PHOENIX, May 6, 2021 /PRNewswire/ -- VEREIT, Inc. (NYSE:
VER) ("VEREIT" or the "Company") announced today its operating
results for the three months ending March 31, 2021.
First Quarter 2021 Financial and Operating
Highlights
- Net income of $120.7 million and
net income per diluted share of $0.50
- Achieved $0.80 AFFO per diluted
share
- Rent collection of 99%
- Compared to last quarter, Total debt - as reported decreased
from $5.9 billion to $5.6 billion; Adjusted Principal Outstanding
decreased from $6.1 billion to
$5.8 billion; Net Debt decreased from
$5.6 billion to $5.5 billion; and Net Debt to Normalized EBITDA
decreased from 5.64x to 5.45x
- Redeemed $100.0 million of the
Company's 6.7% Series F preferred stock which leaves approximately
$373.0 million outstanding
- S&P Global Ratings upgraded the Company's corporate rating
from 'BBB-' to 'BBB' with the Rating Outlook remaining at 'Stable,'
Moody's upgraded the Company's rating from 'Baa3' to 'Baa2' with
the Rating Outlook remaining at 'Stable' and Fitch Ratings affirmed
the Company's rating of 'BBB' with the Rating Outlook remaining at
'Stable'
- Subsequent to the end of the quarter, the Company signed a
definitive merger agreement with Realty Income Corporation. Upon
closing, the contemplated merger would create a combined company
with an enterprise value of approximately $50 billion. The merger is expected to close in
the fourth quarter of 2021, subject to customary closing
conditions, including the approval of both VEREIT's and Realty
Income's shareholders.
Year-To-Date Transaction Highlights as of April 30, 2021
- Acquisitions totaled $168.1
million with over $300.0
million under contract or letter of intent
- Office dispositions totaled $235.5
million reducing office exposure to 14.9%
- Strategic dispositions totaled $48.3
million
First Quarter 2021 Financial Results
Total Revenues
Total revenues for the quarter ended
March 31, 2021 decreased $8.4
million to $290.8 million as
compared to total revenues of $299.2
million for the same quarter in 2020.
Net Income and Net Income Attributable to Common Stockholders
per Diluted Share
Net income for the quarter ended
March 31, 2021 increased $33.8 million to a net income of
$120.7 million as compared to net
income of $86.9 million for the same
quarter in 2020, and net income per diluted share increased
$0.16 to a net income per diluted
share of $0.50 for the quarter ended
March 31, 2021, as compared to net income per diluted share of
$0.34 for the same quarter in
2020.
Normalized EBITDA
Normalized EBITDA for the quarter
ended March 31, 2021 decreased $6.0
million to $251.2 million as
compared to Normalized EBITDA of $257.2
million for the same quarter in 2020.
Funds From Operations Attributable to Common Stockholders and
Limited Partners ("FFO") and FFO per Diluted Share
FFO for
the quarter ended March 31, 2021 decreased $2.8 million to $179.0
million, as compared to $181.8
million for the same quarter in 2020, and FFO per diluted
share decreased $0.06 to $0.78 for the quarter ended March 31, 2021,
as compared to FFO per diluted share of $0.84 for the same quarter in 2020.
Adjusted FFO Attributable to Common Stockholders and Limited
Partners ("AFFO") and AFFO per Diluted
Share
AFFO for the quarter ended March 31, 2021
increased $2.0 million to
$183.0 million, as compared to
$181.0 million for the same quarter
in 2020, and AFFO per diluted share decreased $0.04 to $0.80 for
the quarter ended March 31, 2021, as compared to $0.84 for the same quarter in 2020.
Balance Sheet and Liquidity
As of the end of the first
quarter, the Company had corporate liquidity of approximately
$1.8 billion, comprised of
$318.6 million in cash and cash
equivalents and $1.5 billion of
availability under its credit facility. In addition, secured debt
was reduced by $292.8 million.
Capital Market Activity
The Company redeemed
$100.0 million of VEREIT's 6.7%
Series F preferred stock on January 15,
2021, which was previously announced on December 16, 2020. This leaves approximately
$373.0 million outstanding.
Consolidated Financial Statistics
Financial Statistics
as of the quarter ended March 31, 2021 are as follows:
Net Debt to Normalized EBITDA of 5.45x, Fixed Charge Coverage Ratio
of 3.8x, Unencumbered Asset Ratio of 86.0%, Net Debt to Gross Real
Estate Investments of 37.8%, and Weighted Average Debt Term of 6.0
years.
Common Stock Dividend Information
On May 04,
2021, the Company's Board of Directors declared a quarterly
dividend of $0.462 per share for the
second quarter of 2021. The dividend will be paid on July 15,
2021 to common stockholders of record as of June 30, 2021.
Real Estate Portfolio
As of March 31, 2021, the
Company's portfolio consisted of 3,855 properties with total
portfolio occupancy of 98.0%, investment grade tenancy of 37.8% and
a weighted-average remaining lease term of 8.4 years.
Real Estate Leasing Activity
During the first
quarter, the Company entered into 61 new and renewal leases on
approximately 1.4 million square feet, or 1.5% of the
portfolio. Leasing activity included 0.3 million square feet
of early renewals.
Acquisitions
During the quarter ended March 31,
2021, the Company invested in 54 properties for $138.4 million at an average cash cap rate of
7.1%.
Office Dispositions
During the quarter ended
March 31, 2021, the Company disposed of 10 office properties
for an aggregate sales price of $235.5
million. Of this amount, $225.6
million was used in the total weighted average cash cap rate
calculation of 6.2%. The gain on first quarter office
dispositions was $56.8 million.
Strategic Dispositions
During the quarter ended
March 31, 2021, the Company disposed of 20 properties for an
aggregate sales price of $35.7
million. Of this amount, $27.0
million was used in the total weighted average cash cap rate
calculation of 5.0%. The gain on first quarter strategic
dispositions was $19.4
million.
COVID-19 Company Update
As of April 22, 2021, VEREIT had received rent of
approximately 99% for the first quarter of 2021, which is based on
the terms of lease agreements in effect at January 1, 2021 and excludes tenants being
accounted for on a cash basis. The property type breakdown
for rent collection is as follows:
Property
Type
|
Q1 2021
|
Total
Retail
|
99%
|
Casual
Dining
|
99%
|
Quick
Service
|
96%
|
Total
Restaurant
|
98%
|
Total
Office
|
100%
|
Total
Industrial
|
100%
|
As of April 22, 2021, we collected
$9.8 million of deferred rent,
representing approximately 100% of amounts due through March 31, 2021, or 54% of total executed
deferrals. Further rent collection details can be found in
our investor presentation made available today.
2021 Guidance Update
In light of the Company's
proposed merger with Realty Income announced on April 29, 2021, the Company will no longer
provide guidance nor is it affirming past guidance.
Subsequent Events
Acquisitions
From April 1,
2021 through April 30, 2021,
the Company acquired 19 properties for $29.7
million, bringing acquisitions year-to-date through
April 30, 2021, to $168.1 million, with over $300.0 million under contract or letter of
intent.
Office Dispositions
There were no office dispositions
subsequent to the quarter end.
Strategic Dispositions
From April 1, 2021 through April 30, 2021, the Company disposed of nine
properties for an aggregate sales price of $12.6 million, bringing strategic dispositions
year-to-date through April 30, 2021,
to approximately $48.3 million.
Audio Webcast and Call Details
In light of the
Company's proposed merger with Realty Income, the Company will no
longer host its previously planned earnings call.
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 $14.5 billion including approximately 3,900
properties and 88.7 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.
About the Data
Prior period shares and
per share amounts have been updated to reflect the reverse stock
split, which took effect on December 17,
2020.
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 based
on the terms of the lease agreements in effect at January 1, 2021 and exclude rent due and cash
received for leases being accounted for on a cash basis as of
January 1, 2021. This change better
reflects normalized collections and has a very modest impact of
approximately 1.0%. Percentages also 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"), an industry
trade group, 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 and gains or losses on sale of investment securities or
mortgage notes receivable. We also exclude certain non-cash items
such as impairments of goodwill, intangible and right of use
assets, gains or losses on derivatives, gains or losses on the
extinguishment or forgiveness of debt and amortization of
intangibles, above-market lease assets and below-market lease
liabilities. 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.
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.
Funds from Operations ("FFO") and Adjusted Funds from
Operations ("AFFO")
Due to certain unique operating
characteristics of real estate companies, as discussed below,
Nareit 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 and gains or losses on sale
of investment securities or mortgage notes receivable. We also
exclude certain non-cash items such as impairments of goodwill,
intangible and right of use assets, straight-line rent, net direct
financing lease adjustments, gains or losses on derivatives, gains
or losses on the extinguishment or forgiveness of debt,
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. Management believes that excluding these items 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 the amortization of
deferred financing costs, premiums and discounts, which is included
in interest expense in accordance with GAAP. 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.
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 the 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.
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.
Unconsolidated Joint Ventures
Unconsolidated Joint Ventures include the Company's investments in
unconsolidated joint ventures formed to acquire and own real estate
properties and exclude other investments in unconsolidated
entities.
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 and
occupancy, acquisitions, dispositions, rent receipts, rent relief
requests, rent relief granted, the payment of future dividends, the
impact of the coronavirus (COVID-19) on the Company's business, and
the pending merger (the "Merger") with Realty Income Corporation.
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 consummate the proposed Merger
and the timing of the closing of the proposed Merger; the potential
impact of the announcement of the proposed transactions or
consummation of the proposed transactions on business
relationships, including with tenants, clients, employees,
customers and competitors; potential litigation associated with the
Merger; costs, fees, expenses and charges related to the proposed
transactions; risks as a result of the restrictions imposed by
operating covenants contained in the Merger Agreement restricting
the Company generally from issuing equity, incurring or pre-paying
debt and limitations on the use of its revolving credit facility;
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; 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.
VEREIT,
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(In thousands, except
for share and per share data) (Unaudited)
|
|
|
|
March 31,
2021
|
|
December
31,
2020
|
ASSETS
|
|
|
|
|
Real estate
investments, at cost:
|
|
|
|
|
Land
|
|
$
|
2,698,232
|
|
|
$
|
2,699,110
|
|
Buildings, fixtures
and improvements
|
|
9,941,903
|
|
|
10,032,055
|
|
Intangible lease
assets
|
|
1,883,826
|
|
|
1,872,461
|
|
Total real estate
investments, at cost
|
|
14,523,961
|
|
|
14,603,626
|
|
Less: accumulated
depreciation and amortization
|
|
3,861,411
|
|
|
3,833,084
|
|
Total real estate
investments, net
|
|
10,662,550
|
|
|
10,770,542
|
|
Operating lease
right-of-use assets
|
|
191,443
|
|
|
195,518
|
|
Investment in
unconsolidated entities
|
|
80,513
|
|
|
81,639
|
|
Cash and cash
equivalents
|
|
318,561
|
|
|
523,539
|
|
Restricted
cash
|
|
12,704
|
|
|
13,842
|
|
Rent and tenant
receivables and other assets, net
|
|
368,926
|
|
|
366,620
|
|
Goodwill
|
|
1,337,773
|
|
|
1,337,773
|
|
Real estate assets
held for sale, net
|
|
4,888
|
|
|
65,583
|
|
Total
assets
|
|
$
|
12,977,358
|
|
|
$
|
13,355,056
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Mortgage notes
payable, net
|
|
$
|
1,035,328
|
|
|
$
|
1,328,835
|
|
Corporate bonds,
net
|
|
4,586,252
|
|
|
4,584,230
|
|
Below-market lease
liabilities, net
|
|
117,121
|
|
|
120,938
|
|
Accounts payable and
accrued expenses
|
|
116,486
|
|
|
117,015
|
|
Derivative, deferred
rent and other liabilities
|
|
62,944
|
|
|
63,204
|
|
Distributions
payable
|
|
106,989
|
|
|
89,514
|
|
Operating lease
liabilities
|
|
202,024
|
|
|
209,104
|
|
Total
liabilities
|
|
6,227,144
|
|
|
6,512,840
|
|
Series F preferred
stock
|
|
149
|
|
|
189
|
|
Common
stock
|
|
2,291
|
|
|
2,289
|
|
Additional paid-in
capital
|
|
13,350,661
|
|
|
13,449,412
|
|
Accumulated other
comprehensive income
|
|
634
|
|
|
536
|
|
Accumulated
deficit
|
|
(6,610,678)
|
|
|
(6,617,380)
|
|
Total stockholders'
equity
|
|
6,743,057
|
|
|
6,835,046
|
|
Non-controlling
interests
|
|
7,157
|
|
|
7,170
|
|
Total
equity
|
|
6,750,214
|
|
|
6,842,216
|
|
Total liabilities and
equity
|
|
$
|
12,977,358
|
|
|
$
|
13,355,056
|
|
VEREIT,
INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(In thousands, except
for share and per share data) (Unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
|
2021
|
|
2020
|
Revenues:
|
|
|
|
|
Rental
|
|
$
|
290,309
|
|
|
$
|
298,586
|
|
Fees from managed
partnerships
|
|
500
|
|
|
596
|
|
Total
revenues
|
|
290,809
|
|
|
299,182
|
|
Operating
expenses:
|
|
|
|
|
Acquisition-related
|
|
1,354
|
|
|
1,523
|
|
Litigation and
non-routine costs, net
|
|
68
|
|
|
(8,564)
|
|
Property
operating
|
|
30,605
|
|
|
30,490
|
|
General and
administrative
|
|
14,526
|
|
|
15,056
|
|
Depreciation and
amortization
|
|
108,075
|
|
|
124,080
|
|
Impairments
|
|
31,849
|
|
|
8,380
|
|
Total operating
expenses
|
|
186,477
|
|
|
170,965
|
|
Other income
(expense):
|
|
|
|
|
Interest
expense
|
|
(60,736)
|
|
|
(64,696)
|
|
Loss on extinguishment
and forgiveness of debt, net
|
|
(2,132)
|
|
|
(1,280)
|
|
Other income,
net
|
|
3,666
|
|
|
175
|
|
Equity in income of
unconsolidated entities
|
|
447
|
|
|
246
|
|
Gain on disposition of
real estate and real estate assets held for sale, net
|
|
76,074
|
|
|
25,249
|
|
Total other income
(expenses), net
|
|
17,319
|
|
|
(40,306)
|
|
Income before
taxes
|
|
121,651
|
|
|
87,911
|
|
Provision for income
taxes
|
|
(928)
|
|
|
(1,048)
|
|
Net
income
|
|
120,723
|
|
|
86,863
|
|
Net income
attributable to non-controlling interests
|
|
(76)
|
|
|
(55)
|
|
Net income
attributable to the General Partner
|
|
$
|
120,647
|
|
|
$
|
86,808
|
|
|
|
|
|
|
Basic and diluted net
income per share attributable to common stockholders
|
|
$
|
0.50
|
|
|
$
|
0.34
|
|
Distributions
declared per common share
|
|
$
|
0.46
|
|
|
$
|
0.69
|
|
VEREIT,
INC.
|
EBITDAre AND
NORMALIZED EBITDA
|
(In thousands)
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2021
|
|
December
31,
2020
|
|
March 31,
2020
|
Net income
(loss)
|
|
$
|
120,723
|
|
|
$
|
(37,866)
|
|
|
$
|
86,863
|
|
Adjustments:
|
|
|
|
|
|
|
Interest
expense
|
|
60,736
|
|
|
68,416
|
|
|
64,696
|
|
Depreciation and
amortization
|
|
108,075
|
|
|
108,138
|
|
|
124,080
|
|
Provision for income
taxes
|
|
928
|
|
|
1,358
|
|
|
1,048
|
|
Proportionate share of
adjustments for unconsolidated entities
|
|
2,249
|
|
|
2,443
|
|
|
1,761
|
|
Gain on disposition of
real estate assets, net
|
|
(76,074)
|
|
|
(18,965)
|
|
|
(25,249)
|
|
Impairments of real
estate
|
|
31,849
|
|
|
24,852
|
|
|
8,380
|
|
EBITDAre
|
|
$
|
248,486
|
|
|
$
|
148,376
|
|
|
$
|
261,579
|
|
Impairment of
intangibles and right of use assets
|
|
—
|
|
|
3,352
|
|
|
—
|
|
Acquisition-related
expenses
|
|
1,354
|
|
|
1,048
|
|
|
1,523
|
|
Litigation and
non-routine costs, net
|
|
68
|
|
|
10,925
|
|
|
(8,564)
|
|
(Gain) loss on
investments
|
|
(695)
|
|
|
(313)
|
|
|
541
|
|
Loss on derivative
instruments, net
|
|
—
|
|
|
85,392
|
|
|
—
|
|
Amortization of
above-market lease assets and deferred lease incentives,
net of amortization of below-market lease liabilities
|
|
1,547
|
|
|
1,428
|
|
|
748
|
|
Loss on extinguishment
and forgiveness of debt, net
|
|
2,132
|
|
|
67
|
|
|
1,280
|
|
Net direct financing
lease adjustments
|
|
366
|
|
|
379
|
|
|
365
|
|
Other adjustments,
net
|
|
(2,055)
|
|
|
(3,919)
|
|
|
(205)
|
|
Proportionate
share of adjustments for unconsolidated entities
|
|
(32)
|
|
|
(46)
|
|
|
(36)
|
|
Normalized
EBITDA
|
|
$
|
251,171
|
|
|
$
|
246,689
|
|
|
$
|
257,231
|
|
Normalized EBITDA
annualized
|
|
$
|
1,004,684
|
|
|
$
|
986,756
|
|
|
$
|
1,028,924
|
|
VEREIT,
INC.
|
FUNDS FROM
OPERATIONS
|
(In thousands, except
for share and per share data) (Unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
|
2021
|
|
2020
|
Net
income
|
|
$
|
120,723
|
|
|
$
|
86,863
|
|
Dividends on
non-convertible preferred stock
|
|
(6,525)
|
|
|
(12,948)
|
|
Gain on disposition
of real estate assets, net
|
|
(76,074)
|
|
|
(25,249)
|
|
Depreciation and
amortization of real estate assets
|
|
107,700
|
|
|
123,645
|
|
Impairment of real
estate
|
|
31,849
|
|
|
8,380
|
|
Proportionate share
of adjustments for unconsolidated entities
|
|
1,315
|
|
|
1,131
|
|
FFO attributable
to common stockholders and limited partners
|
|
$
|
178,988
|
|
|
$
|
181,822
|
|
|
|
|
|
|
Weighted-average
shares outstanding - basic
|
|
229,159,472
|
|
|
215,587,560
|
|
Effect of
weighted-average Limited Partner OP Units and dilutive
securities
|
|
270,395
|
|
|
362,688
|
|
Weighted-average
shares outstanding - diluted
|
|
229,429,867
|
|
|
215,950,248
|
|
|
|
|
|
|
FFO attributable
to common stockholders and limited partners per diluted
share
|
|
$
|
0.78
|
|
|
$
|
0.84
|
|
VEREIT,
INC.
|
ADJUSTED FUNDS
FROM OPERATIONS
|
(In thousands, except
for share and per share data) (Unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
|
2021
|
|
2020
|
FFO attributable
to common stockholders and limited partners
|
|
$
|
178,988
|
|
|
$
|
181,822
|
|
|
|
|
|
|
Acquisition-related
expenses
|
|
1,354
|
|
|
1,523
|
|
Litigation and
non-routine costs, net
|
|
68
|
|
|
(8,564)
|
|
(Gain) loss on
investments
|
|
(695)
|
|
|
541
|
|
Amortization of
premiums and discounts on debt and investments, net
|
|
87
|
|
|
(689)
|
|
Amortization of
above-market lease assets and deferred lease incentives, net of
amortization of below-market lease liabilities
|
|
1,547
|
|
|
748
|
|
Net direct financing
lease adjustments
|
|
366
|
|
|
365
|
|
Amortization and
write-off of deferred financing costs
|
|
2,555
|
|
|
2,841
|
|
Loss on
extinguishment and forgiveness of debt, net
|
|
2,132
|
|
|
1,280
|
|
Straight-line
rent
|
|
(4,219)
|
|
|
(2,054)
|
|
Equity-based
compensation
|
|
2,669
|
|
|
2,602
|
|
Other adjustments,
net
|
|
(1,661)
|
|
|
228
|
|
Proportionate share
of adjustments for unconsolidated entities
|
|
(144)
|
|
|
331
|
|
AFFO attributable
to common stockholders and limited partners
|
|
$
|
183,047
|
|
|
$
|
180,974
|
|
|
|
|
|
|
Weighted-average
shares outstanding - basic
|
|
229,159,472
|
|
|
215,587,560
|
|
Effect of
weighted-average Limited Partner OP Units and dilutive
securities
|
|
270,395
|
|
|
362,688
|
|
Weighted-average
shares outstanding - diluted
|
|
229,429,867
|
|
|
215,950,248
|
|
|
|
|
|
|
AFFO attributable
to common stockholders and limited partners per diluted
share
|
|
$
|
0.80
|
|
|
$
|
0.84
|
|
VEREIT,
INC.
|
FINANCIAL AND
OPERATIONS STATISTICS AND RATIOS
|
(Dollars in
thousands) (Unaudited)
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2021
|
Interest expense - as
reported
|
|
$
|
60,736
|
|
Adjustments:
|
|
|
Amortization of
deferred financing costs and other non-cash charges
|
|
(2,412)
|
|
Amortization of net
premiums
|
|
(248)
|
|
Proportionate share
of amounts for Unconsolidated Joint Ventures
|
|
784
|
|
Interest Expense,
Excluding Non-Cash Amortization
|
|
$
|
58,860
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2021
|
Interest Expense,
Excluding Non-Cash Amortization
|
|
$
|
58,860
|
|
Secured debt
principal amortization
|
|
687
|
|
Dividends
attributable to preferred shares
|
|
6,525
|
|
Total fixed
charges
|
|
66,072
|
|
Normalized
EBITDA
|
|
251,171
|
|
Fixed Charge Coverage
Ratio
|
|
3.80x
|
|
|
|
|
|
March 31,
2021
|
|
December
31,
2020
|
Mortgage notes
payable, net
|
|
$
|
1,035,328
|
|
|
$
|
1,328,835
|
|
Corporate bonds,
net
|
|
4,586,252
|
|
|
4,584,230
|
|
Total debt - as
reported
|
|
5,621,580
|
|
|
5,913,065
|
|
Deferred financing
costs, net
|
|
42,503
|
|
|
44,573
|
|
Net discounts
(premiums)
|
|
26,305
|
|
|
25,557
|
|
Principal
Outstanding
|
|
5,690,388
|
|
|
5,983,195
|
|
Proportionate share
of amounts for Unconsolidated
Joint Ventures
|
|
106,516
|
|
|
106,516
|
|
Adjusted Principal
Outstanding
|
|
$
|
5,796,904
|
|
|
$
|
6,089,711
|
|
Cash and cash
equivalents
|
|
(318,561)
|
|
|
(523,539)
|
|
Pro rata share of
Unconsolidated Joint Ventures' cash
and cash equivalents
|
|
(1,587)
|
|
|
(1,619)
|
|
Net
Debt
|
|
$
|
5,476,756
|
|
|
$
|
5,564,553
|
|
|
|
March 31,
2021
|
Total real estate
investments, at cost - as reported
|
|
$
|
14,523,961
|
|
Adjustments:
|
|
|
Investment in Cole
REITs
|
|
7,951
|
|
Gross assets held for
sale
|
|
7,145
|
|
Investment in direct
financing leases, net
|
|
6,181
|
|
Gross below market
leases
|
|
(225,657)
|
|
Proportionate share
of amounts for Unconsolidated Joint
Ventures
|
|
165,646
|
|
Gross Real Estate
Investments
|
|
$
|
14,485,227
|
|
|
|
March 31,
2021
|
|
December
31,
2020
|
Net
Debt
|
|
$
|
5,476,756
|
|
|
$
|
5,564,553
|
|
Normalized EBITDA
Annualized
|
|
1,004,684
|
|
|
986,756
|
|
Net Debt to
Normalized EBITDA Annualized Ratio
|
|
5.45x
|
|
|
5.64x
|
|
|
|
March 31,
2021
|
Net
Debt
|
|
$
|
5,476,756
|
|
Gross Real Estate
Investments
|
|
14,485,227
|
|
Net Debt Leverage
Ratio
|
|
37.8
|
%
|
|
|
|
Unencumbered Gross
Real Estate Investments
|
|
$
|
12,455,130
|
|
Gross Real Estate
Investments
|
|
14,485,227
|
|
Unencumbered asset
ratio
|
|
86.0
|
%
|
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SOURCE VEREIT, Inc.