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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)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2020
 
OR
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)
 
 
 
 
 
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 PRF
New York Stock Exchange
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
 
Accelerated filer
 
Non-accelerated filer
 
 
 
 
 
 
 
 
 
Smaller reporting company
 
Emerging growth company
 
 
VEREIT Operating Partnership, L.P.
Large accelerated filer
 
Accelerated filer
 
Non-accelerated filer
 
 
 
 
 
 
 
 
 
Smaller reporting 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 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 No x VEREIT Operating Partnership, L.P. Yes No x
There were 1,077,848,554 shares of common stock of VEREIT, Inc. outstanding as of May 14, 2020.





EXPLANATORY NOTE

This report combines the Quarterly Reports on Form 10-Q for the three months ended March 31, 2020 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 sole 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, 2020



 
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, 2020
 
December 31, 2019
ASSETS
 
 
 
 
Real estate investments, at cost:
 
 
 
 
Land
 
$
2,715,625

 
$
2,738,679

Buildings, fixtures and improvements
 
10,135,933

 
10,200,550

Intangible lease assets
 
1,899,900

 
1,904,641

Total real estate investments, at cost
 
14,751,458

 
14,843,870

Less: accumulated depreciation and amortization
 
3,659,980

 
3,594,247

Total real estate investments, net
 
11,091,478

 
11,249,623

Operating lease right-of-use assets
 
211,187

 
215,227

Investment in unconsolidated entities
 
78,718

 
68,825

Cash and cash equivalents
 
600,945

 
12,921

Restricted cash
 
18,720

 
20,959

Rent and tenant receivables and other assets, net
 
345,103

 
348,395

Goodwill
 
1,337,773

 
1,337,773

Real estate assets held for sale, net
 
88,513

 
26,957

Total assets
 
$
13,772,437


$
13,280,680

 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
Mortgage notes payable, net
 
$
1,405,701

 
$
1,528,134

Corporate bonds, net
 
2,814,474

 
2,813,739

Convertible debt, net
 
319,120

 
318,183

Credit facility, net
 
1,767,306

 
1,045,669

Below-market lease liabilities, net
 
134,410

 
143,583

Accounts payable and accrued expenses
 
125,358

 
126,320

Derivative, deferred rent and other liabilities
 
146,893

 
90,349

Distributions payable
 
150,493

 
150,364

Operating lease liabilities
 
217,567

 
221,061

Total liabilities
 
7,081,322


6,437,402

Commitments and contingencies (Note 10)
 

 


Preferred stock, $0.01 par value, 100,000,000 shares authorized and 30,871,246 issued and outstanding as of each of March 31, 2020 and December 31, 2019, respectively
 
309

 
309

Common stock, $0.01 par value, 1,500,000,000 shares authorized and 1,077,781,479 and 1,076,845,984 issued and outstanding as of March 31, 2020 and December 31, 2019, respectively
 
10,778

 
10,768

Additional paid-in capital
 
13,252,447

 
13,251,962

Accumulated other comprehensive loss
 
(104,217
)
 
(27,670
)
Accumulated deficit
 
(6,475,568
)
 
(6,399,626
)
Total stockholders’ equity
 
6,683,749

 
6,835,743

Non-controlling interests
 
7,366

 
7,535

Total equity
 
6,691,115

 
6,843,278

Total liabilities and equity
 
$
13,772,437


$
13,280,680


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,
 
 
2020
 
2019
Revenues:
 
 
 
 
Rental
 
$
298,586

 
$
316,843

Fees from managed partnerships
 
596

 
37

Total revenues
 
299,182


316,880

Operating expenses:
 
 
 
 
Acquisition-related
 
1,523

 
985

Litigation and non-routine costs, net
 
(8,564
)
 
(21,492
)
Property operating
 
30,490

 
32,378

General and administrative
 
15,056

 
14,846

Depreciation and amortization
 
124,080

 
136,555

Impairments
 
8,380

 
11,988

Restructuring
 

 
9,076

Total operating expenses
 
170,965


184,336

Other (expenses) income:
 
 
 
 
Interest expense
 
(64,696
)
 
(71,254
)
Loss on extinguishment and forgiveness of debt, net
 
(1,280
)
 

Other income (loss), net
 
175

 
(439
)
Equity in income of unconsolidated entities
 
246

 
500

Gain on disposition of real estate and real estate assets held for sale, net
 
25,249

 
10,831

Total other expenses, net

(40,306
)

(60,362
)
Income before taxes

87,911


72,182

Provision for income taxes
 
(1,048
)
 
(1,211
)
Net income
 
86,863

 
70,971

Net income attributable to non-controlling interests (1)
 
(55
)
 
(1,667
)
Net income attributable to the General Partner
 
$
86,808


$
69,304

 
 
 
 
 
Basic and diluted net income per share attributable to common stockholders
 
$
0.07

 
$
0.05

_______________________________________________
(1)
Represents net 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,
 
 
2020
 
2019
Net income
 
$
86,863

 
$
70,971

Total other comprehensive loss
 
 
 
 
Unrealized loss on interest rate derivatives
 
(78,550
)
 
(11,286
)
Reclassification of previous unrealized loss on interest rate derivatives into net income
 
1,948

 
97

Total other comprehensive loss
 
(76,602
)

(11,189
)
 
 
 
 
 
Total comprehensive income
 
10,261

 
59,782

Comprehensive income attributable to non-controlling interests(1)
 

 
(1,400
)
Total comprehensive income attributable to the General Partner
 
$
10,261

 
$
58,382

_______________________________________________
(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, 2020
 
30,871,246

 
$
309

 
1,076,845,984

 
$
10,768

 
$
13,251,962

 
$
(27,670
)
 
$
(6,399,626
)
 
$
6,835,743

 
$
7,535

 
$
6,843,278

Conversion of OP Units to Common Stock
 

 

 
4,549

 
1

 
44

 

 

 
45

 
(45
)
 

Redemption of Series F Preferred Stock
 

 

 

 

 
(27
)
 

 

 
(27
)
 

 
(27
)
Repurchases of Common Stock to settle tax obligation
 

 

 
(241,092
)
 
(2
)
 
(2,376
)
 

 

 
(2,378
)
 

 
(2,378
)
Equity-based compensation, net
 

 

 
1,172,038

 
11

 
2,844

 

 

 
2,855

 

 
2,855

Distributions declared on Common Stock —
$0.1375 per common share
 

 

 

 

 

 

 
(148,194
)
 
(148,194
)
 

 
(148,194
)
Distributions to non-controlling interest holders
 

 

 

 

 

 

 

 

 
(105
)
 
(105
)
Dividend equivalents on awards granted under the Equity Plan
 

 

 

 

 

 

 
(1,628
)
 
(1,628
)
 

 
(1,628
)
Distributions to preferred shareholders and unitholders
 

 

 

 

 

 

 
(12,928
)
 
(12,928
)
 
(19
)
 
(12,947
)
Net income
 

 

 

 

 

 

 
86,808

 
86,808

 
55

 
86,863

Other comprehensive loss
 

 

 

 

 

 
(76,547
)
 

 
(76,547
)
 
(55
)
 
(76,602
)
Balance, March 31, 2020
 
30,871,246

 
$
309

 
1,077,781,479

 
$
10,778

 
$
13,252,447

 
$
(104,217
)
 
$
(6,475,568
)
 
$
6,683,749

 
$
7,366

 
$
6,691,115




7

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


The accompanying notes are an integral part of these statements.

8

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


 
Three Months Ended March 31,
 
 
2020
 
2019
Cash flows from operating activities:
 
 
 
 

Net income
 
$
86,863

 
$
70,971

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
126,980

 
139,394

Gain on real estate assets, net
 
(25,508
)
 
(10,831
)
Impairments
 
8,380

 
11,988

Equity-based compensation
 
2,855

 
2,872

Equity in income of unconsolidated entities
 
(246
)
 
(500
)
Distributions from unconsolidated entities
 
259

 

Loss on investments
 
541

 
470

Loss on derivative instruments
 

 
34

Non-cash restructuring expense
 

 
4,018

Loss on extinguishment and forgiveness of debt, net
 
1,280

 

Changes in assets and liabilities:
 
 
 
 
Investment in direct financing leases
 
364

 
409

 Rent and tenant receivables, operating lease right-of-use and other assets, net
 
(4,462
)
 
(7,160
)
Accounts payable and accrued expenses
 
(2,749
)
 
(2,415
)
Deferred rent, operating lease and other liabilities
 
(22,546
)
 
(15,216
)
Net cash provided by operating activities
 
172,011

 
194,034

Cash flows from investing activities:
 
 
 
 
Investments in real estate assets
 
(147,121
)
 
(81,065
)
Capital expenditures and leasing costs
 
(9,502
)
 
(7,498
)
Real estate developments
 
(3,231
)
 
(3,232
)
 Principal repayments received on mortgage notes receivable
 

 
62

Investments in unconsolidated entities
 
(2,669
)
 

Return of investment from unconsolidated entities
 
257

 

Proceeds from disposition of real estate
 
140,428

 
60,496

Investment in leasehold improvements and other assets
 
(87
)
 
(177
)
Deposits for real estate assets
 
(895
)
 
(900
)
Proceeds from sale of investments and other assets
 

 
8,199

Uses and refunds of deposits for real estate assets
 
3,130

 
1,240

Proceeds from the settlement of property-related insurance claims
 
38

 
32

Net cash used in investing activities
 
(19,652
)
 
(22,843
)
Cash flows from financing activities:
 
 
 
 
Proceeds from mortgage notes payable
 
913

 

 Payments on mortgage notes payable and other debt, including debt extinguishment costs
 
(123,574
)
 
(2,426
)
Proceeds from credit facility
 
831,313

 
899,000

Payments on credit facility
 
(110,000
)
 
(207,000
)
Redemptions of corporate bonds, including extinguishment costs
 
(26
)
 
(750,000
)
Extinguishment costs related to the repurchases of convertible notes
 
(13
)
 

Payments of deferred financing costs
 
(35
)
 
(172
)
Repurchases of Common Stock to settle tax obligations
 
(2,378
)
 
(1,595
)
 Proceeds from the issuance of Common Stock, net of underwriters’ discount and offering expenses
 

 
20,894

Series F Preferred Stock redemption expenses
 
(27
)
 

Contributions from non-controlling interest holders
 

 
64

Distributions paid
 
(162,747
)
 
(152,314
)
Net cash provided by (used in) financing activities
 
433,426

 
(193,549
)
Net change in cash and cash equivalents and restricted cash
 
$
585,785

 
$
(22,358
)
 
 
 
 
 

9

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



 
Three Months Ended March 31,
 
 
2020
 
2019
Cash and cash equivalents and restricted cash, beginning of period
 
$
33,880

 
$
53,663

 
 
 
 
 
Cash and cash equivalents and restricted cash, end of period
 
$
619,665

 
$
31,305

 
 
 
 
 
Reconciliation of Cash and Cash Equivalents and Restricted Cash
 
 
 
 
Cash and cash equivalents at beginning of period
 
$
12,921

 
$
30,758

Restricted cash at beginning of period
 
20,959

 
22,905

Cash and cash equivalents and restricted cash at beginning of period
 
33,880

 
53,663

 
 
 
 
 
Cash and cash equivalents at end of period
 
600,945

 
12,788

Restricted cash at end of period
 
18,720

 
18,517

Cash and cash equivalents and restricted cash at end of period
 
$
619,665

 
$
31,305


The accompanying notes are an integral part of these statements.

10

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

 
 
March 31, 2020
 
December 31, 2019
ASSETS
 
 
 
 
Real estate investments, at cost:
 
 
 
 
Land
 
$
2,715,625

 
$
2,738,679

Buildings, fixtures and improvements
 
10,135,933

 
10,200,550

Intangible lease assets
 
1,899,900

 
1,904,641

Total real estate investments, at cost
 
14,751,458


14,843,870

Less: accumulated depreciation and amortization
 
3,659,980

 
3,594,247

Total real estate investments, net
 
11,091,478


11,249,623

Operating lease right-of-use assets
 
211,187

 
215,227

Investment in unconsolidated entities
 
78,718

 
68,825

Cash and cash equivalents
 
600,945

 
12,921

Restricted cash
 
18,720

 
20,959

Rent and tenant receivables and other assets, net
 
345,103

 
348,395

Goodwill
 
1,337,773

 
1,337,773

Real estate assets held for sale, net
 
88,513

 
26,957

Total assets
 
$
13,772,437


$
13,280,680

 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 

Mortgage notes payable, net
 
$
1,405,701

 
$
1,528,134

Corporate bonds, net
 
2,814,474

 
2,813,739

Convertible debt, net
 
319,120

 
318,183

Credit facility, net
 
1,767,306

 
1,045,669

Below-market lease liabilities, net
 
134,410

 
143,583

Accounts payable and accrued expenses
 
125,358

 
126,320

Derivative, deferred rent and other liabilities
 
146,893

 
90,349

Distributions payable
 
150,493

 
150,364

Operating lease liabilities
 
217,567

 
221,061

Total liabilities
 
7,081,322


6,437,402

Commitments and contingencies (Note 10)
 


 


General Partner's preferred equity, 30,871,246 General Partner Series F Preferred Units issued and outstanding as of each of March 31, 2020 and December 31, 2019, respectively
 
447,549

 
460,504

General Partner's common equity, 1,077,781,479 and 1,076,845,984 General Partner OP Units issued and outstanding as of March 31, 2020 and December 31, 2019, respectively
 
6,236,200

 
6,375,239

Limited Partner's preferred equity, 49,766 Limited Partner Series F Preferred Units issued and outstanding as of each of March 31, 2020 and December 31, 2019, respectively
 
1,850

 
1,869

Limited Partner's common equity, 782,170 and 786,719 Limited Partner OP Units issued and outstanding as of March 31, 2020 and December 31, 2019, respectively
 
4,290

 
4,433

Total partners’ equity
 
6,689,889


6,842,045

Non-controlling interests
 
1,226

 
1,233

Total equity
 
6,691,115


6,843,278

Total liabilities and equity
 
$
13,772,437


$
13,280,680


The accompanying notes are an integral part of these statements.

11

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,
 
 
2020
 
2019
Revenues:
 
 
 
 
Rental
 
$
298,586

 
$
316,843

Fees from managed partnerships
 
596

 
37

Total revenues
 
299,182

 
316,880

Operating expenses:
 
 
 
 
Acquisition-related
 
1,523

 
985

Litigation and non-routine costs, net
 
(8,564
)
 
(21,492
)
Property operating
 
30,490

 
32,378

General and administrative
 
15,056

 
14,846

Depreciation and amortization
 
124,080

 
136,555

Impairments
 
8,380

 
11,988

Restructuring
 

 
9,076

Total operating expenses
 
170,965


184,336

Other (expenses) income:
 
 
 
 
Interest expense
 
(64,696
)
 
(71,254
)
Loss on extinguishment and forgiveness of debt, net
 
(1,280
)
 

Other income (loss), net
 
175

 
(439
)
Equity in income of unconsolidated entities
 
246

 
500

Gain on disposition of real estate and real estate assets held for sale, net
 
25,249

 
10,831

Total other expenses, net
 
(40,306
)

(60,362
)
Income before taxes
 
87,911


72,182

Provision for income taxes
 
(1,048
)
 
(1,211
)
Net income
 
86,863


70,971

Net loss attributable to non-controlling interests (1)
 
7

 
28

Net income attributable to the OP
 
$
86,870


$
70,999

 
 
 
 
 
Basic and diluted net income per unit attributable to common unitholders
 
$
0.07

 
$
0.05


_______________________________________________
(1)
Represents net loss attributable to a consolidated joint venture partner.

The accompanying notes are an integral part of these statements.


12

Table of Contents
VEREIT OPERATING PARTNERSHIP, L.P.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands) (Unaudited)

 
 
Three Months Ended March 31,
 
 
2020
 
2019
Net income
 
$
86,863

 
$
70,971

Total other comprehensive loss
 
 
 
 
Unrealized loss on interest rate derivatives
 
(78,550
)
 
(11,286
)
Reclassification of previous unrealized loss on interest rate derivatives into net income
 
1,948

 
97

Total other comprehensive loss

(76,602
)

(11,189
)
 
 
 
 
 
Total comprehensive income

10,261


59,782

Comprehensive loss attributable to non-controlling interests(1)
 
7

 
28

Total comprehensive income attributable to the OP

$
10,268


$
59,810

_______________________________________________
(1)
Represents comprehensive loss attributable to a consolidated joint venture partner.

The accompanying notes are an integral part of these statements.


13

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

 
 
Preferred Units
 
Common Units
 
 
 
 
 
 
 
 
General Partner
 
Limited Partner
 
General Partner
 
Limited Partner