PHOENIX, Aug. 5, 2021 /PRNewswire/ -- VEREIT, Inc. (NYSE:
VER) ("VEREIT" or the "Company") announced today its operating
results for the three months ending June 30, 2021.
Second Quarter 2021 Financial and Operating
Highlights
- Net income of $77.9 million and
net income per diluted share of $0.31
- Achieved $0.81 AFFO per diluted
share, representing an 8.0% increase compared to the same quarter
in 2020
- Rent collection of 99.4%
- Compared to last quarter, the following items remained
essentially flat: Total debt - as reported at $5.6 billion; Adjusted Principal Outstanding at
$5.8 billion; Net Debt at
$5.5 billion; and Net Debt to
Normalized EBITDA at 5.46x
- On April 29, 2021, the Company
announced it had entered into 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 July 30, 2021
- Invested $860.9 million of
capital, including $387.9 million in
property acquisitions and build-to-suits placed into service, along
with approximately $473.0 million
allocated toward the full redemption of the Company's 6.7% Series F
Preferred Stock, $100.0 million of
which was redeemed on January 15,
2021 and the remainder will be redeemed on August 15, 2021
- Office dispositions totaled $270.8
million reducing office exposure to 14.4% as of
quarter-end
- Strategic dispositions totaled $116.3
million
Second Quarter 2021 Financial Results
Total Revenues
Total revenues for the quarter ended
June 30, 2021 increased $12.3
million to $291.3 million as
compared to total revenues of $279.0
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
June 30, 2021 increased $21.8 million to $77.9 million as compared to net income of
$56.1 million for the same quarter in
2020, and net income per diluted share increased $0.11 to $0.31 for
the quarter ended June 30, 2021, as compared to net income per
diluted share of $0.20 for the same
quarter in 2020.
Normalized EBITDA
Normalized EBITDA for the quarter
ended June 30, 2021 increased $13.1
million to $251.6 million as
compared to Normalized EBITDA of $238.5
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 June 30, 2021 increased $19.8 million to $175.7
million, as compared to $155.9
million for the same quarter in 2020, and FFO per diluted
share increased $0.04 to $0.76 for the quarter ended June 30, 2021,
as compared to FFO per diluted share of $0.72 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 June 30, 2021
increased $25.5 million to
$186.6 million, as compared to
$161.1 million for the same quarter
in 2020, and AFFO per diluted share increased $0.06 to $0.81 for
the quarter ended June 30, 2021, as compared to $0.75 for the same quarter in 2020.
Balance Sheet and Liquidity
As of the end of the
second quarter, the Company had corporate liquidity of
approximately $1.8 billion, comprised
of $275.5 million in cash and cash
equivalents and $1.5 billion of
availability under its credit facility. In addition, secured debt
was reduced by $33.3 million.
Consolidated Financial Statistics
Financial Statistics
as of the quarter ended June 30, 2021 are as follows:
Net Debt to Normalized EBITDA of 5.46x, Fixed Charge Coverage Ratio
of 4.0x, Unencumbered Asset Ratio of 86.6%, Net Debt to Gross Real
Estate Investments of 37.7%, and Weighted Average Debt Term of 5.8
years.
Common Stock Dividend Information
On August 4, 2021, the Company's Board of Directors
declared a quarterly dividend of $0.462 per share for the third quarter of 2021.
The dividend will be paid on October 15, 2021 to common
stockholders of record as of September 30, 2021.
Real Estate Portfolio
As of June 30, 2021, the
Company's portfolio consisted of 3,885 properties with total
portfolio occupancy of 97.1%, investment grade tenancy of 37.8% and
a weighted-average remaining lease term of 8.5 years. Occupancy in
the second quarter was mostly impacted by an 807,000 square foot
industrial property with manageable re-leasing spreads.
During the quarter ended June 30, 2021, same-store contract
rental revenue (3,752 properties) increased 5.3% as compared to the
same quarter in 2020. The weighted-average rent coverage for
retail and restaurant properties was 2.69x.
Real Estate Leasing Activity
During the second
quarter, the Company entered into 52 new and renewal leases on
approximately 2.0 million square feet, or 2.2% of the
portfolio. Leasing activity included 1.2 million square
feet of early renewals. Rent recapture for the quarter
approximated 104% of prior rents on an initial cash basis,
including early renewals.
Acquisitions
During the quarter ended June 30,
2021, the Company invested in 52 properties for $177.4 million at an average cash cap rate of
6.7%. In addition, the Company placed in service one
build-to-suit project with a total investment of $44.5 million, including $12.3 million related to land acquired in 2020,
at a cash cap rate of 8.4%. This brings the total weighted average
cash cap rate for the quarter to 7.0%.
Office Dispositions
During the quarter ended
June 30, 2021, the Company disposed of two office properties
for an aggregate sales price of $35.3
million. Of this amount, $20.4
million was used in the total weighted average cash cap rate
calculation of 7.3%. The gain on second quarter office
dispositions was $2.9 million.
Strategic Dispositions
During the quarter ended
June 30, 2021, the Company disposed of 20 properties for an
aggregate sales price of $73.7 million, which included the sale of a
legacy shopping center for $50.0
million. Of the total sales price, $64.1 million was used in the total weighted
average cash cap rate calculation of 7.2%. The gain on second
quarter strategic dispositions was $14.2
million.
COVID-19 Company Update
As of July 30, 2021, VEREIT had received rent of
approximately 99.4% for the second 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
|
Q2 2021
|
Total
Retail
|
99%
|
Casual
Dining
|
100%
|
Quick
Service
|
98%
|
Total
Restaurant
|
99%
|
Total
Office
|
100%
|
Total
Industrial
|
100%
|
As of July 21, 2021, we collected
$14.2 million of deferred rent,
representing approximately 100% of amounts due through June 30, 2021, or 75% of total executed
deferrals. Further rent collection details can be found in
our investor presentation made available today.
Subsequent Events
Acquisitions
From July 1,
2021 through July 30, 2021,
the Company acquired 15 properties for $39.8 million, bringing acquisitions and
build-to-suits placed into service year-to-date through
July 30, 2021, to $387.9 million
Full Redemption of Preferred Stock
On July 16, 2021, the Company announced the
redemption of all of the remaining approximately $373.0 million outstanding shares of its 6.7%
Series F preferred stock, which will be redeemed on August 15, 2021.
Strategic Dispositions
From July 1, 2021 through July
30, 2021, the Company disposed of 8 properties for an
aggregate sales price of $7.0
million, bringing strategic dispositions year-to-date
through July 30, 2021, to approximately $116.3 million.
Audio Webcast and Call Details
In light of the
Company's proposed merger with Realty Income, the Company will no
longer be holding earnings conference calls.
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 88.9 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.
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. As previously disclosed, the Company identified an
overstatement in amounts recorded to depreciation expense. The
Company revised the accompanying statement of operations for the
three months ended June 30, 2020 to
reduce depreciation and amortization expense by $1.9 million.
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 0.5%. Percentages also exclude any tenants in
bankruptcy prior to the pandemic.
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, Unencumbered Asset Ratio, Contract Rental
Revenue, and Rent Coverage 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.
Contract Rental Revenue
Includes minimum rent, percentage rent and other contingent
consideration, and rental revenue from parking and storage space
and the Company's pro rata share of such revenues from properties
owned by Unconsolidated Joint Ventures. Contract Rental Revenue
excludes GAAP adjustments, such as straight-line rent and
amortization of above-market lease assets and below-market lease
liabilities. Contract Rental Revenue includes such revenues from
properties subject to a direct financing lease. The Company
believes that Contract Rental Revenue is a useful non-GAAP
supplemental measure to investors and analysts for assessing
performance. However, Contract Rental Revenue should not be
considered as an alternative to revenue, as computed in accordance
with GAAP, or as an indicator of the Company's financial
performance. Contract Rental Revenue may not be comparable to
similarly titled measures of other companies.
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, merger, 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, merger,
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.
Rent Coverage
Rent Coverage is calculated as our tenants' property level
EBITDAR (earnings before interest, tax, depreciation, amortization
and rent), prior to the deduction of any corporate overhead
expenses, for the most recently provided trailing twelve-month
period, divided by annualized June
2021 rent per the lease terms.
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, the pending merger (the "Merger") with Realty
Income Corporation, including the estimated enterprise value of the
combined company, and the redemption of the 6.7% Series F Preferred
Stock and Series F Preferred Units. 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; 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)
|
|
|
|
June 30,
2021
|
|
March 31,
2021
|
ASSETS
|
|
|
|
|
Real estate
investments, at cost:
|
|
|
|
|
Land
|
|
$
|
2,724,975
|
|
|
$
|
2,698,232
|
|
Buildings, fixtures
and improvements
|
|
9,912,886
|
|
|
9,941,903
|
|
Intangible lease
assets
|
|
1,908,178
|
|
|
1,883,826
|
|
Total real estate
investments, at cost
|
|
14,546,039
|
|
|
14,523,961
|
|
Less: accumulated
depreciation and amortization
|
|
3,917,175
|
|
|
3,861,411
|
|
Total real estate
investments, net
|
|
10,628,864
|
|
|
10,662,550
|
|
Operating lease
right-of-use assets
|
|
188,628
|
|
|
191,443
|
|
Investment in
unconsolidated entities
|
|
80,487
|
|
|
80,513
|
|
Cash and cash
equivalents
|
|
275,496
|
|
|
318,561
|
|
Restricted
cash
|
|
9,584
|
|
|
12,704
|
|
Rent and tenant
receivables and other assets, net
|
|
365,186
|
|
|
368,926
|
|
Goodwill
|
|
1,337,773
|
|
|
1,337,773
|
|
Real estate assets
held for sale, net
|
|
28,977
|
|
|
4,888
|
|
Total
assets
|
|
$
|
12,914,995
|
|
|
$
|
12,977,358
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Mortgage notes
payable, net
|
|
$
|
1,002,496
|
|
|
$
|
1,035,328
|
|
Corporate bonds,
net
|
|
4,588,286
|
|
|
4,586,252
|
|
Below-market lease
liabilities, net
|
|
115,831
|
|
|
117,121
|
|
Accounts payable and
accrued expenses
|
|
117,445
|
|
|
116,486
|
|
Derivative, deferred
rent and other liabilities
|
|
64,371
|
|
|
62,944
|
|
Distributions
payable
|
|
106,999
|
|
|
106,989
|
|
Operating lease
liabilities
|
|
199,561
|
|
|
202,024
|
|
Total
liabilities
|
|
6,194,989
|
|
|
6,227,144
|
|
Series F preferred
stock
|
|
149
|
|
|
149
|
|
Common
stock
|
|
2,291
|
|
|
2,291
|
|
Additional paid-in
capital
|
|
13,354,657
|
|
|
13,350,661
|
|
Accumulated other
comprehensive income
|
|
732
|
|
|
634
|
|
Accumulated
deficit
|
|
(6,644,896)
|
|
|
(6,610,678)
|
|
Total stockholders'
equity
|
|
6,712,933
|
|
|
6,743,057
|
|
Non-controlling
interests
|
|
7,073
|
|
|
7,157
|
|
Total
equity
|
|
6,720,006
|
|
|
6,750,214
|
|
Total liabilities and
equity
|
|
$
|
12,914,995
|
|
|
$
|
12,977,358
|
|
VEREIT,
INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(In thousands, except
for share and per share data) (Unaudited)
|
|
|
|
Three Months Ended
June 30,
|
|
|
2021
|
|
2020
|
Revenues:
|
|
|
|
|
Rental
|
|
$
|
290,567
|
|
|
$
|
278,576
|
|
Fees from managed
partnerships
|
|
700
|
|
|
421
|
|
Total
revenues
|
|
291,267
|
|
|
278,997
|
|
Operating
expenses:
|
|
|
|
|
Acquisition-related
|
|
1,428
|
|
|
1,169
|
|
Merger, litigation and
non-routine costs, net
|
|
6,605
|
|
|
(118)
|
|
Property
operating
|
|
29,174
|
|
|
29,098
|
|
General and
administrative
|
|
16,451
|
|
|
16,120
|
|
Depreciation and
amortization
|
|
105,839
|
|
|
108,733
|
|
Impairments
|
|
14,129
|
|
|
12,094
|
|
Total operating
expenses
|
|
173,626
|
|
|
167,096
|
|
Other income
(expense):
|
|
|
|
|
Interest
expense
|
|
(59,291)
|
|
|
(65,613)
|
|
Gain (loss) on
extinguishment and forgiveness of debt, net
|
|
35
|
|
|
(200)
|
|
Other income,
net
|
|
3,089
|
|
|
778
|
|
Equity in income of
unconsolidated entities
|
|
464
|
|
|
1,497
|
|
Gain on disposition of
real estate and real estate assets held for sale, net
|
|
16,896
|
|
|
8,795
|
|
Total other
expenses, net
|
|
(38,807)
|
|
|
(54,743)
|
|
Income before
taxes
|
|
78,834
|
|
|
57,158
|
|
Provision for income
taxes
|
|
(931)
|
|
|
(1,053)
|
|
Net
income
|
|
77,903
|
|
|
56,105
|
|
Net income
attributable to non-controlling interests
|
|
(7)
|
|
|
(31)
|
|
Net income
attributable to the General Partner
|
|
$
|
77,896
|
|
|
$
|
56,074
|
|
|
|
|
|
|
Basic and diluted net
income per share attributable to common stockholders
|
|
$
|
0.31
|
|
|
$
|
0.20
|
|
Distributions
declared per common share
|
|
$
|
0.46
|
|
|
$
|
0.39
|
|
VEREIT,
INC.
|
EBITDAre AND
NORMALIZED EBITDA
|
(In thousands)
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
|
June 30,
2021
|
|
March 31,
2021
|
|
June 30,
2020
|
Net
income
|
|
$
|
77,903
|
|
|
$
|
120,723
|
|
|
$
|
56,105
|
|
Adjustments:
|
|
|
|
|
|
|
Interest
expense
|
|
59,291
|
|
|
60,736
|
|
|
65,613
|
|
Depreciation and
amortization
|
|
105,839
|
|
|
108,075
|
|
|
108,733
|
|
Provision for income
taxes
|
|
931
|
|
|
928
|
|
|
1,053
|
|
Proportionate share of
adjustments for unconsolidated entities
|
|
2,267
|
|
|
2,249
|
|
|
1,775
|
|
Gain on disposition of
real estate assets, net
|
|
(16,896)
|
|
|
(76,074)
|
|
|
(8,795)
|
|
Impairments of real
estate
|
|
14,129
|
|
|
31,849
|
|
|
12,094
|
|
EBITDAre
|
|
$
|
243,464
|
|
|
$
|
248,486
|
|
|
$
|
236,578
|
|
Acquisition-related
expenses
|
|
1,428
|
|
|
1,354
|
|
|
1,169
|
|
Merger, litigation and
non-routine costs, net
|
|
6,605
|
|
|
68
|
|
|
(118)
|
|
Loss (gain) on
investments
|
|
22
|
|
|
(695)
|
|
|
142
|
|
Amortization of
above-market lease assets and deferred lease incentives,
net of amortization of below-market lease liabilities
|
|
1,830
|
|
|
1,547
|
|
|
788
|
|
(Gain) loss on
extinguishment and forgiveness of debt, net
|
|
(35)
|
|
|
2,132
|
|
|
200
|
|
Net direct financing
lease adjustments
|
|
374
|
|
|
366
|
|
|
372
|
|
Other adjustments,
net
|
|
(2,050)
|
|
|
(2,055)
|
|
|
54
|
|
Proportionate
share of adjustments for unconsolidated entities
|
|
(32)
|
|
|
(32)
|
|
|
(706)
|
|
Normalized
EBITDA
|
|
$
|
251,606
|
|
|
$
|
251,171
|
|
|
$
|
238,479
|
|
Normalized EBITDA
annualized
|
|
$
|
1,006,424
|
|
|
$
|
1,004,684
|
|
|
$
|
953,916
|
|
VEREIT,
INC.
|
FUNDS FROM
OPERATIONS
|
(In thousands, except
for share and per share data) (Unaudited)
|
|
|
|
Three Months Ended
June 30,
|
|
|
2021
|
|
2020
|
Net
income
|
|
$
|
77,903
|
|
|
$
|
56,105
|
|
Dividends on
non-convertible preferred stock
|
|
(6,248)
|
|
|
(12,948)
|
|
Gain on disposition
of real estate assets, net
|
|
(16,896)
|
|
|
(8,795)
|
|
Depreciation and
amortization of real estate assets
|
|
105,440
|
|
|
108,341
|
|
Impairment of real
estate
|
|
14,129
|
|
|
12,094
|
|
Proportionate share
of adjustments for unconsolidated entities
|
|
1,324
|
|
|
1,146
|
|
FFO attributable
to common stockholders and limited partners
|
|
$
|
175,652
|
|
|
$
|
155,943
|
|
|
|
|
|
|
Weighted-average
shares outstanding - basic
|
|
229,251,460
|
|
|
215,673,313
|
|
Effect of
weighted-average Limited Partner OP Units and dilutive
securities
|
|
740,106
|
|
|
237,300
|
|
Weighted-average
shares outstanding - diluted
|
|
229,991,566
|
|
|
215,910,613
|
|
|
|
|
|
|
FFO attributable
to common stockholders and limited partners per diluted
share
|
|
$
|
0.76
|
|
|
$
|
0.72
|
|
VEREIT,
INC.
|
ADJUSTED FUNDS
FROM OPERATIONS
|
(In thousands, except
for share and per share data) (Unaudited)
|
|
|
|
Three Months Ended
June 30,
|
|
|
2021
|
|
2020
|
FFO attributable
to common stockholders and limited partners
|
|
$
|
175,652
|
|
|
$
|
155,943
|
|
|
|
|
|
|
Acquisition-related
expenses
|
|
1,428
|
|
|
1,169
|
|
Merger, litigation
and non-routine costs, net
|
|
6,605
|
|
|
(118)
|
|
Loss on
investments
|
|
22
|
|
|
142
|
|
Amortization of
premiums and discounts on debt and investments, net
|
|
555
|
|
|
(362)
|
|
Amortization of
above-market lease assets and deferred lease incentives, net of
amortization of below-market lease liabilities
|
|
1,830
|
|
|
788
|
|
Net direct financing
lease adjustments
|
|
374
|
|
|
372
|
|
Amortization and
write-off of deferred financing costs
|
|
2,649
|
|
|
2,898
|
|
(Gain) loss on
extinguishment and forgiveness of debt, net
|
|
(35)
|
|
|
200
|
|
Straight-line
rent
|
|
(4,613)
|
|
|
(3,404)
|
|
Equity-based
compensation
|
|
3,903
|
|
|
3,857
|
|
Other adjustments,
net
|
|
(1,638)
|
|
|
441
|
|
Proportionate share
of adjustments for unconsolidated entities
|
|
(136)
|
|
|
(843)
|
|
AFFO attributable
to common stockholders and limited partners
|
|
$
|
186,596
|
|
|
$
|
161,083
|
|
|
|
|
|
|
Weighted-average
shares outstanding - basic
|
|
229,251,460
|
|
|
215,673,313
|
|
Effect of
weighted-average Limited Partner OP Units and dilutive
securities
|
|
740,106
|
|
|
237,300
|
|
Weighted-average
shares outstanding - diluted
|
|
229,991,566
|
|
|
215,910,613
|
|
|
|
|
|
|
AFFO attributable
to common stockholders and limited partners per diluted
share
|
|
$
|
0.81
|
|
|
$
|
0.75
|
|
VEREIT,
INC.
|
CONTRACT RENTAL
REVENUE
|
(Dollars in
thousands) (Unaudited)
|
|
|
|
Three Months Ended
June 30,
|
|
|
2021
|
|
2020
|
Rental revenue -
as reported
|
|
$
|
290,567
|
|
|
$
|
278,576
|
|
Adjustments:
|
|
|
|
|
Costs reimbursed
related to CAM, property operating expenses and ground
leases
|
|
(15,523)
|
|
|
(22,681)
|
|
Straight-line
rent
|
|
(4,613)
|
|
|
(3,404)
|
|
Amortization of
above-market lease assets and deferred lease incentives, net of
amortization
of below-market lease liabilities
|
|
1,830
|
|
|
788
|
|
Net direct financing
lease adjustments
|
|
374
|
|
|
372
|
|
Other non-contract
rental revenue
|
|
(450)
|
|
|
(1,730)
|
|
Proportionate share
of amounts for Unconsolidated Joint Ventures
|
|
2,631
|
|
|
2,528
|
|
Contract Rental
Revenue
|
|
$
|
274,816
|
|
|
$
|
254,449
|
|
VEREIT,
INC.
|
FINANCIAL AND
OPERATIONS STATISTICS AND RATIOS
|
(Dollars in
thousands) (Unaudited)
|
|
|
|
Three Months
Ended
|
|
|
June 30,
2021
|
Interest expense - as
reported
|
|
$
|
59,291
|
|
Adjustments:
|
|
|
Amortization of
deferred financing costs and other non-cash charges
|
|
(2,508)
|
|
Amortization of net
premiums
|
|
(709)
|
|
Proportionate share
of amounts for Unconsolidated Joint Ventures
|
|
792
|
|
Interest Expense,
Excluding Non-Cash Amortization
|
|
$
|
56,866
|
|
|
|
Three Months
Ended
|
|
|
June 30,
2021
|
Interest Expense,
Excluding Non-Cash Amortization
|
|
$
|
56,866
|
|
Secured debt
principal amortization
|
|
524
|
|
Dividends
attributable to preferred shares
|
|
6,248
|
|
Total fixed
charges
|
|
63,638
|
|
Normalized
EBITDA
|
|
251,606
|
|
Fixed Charge Coverage
Ratio
|
|
3.95x
|
|
|
|
June 30,
2021
|
|
March 31,
2021
|
Mortgage notes
payable, net
|
|
$
|
1,002,496
|
|
|
$
|
1,035,328
|
|
Corporate bonds,
net
|
|
4,588,286
|
|
|
4,586,252
|
|
Total debt - as
reported
|
|
5,590,782
|
|
|
5,621,580
|
|
Deferred financing
costs, net
|
|
40,693
|
|
|
42,503
|
|
Net discounts
(premiums)
|
|
25,634
|
|
|
26,305
|
|
Principal
Outstanding
|
|
5,657,109
|
|
|
5,690,388
|
|
Proportionate share
of amounts for Unconsolidated Joint Ventures
|
|
109,678
|
|
|
106,516
|
|
Adjusted Principal
Outstanding
|
|
$
|
5,766,787
|
|
|
$
|
5,796,904
|
|
Cash and cash
equivalents
|
|
(275,496)
|
|
|
(318,561)
|
|
Pro rata share of
Unconsolidated Joint Ventures' cash and cash equivalents
|
|
(621)
|
|
|
(1,587)
|
|
Net
Debt
|
|
$
|
5,490,670
|
|
|
$
|
5,476,756
|
|
|
|
June 30,
2021
|
Total real estate
investments, at cost - as reported
|
|
$
|
14,546,039
|
|
Adjustments:
|
|
|
Investment in Cole
REITs
|
|
7,929
|
|
Gross assets held for
sale
|
|
47,666
|
|
Investment in direct
financing leases, net
|
|
5,806
|
|
Gross below market
leases
|
|
(227,183)
|
|
Proportionate share
of amounts for Unconsolidated Joint Ventures
|
|
170,982
|
|
Gross Real Estate
Investments
|
|
$
|
14,551,239
|
|
|
|
June 30,
2021
|
|
March 31,
2021
|
Net
Debt
|
|
$
|
5,490,670
|
|
|
$
|
5,476,756
|
|
Normalized EBITDA
Annualized
|
|
1,006,424
|
|
|
1,004,684
|
|
Net Debt to
Normalized EBITDA Annualized Ratio
|
|
5.46x
|
|
|
5.45x
|
|
|
|
June 30,
2021
|
Net
Debt
|
|
$
|
5,490,670
|
|
Gross Real Estate
Investments
|
|
14,551,239
|
|
Net Debt Leverage
Ratio
|
|
37.7
|
%
|
|
|
|
Unencumbered Gross
Real Estate Investments
|
|
$
|
12,600,755
|
|
Gross Real Estate
Investments
|
|
14,551,239
|
|
Unencumbered asset
ratio
|
|
86.6
|
%
|
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SOURCE VEREIT, Inc.