the three months ended September 30, 2020 included 3,760(1) Operating Properties, with 85.3 million aggregate square feet, acquired prior to July 1, 2019 and owned through September 30, 2020 and the pro rata share of Contract Rental Revenue from properties owned by unconsolidated joint ventures.
Three Months Ended September 30,Increase/(Decrease)
20202019$ Change% Change
Contract Rental Revenue (2)
$251,286 $261,156 $(9,870)(3.8)%
Economic Occupancy Rate98.4 %99.3 %N/A(0.9)%
Contract Rental Revenue
Number ofThree Months Ended September 30,Increase/(Decrease)
Properties20202019$ Change% Change
Retail
2,006 $112,852 $114,552 $(1,700)(1.5)%
Restaurant
1,529 46,339 54,521 (8,182)(15.0)%
Industrial
145 45,284 44,733 551 1.2 %
Office72 46,776 47,316 (540)(1.1)%


Other (3)
35 34