VEREIT
Annual Report 2018

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More annual reports from VEREIT:

2019 Report
2018 Report
2017 Report
2016 Report
2011 Report

Peers and competitors of VEREIT:

Whitestone REIT
British Land Company
Morguard Real Estate Investment Trust
Annaly Capital Management
Empire State Realty Trust

Plain-text annual report

2 0 1 8 A N N U A L R E P O R T Disciplined. Transparent. Consistent. 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. www.VEREIT.com L E T T E R F R O M T H E C E O Dear Stockholder, I am happy to report that 2018 was a successful year for VEREIT as we skillfully achieved core components of the business plan created in 2015. This plan established a set of principles which has guided our business model as a full service real estate (cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:17)(cid:3)(cid:57)(cid:40)(cid:53)(cid:40)(cid:918)(cid:55)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:81)(cid:68)(cid:89)(cid:76)(cid:74)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:71)(cid:76)(cid:605)(cid:70)(cid:88)(cid:79)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3) 2014 and our turnaround plan is on pace. To achieve this, we’ve imperative elements of our business: focused on three strengthening and diversifying our portfolio, creating an invest- ment-grade balance sheet and enhancing the Company’s leadership. Furthermore, we are very pleased with how the capital markets have funded us since we adopted our business plan. We have had total capital activity of $11.0 billion since 2015 which has allowed us to achieve our accomplishments. Strengthened Portfolio Our portfolio of approximately 4,000 properties has always (cid:69)(cid:72)(cid:72)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:80)(cid:82)(cid:86)(cid:87)(cid:3)(cid:76)(cid:80)(cid:83)(cid:82)(cid:85)(cid:87)(cid:68)(cid:81)(cid:87)(cid:3)(cid:68)(cid:86)(cid:83)(cid:72)(cid:70)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:17)(cid:3)(cid:39)(cid:76)(cid:89)(cid:72)(cid:85)(cid:86)(cid:76)(cid:564)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) has been at the core of our portfolio management strategy for many years, and it’s a central attribute in VEREIT’s portfolio strength. We’ve continued to cull our portfolio through disposi- tions and have added targeted acquisitions to meet our proper- (cid:87)(cid:92)(cid:3) (cid:87)(cid:92)(cid:83)(cid:72)(cid:3) (cid:71)(cid:76)(cid:89)(cid:72)(cid:85)(cid:86)(cid:76)(cid:564)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:92)(cid:3) (cid:82)(cid:73)(cid:3) (cid:23)(cid:19)(cid:8)(cid:16)(cid:24)(cid:19)(cid:8)(cid:3) (cid:85)(cid:72)(cid:87)(cid:68)(cid:76)(cid:79)(cid:15)(cid:3) (cid:20)(cid:24)(cid:8)(cid:16)(cid:21)(cid:19)(cid:8)(cid:3) (cid:85)(cid:72)(cid:86)(cid:87)(cid:68)(cid:88)(cid:85)(cid:68)(cid:81)(cid:87)(cid:86)(cid:15)(cid:3) (cid:20)(cid:24)(cid:8)(cid:16)(cid:21)(cid:19)(cid:8)(cid:3) (cid:82)(cid:605)(cid:70)(cid:72)(cid:15)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:20)(cid:24)(cid:8)(cid:16)(cid:21)(cid:19)(cid:8)(cid:3) (cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:68)(cid:79)(cid:17)(cid:3) (cid:54)(cid:76)(cid:81)(cid:70)(cid:72)(cid:3) 2015, we have sold over $3.7 billion in properties and mortgage related investments at net gains and acquired over $1.4 billion, (cid:76)(cid:80)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:80)(cid:72)(cid:87)(cid:85)(cid:76)(cid:70)(cid:86)(cid:17)(cid:3) (cid:58)(cid:72)(cid:3) (cid:68)(cid:79)(cid:86)(cid:82)(cid:3) (cid:72)(cid:86)(cid:87)(cid:68)(cid:69)(cid:79)(cid:76)(cid:86)(cid:75)(cid:72)(cid:71)(cid:3) (cid:86)(cid:83)(cid:72)(cid:70)(cid:76)(cid:564)(cid:70)(cid:3) (cid:74)(cid:82)(cid:68)(cid:79)(cid:86)(cid:15)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:81)(cid:82)(cid:3)(cid:87)(cid:72)(cid:81)(cid:68)(cid:81)(cid:87)(cid:3)(cid:86)(cid:75)(cid:82)(cid:88)(cid:79)(cid:71)(cid:3)(cid:80)(cid:68)(cid:78)(cid:72)(cid:3)(cid:88)(cid:83)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:24)(cid:17)(cid:19)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3) (cid:83)(cid:82)(cid:85)(cid:87)(cid:73)(cid:82)(cid:79)(cid:76)(cid:82)(cid:15)(cid:3)(cid:81)(cid:82)(cid:3)(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:92)(cid:3)(cid:82)(cid:85)(cid:3)(cid:74)(cid:72)(cid:82)(cid:74)(cid:85)(cid:68)(cid:83)(cid:75)(cid:92)(cid:3)(cid:86)(cid:75)(cid:82)(cid:88)(cid:79)(cid:71)(cid:3)(cid:69)(cid:72)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:20)(cid:19)(cid:17)(cid:19)(cid:8)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:74)(cid:85)(cid:68)(cid:71)(cid:72)(cid:3)(cid:87)(cid:72)(cid:81)(cid:68)(cid:81)(cid:87)(cid:86)(cid:3)(cid:86)(cid:75)(cid:82)(cid:88)(cid:79)(cid:71)(cid:3)(cid:69)(cid:72)(cid:3)(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:91)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:79)(cid:92)(cid:3)(cid:22)(cid:19)(cid:16)(cid:23)(cid:19)(cid:8)(cid:3) of VEREIT’s portfolio. Back in 2015, we had one tenant, Red (cid:47)(cid:82)(cid:69)(cid:86)(cid:87)(cid:72)(cid:85)(cid:3)(cid:68)(cid:87)(cid:3)(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:91)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:79)(cid:92)(cid:3)(cid:20)(cid:21)(cid:17)(cid:19)(cid:8)(cid:17)(cid:3)(cid:54)(cid:76)(cid:81)(cid:70)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:81)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:86)(cid:82)(cid:79)(cid:71)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3) $1.0 billion of Red Lobster properties and have reduced (cid:72)(cid:91)(cid:83)(cid:82)(cid:86)(cid:88)(cid:85)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:24)(cid:17)(cid:24)(cid:8)(cid:17)(cid:3)(cid:50)(cid:88)(cid:85)(cid:3)(cid:87)(cid:82)(cid:83)(cid:3)(cid:87)(cid:72)(cid:81)(cid:3)(cid:87)(cid:72)(cid:81)(cid:68)(cid:81)(cid:87)(cid:86)(cid:3)(cid:85)(cid:72)(cid:83)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:3)(cid:21)(cid:26)(cid:17)(cid:21)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3) (cid:83)(cid:82)(cid:85)(cid:87)(cid:73)(cid:82)(cid:79)(cid:76)(cid:82)(cid:15)(cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) (cid:76)(cid:86)(cid:3) (cid:71)(cid:82)(cid:90)(cid:81)(cid:3) (cid:73)(cid:85)(cid:82)(cid:80)(cid:3) (cid:22)(cid:22)(cid:17)(cid:22)(cid:8)(cid:3) (cid:76)(cid:81)(cid:3) (cid:21)(cid:19)(cid:20)(cid:24)(cid:17)(cid:3) (cid:58)(cid:72)(cid:3) (cid:85)(cid:72)(cid:80)(cid:68)(cid:76)(cid:81)(cid:3) (cid:89)(cid:72)(cid:85)(cid:92)(cid:3) (cid:71)(cid:76)(cid:89)(cid:72)(cid:85)(cid:86)(cid:76)(cid:564)(cid:72)(cid:71)(cid:3) (cid:74)(cid:72)(cid:82)(cid:74)(cid:85)(cid:68)(cid:83)(cid:75)(cid:76)(cid:70)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:69)(cid:92)(cid:3) (cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:92)(cid:17)(cid:3) (cid:50)(cid:88)(cid:85)(cid:3) (cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) grade tenants have remained healthy, making up more than (cid:23)(cid:19)(cid:17)(cid:19)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:73)(cid:82)(cid:79)(cid:76)(cid:82)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:57)(cid:40)(cid:53)(cid:40)(cid:918)(cid:55)(cid:519)(cid:86)(cid:3)(cid:68)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:73)(cid:82)(cid:79)(cid:76)(cid:82)(cid:3)(cid:82)(cid:70)(cid:70)(cid:88)(cid:83)(cid:68)(cid:81)(cid:70)(cid:92)(cid:3) (cid:75)(cid:68)(cid:86)(cid:3) (cid:85)(cid:72)(cid:80)(cid:68)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3) (cid:68)(cid:69)(cid:82)(cid:89)(cid:72)(cid:3) (cid:28)(cid:27)(cid:17)(cid:19)(cid:8)(cid:17)(cid:3) (cid:50)(cid:88)(cid:85)(cid:3) (cid:83)(cid:85)(cid:82)(cid:83)(cid:72)(cid:85)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3) (cid:82)(cid:73)(cid:87)(cid:72)(cid:81)(cid:3) (cid:75)(cid:82)(cid:79)(cid:71)(cid:3) mission-critical components for tenants and are strategically located across the country. Balance Sheet Health Having a very strong balance sheet has been a priority for VEREIT – we achieved investment grade rating earlier than (cid:82)(cid:85)(cid:76)(cid:74)(cid:76)(cid:81)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:70)(cid:87)(cid:72)(cid:71)(cid:17)(cid:3)(cid:54)(cid:76)(cid:81)(cid:70)(cid:72)(cid:3)(cid:21)(cid:19)(cid:20)(cid:24)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:85)(cid:72)(cid:71)(cid:88)(cid:70)(cid:72)(cid:71)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:87)(cid:82)(cid:87)(cid:68)(cid:79)(cid:3)(cid:71)(cid:72)(cid:69)(cid:87)(cid:3) from $10.4 billion to $6.1 billion and net debt to normalized EBITDA from 7.5x to 5.9x. During 2018, we entered into a new $2.9 billion credit facility replacing our $2.3 billion facility. The new credit facility was comprised of a $2.0 billion unsecured revolving credit line and a $900.0 million unsecured term loan – (cid:72)(cid:81)(cid:75)(cid:68)(cid:81)(cid:70)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:79)(cid:76)(cid:84)(cid:88)(cid:76)(cid:71)(cid:76)(cid:87)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:564)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:565)(cid:72)(cid:91)(cid:76)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:17)(cid:3)(cid:918)(cid:81)(cid:3)(cid:68)(cid:71)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3) repaid $597.5 million of principal outstanding related to the 2018 convertible notes that came due in August, and issued (cid:7)(cid:24)(cid:24)(cid:19)(cid:17)(cid:19)(cid:3) (cid:80)(cid:76)(cid:79)(cid:79)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:23)(cid:17)(cid:25)(cid:21)(cid:24)(cid:8)(cid:3) (cid:88)(cid:81)(cid:86)(cid:72)(cid:70)(cid:88)(cid:85)(cid:72)(cid:71)(cid:3) (cid:86)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3) (cid:81)(cid:82)(cid:87)(cid:72)(cid:86)(cid:17)(cid:3) (cid:50)(cid:88)(cid:85)(cid:3) (cid:69)(cid:82)(cid:81)(cid:71)(cid:3) (cid:82)(cid:909)(cid:72)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:90)(cid:68)(cid:86)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:86)(cid:88)(cid:69)(cid:86)(cid:70)(cid:85)(cid:76)(cid:69)(cid:72)(cid:71)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:90)(cid:72)(cid:3)(cid:76)(cid:80)(cid:83)(cid:85)(cid:82)(cid:89)(cid:72)(cid:71)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:71)(cid:72)(cid:69)(cid:87)(cid:3)(cid:80)(cid:68)(cid:87)(cid:88)(cid:85)(cid:76)- ty schedule. VEREIT will continue to monitor its debt balances and unencumber our assets to ensure VEREIT’s balance sheet (cid:85)(cid:72)(cid:80)(cid:68)(cid:76)(cid:81)(cid:86)(cid:3) (cid:565)(cid:72)(cid:91)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:79)(cid:76)(cid:84)(cid:88)(cid:76)(cid:71)(cid:3) (cid:68)(cid:86)(cid:3) (cid:90)(cid:72)(cid:3) (cid:68)(cid:85)(cid:72)(cid:3) (cid:70)(cid:82)(cid:74)(cid:81)(cid:76)(cid:93)(cid:68)(cid:81)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:86)(cid:72)(cid:87)(cid:87)(cid:79)(cid:72)- ment payments we have been making. VEREIT has now settled (cid:70)(cid:79)(cid:68)(cid:76)(cid:80)(cid:86)(cid:3)(cid:69)(cid:85)(cid:82)(cid:88)(cid:74)(cid:75)(cid:87)(cid:3)(cid:69)(cid:92)(cid:3)(cid:83)(cid:79)(cid:68)(cid:76)(cid:81)(cid:87)(cid:76)(cid:909)(cid:86)(cid:3)(cid:85)(cid:72)(cid:83)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:91)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:79)(cid:92)(cid:3)(cid:22)(cid:22)(cid:17)(cid:24)(cid:8)(cid:3) of VEREIT’s outstanding shares of common stock held at the relevant time for a total of $233.2 million. Litigation remains our last major legacy issue. Consistent Leadership These achievements were facilitated by VEREIT’s strong leader- ship team, which has remained consistent since 2015. Made up of industry experts, the executive management team is commit- ted to serving tenants, stakeholders and employees. Their commitment to VEREIT’s business model has allowed the Company to achieve our established goals. VEREIT also remains committed to having strong corporate governance through the reconstitution of its Board of Directors since 2014 and imple- mentation of best-in-class corporate governance policies. The Company has opted out of Maryland anti-takeover statutes, implemented majority voting for uncontested director elections, initiated stockholder rights plan limits, implemented proxy access and adopted a clawback policy for the potential (cid:85)(cid:72)(cid:70)(cid:82)(cid:88)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:605)(cid:70)(cid:72)(cid:85)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:17)(cid:3)(cid:37)(cid:72)(cid:70)(cid:68)(cid:88)(cid:86)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:87)(cid:85)(cid:72)(cid:81)(cid:74)(cid:87)(cid:75)(cid:3) (cid:82)(cid:73)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:79)(cid:72)(cid:68)(cid:71)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3) (cid:87)(cid:72)(cid:68)(cid:80)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:72)(cid:909)(cid:82)(cid:85)(cid:87)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:86)(cid:15)(cid:3) (cid:76)(cid:81)(cid:3) 2018, VEREIT was selected as one of Arizona’s Most Admired Companies for the second year in a row. The organization was also named one of Phoenix’s Best Places to Work and numer- ous employees were recognized with industry awards in 2018. (cid:55)(cid:75)(cid:72)(cid:3) (cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:83)(cid:79)(cid:68)(cid:70)(cid:72)(cid:3) (cid:85)(cid:72)(cid:70)(cid:82)(cid:74)(cid:81)(cid:76)(cid:93)(cid:72)(cid:86)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:82)(cid:85)(cid:74)(cid:68)(cid:81)(cid:76)(cid:93)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:519)(cid:86)(cid:3) (cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:564)(cid:70)(cid:68)(cid:81)(cid:87)(cid:3) success and has honored the diligent work of our team. Outlook We have been able to navigate an evolving market through our (cid:564)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:70)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:68)(cid:70)(cid:87)(cid:76)(cid:89)(cid:76)(cid:87)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:90)(cid:72)(cid:79)(cid:79)(cid:3)(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:72)(cid:71)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3) 2019. Looking beyond 2019, we believe we will have a healthy portfolio, well organized operating platform, and a solid balance sheet. On behalf of everyone at VEREIT, I would like to thank each of our stockholders for their ongoing trust. We’ve made great strides in achieving our established business plan and will continue to focus on achieving the goals we have set for the Company. Glenn J. Rufrano(cid:3)(cid:95)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:605)(cid:70)(cid:72)(cid:85)(cid:3)(cid:95)(cid:3)(cid:57)(cid:40)(cid:53)(cid:40)(cid:918)(cid:55)(cid:15)(cid:3)(cid:918)(cid:81)(cid:70)(cid:17) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 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.) Delaware (VEREIT Operating Partnership, L.P.) (State or other jurisdiction of incorporation or organization) 2325 E. Camelback Road, Suite 1100, Phoenix, AZ (Address of principal executive offices) (800) 606-3610 45-2482685 45-1255683 (I.R.S. Employer Identification No.) 85016 (Zip Code) (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: Name of each exchange on which registered: Common Stock, $0.01 par value per share (VEREIT, Inc.) 6.70% Series F Cumulative Redeemable Preferred Stock, $0.01 par value per share (VEREIT, Inc.) New York Stock Exchange New York Stock Exchange Securities registered pursuant to Section 12(g) of the Securities Exchange Act of 1934: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act of 1933. VEREIT, Inc. Yes VEREIT Operating Partnership, L.P. Yes No No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934. VEREIT, Inc. Yes VEREIT Operating Partnership, L.P. Yes No No 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 VEREIT Operating Partnership, L.P. Yes No No 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 VEREIT Operating Partnership, L.P. Yes No No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. 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. VEREIT Operating Partnership, L.P. Large accelerated filer Smaller reporting company Large accelerated filer Smaller reporting company Accelerated filer Emerging growth company Accelerated filer Emerging growth company Non-accelerated filer Non-accelerated filer 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. Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). VEREIT, Inc. Yes VEREIT Operating Partnership, L.P. Yes No No The aggregate market value of voting and non-voting common stock held by non-affiliates of VEREIT, Inc. as of June 29, 2018 was approximately $7.2 billion based on the closing sale price for VEREIT, Inc.’s common stock on that day as reported by the New York Stock Exchange. There were 967,784,153 shares of common stock of VEREIT, Inc. outstanding as of February 19, 2019. There is no public trading market for the common units of VEREIT Operating Partnership, L.P. As a result, the aggregate market value of the common units held by non-affiliates of VEREIT Operating Partnership, L.P. cannot be determined. DOCUMENTS INCORPORATED BY REFERENCE Certain portions of VEREIT, Inc.’s Definitive Proxy Statement for its 2019 Annual Meeting of Stockholders (the “Proxy Statement”) to be filed pursuant to Rule 14a-6 of the Securities Exchange Act of 1934, as amended, are incorporated by reference into this Annual Report on Form 10-K. Other than those portions of the Proxy Statement specifically incorporated by reference pursuant to Items 10 through 14 of Part III hereof, no other portions of the Proxy Statement shall be deemed so incorporated. [This page intentionally left blank] EXPLANATORY NOTE This report combines the Annual Reports on Form 10-K for the year ended December 31, 2018 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 Annual Reports on Form 10-K 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 9A. Controls and Procedures and Exhibit 31 and Exhibit 32 certifications. As general partner with control of the Operating Partnership, VEREIT, Inc. consolidates the Operating Partnership for financial reporting purposes. Therefore, the assets and liabilities of VEREIT, Inc. and VEREIT Operating Partnership, L.P. are the same on their respective consolidated financial statements. The separate discussions of VEREIT, Inc. and VEREIT Operating Partnership, L.P. in this report should be read in conjunction with each other to understand the results of the Company on a consolidated basis and how management operates the Company. [This page intentionally left blank] VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. For the fiscal year ended December 31, 2018 Forward-Looking Statements PART I Item 1. Business Item 1A. Risk Factors Item 1B. Unresolved Staff Comments Item 2. Properties Item 3. Legal Proceedings Item 4. Mine Safety Disclosures PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Item 6. Selected Financial Data Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 7A. Quantitative and Qualitative Disclosures About Market Risk Item 8. Financial Statements and Supplementary Data Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Item 9A. Controls and Procedures Item 9B. Other Information PART III Item 10. Directors, Executive Officers and Corporate Governance Item 11. Executive Compensation Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Item 13. Certain Relationships and Related Transactions, and Director Independence Item 14. Principal Accounting Fees and Services PART IV Item 15. Exhibits and Financial Statement Schedules Item 16. Form 10-K Summary Signatures Index to Consolidated Financial Statements Page 2 3 7 28 29 29 29 30 31 33 51 51 52 52 55 56 56 56 56 56 57 61 62 F-1 1 Forward-Looking Statements This Annual Report on Form 10-K includes “forward-looking statements” (within the meaning of the federal securities laws, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act of 1934, as amended (the “Exchange Act”)) that reflect our expectations and projections about our future results, performance, prospects and opportunities. We have attempted to identify these forward-looking statements by the use of words such as “may,” “will,” “seek,” “expects,” “anticipates,” “believes,” “targets,” “intends,” “should,” “estimates,” “could,” “continue,” “assume,” “projects,” “plans” or similar expressions. These forward-looking statements are based on information currently available to us and are subject to a number of known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, among other things, those discussed below. We intend for all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable by law. We do not undertake publicly to update or revise any forward-looking statements, whether as a result of changes in underlying assumptions or new information, future events or otherwise, except as may be required to satisfy our obligations under federal securities law. The following are some, but not all, of the assumptions, risks, uncertainties and other factors that could cause our actual results to differ materially from those presented in our forward-looking statements: • We may be unable to renew leases, lease vacant space or re-lease space as leases expire on favorable terms or at all. • We are subject to risks associated with tenant, geographic and industry concentrations with respect to our properties. • Our properties, goodwill and intangible assets and other assets may be subject to impairment charges. • We could be subject to 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 (“1031 real estate programs”) and VEREIT’s management with respect to such programs. • We are subject to competition in the acquisition and disposition of properties and in the leasing of our properties and we may be unable to acquire, dispose of, or lease properties on advantageous terms. • We could be subject to risks associated with bankruptcies or insolvencies of tenants, from tenant defaults generally or from the unpredictability of the business plans and financial condition of our tenants. • We are subject to risks associated with pending government investigations relating to the findings of the investigation conducted in 2014 by the audit committee (the “Audit Committee”) of the General Partner’s Board of Directors (the “Audit Committee Investigation”) and related litigation, including the expense of such investigations and litigation and any additional potential payments upon resolution. • We have substantial indebtedness, which may affect our ability to pay dividends, and expose us to interest rate fluctuation risk and the risk of default under our debt obligations. • • Our overall borrowing and operating flexibility may be adversely affected by the terms and restrictions within the indenture governing the senior unsecured notes (the “Senior Notes”), and the Credit Agreement governing the terms of the Credit Facility (as both terms are defined in Item 1. Business). Our access to capital and terms of future financings may be affected by adverse changes to our credit rating. • We may be affected by the incurrence of additional secured or unsecured debt. • We may not be able to achieve and maintain profitability. • We may not generate cash flows sufficient to pay our dividends to stockholders or meet our debt service obligations. • We may be affected by risks resulting from losses in excess of insured limits. • We may fail to remain qualified as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. • Compliance with the REIT annual distribution requirements may limit our operating flexibility. • We may be unable to retain or hire key personnel. All forward-looking statements should be read in light of the risks identified in Part I, Item 1A. Risk Factors within our Annual Report on Form 10-K for the year ended December 31, 2018. 2 We use certain defined terms throughout this Annual Report on Form 10-K that have the following meanings: When we refer to “annualized rental income,” we mean the rental revenue under our leases on operating properties owned at the respective reporting date on a straight-line basis, which includes the effect of rent escalations and any tenant concessions, such as free rent, and excludes any bad debt allowances and any contingent rent, such as percentage rent. Management uses annualized rental income as a basis for tenant, industry and geographic concentrations and other metrics within the portfolio. Annualized rental income is not indicative of future performance. When we refer to a “creditworthy tenant,” we mean a tenant that has entered into a lease that we determine is creditworthy and may include tenants with an investment grade or below investment grade credit rating, as determined by major credit rating agencies, or unrated tenants. To the extent we determine that a tenant is a “creditworthy tenant” even though it does not have an investment grade credit rating, we do so based on our management’s determination that a tenant should have the financial wherewithal to honor its obligations under its lease with us. As explained further below, this determination is based on our management’s substantial experience performing credit analysis and is made after evaluating all of a tenant’s due diligence materials that are made available to us, including financial statements and operating data. When we refer to a “direct financing lease,” we mean a lease that requires specific treatment due to the significance of the lease payments from the inception of the lease compared to the fair value of the property, term of the lease, a transfer of ownership, or a bargain purchase option. These leases are recorded as a net asset on the balance sheet. The amount recorded is calculated as the fair value of the remaining lease payments on the leases and the estimated fair value of any expected residual property value at the end of the lease term. When we refer to properties that are net leased on a “long term basis,” we mean properties with remaining primary lease terms of generally seven to 10 years or longer on average, depending on property type. Under a “net lease,” the tenant occupying the leased property (usually as a single tenant) does so in much the same manner as if the tenant were the owner of the property. There are various forms of net leases, most typically classified as triple net or double net. Triple net leases typically require that the tenant pay all expenses associated with the property (e.g., real estate taxes, insurance, maintenance and repairs). Double net leases typically require that the tenant pay all operating expenses associated with the property (e.g., real estate taxes, insurance and maintenance), but excludes some or all major repairs (e.g., roof, structure and parking lot). Accordingly, the owner receives the rent “net” of these expenses, rendering the cash flow associated with the lease predictable for the term of the lease. Under a net lease, the tenant generally agrees to lease the property for a significant term and agrees that it will either have no ability or only limited ability to terminate the lease or abate rent prior to the expiration of the term of the lease as a result of real estate driven events such as casualty, condemnation or failure by the landlord to fulfill its obligations under the lease. When we refer to “operating properties” we mean properties owned by the Company and beginning in 2017, omitting Excluded Properties. “Excluded Properties” are defined as properties for which (i) the related mortgage loan is in default, and (ii) management decides to transfer the properties to the lender in connection with settling the mortgage note obligation. As of December 31, 2018, our portfolio was comprised of 3,994 retail, restaurant, office and industrial real estate properties with an aggregate of 95.0 million square feet, of which 98.8% was leased, with a weighted-average remaining lease term of 8.9 years. As of December 31, 2018, there were no Excluded Properties. During the year ended December 31, 2018, one vacant industrial property was considered an Excluded Property. The Company entered into a deed-in-lieu of foreclosure agreement and conveyed its interest in this property to the lender in April 2018. Item 1. Business. Overview PART I 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 3,994 retail, restaurant, office and industrial operating properties with an aggregate of 95.0 million square feet, of which 98.8% was leased as of December 31, 2018, with a weighted-average remaining lease term of 8.9 years. VEREIT’s business model provides equity capital to creditworthy corporations in return for long-term leases on their properties. Substantially all of our real estate operations are conducted through the Operating Partnership. VEREIT, Inc. is the sole general partner and holder of 97.6% of the common partnership interests in the Operating Partnership (the “OP Units”) as of December 31, 2018 with the remaining 2.4% of the OP Units owned by certain non-affiliated investors and certain former directors, officers and employees of the Former Manager (as defined in Item 1A. Risk Factors). 3 Prior to the fourth quarter of 2017, the Company operated through two business segments, the real estate investment segment and the investment management segment, Cole Capital. The Company completed the sale of Cole Capital on February 1, 2018. The assets, liabilities and related financial results of substantially all of the Cole Capital segment are reflected in the financial statements as discontinued operations. VEREIT, Inc. was incorporated in the State of Maryland on December 2, 2010 and has elected to be treated as a REIT for U.S. federal income tax purposes. The Operating Partnership was formed in the State of Delaware on January 13, 2011. We operate our business in a manner that permits us to maintain our exemption from registration under the Investment Company Act of 1940, as amended. VEREIT, Inc.’s shares of common stock (“Common Stock”) and 6.70% Series F Cumulative Redeemable Preferred Stock (“Series F Preferred Stock”) trade on the New York Stock Exchange (the “NYSE”) under the trading symbols “VER” and “VER PRF,” respectively. 2018 Developments Real Estate Acquisitions During the year ended December 31, 2018, the Company acquired controlling financial interests in 52 commercial properties, including one land parcel for build-to-suit development, for an aggregate purchase price of $502.7 million, which includes $2.6 million of external acquisition-related expenses that were capitalized. Real Estate Dispositions During the year ended December 31, 2018, the Company disposed of 149 properties, including one property conveyed to a lender in a deed-in-lieu of foreclosure transaction, the Excluded Property, and one property owned by an unconsolidated joint venture for an aggregate sales price of $560.5 million, of which the Company’s share was $521.4 million, resulting in consolidated proceeds of $502.3 million after repayment of the unconsolidated joint venture’s mortgage loan and closing costs. The Company recorded a gain of $96.9 million related to the dispositions. Balance Sheet and Liquidity Litigation Settlements During the year ended December 31, 2018, the Company entered into settlement agreements with various plaintiffs in connection with litigation filed as a result of the findings of the Audit Committee Investigation for $217.5 million. The Company also entered into a settlement agreement for $15.7 million subsequent to December 31, 2018, which was accrued as of December 31, 2018 and included in litigation, merger and other non-routine costs, net of insurance recoveries in the consolidated statements of operations for the year ended December 31, 2018. See Note 10 – Commitments and Contingencies for additional information. Credit Agreement On May 23, 2018, the General Partner, as guarantor, and the OP, as borrower, entered into a credit agreement with Wells Fargo Bank, National Association, as administrative agent and the other lenders party thereto (the “Credit Agreement”). The Credit Agreement allows for maximum borrowings of $2.9 billion, consisting of a $2.0 billion unsecured revolving credit facility (the “Revolving Credit Facility”) and a $900.0 million unsecured term loan facility (the “Credit Facility Term Loan,” together with the Revolving Credit Facility, the “Credit Facility”). In connection with entering into the Credit Agreement, the OP repaid all of the outstanding obligations under the Amended and Restated Credit Agreement dated as of June 30, 2014 (as amended, the “2014 Credit Agreement”) and the 2014 Credit Agreement was terminated. 2018 Convertible Notes The Company’s convertible senior notes due August 1, 2018 (the “2018 Convertible Notes”) matured and the principal outstanding balance of $597.5 million, plus accrued and unpaid interest thereon, was repaid with proceeds from the Revolving Credit Facility. 2025 Senior Notes On October 16, 2018, the Company closed a senior note offering, consisting of $550.0 million aggregate principal amount of the OP’s 4.625% Senior Notes due 2025 (the “2025 Senior Notes”). The OP used the net proceeds from the offering of the notes to repay borrowings under its Revolving Credit Facility. 4 Debt Activity During the year ended December 31, 2018, the Company’s total debt increased by $14.5 million, from $6.07 billion to $6.09 billion, partially due to the issuance of the 2025 Senior Notes, and net borrowings on the 2014 Credit Agreement and Credit Facility of $218.0 million. These borrowings were partially offset by the repayment of $597.5 million of the 2018 Convertible Notes and a reduction of $153.9 million in secured debt. Share Repurchase Programs On May 12, 2017, the Company’s Board of Directors authorized the repurchase of up to $200.0 million of the Company’s outstanding Common Stock over the subsequent 12 months, as market conditions warranted (the “2017 Share Repurchase Program”). On May 3, 2018, the Company’s Board of Directors terminated the 2017 Share Repurchase Program and authorized a new program (the “2018 Share Repurchase Program,” and collectively with the 2017 Share Repurchase Program, the “Share Repurchase Programs”) that permits the Company to repurchase up to $200.0 million of its outstanding Common Stock through May 3, 2019, as market conditions warrant. During the year ended December 31, 2018, the Company repurchased approximately 6.4 million shares of Common Stock in multiple open market transactions, at a weighted average share price of $6.94, for an aggregate purchase price of $44.6 million, as part of the 2017 Share Repurchase Program and 0.8 million shares of Common Stock in multiple open market transactions, at a weighted average share price of $6.95 for an aggregate purchase price of $5.6 million as part of the 2018 Share Repurchase Program. Cole Capital Sale On February 1, 2018, we sold all of the issued and outstanding shares of common stock of Cole Capital Advisors, Inc. (“CCA”), our subsidiary that sponsored and managed non-listed real estate investment trusts, and certain of CCA’s subsidiaries, to CCA Acquisition, LLC (the “Cole Purchaser”), an affiliate of CIM Group, LLC for total consideration of approximately $120.0 million in cash. On February 1, 2018, we entered into a services agreement (the “Services Agreement”) with Cole Capital, pursuant to which we will continue to provide certain services to Cole Capital and its subsidiaries and to Cole Credit Property Trust IV, Inc. (“CCPT IV”), CIM Income NAV, Inc. (formerly known as Cole Real Estate Income Strategy (Daily NAV), Inc.) (“INAV”), Cole Office & Industrial REIT (CCIT II), Inc. (“CCIT II”), Cole Office & Industrial REIT (CCIT III), Inc. (“CCIT III”), and Cole Credit Property Trust V, Inc. (“CCPT V” and collectively with CCPT IV, INAV, CCIT II and CCIT III, the “Cole REITs”) including operational real estate support. Under the terms of the Services Agreement, we are entitled to receive reimbursement for certain of the services provided and fees based on the future revenues of Cole Capital above a specified dollar threshold (the “Net Revenue Payments”), up to an aggregate of $80.0 million in Net Revenue Payments. There were no Net Revenue Payments received or earned for 2018. Primary Investment Focus We own and actively manage a diversified portfolio of single-tenant retail, restaurant, office and industrial real estate assets subject to long-term net leases with creditworthy tenants. Our focus is on single-tenant, net-leased properties that are strategically located and essential to the business operations of the tenant, as well as retail properties that offer necessity and value-oriented products or services. We actively manage the portfolio by considering several metrics including property type, tenant concentration, geography, credit and key economic factors for appropriate balance and diversity. We believe that actively managing our portfolio allows us to attain the best operating results for each asset and the overall portfolio through strategic planning, implementation of these plans and responding proactively to changes and challenges in the marketplace. Investment Policies When evaluating prospective investments in or dispositions of real property, our management considers relevant real estate and financial factors, including the location of the property, the leases and other agreements affecting the property and business operations of the tenant, the creditworthiness of major tenants, its income-producing capacity, its physical condition, its prospects for appreciation, its prospects for liquidity, tax considerations and other factors. In this regard, our management will have substantial discretion with respect to the selection of specific investments, subject in certain instances to the approval of the Board of Directors. As part of our overall portfolio strategy, we seek to lease space and/or acquire properties leased to creditworthy tenants that meet our underwriting and operating guidelines. Prior to entering into any transaction, our corporate credit analysis and underwriting professionals conduct a review of a tenant’s credit quality. In addition, we consistently monitor the credit quality of our portfolio by actively reviewing the creditworthiness of certain tenants, focusing primarily on those tenants representing the greatest concentration of our portfolio. This review primarily includes an analysis of the tenant’s financial statements either quarterly, or as frequently as the lease permits. We also consider tenant credit quality when assessing our portfolio for strategic dispositions. When we assess tenant credit quality, we, among other factors that we may deem relevant: (i) review relevant financial information, 5 including financial ratios, net worth, revenue, cash flows, leverage and liquidity; (ii) evaluate the depth and experience of the tenant’s management team; and (iii) assess the strength/growth of the tenant’s industry. On an on-going basis, we evaluate the need for an allowance for doubtful accounts arising from estimated losses that could result from the tenant’s inability to make required current rent payments and an allowance against accrued rental revenue for future potential losses that we deem to be unrecoverable over the term of the lease. The factors considered in determining the credit risk of our tenants include, but are not limited to: payment history; credit status and change in status (credit ratings for public companies are used as a primary metric); change in tenant space needs (i.e., expansion/downsize); tenant financial performance; economic conditions in a specific geographic region; and industry specific credit considerations. We are of the opinion that the credit risk of our portfolio is reduced by the high quality of our existing tenant base, reviews of prospective tenants’ risk profiles prior to lease execution and consistent monitoring of our portfolio to identify potential problem tenants and mitigation options. Real Estate Investments As of December 31, 2018, the Company owned 3,994 operating properties comprising 95.0 million square feet of retail and commercial space located in 49 states and Puerto Rico, which includes properties owned through consolidated joint ventures. The rentable space at these properties was 98.8% leased with a weighted-average remaining lease term of 8.9 years. There were no tenants exceeding 10% of our consolidated annualized rental income as of December 31, 2018, 2017 or 2016. As of December 31, 2018, 2017 and 2016, properties located in Texas represented 12.5%, 12.8% and 13.5%, respectively, of our consolidated annualized rental income. As of December 31, 2018, tenants in the casual dining restaurant and manufacturing industries accounted for 12.8% and 10.1%, respectively, of our consolidated annualized rental income. As of December 31, 2017, tenants in the casual dining restaurant and manufacturing industries accounted for 13.8% and 10.1%, respectively, of our consolidated annualized rental income. As of December 31, 2016, tenants in the casual dining restaurant and manufacturing industries accounted for 15.6% and 10.1%, respectively, of our consolidated annualized rental income. Financing Policies We rely on leverage to allow us to invest in a greater number of assets and enhance our asset returns. We intend to finance future acquisitions with the most advantageous source of capital available to us at the time of the transaction, which may include a combination of public and private offerings of our equity and debt securities, unsecured corporate-level debt, and other public, private or bank debt. In addition, we may acquire properties in exchange for the issuance of Common Stock or OP Units and we may acquire properties subject to existing mortgage indebtedness. We also may obtain secured or unsecured debt to acquire properties, and we expect that our financing sources will include the public debt market, banks and institutional investment firms, including asset managers and life insurance companies. Although we intend to maintain a conservative capital structure, our charter does not contain a specific limitation on the amount of debt we may incur and the Board of Directors may implement or change target debt levels at any time without the approval of our stockholders. We intend to continue to emphasize unsecured corporate-level or OP-level debt in our financing and to seek to reduce the percentage of our assets which are secured by mortgage loans. For information relating to our Credit Facility, see Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources. Competition We are subject to competition in the acquisition and disposition of properties and in the leasing of our properties. We compete with a number of developers, owners and operators of retail, restaurant, office and industrial real estate, many of which own properties similar to ours in the same markets in which our properties are located. We also may face new competitors and, due to our focus on single-tenant properties located throughout the United States, and because many of our competitors are locally or regionally focused, we do not expect to encounter the same competitors in each region of the United States. Our competitors may be willing to accept lower returns on their investments and may succeed in buying the properties that we have targeted for acquisition. Foreign investors may view the U.S. real estate market as being more stable than other international markets and may increase investments in high-quality single-tenant properties, especially in gateway cities. We may also incur costs in connection with unsuccessful acquisitions that we will not be able to recover. Regulations Our investments are subject to various federal, state, local and foreign laws, ordinances and regulations, including, among other things, health, safety and zoning regulations, land use controls, environmental controls relating to air and water quality, noise pollution and indirect environmental impacts such as increased motor vehicle activity. We believe that we have all material permits and approvals necessary under current law to operate our investments. 6 Our properties are also subject to laws such as the Americans with Disabilities Act of 1990 (“ADA”), which require that all public accommodations must meet federal requirements related to access and use by disabled persons. Some of our properties may currently not be in compliance with the ADA. If one or more of the properties in our portfolio is not in compliance with the ADA or any other regulatory requirements, we may be required to incur additional costs to bring the property into compliance. Environmental Matters Under various federal, state and local environmental laws, a current owner of real estate may be required to investigate and clean up contaminated property. Under these laws, courts and government agencies have the authority to impose cleanup responsibility and liability even if the owner did not know of and was not responsible for the contamination. For example, liability can be imposed upon us based on the activities of our tenants or a prior owner. In addition to the cost of the cleanup, environmental contamination on a property may adversely affect the value of the property and our ability to sell, rent or finance the property, and may adversely impact our investment in that property. Prior to acquisition of a property, we will obtain Phase I environmental reports, or will rely on recent Phase I environmental reports. These reports will be prepared in accordance with an appropriate level of due diligence based on our standards and generally include a physical site inspection, a review of relevant federal, state and local environmental and health agency database records, one or more interviews with appropriate site-related personnel, review of the property’s chain of title and review of historic aerial photographs and other information on past uses of the property and nearby or adjoining properties. We may also obtain a Phase II investigation which may include limited subsurface investigations and tests for substances of concern where the results of the Phase I environmental reports or other information indicates possible contamination or where our consultants recommend such procedures. Employees As of December 31, 2018, we had approximately 180 employees. Available Information We electronically file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports, and proxy statements, with the U.S. Securities and Exchange Commission (the “SEC”). You may access any materials we file with the SEC through the EDGAR database at the SEC’s website at http://www.sec.gov. In addition, copies of our filings with the SEC may be obtained from our website at www.ir.vereit.com. We are providing our website address solely for the information of investors. We do not intend for the information contained on our website to be incorporated into this Annual Report on Form 10-K or other filings with the SEC. Supplemental Federal Income Tax Considerations This summary is for general information purposes only and is not tax advice. This discussion does not address all aspects of taxation that may be relevant to particular holders of our securities in light of their personal investment or tax circumstances. Recent Legislation Tax Cuts and Jobs Act On December 22, 2017, H.R. 1, informally titled the Tax Cuts and Jobs Act (the “TCJA”), was enacted. The TCJA made major changes to the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), including a number of provisions of the Internal Revenue Code that affect the taxation of REITs and their stockholders. The long-term effect of the significant changes made by the TCJA remains uncertain, and additional administrative guidance will be required in order to fully evaluate the effect of many provisions. The effect of any technical corrections with respect to the TCJA could have an adverse effect on us or our stockholders or holders of our debt securities. Item 1A. Risk Factors. Investors should carefully consider the following factors, together with all the other information included in this Annual Report on Form 10-K, in evaluating the Company and our business. If any of the following risks actually occur, our business, financial condition and results of operations could be materially and adversely affected, the trading price of VEREIT's securities could decline and its stockholders and/or the Operating Partnership's unitholders may lose all or part of their investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. This “Risk Factors” section contains references to our “capital stock” and to our “stockholders” and “unitholders.” Unless expressly stated otherwise, references to our “capital stock” represent VEREIT’s Common Stock and any class or series of its preferred stock, references to our “stockholders” represent holders of VEREIT’s Common Stock and any class or series of its preferred stock, and references to our “unitholders” represent holders of the OP Units and any class of series of the Operating Partnership’s preferred units. 7 Risks Related to Our Business We are primarily dependent on single-tenant leases for our revenue and, accordingly, if we are unable to renew leases, lease vacant space, including vacant space resulting from tenant defaults, or re-lease space as leases expire, on favorable terms or at all, our financial condition could be adversely affected. We focus our investment activities on ownership of freestanding, single-tenant commercial properties that are net leased to a single tenant. Therefore, the financial failure of, or other default by, a significant tenant or multiple tenants could cause a material reduction in our revenues and operating cash flows. In addition, this risk is increased where we lease multiple properties to a single tenant under a master lease. In such an instance, a default specific to a particular property could result in a termination of the entire master lease, resulting in the loss of revenue from all properties under the master lease. We cannot assure you that our leases will be renewed or that we will be able to lease or re-lease the properties on favorable terms, or at all, or that lease terminations will not cause us to sell the properties at a loss. Any of our properties that become vacant could be difficult to sell or re-lease at similar or favorable rental rates or at all. We have and may continue to experience vacancies either by the default of a tenant under its lease or the expiration of one of our leases. We typically must incur all of the costs of ownership for a property that is vacant. Upon or pending the expiration of leases at our properties, we may be required to make rent or other concessions to tenants, or accommodate requests for lower rents, remodeling and other improvements, in order to retain and attract tenants. Certain of our properties may be specifically suited to the particular needs of a tenant (e.g., a retail bank branch or distribution warehouse) and major renovations and expenditures may be required in order for us to re-lease the space for other uses. If the vacancies continue for a long period of time, we may suffer reduced revenues, resulting in less cash available for distribution to our stockholders and unitholders. If we are unable to renew leases, lease vacant space, including vacant space resulting from tenant defaults, or re-lease space as leases expire, on favorable terms or at all, our financial condition could be adversely affected. We are subject to tenant, geographic and industry concentrations that make us more susceptible to adverse events with respect to certain tenants, geographic areas or industries. As of December 31, 2018, we had derived approximately: • $63.7 million, or 5.5%, of our annualized rental income from Red Lobster®, a wholly owned subsidiary of Golden Gate Capital; $339.2 million, or 29.5%, of our annualized rental income from properties located in the following four states: Texas (12.5%), Ohio (5.9%), Florida (5.6%), and Illinois (5.5%); and $600.9 million, or 52.3%, of our annualized rental income from tenants in the following six industries: the casual dining restaurant industry (12.8%), the manufacturing industry (10.1%), the quick service restaurant industry (8.7%), the discount retail industry (8.4%), the pharmacy retail industry (6.8%) and the home and garden retail industry (5.5%). • • As we continue to acquire properties, our portfolio may become more concentrated by tenant, geographic area or industry. Any adverse change in the financial condition of a tenant with whom we may have a significant credit concentration now or in the future, or any downturn of the economy in any state or industry in which we may have a significant credit concentration now or in the future, could result in a material reduction of our cash flows or material losses to us. These concentrations may also strengthen tenant bargaining power and make us more susceptible to adverse regulatory changes, natural disasters or other unexpected events that may impact a particular tenant, geographic location or industry which could negatively affect our operations or result in a material reduction of our cash flows or material losses to us. Our net leases may require us to pay property-related expenses that are not the obligations of our tenants. Under the terms of the majority of our net leases, in addition to satisfying their rent obligations, our tenants are responsible for the payment or reimbursement of property expenses such as real estate taxes, insurance and ordinary maintenance and repairs. However, under the provisions of certain existing leases and leases that we may enter into in the future with our tenants, we may be required to pay some or all of the expenses of the property, such as the costs of environmental liabilities, roof and structural repairs, real estate taxes, insurance, certain non-structural repairs and maintenance. If our properties incur significant expenses that must be paid by us under the terms of our leases, our business, financial condition and results of operations may be adversely affected and the amount of cash available to meet expenses and to make distributions to our stockholders and unitholders may be reduced. Our properties may be subject to impairment charges. We routinely evaluate our real estate investments for impairment indicators. The judgment regarding the existence of impairment indicators is based on factors such as market conditions and tenant performance. For example, the early termination of, or default under, a lease by a tenant may lead to an impairment charge. Since our investment focus is on properties net leased 8 to a single tenant, the financial failure of, or other default by, a single tenant under its lease(s) may result in a significant impairment loss. If we determine that an impairment has occurred, we would be required to make a downward adjustment to the net carrying value of the property, which could have a material adverse effect on our results of operations in the period in which the impairment charge is recorded. Management has recorded impairment charges related to certain properties in the year ended December 31, 2018, and may record future impairments based on actual results and changes in circumstances. Negative developments in the real estate market may cause management to reevaluate the business and macro-economic assumptions used in its impairment analysis. Changes in management’s assumptions based on actual results may have a material impact on the Company’s financial statements. See Note 6 – Fair Value Measures to our consolidated financial statements for a discussion of real estate impairment charges. Our ownership of certain properties and other facilities are subject to ground leases or other similar agreements which limit our uses of these properties and may restrict our ability to sell or otherwise transfer such properties. As of December 31, 2018, we held interests in properties and other facilities through leasehold interests in the land on which the buildings are located and we may acquire additional properties in the future that are subject to ground leases or other similar agreements. As of December 31, 2018, the costs associated with these ground leases represented 2.0% of annualized rental revenue. The terms of the ground leases may be different than the related operating lease for the property and many of our ground leases and other similar agreements limit our uses of these properties and may restrict our ability to sell or otherwise transfer such properties without the ground landlord’s consent, all of which may impair their value. Real estate investments are relatively illiquid and therefore we may not be able to dispose of properties when appropriate or on favorable terms. Real estate investments are, in general, relatively illiquid and may become even more illiquid during periods of economic downturn. As a result, we may not be able to sell our properties quickly or on favorable terms in response to changes in the economy or other conditions when it otherwise may be prudent to do so. In addition, certain significant expenditures generally do not change in response to economic or other conditions, including debt service obligations, real estate taxes, and operating and maintenance costs. This combination of variable revenue and relatively fixed expenditures may result, under certain market conditions, in reduced earnings. Further, as a result of the 100% prohibited transactions tax applicable to REITs, we intend to hold our properties for investment, rather than primarily for sale in the ordinary course of business, which may cause us to forgo or defer sales of properties that otherwise would be favorable. Therefore, we may be unable to adjust our portfolio promptly in response to economic, market or other conditions, which could adversely affect our business, financial condition, liquidity and results of operations. A substantial portion of our properties are leased to tenants with a below investment grade rating, as determined by major credit rating agencies, or are leased to tenants that are not rated, and may have a greater risk of default. As of December 31, 2018, approximately 58.1% of our tenants were not rated or did not have an investment grade credit rating from a major ratings agency or were not affiliates of companies having an investment grade credit rating. Our investments in properties leased to such tenants may have a greater risk of default and bankruptcy than investments in properties leased exclusively to investment grade tenants. When we invest in properties where the tenant does not have a publicly available credit rating, we will use certain credit-assessment tools as well as rely on our own underwriting and analysis of the tenant’s credit rating which includes, among other things, reviewing the tenant’s financial information (e.g., financial ratios, net worth, revenue, cash flows, leverage and liquidity, if applicable). If our ratings estimates are inaccurate, the default or bankruptcy risk for the subject tenant may be greater than anticipated. This outcome could have an adverse impact on our returns on that asset and hence our operating results. We may be unable to sell a property if or when we decide to do so, including as a result of uncertain market conditions, which could adversely impact our ability to make cash distributions to our stockholders and unitholders. We expect to hold the various real properties in which we invest until such time as we decide that a sale or other disposition is appropriate given our investment business objectives and REIT limitations. We generally intend to hold properties for an extended time, but our management or Board of Directors may exercise their discretion as to whether and when to sell a property to achieve investment or portfolio objectives. Our ability to dispose of properties on advantageous terms or at all depends on certain factors beyond our control, including competition from other sellers, the availability of attractive financing for potential buyers of our properties and the quality of the underlying tenant. In addition, if our competitors sell assets similar to assets we intend to divest and/or at valuations below our valuations for comparable assets, we may be unable to divest our assets at all or at favorable pricing or terms. We cannot predict the various market conditions affecting real estate investments which will exist at any particular time in the future. Due to the uncertainty of market conditions which may affect the disposition of our properties, we cannot assure you that we will be able to sell such properties at a profit or at all in the future. Accordingly, the extent to which our stockholders and unitholders will receive cash distributions and realize potential appreciation on our real estate investments will depend upon 9 fluctuating market conditions. Furthermore, we may be required to seek modifications of an underlying lease or expend funds to correct defects or to make improvements before a property can be sold. Dividends paid from sources other than our cash flow from operations could affect our profitability, restrict our ability to generate sufficient cash flow from operations, and dilute stockholders’ and unitholders’ interests in us. We may not generate sufficient cash flow from operations to pay dividends and we may in the future pay dividends from sources other than from our cash flow from operations, such as from the proceeds of property or other asset dispositions, borrowings (including on our existing line of credit), cash and cash equivalents balances, and/or offerings of debt and/or equity securities. We have not established any limit on the amount of borrowings and/or the sale of property or other assets or the proceeds from an offering of debt or equity securities that may be used to fund dividends, except that, in accordance with our organizational documents and Maryland law, we may not make dividend distributions that would: (1) cause us to be unable to pay our debts as they become due in the usual course of business; (2) cause our total assets to be less than the sum of our total liabilities plus senior liquidation preferences; or (3) jeopardize our ability to qualify as a REIT. Funding dividends from borrowings could restrict the amount we can borrow for investments, which may affect our profitability. Funding dividends with the sale of property or other assets or the proceeds of offerings of debt or equity securities may affect our ability to generate cash flows. Payment of dividends from these sources could affect our profitability, restrict our ability to generate sufficient cash flow from operations, and dilute stockholders’ and unitholders’ interests in us, any or all of which may adversely affect your overall return. In addition, funding dividends from the sale of additional debt or equity securities could dilute your interest in us if we sell shares of our Common Stock or securities that are convertible or exercisable into shares of our Common Stock to third party investors. As a result, the return you realize on your investment may be reduced. We could face potential adverse effects from the bankruptcies or insolvencies of tenants or from tenant defaults generally. The bankruptcy or insolvency of our tenants may adversely affect the income produced by our properties. Under bankruptcy law, a tenant cannot be evicted solely because of its bankruptcy and has the option to assume or reject any unexpired lease. If the tenant rejects the lease, any resulting claim we have for breach of the lease (excluding collateral securing the claim) will be treated as a general unsecured claim. Our claim against the bankrupt tenant for unpaid and future rent will be subject to a statutory cap that might be substantially less than the remaining rent actually owed under the lease, and it is unlikely that a bankrupt tenant that rejects its lease would pay in full amounts it owes us under the lease. Even if a lease is assumed and brought current, we still run the risk that a tenant could condition lease assumption on a restructuring of certain terms, including rent, that would have an adverse impact on us. Any shortfall resulting from the bankruptcy of one or more of our tenants could adversely affect our cash flows and results of operations and could cause us to reduce the amount of distributions to our stockholders and unitholders. In addition, the financial failure of, or other default by, one or more of the tenants to whom we have exposure could have an adverse effect on the results of our operations. While we evaluate the creditworthiness of our tenants by reviewing available financial and other pertinent information, there can be no assurance that any tenant will be able to make timely rental payments or avoid defaulting under its lease. If any of our tenants’ businesses experience adverse changes, they may fail to make rental payments when due, close a number of stores, exercise early termination rights (to the extent such rights are available to the tenant) or declare bankruptcy. A default by a significant tenant or multiple tenants could cause a material reduction in our revenues and operating cash flows. In addition, if a tenant defaults, we may incur substantial costs in protecting our investment. If a sale-leaseback transaction is re-characterized in a tenant’s bankruptcy proceeding, our financial condition could be adversely affected. We have entered and may continue to enter into sale-leaseback transactions. In a sale-leaseback transaction, we purchase a property and then lease it back to the third party from whom we purchased it. In the event of the bankruptcy of a tenant, a transaction structured as a sale-leaseback might possibly be re-characterized as either a financing or a joint venture, either of which outcomes could adversely affect our financial condition, cash flows and the amount available for distribution to our stockholders and unitholders. If a sale-leaseback is re-characterized as a financing, we would not be considered the owner of the property and, as a result, would have the status of a creditor in relation to the tenant. In that event, we would no longer have the right to sell or encumber our ownership interest in the property. Instead, we would have a claim against the tenant for the amounts owed under the lease, with the claim arguably secured by the property. The tenant/debtor might have the ability to propose a plan restructuring the term, interest rate and amortization schedule of its outstanding balance. If confirmed by the bankruptcy court, we could be bound by the new terms and prevented from foreclosing our lien on the property. If the sale-leaseback is re-characterized as a joint venture, our tenant and we could be treated as co-venturers with regard to the property. As a result, we could be held liable, under some circumstances, for debts incurred by the tenant relating to the property. 10 We have a history of operating losses and cannot assure you that we will achieve or maintain profitability. Since our inception in 2010, we have experienced net losses (calculated in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and as of December 31, 2018, had an accumulated deficit of $5.47 billion. The extent of our future operating losses and the timing of when we will achieve profitability are uncertain, and together depend on the demand for, and value of, our portfolio of properties. We may never achieve or sustain profitability. We may be unable to enter into and consummate property acquisitions on advantageous terms or our property acquisitions may not perform as we expect due to competitive conditions and other factors. We may acquire properties in the future. The acquisition of properties entails various risks, including the risks that our investments may not perform as we expect and that our cost estimates for bringing an acquired property up to market standards may prove inaccurate. Further, we expect to finance any future acquisitions through a combination of borrowings (including under our Revolving Credit Facility), cash and cash equivalent balances, proceeds from equity and/or debt offerings by VEREIT, the Operating Partnership or their subsidiaries, cash flow from operations and proceeds from property or other asset dispositions which, if unavailable, could adversely affect our cash flows. In addition, our ability to acquire properties in the future on satisfactory terms and successfully integrate and operate such properties is subject to the following significant risks: • • • • • • • we may be unable to acquire desired properties or the purchase price of a desired property may increase significantly because of competition from other real estate investors, including other real estate operating companies, REITs and investment funds; we may acquire properties that are not accretive to our earnings upon acquisition; we may be unable to obtain the necessary debt or equity financing to consummate an acquisition or, if obtainable, financing may not be on satisfactory terms; we may need to spend more than budgeted amounts to make necessary improvements or renovations to acquired properties; agreements for the acquisition of properties are typically subject to customary conditions to closing, including satisfactory completion of due diligence investigations, and we may spend significant time and money on potential acquisitions that we do not consummate; we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations; and we may acquire properties without any recourse, or with only limited recourse, for liabilities, whether known or unknown, such as cleanup of environmental contamination, remediation of latent defects, claims by tenants, vendors or other persons against the former owners of the properties and claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the properties. Any of the above risks could adversely affect our business, financial condition, liquidity and results of operations. We have assumed, and may in the future assume, liabilities in connection with our property acquisitions, including unknown liabilities. We have assumed, and may in the future assume, existing liabilities in connection with property acquisitions, some of which may have been unknown or unquantifiable at the time of the transaction or the magnitude of which may have increased since the time of the transaction. Such liabilities might include liabilities for cleanup or remediation of undisclosed or disclosed environmental conditions, claims of tenants or other persons dealing with prior owners of the properties, tax liabilities, and accrued but unpaid liabilities whether incurred in the ordinary course of business or otherwise. If the magnitude of such liabilities is material or higher than anticipated, either singly or in the aggregate, it could adversely affect our business, financial condition, liquidity and results of operations. We face intense competition, which may decrease or prevent increases in the occupancy and rental rates of our properties. We are subject to competition in the leasing of our properties. We compete with numerous developers, owners and operators of retail, restaurant, industrial and office real estate, many of which have greater financial and other resources than us. Many of our competitors own properties similar to ours in the same markets in which our properties are located. If one of our properties is nearing the end of the lease term or becomes vacant and our competitors offer space at rental rates below current market rates or below the rental rates we currently charge our tenants, we may lose existing or potential tenants and we may be pressured to reduce our rental rates below those we currently charge or to offer substantial rent concessions in order to retain tenants when such tenants’ 11 leases expire or to attract new tenants. As a result of these actions by our competitors, our business, financial condition, liquidity and results of operations may be adversely affected. The value of our real estate investments is subject to risks associated with our real estate assets and with the real estate industry. Our real estate investments are subject to various risks, fluctuations and cycles in value and demand, many of which are beyond our control. Certain events may decrease our cash available for distribution to our stockholders and unitholders, as well as the value of our properties. These events include, but are not limited to: • • • • • • • • • • • • adverse changes in international, national or local economic and demographic conditions; vacancies or our inability to lease space on favorable terms, including possible market pressures to offer tenants rent abatements, tenant improvements, early termination rights or tenant-favorable renewal options; adverse changes in financial conditions of buyers, sellers and tenants of properties; inability to collect rent from tenants, or other failures by tenants to perform the obligations under their leases; competition from other real estate investors, including other real estate operating companies, REITs and institutional investment funds; reductions in the level of demand for commercial space generally, and freestanding net leased properties specifically, and changes in the relative popularity of our tenants and/or properties; increases in the supply of freestanding single-tenant properties; fluctuations in interest rates, which could adversely affect our ability, or the ability of buyers and tenants of our properties, to obtain financing on favorable terms or at all; increases in expenses, including, but not limited to, insurance costs, labor costs, energy prices, real estate assessments and other taxes and costs of compliance with laws, regulations and governmental policies, all of which have an adverse impact on the rent a tenant may be willing to pay us in order to lease one or more of our properties; loss of property rights, adverse impacts on our tenants’ business operations and/or increases in tenant vacancies resulting from eminent domain proceedings; civil unrest, acts of God, including earthquakes, floods, hurricanes and other natural disasters, including extreme weather events from possible future climate change, which may result in uninsured losses, and acts of war or terrorism; and changes in, and changes in enforcement of, laws, regulations and governmental policies, including, without limitation, health, safety, environmental, zoning and tax laws, governmental fiscal policies and the ADA. In addition, our properties are subject to the ADA and while our tenants are obligated to comply with the ADA and may be obligated under our leases to pay for the costs associated with compliance with the ADA, if compliance involves expenditures that are greater than anticipated or if tenants fail or are unable to comply, we may be required to incur expenses to bring a property into compliance. Any or all of these factors could materially adversely affect our results of operations through decreased revenues or increased costs. Uninsured losses or losses in excess of our insurance coverage could materially adversely affect our financial condition and cash flows, and there can be no assurance as to future costs and the scope of coverage that may be available under insurance policies. We carry commercial general liability, flood, earthquake, and property and rental loss insurance covering all of the properties in our portfolio under one or more blanket insurance policies with policy specifications, limits and deductibles customarily carried for similar properties. In addition, we carry professional liability and directors’ and officers’ insurance, and cyber liability insurance. We select policy specifications and insured limits that we believe are appropriate and adequate given the relative risk of loss, insurance coverages provided by tenants, the cost of the coverage and industry practice. There can be no assurance, however, that the insured limits on any particular policy will adequately cover an insured loss if one occurs. If any such loss is insured, we may be required to pay a significant deductible on any claim for recovery of such a loss prior to our insurer being obligated to reimburse us for the loss, or the amount of the loss may exceed our coverage for the loss. In addition, we may reduce or discontinue certain coverages on some or all of our properties in the future if the cost of premiums for any of these policies exceeds, in our judgment, the value of the coverage discounted for the risk of loss. Our title insurance policies may not insure for the current aggregate market value of our portfolio, and we do not intend to increase our title insurance coverage as the market value of our portfolio increases. Further, we do not carry insurance for certain losses, including, but not limited to, losses caused by riots, war or nuclear explosions. Certain types of losses may be either uninsurable or not economically insurable, such as losses due to nuclear explosions, riots or acts of war. If we experience a loss that is uninsured or which exceeds policy limits, we could lose the capital invested in 12 the damaged properties as well as the anticipated future cash flows from those properties. In addition, if the damaged properties are subject to recourse indebtedness, we would continue to be liable for the indebtedness, even if these properties were irreparably damaged. In addition, we carry several different lines of insurance, placed with several large insurance carriers. If any one of these large insurance carriers were to become insolvent, we would be forced to replace the existing insurance coverage with another suitable carrier, and any outstanding claims would be at risk for collection. In such an event, we cannot be certain that we would be able to replace the coverage at similar or otherwise favorable terms. As a result of any of the situations described above, our financial condition and cash flows may be materially and adversely affected. Our participation in joint ventures creates additional risks as compared to direct real estate investments, and the actions of our joint venture partners could adversely affect our operations or performance. We have in the past participated, and may in the future participate, in transactions structured to purchase or dispose of assets jointly with unaffiliated third parties (a “joint venture”). There are additional risks involved in joint venture transactions. As a co- investor in a joint venture, we may not be in a position to exercise sole decision-making authority relating to the property, joint venture, or other entity. In addition, there is the potential of the third-party participant in the joint venture becoming bankrupt and the possibility of diverging or inconsistent economic or business interests of us and that participant. These diverging interests could result in, among other things, exposure to liabilities of the joint venture in excess of our proportionate share of these liabilities. Investments in joint ventures may preclude us from acquiring properties for our own portfolio or a property that may be suitable for our portfolio may instead be allocated to the joint venture. The competing rights of each owner in a jointly-owned property could effect a reduction in the value of each owner’s interest in the subject property. If we are unable to maintain effective disclosure controls and procedures and effective internal control over financial reporting, investor confidence and our stock price could be adversely affected. Our management is responsible for establishing and maintaining effective disclosure controls and procedures and internal control over financial reporting. There were no changes to our internal control over financial reporting that occurred during the year ended December 31, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, however, there can be no guarantee as to the effectiveness of our disclosure controls and procedures and we cannot assure you that our internal control over financial reporting will not be subject to material weaknesses in the future. If we fail to maintain the adequacy of our internal controls over financial reporting and our operating internal controls, including any failure to implement required new or improved controls as a result of changes to our business or otherwise, or if we experience difficulties in their implementation, our business, results of operations and financial condition could be adversely affected and we could fail to meet our reporting obligations. Government investigations relating to the findings of the Audit Committee Investigation has resulted in significant expenses and may result in significant legal expenses, fines, and/or penalties, including indemnification obligations, and cause our business, financial condition, liquidity and results of operations to suffer. On November 13, 2014, we received the first of two subpoenas relating to the findings of the Audit Committee Investigation from the staff of the SEC, each of which called for the production of certain documents. On December 19, 2014, we received a subpoena from the Securities Division of the Office of the Secretary of the Commonwealth of Massachusetts. The U.S. Attorney’s Office for the Southern District of New York also contacted counsel for the Company and counsel for the Audit Committee. We are cooperating with these regulators in their investigations. The U.S. Attorney’s Office for the Southern District of New York has indicated that it does not intend to bring criminal charges against the Company arising from its investigation. In addition, we have not been in contact with the Massachusetts regulator since June 2015 and we believe that the investigation has concluded. We cannot, however, predict the outcome or time needed to resolve the SEC investigation or whether we will face additional government investigations, inquiries or other actions related to these matters. Subject to certain limitations, we are obligated to advance certain legal expenses to and indemnify our former directors, officers and employees, among others in connection with the ongoing government investigations and potential future government inquiries, investigations or actions. These matters could result in actions seeking, among other things, injunctions against us and the payment of significant fines and/or penalties, as well as requiring payment of substantial legal fees and indemnification obligations, and cause our business, financial condition, liquidity and results of operations to suffer. We have not reserved an amount for the SEC investigation because we believe that any probable loss or reasonably possible range of loss is not reasonably estimable at this time. We can provide no assurance as to the outcome of any government investigation. 13 The Company and certain of our former officers and directors, among others, have been named as defendants in various lawsuits related to the findings of the Audit Committee Investigation which have resulted in significant legal expenses which are expected to continue. Any resolution could require substantial payments by the Company, including indemnification obligations, and may materially impact our business, financial condition, liquidity and results of operations. Since the October 29, 2014 announcement of the findings of the Audit Committee Investigation and the subsequent restatement of the Company’s financial statements in March 2015, the Company and its former officers and directors (along with others) have been named as defendants in multiple putative securities class action complaints in the United States District Court for the Southern District of New York, which were subsequently consolidated under the caption In re American Realty Capital Properties, Inc. Litigation, No. 15-MC-00040 (AKH), multiple individual securities lawsuits (“opt-out actions”) and multiple derivative lawsuits. The Company has currently settled all but one of the opt-out actions. See Note 10 – Commitments and Contingencies to our consolidated financial statements for additional details regarding pending litigation matters related to the Audit Committee Investigation. As a result of the various pending litigations, and subject to certain limitations, we are obligated to advance certain legal expenses to and indemnify our former directors, officers and employees, as well as certain outside individuals and entities. These lawsuits have resulted in significant ongoing legal expenses, which are expected to continue. We have not reserved amounts for the pending class action and remaining opt-out action because we believe that any probable loss or reasonably possible range of loss is not reasonably estimable at this time. The resolution of these matters, and the timing thereof, are uncertain. Any such resolution, whether through a judgment or a settlement, could require substantial payments by the Company, including potential indemnification obligations, which are not expected to be covered by insurance, and may materially impact the Company’s business, financial condition, liquidity and results of operations. Historical 1031 real estate programs we manage may divert resources from our core business operations and may subject us to unexpected liabilities and costs. We continue to serve as the asset manager of certain historical 1031 real estate programs. While the volume of programs under management has been decreasing, we continue to manage the remaining properties which requires the allocation of staff and other Company resources. Continuing management of these programs may divert resources from our core business operations and could result in unexpected liabilities and costs, including potential litigation. Our accounting policies and methods are fundamental to how we record and report our financial position and results of operations, and they require management to make estimates, judgments, and assumptions about matters that are inherently uncertain. Our accounting policies and methods are fundamental to how we record and report our financial position and results of operations. We have identified several accounting policies as being critical to the presentation of our financial position and results of operations because they require management to make particularly subjective or complex judgments about matters that are inherently uncertain and because of the likelihood that materially different amounts would be recorded under different conditions or using different assumptions. Because of the inherent uncertainty of the estimates, judgments, and assumptions associated with these critical accounting policies, we cannot provide any assurance that we will not make subsequent significant adjustments to our consolidated financial statements. If our judgments, assumptions, and allocations prove to be incorrect, or if circumstances change, our business, financial condition, liquidity and results of operations could be adversely affected. Changes in accounting pronouncements could adversely impact our or our tenants’ reported financial performance. Accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. From time to time the Financial Accounting Standards Board and the SEC, who create and interpret appropriate accounting standards, may change the financial accounting and reporting standards or their interpretation and application of these standards that govern the preparation of our financial statements. These changes could have a material impact on our reported financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retroactively, resulting in restating prior period financial statements. Similarly, these changes could have a material impact on our tenants’ reported financial condition or results of operations and affect their preferences regarding leasing real estate. We may not be able to maintain our competitive advantages if we are not able to attract and retain key personnel. Our success depends to a significant extent on our ability to attract and retain key members of our executive and senior management teams and staff supporting our continuing operations. If there are changes in senior leadership affecting our continuing operations, such changes could be disruptive and could compromise our ability to operate our business. While we have entered into employment agreements with certain key personnel, there can be no assurance that we will be able to retain the services of 14 individuals whose knowledge and skills are important to our businesses. Our success also depends on our ability to prospectively attract, integrate, train and retain qualified management personnel. Because the competition for qualified personnel is intense, costs related to compensation and retention could increase significantly in the future. If we were to lose a sufficient number of our key employees and were unable to replace them in a reasonable period of time, these losses could damage our business and adversely affect our results of operations. Competition that traditional retail tenants face from e-commerce retail sales, or the integration of brick and mortar stores with e-commerce retailers, could adversely affect our business. Our retail tenants face increasing competition from e-commerce retailers. E-commerce sales continue to account for an increasing percentage of retail sales and this trend is expected to continue. These trends may have an impact on decisions that retailers make regarding their brick and mortar stores. Changes in shopping trends as a result of the growth in e-commerce may also impact the profitability of retailers that do not adapt to changes in market conditions. The continued growth of e-commerce sales could decrease the need for traditional retail outlets and reduce retailers' space and property requirements. These conditions could adversely impact our results of operations and cash flows if we are unable to meet the needs of our tenants or if our tenants encounter financial difficulties as a result of changing market conditions. Cybersecurity risks and cyber incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships or reputation, all of which could negatively impact our financial results. A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of our information resources. These incidents may be an intentional attack or an unintentional event and could involve gaining unauthorized access to our information systems for purposes of misappropriating assets, stealing confidential information, corrupting data or causing operational disruption. The result of these incidents may include disrupted operations (e.g., disruption of finance or accounting systems that process or receive payment obligations, manage cash, warehouse data and other processes and procedures), misstated or unreliable financial data, liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation and damage to our tenant and investor relationships. In addition, from time to time, we update, modify or change our information systems and, although we have taken steps to protect the security of the data and systems, our security measures may not be able to prevent cyber incidents resulting from such modifications or changes. As our reliance on technology has increased, so have the risks posed to our information systems, both internal and those we have outsourced. We have implemented processes, procedures (including training and recovery procedures) and internal controls to help mitigate cybersecurity risks and cyber intrusions, but these measures, as well as our increased awareness of the nature and extent of a risk of a cyber incident, do not guarantee that our financial results, operations, business relationships or confidential information will not be negatively impacted by such an incident. The remediation of a cyber incident could result in significant unplanned expenditures and our cash flows and results of operations could be adversely affected. We may acquire properties or portfolios of properties through tax deferred contribution transactions, which could result in the dilution of our stockholders and unitholders, and limit our ability to sell or refinance such assets. We have in the past and may in the future acquire properties or portfolios of properties through tax deferred contribution transactions in exchange for OP Units. Under the Third Amended and Restated Agreement of Limited Partnership of the OP, as amended (the “LPA”), after holding OP Units for a period of one year, unless otherwise consented to by the General Partner, holders of OP Units have a right to redeem the OP Units for the cash value of a corresponding number of shares of the General Partner’s Common Stock or, at the option of the General Partner, a corresponding number of shares of the General Partner’s Common Stock. This could result in the dilution of our stockholders and unitholders through the issuance of OP Units that may be exchanged for shares of our Common Stock. This acquisition structure may also have the effect of, among other things, reducing the amount of tax depreciation we could deduct over the tax life of the acquired properties, and may require that we agree to restrictions on our ability to dispose of, or refinance the debt on, the acquired properties in order to protect the contributors’ ability to defer recognition of taxable gain. Similarly, we may be required to incur or maintain debt we would otherwise not incur so we can allocate the debt to the contributors to maintain their tax bases. These restrictions could limit our ability to sell or refinance an asset at a time, or on terms, that would be favorable absent such restrictions. 15 Risks Related to Financing We intend to rely on external sources of capital to fund future capital needs, and if we encounter difficulty in obtaining such capital, we may not be able to meet maturing obligations or make any additional investments. In order to qualify as a REIT under the Internal Revenue Code, we are required, among other things, to distribute annually to our stockholders at least 90% of our REIT taxable income (which does not equal net income as calculated in accordance with U.S. GAAP), determined without regard to the deduction for dividends paid and excluding any net capital gain. Because of this dividend requirement, we may not be able to fund from cash retained from operations all of our future capital needs, including capital needed to refinance maturing obligations or make investments. Market volatility and disruption could hinder our ability to obtain new debt financing or refinance our maturing debt on favorable terms or at all or to raise debt and equity capital. Our access to capital will depend upon a number of factors, including: • • • • • • • • • • general market conditions; the market’s perception of our future growth potential; the extent of investor interest; analyst reports about us and the REIT industry; the general reputation of REITs and the attractiveness of their equity securities in comparison to other equity securities, including securities issued by other real estate-based companies; our financial performance and that of our tenants; our current debt levels; our current and expected future earnings; our cash flow and cash dividends, including our ability to satisfy the dividend requirements applicable to REITs; and the market price per share of our Common Stock. If we are unable to obtain needed capital on satisfactory terms or at all, we may not be able to meet our obligations and commitments as they mature or make any additional investments. We have substantial amounts of indebtedness outstanding, which may affect our ability to pay dividends, and may expose us to interest rate fluctuation risk and to the risk of default under our debt obligations. As of December 31, 2018, our aggregate indebtedness was $6.1 billion. We may incur significant additional debt in the future, including borrowings under our Credit Facility, for various purposes including, without limitation, the funding of future acquisitions, capital improvements and leasing commissions in connection with the repositioning of a property and litigation expenses. At December 31, 2018, we had $2.5 billion of undrawn commitments under our Credit Facility. Our substantial outstanding indebtedness, and the limitations imposed on us by our debt agreements, could have significant adverse consequences, including as follows: • • • • • • • our cash flow may be insufficient to meet our required principal and interest payments; we may be unable to borrow additional funds as needed or on satisfactory terms to fund future working capital, capital expenditures and other general corporate requirements, which could, among other things, adversely affect our ability to capitalize upon any acquisition opportunities or fund capital improvements and leasing commissions; we may be unable to pay off or refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our original indebtedness; payments of principal and interest on borrowings may leave us with insufficient cash resources to make the dividend payments necessary to maintain our REIT qualification or may otherwise impose restrictions on our ability to make distributions; we may be forced to dispose of properties, possibly on disadvantageous terms; we may violate restrictive covenants in our loan documents, which would entitle the lenders to accelerate our debt obligations; certain of the property subsidiaries’ loan documents may include restrictions that limit the subsidiary’s ability to take certain actions with respect to the property, including restrictions on the subsidiary’s ability to make dividends to us or restrictions that require us to obtain lender consent which could adversely affect our ability to sell, lease or otherwise address issues with the property; 16 • • • • we may be unable to hedge floating-rate debt, counterparties may fail to honor their obligations under our hedge agreements, these agreements may not effectively hedge interest rate fluctuation risk, and, upon the expiration of any hedge agreements, we would be exposed to then-existing market rates of interest and future interest rate volatility; we may default on our obligations and the lenders or mortgagees may foreclose on our properties that secure their loans and exercise their rights under any assignment of rents and leases; we may be vulnerable to general adverse economic and industry conditions; and we may be at a disadvantage compared to our competitors with less indebtedness. If we default under a loan or indenture (including any default in respect of the financial maintenance and negative covenants contained in the Credit Agreement, or the indenture governing the Senior Notes, we may automatically be in default under any other loan or indenture that has cross-default provisions (including the Credit Agreement governing the Credit Facility), and (x) further borrowings under the Credit Facility will be prohibited, and outstanding indebtedness under the Credit Facility, and our indenture (including the indenture governing the Senior Notes) or such other loans may be accelerated and (y) to the extent any such debt is secured, directly or indirectly, by any properties or assets, the lenders may foreclose on the properties or assets securing such indebtedness. In addition, increases in interest rates may impede our operating performance and payments of required debt service obligations or amounts due at maturity, or creation of additional reserves under loan agreements or indentures, could adversely affect our financial condition and operating results. Further, any foreclosure on our properties could create taxable income without accompanying cash proceeds, which could adversely affect our ability to meet the REIT dividend requirements imposed by the Internal Revenue Code. The indenture governing our Senior Notes and the Credit Agreement governing the Credit Facility contain restrictive covenants that limit our operating flexibility. The indenture governing our Senior Notes and the Credit Agreement governing the Credit Facility require us to comply with customary affirmative and negative covenants and other financial and operating covenants that, among other things, restrict our ability to take specific actions, including restrictions on our ability to: • • consummate a merger, consolidation or sale of all or substantially all of our assets; and incur or guarantee additional secured and unsecured indebtedness. In addition, the indenture governing our Senior Notes requires us, among other things, to maintain a maximum unencumbered leverage ratio and the Credit Agreement governing the Credit Facility requires us, among other things, to maintain a maximum consolidated leverage ratio, a minimum fixed charge coverage ratio, a maximum secured leverage ratio, a maximum unencumbered leverage ratio and a minimum unencumbered interest coverage ratio. The Credit Agreement governing the Credit Facility also includes customary restrictions on, among others, liens, negative pledges, intercompany transfers, fundamental changes, transactions with affiliates and restricted payments. Our ability to comply with these and other provisions of the indenture governing our Senior Notes and the Credit Agreement governing the Credit Facility may be affected by changes in our operating and financial performance, changes in general business and economic conditions, adverse regulatory developments or other events adversely impacting us. Any failure to comply with these covenants would constitute a default under the indenture governing our Senior Notes and/or the Credit Agreement, as applicable, and would prevent further borrowings under the Credit Agreement and could cause those and other obligations to become due and payable. If any of our indebtedness is accelerated, we may not be able to repay it. Our organizational documents have no limitation on the amount of indebtedness that we may incur. As a result, we may become more highly leveraged in the future, which could adversely affect our financial condition. Our business strategy contemplates the use of debt to finance long-term growth. While we intend to limit our indebtedness, our organizational documents contain no limitations on the amount of debt that we may incur. Further, our financing decisions and related decisions regarding levels of debt may be determined by our Board of Directors in its discretion without stockholder approval. As a result, we may be able to incur substantial additional debt, including secured debt, in the future, subject to us meeting the financial and operating covenants described above, which could result in us becoming more highly leveraged and adversely affecting our financial condition. 17 Increases in interest rates would increase our debt service obligations and may adversely affect the refinancing of our existing debt and our ability to incur additional debt, which could adversely affect our financial condition. Certain of our borrowings bear interest at variable rates, and we may incur additional variable-rate debt in the future. Increases in interest rates would result in higher interest expenses on our existing unhedged variable rate debt, and increase the costs of refinancing existing debt or incurring new debt. Additionally, increases in interest rates may result in a decrease in the value of our real estate and decrease the market price of our capital stock and could accordingly adversely affect our financial condition, cash flow and results of operation. We may not be able to generate sufficient cash flow to meet our debt service obligations. Our ability to make payments on and to refinance our indebtedness, and to fund our operations, working capital and capital expenditures, depends on our ability to generate cash. To a certain extent, our cash flow is subject to general economic, industry, financial, competitive, operating, legislative, regulatory and other factors, many of which are beyond our control. We cannot assure you that our business will generate sufficient cash flow from operations or that future sources of cash will be available to us in an amount sufficient to enable us to pay amounts due on our indebtedness or to fund our other liquidity needs. If we incur additional indebtedness in connection with any future acquisitions or development projects or for any other purpose, our debt service obligations could increase. We may need to refinance all or a portion of our indebtedness before maturity. Our ability to refinance our indebtedness or obtain additional financing will depend on, among other things: • • • • • • our financial condition and market conditions at the time; restrictions in the agreements governing our indebtedness; general economic and capital market conditions; the availability of credit from banks or other lenders; investor confidence in us; and our results of operations. As a result, we may not be able to refinance our indebtedness on commercially reasonable terms, or at all. If we do not generate sufficient cash flow from operations, and additional borrowings or refinancings or proceeds of asset sales or other sources of cash are not available to us, we may not have sufficient cash to enable us to meet all of our obligations. Accordingly, if we cannot service our indebtedness, we may have to take actions such as seeking additional equity, or delaying any strategic acquisitions and alliances or capital expenditures, any of which could have a material adverse effect on our operations. Adverse changes in our credit ratings could affect our borrowing capacity and borrowing terms. Credit rating agencies continually evaluate their ratings for the companies that they follow, including us. The credit rating agencies also evaluate our industry as a whole and may change their credit ratings for us based on their overall view of our industry. Our Senior Notes are periodically rated by nationally recognized credit rating agencies, but we cannot be sure that credit rating agencies will maintain their ratings on the Senior Notes. Our current corporate credit and issue-level ratings for our Senior Notes are “BBB-” with a “stable” outlook from Standard & Poor’s Rating Services. Our corporate credit and issue-level ratings for our Senior Notes are “Baa3” with a “stable” outlook assigned by Moody’s Investor Service, Inc. Our corporate credit and issue-level ratings for our Senior Notes are “BBB-” with a “stable” outlook assigned by Fitch Ratings, Inc. The credit ratings are based on our operating performance, liquidity and leverage ratios, overall financial position, and other factors viewed by the credit rating agencies as relevant to our industry and the economic outlook in general. Our credit ratings can adversely affect the cost and availability of capital, as well as the terms of any financing we obtain. Since we depend in part on debt financing to fund our business, an adverse change in our credit ratings could have a material adverse effect on our financial condition, liquidity, results of operations and the trading price of our Senior Notes. 18 Risks Related to Equity The Board of Directors may create and issue a class or series of common or preferred stock without stockholder approval. Subject to applicable legal and regulatory requirements, the Board of Directors is empowered under our charter to amend our charter from time to time to increase or decrease the aggregate number of shares of our stock or the number of shares of stock of any class or series that we have authority to issue, to designate and issue from time to time one or more classes or series of stock and to classify or reclassify any unissued shares of our Common Stock or preferred stock without stockholder approval. The Board of Directors may determine the relative preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of any class or series of stock issued. As a result, we may issue series or classes of stock with voting rights, rights to dividends or other rights, senior to the rights of holders of our outstanding capital stock. The issuance of any such stock could also have the effect of delaying or preventing a change of control transaction that might otherwise be in the best interests of our stockholders. In addition, future sales of shares of our Common Stock or preferred stock may be dilutive to existing stockholders. The trading price of our Common Stock has been and may continue to be subject to wide fluctuations. The sales price of our Common Stock on the NYSE has fluctuated in recent quarters. Our stock price may fluctuate in response to a number of events and factors, including as a result of future offerings of our securities, as a result of the events or realization of the risks described in this “Risk Factors” section or in our future filings with the SEC, and as a result of changes to our dividend yield relative to yields on other financial instruments (e.g., increases in interest rates resulting in higher yields on other financial instruments may adversely affect the sales price of our Common Stock). In addition, the trading volume and price of our Common Stock may fluctuate and be adversely impacted in response to a number of factors, including: • • • • • • • • • • • • • • • actual or anticipated variations in our operating results, earnings, or liquidity, or those of our competitors; changes in our dividend policy; publication of research reports about us, our competitors, our tenants, or the REIT industry; changes in market valuations of companies similar to us; speculation in the press or investment community; our failure to meet, or changes to, our earnings estimates, or those of any securities analysts; increases in market interest rates; adverse market reaction to the amount of or the maturity of our debt and our ability to refinance such debt and the terms thereof; adverse market reaction to any additional indebtedness we incur or equity or securities we may issue; changes in our credit ratings; changes in our key management; the financial condition, liquidity, results of operations, and prospects of our tenants; litigation and government investigations; failure to maintain our REIT qualification; and general market and economic conditions, including the current state of the credit and capital markets. The issuance of additional equity securities may dilute earnings per share and existing equity holders. Giving effect to the issuance of Common Stock in future potential offerings, the receipt of future potential net proceeds and the use of those proceeds, additional equity offerings may have a dilutive effect on our expected earnings per share. Additionally, we are not restricted from issuing additional shares of our Common Stock or preferred stock, including any securities that are convertible into or exchangeable for, or that represent the right to receive, Common Stock or preferred stock or any substantially similar securities in the future. The market price of our Common Stock could decline as a result of sales of a large number of shares of our Common Stock in the market or the perception that such sales could occur. Future offerings of debt, which would be senior to our Common Stock upon liquidation, or preferred equity securities that may be senior to our Common Stock for purposes of dividend distributions or upon liquidation, may adversely affect the market price of our Common Stock. In the future, we may issue debt or preferred equity securities. Upon liquidation, holders of our debt securities and shares of preferred stock and lenders with respect to other borrowings will receive distributions of our available assets prior to the holders of our Common Stock. Additional equity offerings, including offerings of convertible preferred stock, may dilute the holdings of 19 our existing stockholders or otherwise reduce the market price of our Common Stock, or both. Holders of our Common Stock are not entitled to preemptive rights or other protections against dilution. Preferred stock, if issued, could have a preference on liquidating distributions or a preference on distribution payments that could limit our ability to make distributions to holders of our Common Stock. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, our stockholders bear the risk of our future offerings reducing the market price of our Common Stock and diluting their stock holdings in us. The change of control conversion feature of the Series F Preferred Stock may make it more difficult for a party to take over the Company or discourage a party from taking over the Company. Upon the occurrence of a change of control (as defined in the Articles Supplementary for the Series F Preferred Stock) the result of which is that our Common Stock or the common securities of the acquiring or surviving entity are not listed on a national stock exchange, holders of the Series F Preferred Stock will have the right (unless, prior to the change of control conversion date, we have provided or provide notice of our election to redeem the Series F Preferred Stock) to convert some or all of their Series F Preferred Stock into shares of our Common Stock (or equivalent value of alternative consideration). The change of control conversion feature of the Series F Preferred Stock may have the effect of discouraging a third party from making an acquisition proposal for the Company or of delaying, deferring or preventing certain change of control transactions of the Company under circumstances that stockholders may otherwise believe are in their best interests. Risks Relating to our Real Estate Investments Because we own real property, we are subject to extensive environmental regulation, which creates uncertainty regarding future environmental expenditures and liabilities. Environmental laws regulate, and impose liability for, releases of hazardous or toxic substances into the environment. Under various provisions of these laws, an owner or operator of real estate, such as us, is or may be liable for costs related to soil or groundwater contamination on, in, or migrating to or from its property. In addition, persons who arrange for the disposal or treatment of hazardous or toxic substances may be liable for the costs of cleaning up contamination at the disposal site. Such laws often impose liability regardless of whether the person knew of, or was responsible for, the presence of the hazardous or toxic substances that caused the contamination. The presence of, or contamination resulting from, any of these substances, or the failure to properly remediate them, may adversely affect our ability to sell or lease our property or to borrow using such property as collateral. In addition, persons exposed to hazardous or toxic substances may sue us for personal injury damages. As a result, in connection with our current or former ownership, operation, management and development of real properties, we may be potentially liable for investigation and cleanup costs, penalties, and damages under environmental laws. Further, environmental laws may impose liabilities, costs or operating limitations on our tenants which could adversely affect our tenants’ operations and their ability to make rental payments to us. Although our properties are generally subjected to preliminary environmental assessments, known as Phase I assessments, by independent environmental consultants that identify certain liabilities, Phase I assessments are limited in scope, and may not include or identify all potential environmental liabilities or risks associated with the property. Further, any environmental liabilities that arose since the date the studies were done would not be identified in the assessments. Unless required by applicable laws or regulations, we may not further investigate, remedy or ameliorate the liabilities disclosed in the Phase I assessments. We cannot assure you that these or other environmental studies identified all potential environmental liabilities, or that we will not incur material environmental liabilities in the future. If we do incur material environmental liabilities in the future, we may face significant remediation costs, and we may find it difficult to finance or sell any affected properties. We may be subject to risks relating to investments in mortgage, bridge or mezzanine loans which may adversely affect our investment and our ability to sell those loans held for sale. We have in the past and in the future may invest in mortgage, bridge or mezzanine loans which investment involves risk of defaults on those loans caused by many conditions beyond our control, including local and other economic conditions (such as the decline of the underlying property value from our initial investment) affecting real estate values and interest rate levels. If there are defaults under these loans, we may not be able to repossess and sell quickly or foreclose on any properties securing such loans which could reduce the value of our investment in the defaulted loan. An action to foreclose on a property securing a loan is regulated by state statutes and regulations and is subject to many of the delays and expenses of any lawsuit brought in connection with the foreclosure if the defendant raises defenses or counterclaims. In the event of default by a borrower, these restrictions, among other things, may impede our ability to sell our remaining investment or foreclose on or sell the collateral or to obtain proceeds sufficient to repay all amounts due to us on the loan, which could reduce the value of our investment in the defaulted 20 loan. As of December 31, 2018, our investments of mortgage, bridge or mezzanine loans notes receivable were classified as held for sale, however, we may in the future determine to invest in mortgage, bridge or mezzanine loans. We are subject to risks relating to real estate-related securities, including commercial mortgage backed securities (“CMBS”). Real estate-related securities are often unsecured and also may be subordinated to other obligations of the issuer. As a result, investments in real estate-related securities may be subject to risks of (1) limited liquidity in the secondary trading market in the case of unlisted or thinly traded securities, (2) substantial market price volatility resulting from changes in prevailing interest rates in the case of traded equity securities, (3) subordination to the prior claims of banks and other senior lenders to the issuer, (4) the operation of mandatory sinking fund or call/redemption provisions during periods of declining interest rates that could cause the issuer to reinvest redemption proceeds in lower yielding assets, (5) the possibility that earnings of the issuer or that income from collateral may be insufficient to meet debt service and distribution obligations and (6) the declining creditworthiness and potential for insolvency of the issuer during periods of rising interest rates and economic slowdown or downturn. These risks may adversely affect the value of outstanding real estate-related securities, the ability of the obliged parties to repay principal and interest or make distribution payments and our ability to sell these securities we determine to market for sale. CMBS are securities that evidence interests in, or are secured by, a single commercial mortgage loan or a pool of commercial mortgage loans. Accordingly, these securities are subject to the risks listed above and all of the risks of the underlying mortgage loans. CMBS are issued by investment banks and non-regulated financial institutions, and are not insured or guaranteed by the U.S. government. The value of CMBS may change due to shifts in the market’s perception of issuers and regulatory or tax changes adversely affecting the mortgage securities market as a whole and may be negatively impacted by any dislocation in the mortgage- backed securities market in general. CMBS are also subject to several risks created through the securitization process. Subordinate CMBS are paid interest only to the extent that there are funds available to make payments. To the extent the collateral pool includes delinquent loans, there is a risk that interest payments on subordinate CMBS will not be fully paid. Subordinate CMBS are also subject to greater credit risk than those CMBS that are more highly rated. In certain instances, third-party guarantees or other forms of credit support can reduce the credit risk. Our build-to-suit acquisitions are subject to additional risks related to properties under development. From time to time, we engage in build-to-suit acquisitions and the acquisition of properties under development. In connection with these businesses, we enter into purchase and sale arrangements with sellers or developers of suitable properties under development or construction. In such cases, we are generally obligated to purchase the property at the completion of construction, provided that the construction conforms to definitive plans, specifications, and costs approved by us in advance, and if other conditions have been met, such as there being an effective lease for the property, and the tenant having accepted the property and commenced paying rent. We may also engage in development and construction activities involving existing properties, including the construction of new buildings or the expansion of existing facilities (typically at the request of a tenant) or the development or build-out of vacant space. We may advance significant amounts in connection with certain development projects. As a result, we are subject to potential development risks and construction delays and the resultant increased costs and risks, as well as the risk of loss of certain amounts that we have advanced should a development project not be completed. To the extent that we engage in development or construction projects, we may be subject to uncertainties associated with obtaining permits or re-zoning for development, environmental and land use concerns of governmental entities and/or community groups, and the builder’s ability to build in conformity with plans, specifications, budgeted costs and timetables. If a developer or builder fails to perform, we may terminate the purchase, modify the construction contract or resort to legal action to compel performance (or in certain cases, we may elect to take over the project and pursue completion of the project ourselves). A developer’s or builder’s performance may also be affected or delayed by conditions beyond that party’s control. Delays in obtaining permits or completion of construction could also give tenants the right to terminate preconstruction leases. We may incur additional risks if we make periodic progress payments or other advances to builders before they complete construction. These and other such factors can result in increased project costs or the loss of our investment. Although we rarely engage in construction activities relating to space that is not already leased to one or more tenants, to the extent that we do so, we may be subject to normal lease-up risks relating to newly constructed projects. We also will rely on rental revenue and expense projections and estimates of the fair market value of property upon completion of construction when agreeing upon a price at the time we acquire the property. If these projections are inaccurate, we may pay too much for a property and our return on our investment could suffer. If we contract with a development company for a newly developed property, there is a risk that money advanced to that development company for the project may not be fully recoverable if the developer fails to successfully complete the project. 21 Risks Related to the Services Agreement We are subject to conflicts of interest relating to the Cole REITs. During the initial term of the Services Agreement, property acquisition opportunities will be allocated among us and the real estate programs sponsored by CCA pursuant to an asset allocation policy and in accordance with the terms of the Services Agreement. The Cole REITs have characteristics, including targeted investment types, and investment objectives and criteria substantially similar to our own. As a result, we may be seeking to acquire properties and real estate-related investments at the same time as the Cole REITs. During the initial term of the Services Agreement, in the event that an investment opportunity is identified that may be suitable for more than one of us or the other programs sponsored by CCA and for which more than one of such entities has sufficient uninvested funds, then an allocation committee, which is comprised of employees of the Company and employees of CIM Group, LLC, CCA or their respective affiliates, will examine the following factors, among others, in determining the entity for which the investment opportunity is most appropriate: • • • • • • • the investment objective of each entity; the anticipated operating cash flows of each entity and the cash requirements of each entity; the effect of the acquisition both on diversification of each entity’s investments by type of property, geographic area and tenant concentration; the amount of funds available to each entity and the length of time such funds have been available for investment; the policy of each entity relating to leverage of properties; the income tax effects of the purchase to each entity; and the size of the investment. If, in the judgment of the allocation committee, the investment opportunity may be equally appropriate for more than one program, then the entity that has had the longest period of time elapse since it was allocated an investment opportunity of a similar size and type (e.g., office, industrial, retail properties or anchored shopping centers) will be allocated such investment opportunity. If a subsequent development, such as a delay in the closing of the acquisition or a delay in the construction of a property, causes any such investment, in the opinion of the allocation committee, to be more appropriate for an entity other than the entity that committed to make the investment, the allocation committee may determine that the Company or a program sponsored by CCA will make the investment. For programs sponsored by CCA that commenced operations on or after March 5, 2013, the Company retains a right of first refusal for all opportunities to acquire real estate and real estate-related assets or portfolios with a purchase price greater than $100 million. This right of first refusal applies to CCIT II, CCIT III and CCPT V, but does not apply to CCPT IV or INAV. There can be no assurance that these policies will be adequate to address all of the conflicts that may arise or will address such conflicts in a manner that is favorable to us. Risks Related to our Organization and Structure We are a holding company with no direct operations. As a result, we rely on funds received from the Operating Partnership to pay liabilities and dividends, our stockholders’ claims will be structurally subordinated to all liabilities of the Operating Partnership and our stockholders do not have any voting rights with respect to the Operating Partnership’s activities, including the issuance of additional OP Units. We are a holding company and conduct all of our operations through the Operating Partnership. We do not have, apart from our ownership of the Operating Partnership, any independent operations. As a result, we rely on distributions from the Operating Partnership to pay any dividends we might declare on shares of our Common Stock. We also rely on distributions from the Operating Partnership to meet our debt service and other obligations, including our obligations to make distributions required to maintain our REIT qualification. The ability of subsidiaries of the Operating Partnership to make distributions to the Operating Partnership, and the ability of the Operating Partnership to make distributions to us in turn, will depend on their operating results and on the terms of any loans that encumber the properties owned by them. Such loans may contain lockbox arrangements, reserve requirements, financial covenants and other provisions that restrict the distribution of funds. In the event of a default under these loans, the defaulting subsidiary would be prohibited from distributing cash. As a result, a default under any of these loans by the borrower subsidiaries could cause us to have insufficient cash to make distributions on our Common Stock required to maintain our REIT qualification. 22 In addition, because we are a holding company, stockholders’ claims will be structurally subordinated to all existing and future liabilities and obligations (whether or not for borrowed money) of the Operating Partnership and its subsidiaries. Therefore, in the event of our bankruptcy, liquidation or reorganization, claims of our stockholders will be satisfied only after all of our and the Operating Partnership’s and its subsidiaries’ liabilities and obligations have been paid in full. As of December 31, 2018, we owned approximately 97.6% of the OP Units in the Operating Partnership. However, the Operating Partnership may issue additional OP Units in the future. Such issuances could reduce our ownership percentage in the Operating Partnership. Because our stockholders would not directly own any such OP Units, they would not have any voting rights with respect to any such issuances or other partnership-level activities of the Operating Partnership. Our charter and bylaws and Maryland law contain provisions that may delay or prevent a change of control transaction. Our charter, subject to certain exceptions, limits any person to actual or constructive ownership of no more than 9.8% in value of the aggregate of our outstanding shares of stock and not more than 9.8% (in value or in number of shares, whichever is more restrictive) of any class or series of our shares of stock. In addition, our charter provides that we may not consolidate, merge, sell all or substantially all of our assets or engage in a share exchange unless such actions are approved by the affirmative vote of at least two-thirds of the Board of Directors. The ownership limits and the other restrictions on ownership and transfer of our stock and the Board approval requirements contained in our charter may delay or prevent a transaction or a change of control that might involve a premium price for our Common Stock or otherwise be in the best interest of our stockholders. Certain provisions in the LPA may delay, defer or prevent unsolicited acquisitions of us. Certain provisions in the LPA may delay or make more difficult unsolicited acquisitions of us or changes in our control. These provisions could discourage third parties from making such proposals, although some stockholders might consider such proposals, if made, desirable. These provisions include, among others: • • • • redemption rights of qualifying parties; the ability of the General Partner in some cases to amend the LPA without the consent of the limited partners; the right of the limited partners to consent to transfers of the general partnership interest of the General Partner and mergers or consolidations of the Company under specified limited circumstances; and restrictions relating to our qualification as a REIT under the Internal Revenue Code. The LPA also contains other provisions that may have the effect of delaying, deferring or preventing a transaction or a change of control that might involve a premium price for our Common Stock or otherwise be in the best interest of our stockholders. Tax protection provisions on certain properties could limit our operating flexibility. We have agreed with ARC Real Estate Partners, LLC, an affiliate of ARC Properties Advisors, LLC (the “Former Manager”), to indemnify it against any adverse tax consequences if we were to sell, convey, transfer or otherwise dispose of all or any portion of the interests in the properties that were acquired by us in our formation transactions, in a taxable transaction. These tax protection provisions apply until September 6, 2021, which is the 10th anniversary of the closing of our initial public offering (“IPO”). Although it may be in our stockholders’ best interest that we sell one or more of these properties, it may be economically disadvantageous for us to do so because of these obligations. We have also agreed to make debt available for ARC Real Estate Partners, LLC to guarantee. We agreed to these provisions at the time of our IPO in order to assist ARC Real Estate Partners, LLC in preserving its tax position after its contribution of its interests in our initial properties. As a result, we may be required to incur and maintain more debt than we would otherwise. The Company’s fiduciary duties as sole general partner of the Operating Partnership could create conflicts of interest. The Company has fiduciary duties to the Operating Partnership and the limited partners in the Operating Partnership, the discharge of which may conflict with the interests of its stockholders. The LPA provides that, in the event of a conflict between the duties owed by the Company’s directors to the Company and the duties that the Company owes in its capacity as the sole general partner of the Operating Partnership to the Operating Partnership’s limited partners, the Company’s directors are under no obligation to give priority to the interests of such limited partners. As a holder of OP Units, the Company will have the right to vote on certain amendments to the LPA (which require approval by a majority in interest of the limited partners, including the Company) and individually to approve certain amendments that would adversely affect the rights of the Operating Partnership’s limited partners, as well as the right to vote on mergers and consolidations of the Company in its capacity as sole general partner of the Operating Partnership in certain limited circumstances. These voting rights may be exercised in a manner that conflicts with the interests of the Company’s stockholders. For example, the Company cannot adversely affect the limited partners’ rights to 23 receive distributions, as set forth in the LPA, without their consent, even though modifying such rights might be in the best interest of the Company’s stockholders generally. The Board of Directors may change significant corporate policies without stockholder approval. Our investment, financing, borrowing and dividend policies and our policies with respect to other activities, including growth, debt, capitalization, operations and other governance matters, will be determined by the Board of Directors. These policies may be amended or revised at any time and from time to time at the discretion of the Board of Directors without a vote of our stockholders. In addition, the Board of Directors may change our policies with respect to conflicts of interest provided that such changes are consistent with applicable legal requirements. A change in these policies could have an adverse effect on our business, financial condition, liquidity and results of operations and our ability to satisfy our debt service obligations and to make distributions to our stockholders and unitholders. Our rights and the rights of our stockholders to take action against our directors and officers are limited under Maryland law. Maryland law provides that a director or officer has no liability in that capacity if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be in our best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances. In addition, Maryland law permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from (1) actual receipt of an improper personal benefit or profit in money, property or services or (2) active and deliberate dishonesty established by a final judgment as being material to the cause of action. Our charter contains such a provision and limits the liability of our directors and officers to the maximum extent permitted by Maryland law. Maryland law requires us to indemnify our directors and officers for liability actually incurred in connection with any proceeding to which they may be made, or threatened to be made, a party, except to the extent that the act or omission of the director or officer was material to the matter giving rise to the proceeding and was either committed in bad faith or was the result of active and deliberate dishonesty, the director or officer actually received an improper personal benefit in money, property or services, or, in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. As a result, we and our stockholders may have more limited rights against our directors and officers than might otherwise exist under common law. In addition, our charter obligates us to advance the reasonable defense costs incurred by our directors and officers. Finally, we have entered into agreements with our directors and officers pursuant to which we have agreed to indemnify them to the maximum extent permitted by Maryland law. U.S. Federal Income and Other Tax Risks Our failure to remain qualified as a REIT would subject us to U.S. federal income tax and potentially state and local tax, and would adversely affect our operations and the market price of our capital stock. We elected to be taxed as a REIT commencing with the taxable year ended December 31, 2011 and believe we have operated, and intend to operate, in a manner that has allowed us to qualify as a REIT and will allow us to continue to qualify as a REIT. However, we may terminate our REIT qualification if the Board of Directors determines that not qualifying as a REIT is in our best interests, or the qualification may be terminated inadvertently. Our qualification as a REIT depends upon our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis. We structured our activities in a manner designed to satisfy the requirements for qualification as a REIT. However, the REIT qualification requirements are extremely complex and interpretation of the U.S. federal income tax laws governing qualification as a REIT is limited. Accordingly, we cannot be certain that we have been or will be successful in qualifying to be taxed as a REIT. Our ability to satisfy the asset tests depends on our analysis of the characterization and fair market values of our assets, some of which are not susceptible to a precise determination, and for which we will not obtain independent appraisals. Our compliance with the annual income and quarterly asset requirements also depends on our ability to successfully manage the composition of our income and assets on an ongoing basis. Accordingly, if certain of our operations were to be recharacterized by the Internal Revenue Service (the “IRS”), such recharacterization would jeopardize our ability to satisfy the requirements for qualification as a REIT. Furthermore, future legislative, judicial or administrative changes to the U.S. federal income tax laws could result in our disqualification as a REIT for past or future periods. If we fail to qualify as a REIT for any taxable year and we do not qualify for certain statutory relief provisions, we will be subject to U.S. federal income tax on our taxable income at corporate rates. In addition, we would generally be disqualified from treatment as a REIT for the four taxable years following the year of losing our REIT qualification. Losing our REIT qualification would reduce our net earnings because of the additional tax liability. In addition, distributions to stockholders would no longer qualify for the dividends paid deduction, and we would no longer be required to make distributions and, accordingly, distributions the Operating Partnership makes to its unitholders could be similarly reduced. If this occurs, we might be required to borrow funds or liquidate some investments in order to pay the applicable tax. 24 Even if we continue to qualify as a REIT, in certain circumstances, we may incur tax liabilities that would reduce our cash available for distribution to our stockholders and unitholders. Even if we continue to qualify as a REIT, we may be subject to U.S. federal, state and local income taxes. For example, net income from the sale of properties that are considered held for sale and not for investment (a “prohibited transaction” under the Internal Revenue Code) will be subject to a 100% tax. In addition, we may not make sufficient distributions to avoid income and excise taxes on retained income. We also may decide to retain net capital gain we earn from the sale or other disposition of our property or other assets and pay U.S. federal income tax directly on such income. In that event, our stockholders would be treated for federal income tax purposes as if they earned that income and paid the tax on it directly. However, stockholders that are tax- exempt, such as charities or qualified pension plans, would have no benefit from their deemed payment of such tax liability unless they file U.S. federal income tax returns and thereon seek a refund of such tax. We may, in certain circumstances, be required to pay an excise or penalty tax (which could be significant in amount) in order to utilize one or more relief provisions under the Internal Revenue Code to maintain our qualification as a REIT. A REIT may own up to 100% of the stock of one or more taxable REIT subsidiaries (“TRS”). Both the subsidiary and the REIT must jointly elect to treat the subsidiary as a TRS of the REIT. A TRS may hold assets and earn income that would not be qualifying assets or income if held or earned directly by a REIT. We may use TRSs generally to hold properties for sale in the ordinary course of business or to hold assets or conduct activities that we cannot conduct directly as a REIT. Our TRS will be subject to applicable U.S. federal, state, local and foreign income tax on their taxable income. These rules also impose a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis. Not all taxing jurisdictions recognize the favorable tax treatment afforded to REITs under the Internal Revenue Code. As such, we may be subject to regular corporate net income taxes in certain state, local or foreign taxing jurisdictions. In addition, we, the Operating Partnership, our TRS, and/or other entities through which we conduct our business may also be subject to state, local or foreign income, franchise, sales, transfer, excise or other taxes. Any taxes that we incur directly or indirectly will reduce our cash available for distribution to our stockholders and unitholders. Additionally, changes in state, local or foreign tax law could reduce the cash flow from certain investments made by us and could make such investments less attractive to potential buyers when we seek to liquidate such investments. To qualify as a REIT we must meet annual distribution requirements, which may force us to forgo otherwise attractive opportunities or borrow funds during unfavorable market conditions. This could delay or hinder our ability to meet our investment objectives and reduce your overall return. In order to qualify as a REIT, we must distribute annually to our stockholders at least 90% of our REIT taxable income (which does not equal net income as calculated in accordance with U.S. GAAP), determined without regard to the deduction for dividends paid and excluding any net capital gain. We will be subject to U.S. federal income tax on our undistributed taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which dividends we pay with respect to any calendar year are less than the sum of (a) 85% of our ordinary income, (b) 95% of our capital gain net income and (c) 100% of our undistributed income from prior years. These requirements could cause us to distribute amounts that otherwise would be spent on investments in real estate assets and it is possible that we might be required to borrow funds, possibly at unfavorable rates, or sell assets to fund these dividends or make taxable stock dividends. Although we intend to make distributions sufficient to meet the annual distribution requirements and to avoid U.S. federal income and excise taxes on our earnings while we qualify as a REIT, it is possible that we might not always be able to do so. If the Operating Partnership or certain other subsidiaries fail to qualify as a partnership or are not otherwise disregarded for U.S. federal income tax purposes, then we would cease to qualify as a REIT. We intend to maintain the status of the Operating Partnership as a partnership for U.S. federal income tax purposes. However, if the IRS were to successfully challenge the status of the Operating Partnership as a partnership for such purposes, it would be taxable as a corporation. This would result in our failure to qualify as a REIT and would cause us to be subject to a corporate-level tax on our income. This would substantially reduce our cash available to pay distributions and the yield on your investments. In addition, if one or more of the partnerships or limited liability companies through which the Operating Partnership owns its properties, in whole or in part, loses its characterization as a partnership and is otherwise not disregarded for U.S. federal income tax purposes, then it would be subject to taxation as a corporation, thereby reducing distributions to the Operating Partnership. Such a recharacterization of a subsidiary entity could also threaten our ability to maintain our REIT qualification. 25 Recent legislation substantially modified the taxation of REITs and their shareholders, and the effects of such legislation and related regulatory action are uncertain. On December 22, 2017, the TCJA was signed into law. The TCJA makes major changes to the Internal Revenue Code, including a number of provisions of the Internal Revenue Code that affect the taxation of REITs and their stockholders. Among the changes made by the TCJA are permanently reducing the generally applicable corporate tax rate, generally reducing the tax rate applicable to individuals and other non-corporate taxpayers for tax years beginning after December 31, 2017 and before January 1, 2026, eliminating or modifying certain previously allowed deductions (including substantially limiting interest deductibility and, for individuals, the deduction for non-business state and local taxes), and, for taxable years beginning after December 31, 2017 and before January 1, 2026, providing for preferential rates of taxation through a deduction of up to 20% (subject to certain limitations) on most ordinary REIT dividends and certain trade or business income of non-corporate taxpayers. The TCJA also imposes new limitations on the deduction of net operating losses and requires us to recognize income for tax purposes no later than when we take it into account on our financial statements, which may result in us having to make additional taxable distributions to our stockholders in order to comply with REIT distribution requirements or avoid taxes on retained income and gains. The effect of the significant changes made by the TCJA is highly uncertain, and administrative guidance will be required in order to fully evaluate the effect of many provisions. The effect of any technical corrections with respect to the TCJA could have an adverse effect on us or our stockholders. Investors should consult their tax advisors regarding the implications of the TCJA on their investment in our capital stock. Dividends payable by REITs generally do not qualify for the reduced tax rates available for some dividends. Currently, the maximum U.S. federal income tax rate applicable to qualified dividend income payable to U.S. stockholders that are individuals, trusts and estates is 20% (not including the net investment income tax). Dividends payable by REITs, however, generally are not eligible for this reduced rate. Although this does not adversely affect the taxation of REITs or dividends payable by REITs, the more favorable rates applicable to regular corporate qualified dividends could cause investors who are individuals, trusts and estates to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our Common Stock. Pursuant to the TCJA, non-corporate recipients of dividends from a REIT (other than capital gains dividends and dividends eligible for treatment as qualified dividends) may deduct up to 20% of such REIT dividends for taxable years beginning before January 1, 2026. This deduction mitigates but does not eliminate the difference in effective tax rates between REIT dividends and dividends paid by C corporations. If we were considered to have actually or constructively paid a “preferential dividend” to certain of our stockholders, our status as a REIT could be adversely affected. For our taxable years that ended on or before December 31, 2014, and for any year in which we fail to be a “publicly offered” REIT within the meaning of Section 562 of the Internal Revenue Code, in order for our distributions to be counted as satisfying the annual distribution requirements for REITs, and to provide us with a REIT-level tax deduction, the distributions could not have been “preferential dividends.” We believe we qualify as a publicly offered REIT, but there can be no assurance that we will continue to so qualify. A dividend is not a preferential dividend if the distribution is pro rata among all outstanding shares of stock within a particular class, and in accordance with the preferences among different classes of stock as set forth in our organizational documents. There is uncertainty as to the IRS’s position regarding whether certain arrangements that REITs have with their stockholders could give rise to the inadvertent payment of a preferential dividend. While we believe that our operations have been structured in such a manner that we will not be treated as inadvertently paying preferential dividends, there is no de minimis or reasonable cause exception with respect to preferential dividends under the Internal Revenue Code. Therefore, if the IRS were to take the position that we inadvertently paid a preferential dividend prior to January 1, 2015 (or any later year in which we are not a publicly offered REIT), we may be deemed either to (a) have distributed less than 100% of our REIT taxable income and be subject to tax on the undistributed portion, or (b) have distributed less than 90% of our REIT taxable income and our status as a REIT could be terminated for the year in which such determination is made and for the four taxable years following the year of termination if we were unable to cure such failure. Complying with REIT requirements may limit our ability to hedge our liabilities effectively and may cause us to incur tax liabilities. The REIT provisions of the Internal Revenue Code may limit our ability to hedge our liabilities. Any income from a hedging transaction we enter into to manage risk of interest rate changes, price changes or currency fluctuations with respect to borrowings made or to be made to acquire or carry real estate assets or to offset certain other positions, if properly identified under applicable Treasury Regulations, does not constitute “gross income” for purposes of the 75% or 95% gross income tests. To the extent that we enter into other types of hedging transactions, the income from those transactions will likely be treated as non-qualifying income for purposes of one or both of the gross income tests. As a result of these rules, we may need to limit our use of advantageous 26 hedging techniques or implement those hedges through a TRS. This could increase the cost of our hedging activities because our TRSs would be subject to tax on gains or expose us to greater risks associated with changes in interest rates than we would otherwise want to bear. In addition, losses in a TRS generally will not provide any tax benefit, except for being carried forward against future taxable income of such TRS. Complying with REIT requirements may force us to forgo or liquidate otherwise attractive investment opportunities. To qualify as a REIT, we must ensure that we meet the REIT gross income tests annually and that at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities and qualified REIT real estate assets, including certain mortgage loans and certain kinds of mortgage-related securities. The remainder of our investment in securities (other than government securities, qualified real estate assets and stock of a TRS) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our assets (other than government securities, qualified real estate assets and stock of a TRS) can consist of the securities of any one issuer, no more than 20% of the value of our total assets can be represented by securities of one or more TRSs and no more than 25% of the value of our total assets can be represented by certain debt securities of publicly offered REITs. If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences. As a result, we may be required to liquidate assets from our portfolio or not make otherwise attractive investments in order to maintain our qualification as a REIT. These actions could have the effect of reducing our income and amounts available for distribution to our stockholders. Re-characterization of sale-leaseback transactions may cause us to lose our REIT status. We may purchase properties and lease them back to the sellers of such properties. The IRS could challenge our characterization of certain leases in any such sale-leaseback transactions as “true leases,” which allows us to be treated as the owner of the property for U.S. federal income tax purposes. In the event that any sale-leaseback transaction is challenged and re-characterized as a financing transaction or loan for U.S. federal income tax purposes, deductions for depreciation and cost recovery relating to such property would be disallowed. If a sale-leaseback transaction were so re-characterized, we might fail to satisfy the REIT qualification “asset tests” or the “income tests” and, consequently, lose our REIT status effective with the year of re-characterization. Alternatively, such a recharacterization could cause the amount of our REIT taxable income to be recalculated, which might also cause us to fail to meet the distribution requirement for a taxable year and thus lose our REIT status. We may be subject to adverse legislative or regulatory tax changes that could increase our tax liability, reduce our operating flexibility and reduce the market price of our capital stock. In recent years, numerous legislative, judicial and administrative changes have been made in the provisions of U.S. federal income tax laws applicable to investments similar to an investment in shares of our Common Stock. Additional changes to the tax laws are likely to continue to occur, and we cannot assure you that any such changes will not adversely affect our taxation and our ability to qualify as a REIT or the taxation of a stockholder. Any such changes could have an adverse effect on an investment in our shares or on the market value or the resale potential of our assets. Our stockholders are urged to consult with their tax advisor with respect to the impact of recent legislation on their investment in our shares and the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our shares. Although REITs generally receive better tax treatment than entities taxed as regular corporations, it is possible that future legislation would result in a REIT having fewer tax advantages, and it could become more advantageous for a company that invests in real estate to elect to be treated for U.S. federal income tax purposes as a regular corporation. As a result, our charter provides the Board of Directors with the power, under certain circumstances, to revoke or otherwise terminate our REIT election and cause us to be taxed as a regular corporation, without the vote of our stockholders. The Board of Directors has fiduciary duties to us and our stockholders and could only cause such changes in our tax treatment if it determines in good faith that such changes are in the best interest of our stockholders. 27 Non-U.S. stockholders may be subject to U.S. federal withholding tax and may be subject to U.S. federal income tax upon the disposition of our shares. Gain recognized by a non-U.S. stockholder upon the sale or exchange of our Common Stock generally will not be subject to U.S. federal income taxation unless such stock constitutes a “U.S. real property interest” (“USRPI”) under the Foreign Investment in Real Property Tax Act of 1980 (the “FIRPTA”). Our Common Stock will not constitute a USRPI so long as we are a “domestically- controlled qualified investment entity.” A domestically-controlled qualified investment entity includes a REIT if at all times during a specified testing period, less than 50% in value of such REIT’s stock is held directly or indirectly by non-U.S. stockholders. We believe that we are a domestically-controlled qualified investment entity. However, because our Common Stock is and will be publicly traded, no assurance can be given that we are or will be a domestically-controlled qualified investment entity. Even if we do not qualify as a domestically-controlled qualified investment entity at the time a non-U.S. stockholder sells or exchanges our Common Stock, gain arising from such a sale or exchange would not be subject to U.S. taxation under FIRPTA as a sale of a USRPI if: (a) our Common Stock is “regularly traded,” as defined by applicable Treasury regulations, on an established securities market, and (b) such non-U.S. stockholder owned, actually and constructively, 10% or less of our Common Stock at any time during the five-year period ending on the date of the sale. We anticipate that our shares will be “regularly traded” on an established securities market for the foreseeable future, although, no assurance can be given that this will be the case. We encourage you to consult your tax advisor to determine the tax consequences applicable to you if you are a non-U.S. stockholder. Our property taxes could increase due to property tax rate changes or reassessment, which would impact our cash flows. Even if we qualify as a REIT for federal income tax purposes, we will be required to pay some state and local taxes on our properties. The real property taxes on our properties may increase as property tax rates change or as our properties are assessed or reassessed by taxing authorities. Therefore, the amount of property taxes we pay in the future may increase substantially. If the property taxes we pay increase and if any such increase is not reimbursable under the terms of our lease, then our cash flows will be impacted, and our ability to pay expected distributions to our stockholders and unitholders could be adversely affected. The share ownership restrictions of the Internal Revenue Code for REITs and the 9.8% share ownership limit in our charter may inhibit market activity in our shares of stock and restrict our business combination opportunities. In order to qualify as a REIT, five or fewer individuals, as defined in the Internal Revenue Code, may not own, actually or constructively, more than 50% in value of our issued and outstanding shares of stock at any time during the last half of each taxable year, other than the first year for which a REIT election is made. Attribution rules in the Internal Revenue Code determine if any individual or entity actually or constructively owns our shares of stock under this requirement. Additionally, at least 100 persons must beneficially own our shares of stock during at least 335 days of a taxable year for each taxable year, other than the first year for which a REIT election is made. To help insure that we meet these tests, among other purposes, our charter restricts the acquisition and ownership of our shares of stock. Our charter, with certain exceptions, authorizes our directors to take such actions as are necessary and desirable to preserve our qualification as a REIT while we so qualify. Unless exempted by the Board of Directors, for so long as we qualify as a REIT, our charter prohibits, among other limitations on ownership and transfer of shares of our stock, any person from beneficially or constructively owning (applying certain attribution rules under the Internal Revenue Code) more than 9.8% in value of the aggregate of our outstanding shares of stock and more than 9.8% (in value or in number of shares, whichever is more restrictive) of any class or series of our shares of stock. The Board of Directors, in its sole discretion and upon receipt of certain representations and undertakings, may exempt a person (prospectively or retrospectively) from the ownership limits. However, the Board of Directors may not, among other limitations, grant an exemption from these ownership restrictions to any proposed transferee whose ownership, direct or indirect, in excess of the 9.8% ownership limit would result in the termination of our qualification as a REIT. These restrictions on transferability and ownership will not apply, however, if the Board of Directors determines that it is no longer in our best interest to continue to qualify as a REIT or that compliance with the restrictions is no longer required in order for us to continue to so qualify as a REIT. These ownership limits could delay or prevent a transaction or a change in control that might involve a premium price for our Common Stock or otherwise be in the best interest of our stockholders. Item 1B. Unresolved Staff Comments. None. 28 Item 2. Properties. Our leases primarily consist of corporate offices, including our headquarters located in Phoenix, Arizona. As of December 31, 2018, the Company owned 3,994 operating properties comprising 95.0 million square feet of retail and commercial space located in 49 states and Puerto Rico, which includes properties owned through consolidated joint ventures. The rentable space at these properties was 98.8% leased with a weighted-average remaining lease term of 8.9 years. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Real Estate Portfolio Metrics for a discussion of the properties we hold for rental operations and Schedule III – Real Estate and Accumulated Depreciation for a detailed listing of such properties. Item 3. Legal Proceedings. The information contained under the heading “Litigation” in Note 10 – Commitments and Contingencies to our consolidated financial statements is incorporated by reference into this Part I, Item 3. Except as set forth therein, as of the end of the period covered by this Annual Report on Form 10-K, we are not a party to, and none of our properties are subject to, any material pending legal proceedings. Item 4. Mine Safety Disclosures. Not applicable. 29 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Effective July 31, 2015, we transferred the listing of the General Partner’s Common Stock and Series F Preferred Stock to the NYSE from NASDAQ Global Select Market. The General Partner’s Common Stock and Series F Preferred Stock trade under the trading symbols “VER” and “VER PRF,” respectively. Stock Price Performance Graph Set forth below is a line graph comparing the cumulative total stockholder return on the General Partner’s Common Stock, based on the market price of the Common Stock and assuming reinvestment of dividends, with the FTSE National Association of Real Estate Investment Trusts All Equity REITs Index (“FTSE NAREIT All Equity REITs”) and the S&P 500 Index (“S&P 500”) for the period commencing December 31, 2013 and ending December 31, 2018. The graph assumes an investment of $100 on December 31, 2013. The graph above and the accompanying text are not “soliciting material,” are not deemed filed with the SEC and are not to be incorporated by reference in any filing by us under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. In addition, the stock price performance in the graph above is not indicative of future stock price performance. Distributions On February 20, 2019, the Company’s Board of Directors declared a quarterly cash dividend of $0.1375 per share of Common Stock (equaling an annualized dividend rate of $0.55 per share) for the first quarter of 2019 to stockholders of record as of March 29, 2019, which will be paid on April 15, 2019. An equivalent distribution by the Operating Partnership is applicable per OP Unit. Our future distributions may vary and will be determined by the General Partner’s Board of Directors based upon the circumstances prevailing at the time, including our financial condition, operating results, estimated taxable income and REIT distribution requirements, and may be adjusted at the discretion of the Board of Directors. As of February 19, 2019, the General Partner had approximately 3,441 registered stockholders of record of its Common Stock. This figure does not reflect the beneficial ownership of shares held in nominee name. There is no established trading market for the Operating Partnership's OP Units. As of February 19, 2019, there were 26 record holders of the OP Units. Recent Sales of Unregistered Securities During 2018, the General Partner issued an aggregate of 32,439 shares of Common Stock in redemption of 32,439 Limited Partner OP Units (which refers to OP Units issued to parties other than the General Partner). These shares of Common Stock were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act. We relied on the exemption under Section 4(a)(2) based upon factual representations received from the limited partner who received the shares of Common Stock. 30 Securities Authorized for Issuance Under Equity Compensation Plans The following table shows the amount of securities remaining available for future issuance under our equity compensation plans as of December 31, 2018: Plan Category Equity compensation plans approved by security holders Equity compensation plans not approved by security holders Total _______________________________________________ Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted-average exercise price of outstanding options, warrants and rights (b) Securities Available For Future Issuance Under Equity Compensation Plans (1) (excluding securities reflected in column (a)) (c) 2,763,165 $ — 2,763,165 $ 6.84 — 6.84 89,395,172 — 89,395,172 (1) Represents the total number of shares of Common Stock reserved for the issuance of equity under our equity-based compensation plans. Shares available under the Equity Plan are equal to 10.0% of the total number of issued and outstanding shares of our Common Stock (on a fully diluted basis assuming the redemption of all OP Units for shares of Common Stock) at any time. As such, the number of shares available for issuance under the Equity Plan changes automatically with changes in the total number of outstanding shares of Common Stock, outstanding OP Units, and dilutive securities. See Note 12 – Equity- based Compensation to our consolidated financial statements for a discussion of the Company’s equity-based compensation plans. Repurchases of Equity Securities Period October 1, 2018 - October 31, 2018 November 1, 2018 - November 30, 2018 December 1, 2018 - December 31, 2018 Total _______________________________________________ Total Number of Shares/ Units Purchased (1) Average Price Paid Per Share/ Unit (2) 16,538 — — 16,538 $ $ 7.16 — — 7.16 (1) We are authorized to repurchase shares of the General Partner’s Common Stock to satisfy employee withholding tax obligations related to equity-based compensation. During the fourth quarter of 2018, the General Partner and the Operating Partnership repurchased shares of Common Stock and corresponding OP Units that were issued to the General Partner, respectively, in order to satisfy the minimum tax withholding obligation for state and federal payroll taxes on employee restricted shares. (2) The price paid per share/unit is based on the weighted average closing price on the respective vesting date. On May 12, 2017, the Company’s Board of Directors authorized the repurchase of up to $200.0 million of the General Partner’s outstanding shares of Common Stock over 12 months from the date of authorization, as market conditions warranted, under the 2017 Share Repurchase Program. On May 3, 2018, the Company’s Board of Directors terminated the 2017 Share Repurchase Program and authorized the 2018 Share Repurchase Program that permits the Company to repurchase up to $200.0 million of its outstanding Common Stock through May 3, 2019, as market conditions warrant. The 2018 Share Repurchase Program has similar terms as the 2017 Share Repurchase Program. During the year ended December 31, 2018, the Company repurchased approximately 6.4 million shares of Common Stock in multiple open market transactions for $44.6 million as part of the 2017 Share Repurchase Program and approximately 0.8 million shares of Common Stock in multiple open market transactions for $5.6 million as part of the 2018 Share Repurchase Program. None of the share repurchases under the 2018 Share Repurchase Program occurred during the fourth quarter of 2018. As of December 31, 2018, the Company had $194.4 million available for share repurchases under the 2018 Share Repurchase Program. Additional shares of Common Stock repurchased by the Company under the 2018 Share Repurchase Program, if any, will be returned to the status of authorized but unissued shares of Common Stock. Item 6. Selected Financial Data. The following selected financial data should be read in conjunction with the accompanying consolidated financial statements and related notes thereto and Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations appearing elsewhere in this Annual Report on Form 10-K. Prior periods have been reclassified to conform to current presentation, as discussed in Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements. The selected financial data (in thousands, except share and per share amounts) presented below was derived from our consolidated financial statements: 31 Balance sheet data: Total real estate investments, at cost Total assets Total debt, net Total liabilities Total equity Operating data: Rental revenue Litigation, merger and other non-routine costs, net of insurance recoveries (1) Impairments Total other operating expenses Total gain (loss) on dispositions and assets held for sale Interest and other expenses, net Provision for income taxes (Loss) income from continuing operations Income (loss) from discontinued operations, net of income taxes (2) Net (loss) income Net loss (income) attributable to non-controlling interests (3) Net (loss) income attributable to General Partner Cash flow data: Net cash flows provided by operating activities Net cash flows provided by (used in) investing activities Net cash flows (used in) provided by financing activities Per share data: Basic and diluted net loss per share from continuing operations attributable to common stockholders Basic and diluted net income (loss) per share from discontinued operations attributable to common stockholders Basic and diluted net loss per share attributable to common stockholders (4) Weighted-average number of shares of Common Stock outstanding - basic (5)(6) 2018 2017 2016 2015 2014 December 31, $ 15,604,839 $ 13,963,493 $ 6,087,922 $ 6,663,349 $ 7,300,144 $ 15,615,375 $ 14,705,578 $ 6,073,444 $ 6,662,702 $ 8,042,876 $ 15,584,442 $ 15,587,574 $ 6,367,248 $ 6,968,041 $ 8,619,533 $ 16,784,721 $ 17,405,866 $ 8,059,802 $ 8,691,907 $ 8,713,959 $ 18,292,560 $ 20,427,136 $ 10,425,778 $ 11,044,806 $ 9,382,330 2018 2017 2016 2015 2014 Year Ended December 31, $ 1,257,867 $ 1,252,285 $ 1,335,447 $ 1,441,135 $ 1,375,699 290,963 54,647 834,644 94,331 47,960 50,548 897,524 61,536 3,884 182,820 959,714 45,524 33,628 91,755 1,025,962 (72,311) (258,568) (259,412) (304,304) (351,882) 199,685 100,547 1,116,266 (277,031) (398,947) (7,313) (5,101) (91,725) 3,695 (88,030) 2,256 (6,882) 51,495 (19,117) 32,378 (560) (7,136) (76,887) (123,937) (200,824) 4,961 (4,589) (138,992) (724,090) (184,500) (286,822) (323,492) (1,010,912) 7,139 33,727 $ $ $ $ $ $ (85,774) $ 31,818 $ (195,863) $ (316,353) $ (977,185) 493,914 151,119 $ $ 793,267 $ 797,948 (274,106) $ 881,637 $ $ 859,695 $ 502,887 941,417 $ (2,527,726) (655,406) $ (756,595) $ (1,506,985) $ (2,151,604) $ 2,415,555 (0.17) $ (0.02) $ (0.16) $ (0.23) $ (1.01) 0.00 (0.02) (0.13) (0.20) (0.35) (0.16) $ (0.04) $ (0.29) $ (0.43) $ (1.36) 969,092,268 974,098,652 931,422,844 903,360,763 793,150,098 Cash dividends declared per common share $ 0.55 $ 0.55 $ 0.55 $ 0.28 $ 1.08 _______________________________________________ (1) The Company's operations were impacted by litigation and investigations prompted by the results of the Audit Committee Investigation beginning in 2014 through 2018 and significant mergers during 2014. During 2018, the Company expensed litigation settlement costs of $233.2 million. (2) On February 1, 2018, the Company completed the sale of its investment management segment, Cole Capital. Substantially all of the Cole Capital segment is reflected in the financial statements as discontinued operations. (3) Represents income or loss attributable to limited partners and consolidated joint venture partners. (4) Amounts may not total due to rounding. (5) For all periods presented, the effect of certain unvested restricted shares or units, stock options, OP Units outstanding and convertible preferred shares were excluded from the weighted-average share calculation as the effect would be antidilutive. (6) For 2014, the effect of long-term incentive plan units of the OP was also excluded from the weighted-average share calculation as the effect would be antidilutive. 32 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements and notes thereto appearing elsewhere in this Annual Report on Form 10-K. We make statements in this section that are forward- looking statements within the meaning of the federal securities laws. For a complete discussion of forward-looking statements, see the section in this report entitled “Forward-Looking Statements.” Certain risks may cause our actual results, performance or achievements to differ materially from those expressed or implied by the following discussion. For a discussion of such risk factors, see the section in this report entitled “Risk Factors.” Overview 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 3,994 retail, restaurant, office and industrial operating properties with an aggregate 95.0 million square feet, of which 98.8% was leased as of December 31, 2018, with a weighted-average remaining lease term of 8.9 years. On February 1, 2018, the Company completed the sale of its investment management segment, Cole Capital. The assets, liabilities and related financial results of substantially all of the Cole Capital segment are reflected in the financial statements as discontinued operations. Critical Accounting Policies and Significant Accounting Estimates Our accounting policies have been established to conform with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires us to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Management believes that we have made these estimates and assumptions in an appropriate manner and in a way that accurately reflects our financial condition. We continually test and evaluate these estimates and assumptions using our historical knowledge of the business, as well as other factors, to ensure that they are reasonable for reporting purposes. However, actual results may differ from these estimates and assumptions. If our judgment or interpretation of the facts and circumstances relating to the various transactions had been different, it is possible that different accounting policies would have been applied, thus resulting in a different presentation of the financial statements. Additionally, other companies may utilize different assumptions or estimates that may impact comparability of our results of operations to those of companies in similar businesses. We believe the following critical accounting policies govern the significant judgments and estimates used in the preparation of our financial statements, which should be read in conjunction with the more complete discussion of our accounting policies and procedures included in Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements. Loss Contingencies The Company records a liability in the consolidated financial statements for loss contingencies when a loss is known or considered probable and the amount is reasonably estimable. We review these matters on a quarterly basis. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a material loss is reasonably possible but not known or probable, and the amount is reasonably estimable, the estimated loss or range of loss is disclosed. The risks and uncertainties involved in applying the principles related to estimating loss contingencies include, but are not limited to, the following: • • Litigation outcomes are inherently unpredictable and are often resolved over long periods of time. Estimating probable and reasonably possible losses requires the analysis of multiple possible outcomes that often depend on judgments about potential actions by third parties, future changes in facts and circumstances, differing interpretations of the law, assessments of the amount of damages, and other factors beyond our control. There is the potential for a material adverse effect on our financial statements if one or more matters are resolved in a particular period in an amount materially in excess of what we anticipated. • We do not recognize insurance recoveries until any contingencies relating to the insurance recovery claim have been resolved. See Note 10 – Commitments and Contingencies for additional information. Goodwill Impairment We evaluate goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate the carrying value may not be recoverable. The risks and uncertainties involved in applying the principles related to goodwill impairment include, but are not limited to, the following: 33 • We estimate the fair value using discounted cash flows and relevant competitor multiples. • We monitor factors that may impact the fair value including market comparable company multiples, interest rates and global economic conditions. • We use a combined income and market approach in evaluations for potential impairment, which requires management to make key assumptions related to revenue growth rate, cash flow assumptions, discount rate and selection of comparable companies. The Company performed its annual test of goodwill for impairment and determined an estimated fair value of $15.2 billion, $15.1 billion and $18.3 billion at the 2018, 2017, and 2016 measurement dates, respectively, which exceeded the carrying values by 13.4%, 8.1% and 21.0%, respectively. As such, no goodwill impairment was recorded during the years ended December 31, 2018, 2017 or 2016 in (loss) income from continuing operations. If all other assumptions were held constant, increasing the discount rate by 0.5% would decrease the amount that the 2018 fair value exceeds the 2018 carrying value from $1.8 billion to $1.0 billion. Real Estate Investment Impairment We invest in real estate assets and subsequently monitor those investments quarterly for impairment, including the review of real estate properties subject to direct financing leases. Additionally, we record depreciation and amortization related to our investments. The risks and uncertainties involved in applying the principles related to real estate investments include, but are not limited to, the following: • • • • • The estimated useful lives of our depreciable assets affect the amount of depreciation and amortization recognized on our investments. The review of impairment indicators and subsequent determination of the undiscounted future cash flows could require us to reduce the value of assets and recognize an impairment loss. The fair value of held for sale assets is estimated by management. This estimated value could result in a reduction of the carrying value of the asset. The evaluation of real estate assets for potential impairment requires the Company’s management to exercise significant judgment and make certain key assumptions. There are inherent uncertainties in making these estimates such as market conditions and performance and sustainability of the Company’s tenants. Changes related to management’s intent to sell or lease the real estate assets used to develop the forecasted cash flows may have a material impact on the Company’s financial results. Allocation of Purchase Price of Real Estate Assets In connection with our acquisition of properties, we allocate the purchase price to the tangible and intangible assets and liabilities acquired based on their respective estimated fair values. Tangible assets consist of land, buildings, fixtures and tenant improvements. Intangible assets consist of above- and below- market lease values and the value of in-place leases. Our purchase price allocations are developed utilizing third-party appraisal reports, industry standards and management experience. The risks and uncertainties involved in applying the principles related to purchase price allocations include, but are not limited to, the following: • • The value allocated to land as opposed to buildings, fixtures and tenant improvements affects the amount of depreciation expense we record. If more value is attributed to land, depreciation expense is lower than if more value is attributed to buildings, fixtures and tenant improvements; Intangible lease assets and liabilities can be significantly affected by estimates, including market rent, lease term including renewal options at rental rates below estimated market rental rates, carrying costs of the property during a hypothetical expected lease-up period, and current market conditions and costs, including tenant improvement allowances and rent concessions; and • We determine whether any financing assumed is above- or below- market based upon comparison to similar financing terms for similar investment properties. Recently Issued Accounting Pronouncements Recently issued accounting pronouncements are described in Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements. 34 Operating Highlights and Key Performance Indicators 2018 Activity • • • • • • • • • • Acquired controlling financial interests in 52 commercial properties, including one land parcel for build-to-suit development, for an aggregate purchase price of $502.7 million, which includes $2.6 million of external acquisition- related expenses that were capitalized. Disposed of 149 properties and one property owned by an unconsolidated joint venture for an aggregate sales price of $560.5 million, of which the Company’s share was $521.4 million, resulting in consolidated proceeds of $502.3 million after repayment of the unconsolidated joint venture’s mortgage loan and closing costs. We recorded an aggregate gain of $96.9 million related to these sales. Sold substantially all of Cole Capital for approximately $120.0 million in cash. Entered into settlement agreements with various plaintiffs in connection with litigation filed as a result of the findings of the Audit Committee Investigation for $217.5 million. The Company also entered into settlement agreements for $15.7 million subsequent to December 31, 2018, which was accrued and included in litigation, merger and other non-routine costs, net of insurance recoveries in the consolidated statements of operations for the year ended December 31, 2018. On May 23, 2018, entered into the Credit Agreement which allows for maximum borrowings of $2.9 billion, consisting of a $2.0 billion Revolving Credit Facility and a $900.0 million Credit Facility Term Loan. In connection with entering into the Credit Agreement, the existing 2014 Credit Agreement was terminated. On August 1, 2018, the Company’s 2018 Convertible Notes matured and the principal outstanding balance of $597.5 million, plus accrued and unpaid interest thereon, was repaid with proceeds from the Revolving Credit Facility. On October 16, 2018, the Company closed a senior note offering, consisting of $550.0 million aggregate principal amount of the OP’s 4.625% Senior Notes due 2025. The OP used the net proceeds from the offering of the notes to repay borrowings under its Revolving Credit Facility. Total secured debt decreased by $153.9 million, from $2.1 billion to $1.9 billion. Repurchased approximately 6.4 million shares of Common Stock in multiple open market transactions, at a weighted average share price of $6.94, for an aggregate purchase price of $44.6 million, as part of the 2017 Share Repurchase Program and 0.8 million shares of Common Stock in multiple open market transactions, at a weighted average share price of $6.95 for an aggregate purchase price of $5.6 million, as part of the 2018 Share Repurchase Program. Declared a quarterly dividend of $0.1375 per share of Common Stock for each quarter of 2018, representing an annualized dividend rate of $0.55 per share. 35 Real Estate Portfolio Metrics In managing our portfolio, we are committed to diversification by property type, tenant, geography and industry. Below is a summary of our operating property type diversification and our top ten concentrations as of December 31, 2018, based on annualized rental income of $1.2 billion. 36 Our financial performance is influenced by the timing of acquisitions and dispositions and the operating performance of our real estate properties. The following table shows the property statistics of our operating properties, excluding properties owned through our unconsolidated joint ventures, as of December 31, 2018, 2017 and 2016: Portfolio Metrics Operating properties Rentable square feet (in millions) Economic occupancy rate (2) Investment-grade tenants (3) ____________________________________ (1) Omits the impact, if any, of the Excluded Properties. 2018 3,994 95.0 98.8% 41.9% 2017 (1) 4,091 94.4 98.8% 39.6% 2016 4,142 93.3 98.3% 41.2% (2) Economic occupancy rate equals the sum of square feet leased (including space subject to month-to-month agreements) divided by total square feet. (3) Investment-grade tenants are those with a credit rating of BBB- or higher by Standard & Poor’s Financial Services LLC or a credit rating of Baa3 or higher by Moody’s Investor Service, Inc. The ratings may reflect those assigned by Standard & Poor’s Financial Services LLC or Moody’s Investor Service, Inc. to the lease guarantor or the parent company, as applicable. The following table shows the economic metrics of our operating properties, excluding properties owned through our unconsolidated joint ventures, as of December 31, 2018, 2017 and 2016: Economic Metrics Weighted-average lease term (in years) (2) Lease rollover: (2)(3) Annual average Maximum for a single year ____________________________________ (1) Omits the impact, if any, of the Excluded Properties. 2018 8.9 5.5% 7.2% 2017 (1) 9.5 4.8% 7.3% 2016 9.9 4.3% 7.4% (2) Based on annualized rental income of our real estate portfolio as of the respective reporting date. (3) Through the end of the next five years as of the respective reporting date. 37 Operating Performance In addition, management uses the following financial metrics to assess our operating performance (dollar amounts in thousands, except per share amounts). Data presented includes both continuing operations, which primarily represent the Company's real estate operations, and discontinued operations, which represent substantially all of Cole Capital, except as otherwise indicated. Year Ended December 31, 2018 2017 2016 Financial Metrics Rental revenue $ 1,257,867 $ 1,252,285 (Loss) income from continuing operations Income (loss) from discontinued operations, net of income taxes Basic and diluted net loss per share from continuing operations attributable to common stockholders Basic and diluted net income (loss) per share from discontinued operations attributable to common stockholders Basic and diluted net loss per share attributable to common stockholders (1) FFO attributable to common stockholders and limited partners from continuing operations (2) FFO attributable to common stockholders and limited partners from discontinued operations (2) FFO attributable to common stockholders and limited partners (2) AFFO attributable to common stockholders and limited partners from continuing operations (2) AFFO attributable to common stockholders and limited partners from discontinued operations (2) AFFO attributable to common stockholders and limited partners (2) AFFO attributable to common stockholders and limited partners from continuing operations per diluted share (2) AFFO attributable to common stockholders and limited partners from discontinued operations per diluted share (2) AFFO attributable to common stockholders and limited partners per diluted share (2) ____________________________________ $ $ $ $ $ $ $ $ $ $ (91,725) $ $ 3,695 $ 51,495 (19,117) $ $ 1,335,447 (76,887) (123,937) (0.17) $ (0.02) $ (0.16) 0.00 (0.16) $ (0.02) (0.04) $ (0.13) (0.29) 434,371 $ 672,225 $ 737,353 3,695 438,066 $ (19,117) 653,108 $ (123,937) 613,416 710,688 $ 702,556 $ 723,354 3,202 36,213 18,103 713,890 $ 738,769 $ 741,457 0.72 $ 0.70 $ 0.00 0.04 0.72 $ 0.74 $ 0.76 0.02 0.78 (1) Amounts may not total due to rounding. See Note 14 – Net Income (Loss) Per Share/Unit for calculation of net (loss) income per share. (2) See the Non-GAAP Measures section below for descriptions of our non-GAAP measures and reconciliations to the most comparable U.S. GAAP measure. 38 Property Financing Our mortgage notes payable consisted of the following as of December 31, 2018, 2017 and 2016 (dollar amounts in thousands): December 31, 2018 December 31, 2017 (4) December 31, 2016 _______________________________________________ Encumbered Properties Outstanding Loan Amount Weighted Average Effective Interest Rate (1)(2) Weighted Average Maturity (3) 459 471 619 $ $ $ 1,917,132 2,054,838 2,629,949 4.93% 4.88% 4.95% 3.4 4.1 4.6 (1) Weighted average effective interest rates ranged from 3.1% to 6.1% at December 31, 2018, 3.1% to 7.2% at December 31, 2017, and 2.0% to 7.75% at December 31, 2016. (2) Weighted average interest rate is computed using the interest rate in effect until the anticipated repayment date. Should the loan not be repaid at the anticipated repayment date, the applicable interest rate would increase as specified in the respective loan agreement until the extended maturity date. (3) Weighted average years remaining to maturity is computed using the anticipated repayment date as specified in each loan agreement, where applicable. (4) Omits the Excluded Property and the related outstanding loan amount of $16.2 million and interest rate of 9.48%. In addition, we have financing which is not secured by interests in real property, which is described under Liquidity and Capital Resources. Future Lease Expirations The following is a summary of lease expirations for the next 10 years and beyond at the operating properties we owned as of December 31, 2018 (dollar amounts and square feet in thousands): Year of Expiration 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Thereafter Total Number of Leases Expiring (1) Square Feet Square Feet as a % of Total Portfolio Annualized Rental Income Expiring Annualized Rental Income Expiring as a % of Total Portfolio 139 207 192 262 316 194 271 222 360 317 766 3,246 2,331 3,526 8,491 9,365 6,593 9,334 4,324 9,654 7,939 6,275 26,014 93,846 2.4% $ 3.5% 8.9% 9.9% 7.0% 9.9% 4.7% 10.2% 8.3% 6.6% 27.4% 98.8% $ 35,949 40,754 76,624 81,816 82,859 110,212 60,665 84,105 104,748 77,301 396,079 1,151,112 3.1% 3.5% 6.7% 7.1% 7.2% 9.6% 5.3% 7.3% 9.1% 6.7% 34.4% 100.0% _______________________________________________ (1) The Company has certain leases comprised of multiple properties. Results of Operations On February 1, 2018, the Company sold substantially all of Cole Capital, which is presented as discontinued operations for all periods presented. The Company’s continuing operations represent primarily those of the real estate investment segment. The operating expense reimbursements line item has been combined into rental revenue for prior periods presented to be consistent with the current year presentation. Rental Revenue The table below sets forth, for the periods presented, rental revenue information and the dollar amount change year over year (dollar amounts in thousands): Rental revenue $ 1,257,867 $ 1,252,285 $ 1,335,447 $ 5,582 $ (83,162) Year Ended December 31, 2018 2017 2016 2018 vs 2017 Increase/(Decrease) 2017 vs 2016 Increase/(Decrease) 39 2018 vs 2017 – The increase in rental revenue of $5.6 million during the year ended December 31, 2018 as compared to the year ended December 31, 2017 was primarily due to the acquisition and disposition of real estate properties. Subsequent to January 1, 2017, the Company acquired 140 occupied properties for an aggregate purchase price of $1.2 billion and disposed of 286 consolidated properties, of which 69 were vacant, for an aggregate sales price of $1.1 billion. 2017 vs 2016 – The decrease in rental revenue of $83.2 million during the year ended December 31, 2017 as compared to the year ended December 31, 2016 was primarily due to the disposition of 438 consolidated properties subsequent to January 1, 2016. Operating Expenses The table below sets forth, for the periods presented, certain operating expense information and the dollar amount change year over year (dollar amounts in thousands): Year Ended December 31, 2018 2017 2016 2018 vs 2017 Increase/(Decrease) 2017 vs 2016 Increase/(Decrease) Acquisition-related $ 3,632 $ 3,402 $ 1,321 $ 230 $ 2,081 Litigation, merger and other non-routine costs, net of insurance recoveries Property operating General and administrative Depreciation and amortization Impairments 290,963 126,461 63,933 640,618 54,647 47,960 128,717 58,603 706,802 50,548 3,884 144,428 51,927 762,038 182,820 243,003 (2,256) 5,330 (66,184) 4,099 Total operating expenses $ 1,180,254 $ 996,032 $ 1,146,418 $ 184,222 $ 44,076 (15,711) 6,676 (55,236) (132,272) (150,386) Acquisition-Related Expenses 2018 vs 2017 - Acquisition-related expenses, which consist of allocated internal salaries related to time spent on acquiring commercial properties and costs associated with unconsummated deals, remained relatively constant during the year ended December 31, 2018 as compared to the same period in 2017. 2017 vs 2016 - The increase of $2.1 million in acquisition-related expenses for the year ended December 31, 2017, as compared to the same period in 2016 was primarily due to an increase in allocated internal salaries resulting from time spent on acquiring commercial properties during the year ended December 31, 2017. The Company acquired 88 properties and three land parcels for an aggregate purchase price of $748.8 million during the year ended December 31, 2017 as compared with the acquisition of eight properties for an aggregate purchase price of $100.2 million during the year ended December 31, 2016. Litigation, Merger and Other Non-Routine Costs, Net of Insurance Recoveries 2018 vs 2017 - The increase of $243.0 million during the year ended December 31, 2018 as compared to the same period in 2017 was primarily due to litigation settlements related to litigation filed as a result of the findings of the Audit Committee Investigation of $233.2 million during the year ended December 31, 2018. Related litigation costs increased $21.2 million for the year ended December 31, 2018 as compared to the same period in 2017, offset by the reversal of an accrual of $10.9 million, as the Company was legally released from certain advancement obligations. In addition, insurance recoveries of $2.3 million were recognized during the year ended December 31, 2018 related to the litigation resulting from prior mergers. 2017 vs 2016 - The increase of $44.1 million during the year ended December 31, 2017, as compared to the same period in 2016 was due to an increase of $25.2 million in legal fees incurred related to the Audit Committee Investigation and related litigation and investigations during the year ended December 31, 2017 as compared to the same period in 2016. Additionally, the Company recognized $21.2 million of insurance recoveries during the year ended December 31, 2016, of which $10.5 million related to litigation resulting from prior mergers and $10.7 million related to the Audit Committee Investigation and related litigation and investigations. No insurance recoveries were recognized during the year ended December 31, 2017 related to the litigation resulting from prior mergers. Property Operating Expenses 2018 vs 2017 – Property operating expenses such as taxes, insurance, ground rent and maintenance include both reimbursable and non-reimbursable property expenses. The decrease in property operating expenses of $2.3 million during the year ended December 31, 2018 as compared to the same period in 2017 was primarily due to the acquisition and disposition of real estate properties. Subsequent to January 1, 2017, the Company acquired 140 occupied properties for an aggregate purchase price of $1.2 billion and disposed of 286 consolidated properties, of which 69 were vacant, for an aggregate sales price of $1.1 billion. 40 2017 vs 2016 – The decrease in property operating expenses of $15.7 million during the year ended December 31, 2017 as compared to the same period in 2016 was primarily due to the disposition of 438 consolidated properties subsequent to January 1, 2016. General and Administrative Expenses 2018 vs 2017 – The increase of $5.3 million during the year ended December 31, 2018 as compared to the same period in 2017 was primarily due to an increase of $5.5 million of compensation and benefits, including equity-based compensation. 2017 vs 2016 – The increase of $6.7 million during the year ended December 31, 2017 as compared to the same period in 2016 was primarily due to an increase of $6.8 million of compensation and benefits, including equity-based compensation. Depreciation and Amortization Expenses 2018 vs 2017 – The decrease of $66.2 million during the year ended December 31, 2018 as compared to the same period in 2017 was primarily due to furniture and fixtures that were fully depreciated during 2017 and 2018, as they had reached the end of their useful lives. 2017 vs 2016 – The decrease of $55.2 million during the year ended December 31, 2017 as compared to the same period in 2016 was primarily related to the disposition of 438 consolidated properties subsequent to January 1, 2016. The Company also recorded $50.5 million and $182.8 million of impairment charges on real estate investments during the years ended December 31, 2017 and 2016, respectively, which reduced the carrying value being depreciated and amortized. Impairments 2018 vs 2017 – The increase in impairments of $4.1 million during the year ended December 31, 2018 as compared to the same period in 2017 was primarily attributable to management’s change in strategy related to certain retail properties which management determined, based on discussions with the current tenants, will not be re-leased, offset by a decrease in impairments related to industrial properties. The Company impaired 70 properties during the year ended December 31, 2018 as compared to 69 properties during the year ended December 31, 2017. 2017 vs 2016 – The decrease in impairments of $132.3 million during the year ended December 31, 2017 as compared to the same period in 2016 was primarily due to a decrease in the number of properties impaired from 153 properties during the year ended December 31, 2016 to 69 properties during the year ended December 31, 2017. In addition, the decrease was also due to management identifying certain properties for potential sale as part of its portfolio management strategy to reduce exposure to office properties during the year ended December 31, 2016 as well as the Chapter 11 bankruptcy filed by Ovation Brands, Inc. during 2016. Other (Expense) Income, Provision for Income Taxes and Income (Loss) from Discontinued Operations The table below sets forth, for the periods presented, certain financial information and the dollar amount change year over year (dollar amounts in thousands): 2018 2017 2016 2018 vs 2017 Increase/(Decrease) 2017 vs 2016 Increase/(Decrease) Year Ended December 31, Interest expense $ (280,887) $ (289,766) $ (317,376) $ (8,879) $ (27,610) Gain (loss) on extinguishment and forgiveness of debt, net Other income, net Equity in income and gain on disposition of unconsolidated entities Gain (loss) on derivative instruments, net Gain on disposition of real estate and real estate assets held for sale, net Provision for income taxes Income (loss) from discontinued operations, net of income taxes 5,360 14,735 1,869 355 94,331 (5,101) 18,373 6,242 2,763 2,976 61,536 (6,882) (771) 5,251 9,783 (1,191) 45,524 (7,136) 3,695 (19,117) (123,937) (13,013) 8,493 (894) (2,621) 32,795 (1,781) 22,812 19,144 991 (7,020) 4,167 16,012 (254) 104,820 41 Interest Expense 2018 vs 2017 – The decrease of $8.9 million during the year ended December 31, 2018 as compared to the same period in 2017 was primarily due to the repayment of the 2018 Convertible Notes of $597.5 million and a $153.9 million reduction of secured debt, partially offset by the issuance of $550.0 million of the 2025 Senior Notes and an increase in net borrowings under the credit facilities of $218.0 million. In addition, there was a decrease in amortization of deferred financing costs of $3.1 million related to the credit facilities during the year ended December 31, 2018 as compared to the same period in 2017, which was due to lower deferred financing costs incurred in connection with the entrance into the Credit Agreement during the year ended December 31, 2018 as compared to the deferred financing costs incurred in connection with the 2014 Credit Agreement. 2017 vs 2016 – The decrease of $27.6 million during the year ended December 31, 2017 as compared to the same period in 2016 was primarily due to a $579.9 million reduction of secured debt, partially offset by the issuance of $600.0 million of Senior Notes and a reduction in net borrowings under the credit facilities of $315.0 million. Gain (Loss) on Extinguishment and Forgiveness of Debt, Net 2018 vs 2017 – Gain (loss) on extinguishment and forgiveness of debt, net decreased $13.0 million during the year ended December 31, 2018 as compared to the same period in 2017. During the year ended December 31, 2018, the Company entered into a deed-in-lieu of foreclosure agreement with the lender of a mortgage loan, secured by one property, which resulted in a gain on forgiveness of debt of $5.2 million. During the same period in 2017, the Company entered into deed-in-lieu of foreclosure agreements with the lenders of three mortgage loans, secured by six properties, which resulted in a gain on forgiveness of debt of $20.5 million, which was offset by the write-off of $2.0 million of deferred financing costs related to the termination of the 2014 Credit Agreement. 2017 vs 2016 – Gain (loss) on extinguishment and forgiveness of debt, net increased $19.1 million during the year ended December 31, 2017 as compared to the same period in 2016. During the year ended December 31, 2017, the Company entered into deed-in-lieu of foreclosure agreements with the lenders of three mortgage loans, secured by six properties, which resulted in a gain on forgiveness of debt of $20.5 million. There were no comparable transactions resulting in gains on forgiveness of debt during the year ended December 31, 2016. Other Income, Net 2018 vs 2017 – The increase of $8.5 million during the year ended December 31, 2018 as compared to the same period in 2017 was primarily due to a $5.1 million gain on measuring the Company’s investments in the Cole REITs at fair value after the investments were no longer accounted for using the equity method, $4.8 million received related to a fully reserved loan receivable and a gain of $1.7 million related to the sale of three mortgage notes, offset by a loss of $2.2 million related to the sale of six CMBS and a reduction of $1.2 million in 1031 real estate program revenues during the year ended December 31, 2018. 2017 vs 2016 – The increase of $1.0 million during the year ended December 31, 2017 as compared to the same period in 2016 was primarily due to post-closing adjustments of $1.6 million, recorded in accordance with the purchase and sale agreement during the year ended December 31, 2016, related to a multi-tenant asset portfolio sale completed in 2014, offset by a decrease in interest income related to the Company’s investment securities and mortgage notes receivable of $0.6 million. Equity in Income and Gain on Disposition of Unconsolidated Entities 2018 vs 2017 – Equity in income and gain on disposition of unconsolidated entities decreased $0.9 million during the year ended December 31, 2018 as compared to the same period in 2017. During the year ended December 31, 2018, the Company recorded a $0.7 million gain on the disposition and liquidation of one property owned by an unconsolidated joint venture. During the year ended December 31, 2017, the Company recorded a $1.9 million gain on the disposition of one land parcel owned by one unconsolidated joint venture. 2017 vs 2016 – Equity in income and gain on disposition of unconsolidated entities decreased $7.0 million during the year ended December 31, 2017 as compared to the same period in 2016. During the year ended December 31, 2017, the Company recorded a gain of $1.9 million related to the disposition of one land parcel owned by one unconsolidated joint venture. During the year ended December 31, 2016, the Company recorded a gain of $10.2 million related to the disposition of one unconsolidated joint venture owning one property. 42 Gain (Loss) on Derivative Instruments, Net 2018 vs 2017 – The $2.6 million decrease during the year ended December 31, 2018 as compared to the same period in 2017, was primarily a result of the termination of 13 derivative instruments with an aggregate notional value of $662.4 million and the de-designation of one derivative instrument with a notional value of $27.8 million during 2017. 2017 vs 2016 – The $4.2 million increase during the year ended December 31, 2017 as compared to the same period in 2016, was primarily the result of the termination of six interest rate swaps in connection with the early repayment of the outstanding borrowings under the 2014 Credit Agreement, which resulted in a gain of $1.1 million as compared to a loss of $3.3 million in 2016. Gain on Disposition of Real Estate and Real Estate Assets Held For Sale, Net 2018 vs 2017 – The increase in gain on disposition of real estate and real estate assets held for sale, net of $32.8 million during the year ended December 31, 2018 as compared to the same period in 2017, was due to the Company’s disposition of 148 properties, excluding one property conveyed to the lender in a deed-in-lieu of foreclosure transaction, for an aggregate sales price of $526.4 million which resulted in a gain of $96.2 million during the year ended December 31, 2018, as compared to the disposal of 131 properties, excluding six properties transferred to the lender in either a deed-in-lieu of foreclosure or foreclosure sale transaction, for an aggregate sales price of $594.9 million during the same period in 2017 for a gain of $64.7 million. During the year ended December 31, 2018, the Company also recognized a loss of $1.9 million related to assets classified as held for sale, as compared to a loss of $3.1 million during the same period in 2017. 2017 vs 2016 – The increase in gain on disposition of real estate and real estate assets held for sale, net of $16.0 million during the year ended December 31, 2017 as compared to the same period in 2016, was due to the Company’s disposition of 131 properties, excluding six properties transferred to the lender in either a deed-in-lieu of foreclosure or foreclosure sale transaction, for an aggregate sales price of $594.9 million which resulted in a gain of $64.7 million during the year ended December 31, 2017, as compared to the disposal of 301 properties for an aggregate sales price of $1.1 billion during the same period in 2016 for a gain of $50.6 million, which included $28.8 million of goodwill allocation related to the sales. During the year ended December 31, 2017, the Company also recognized a loss of $3.1 million related to assets classified as held for sale, as compared to a loss of $5.1 million during the same period in 2016. Provision for Income Taxes 2018 vs 2017 – The consolidated provision for income taxes of $5.1 million for the year ended December 31, 2018 as compared to a provision of $6.9 million for the same period in 2017 reflects an overall decrease in expense attributable to the tax impact related to the gain on the sale of certain Canadian properties in 2017. 2017 vs 2016 – The consolidated provision for income taxes of $6.9 million for the year ended December 31, 2017 as compared to a provision of $7.1 million for the same period in 2016 reflects an overall decrease in expense attributable to higher state taxes in 2016 and tax on net income from properties held in and sold by a TRS in 2016, which were partially offset by tax on the gain on the sale of certain Canadian properties in 2017. Income (Loss) from Discontinued Operations, Net of Income Taxes 2018 vs 2017 – The decrease in loss from discontinued operations, net of income taxes of $22.8 million during the year ended December 31, 2018 was primarily due to the completion of the sale of Cole Capital on February 1, 2018. 2017 vs 2016 – During the fourth quarter of 2017, the Company entered into a purchase and sale agreement to sell substantially all of the Cole Capital segment. The decrease in loss from discontinued operations, net of income taxes of $104.8 million during the year ended December 31, 2017 was primarily due to decreases in impairment of goodwill of $120.9 million, in general and administrative expenses of $18.8 million and in amortization of intangible assets of $11.7 million, partially offset by the loss recognized on classification as held for sale of $20.0 million and an increase in the provision for income taxes of $24.7 million. Revenues, net of reallowed fees and commissions increased $1.8 million for the year ended December 31, 2017, as compared to the year ended December 31, 2016. 43 Non-GAAP Measures Our results are presented in accordance with U.S. GAAP. We also disclose certain non-GAAP measures, as discussed further below. Management uses these non-GAAP financial measures in our internal analysis of results and believes these measures are useful to investors for the reasons explained below. These non-GAAP financial measures should not be considered as substitutes for any measures derived in accordance with U.S. GAAP. Funds from Operations and Adjusted Funds from Operations 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 funds from operations (“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, excluding 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 calculated FFO in accordance with Nareit’s definition described above. In addition to FFO, we use adjusted funds from operations (“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, merger and other non-routine costs, net of insurance recoveries, held for sale loss on discontinued operations, net revenue or expense earned or incurred that is related to the Services Agreement we entered into with Cole Capital on February 1, 2018, gains or losses on sale of investment securities or mortgage notes receivable, legal settlements and insurance recoveries not in the ordinary course of business and payments received on fully reserved loan receivables. We also exclude certain non-cash items such as impairments of goodwill and intangible assets, straight-line rent, net of bad debt expense related to straight-line rent, net direct financing lease adjustments, gains or losses on derivatives, reserves for loan loss, gains or losses on the extinguishment or forgiveness of debt, non-current portion of the tax benefit or expense, equity- based compensation and amortization of intangible assets, deferred financing costs, premiums and discounts on debt and investments, above-market lease assets and below-market lease liabilities. We omit the impact of the Excluded Properties and related non-recourse mortgage notes from FFO to calculate AFFO. Management believes that excluding these costs from FFO provides investors with supplemental performance information that is consistent with the performance models and analysis used by management, and provides investors a view of the performance of our portfolio over time. AFFO allows for a comparison of the performance of our operations with other publicly-traded REITs, as AFFO, or an equivalent measure, is routinely reported by publicly-traded REITs, and we believe often used by analysts and investors for comparison purposes. For all of these reasons, we believe FFO and AFFO, in addition to net income (loss), as defined by U.S. GAAP, are helpful supplemental performance measures and useful in understanding the various ways in which our management evaluates the performance of the Company over time. However, not all REITs calculate FFO and AFFO the same way, so comparisons with other REITs may not be meaningful. FFO and AFFO should not be considered as alternatives to net income (loss) and are not intended to be used as a liquidity measure indicative of cash flow available to fund our cash needs. Neither the SEC, Nareit, nor any other regulatory body has evaluated the acceptability of the exclusions used to adjust FFO in order to calculate AFFO and its use as a non-GAAP financial performance measure. 44 The table below presents FFO and AFFO for the years ended December 31, 2018, 2017 and 2016 (in thousands, except share and per share data) and includes both continuing operations, which primarily represent the Company's real estate operations, and discontinued operations, which represent substantially all of Cole Capital. Net (loss) income Dividends on non-convertible preferred stock Gain on disposition of real estate assets and interests in unconsolidated joint ventures, net Depreciation and amortization of real estate assets Impairment of real estate Proportionate share of adjustments for unconsolidated entities FFO attributable to common stockholders and limited partners Acquisition-related expenses Litigation, merger and other non-routine costs, net of insurance recoveries Impairment of goodwill and intangible assets Loss on disposition and held for sale loss on discontinued operations Payments received on fully reserved loans Gain on investment securities and mortgage notes receivable (Gain) loss on derivative instruments, net Amortization of premiums and discounts on debt and investments, net Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities Net direct financing lease adjustments Amortization and write-off of deferred financing costs Amortization of management contracts Deferred and other tax (benefit) expense (1) (Gain) loss on extinguishment and forgiveness of debt, net Straight-line rent, net of bad debt expense related to straight-line rent Equity-based compensation Other amortization and non-cash charges, net Proportionate share of adjustments for unconsolidated entities Adjustments for Excluded Properties Year Ended December 31, 2018 2017 $ (88,030) $ (71,892) $ 32,378 (71,892) (95,034) 637,097 54,647 1,278 438,066 3,632 290,309 — 1,815 (4,792) (4,092) (355) (3,486) 4,178 2,023 19,166 — (1,855) (5,360) (39,723) 12,417 1,446 36 465 (61,536) 703,133 50,548 477 653,108 3,402 51,762 — 20,027 — (65) (2,976) (4,616) 5,366 2,093 24,536 14,514 8,671 (18,373) (44,903) 16,751 2,566 378 6,528 2016 (200,824) (71,892) (55,722) 756,315 182,820 2,719 613,416 1,321 3,884 120,931 — — — 1,191 (14,693) 5,396 2,264 28,063 26,171 (10,136) 771 (54,190) 10,728 5,296 1,044 — AFFO attributable to common stockholders and limited partners $ 713,890 $ 738,769 $ 741,457 Weighted-average shares of Common Stock outstanding - basic 969,092,268 974,098,652 931,422,844 Effect of Limited Partner OP Units and dilutive securities(2) 24,145,875 24,059,312 24,626,646 Weighted-average shares of Common Stock outstanding - diluted (3) 993,238,143 998,157,964 956,049,490 AFFO attributable to common stockholders and limited partners per diluted share $ 0.72 $ 0.74 $ 0.78 ____________________________________ (1) This adjustment represents the non-current portion of the provision for or benefit from income taxes in order to show only the current portion of the provision for or benefit from income taxes as an impact to AFFO. For the three months ended December 31, 2017, this adjustment is net of a current tax benefit due to the acceleration of a bonus compensation-related deduction to take advantage of the Company’s higher effective tax rate in 2017. As the Company already recognized the prior year bonus compensation-related tax deduction during the three months ended March 31, 2017, the acceleration of the 2018 benefit was not included in the computation of AFFO. (2) Dilutive securities include unvested restricted shares of Common Stock, unvested restricted stock units and stock options. (3) Weighted-average shares for all periods presented exclude the effect of the convertible debt as the Company would expect to settle the debt with cash and any shares underlying restricted stock units that are not issuable based on the Company’s level of achievement of certain performance targets through the respective reporting period. 45 Liquidity and Capital Resources General Our principal liquidity needs for the next twelve months and beyond are to: • fund normal operating expenses; • fund capital expenditures, tenant improvements and leasing costs • meet debt service and principal repayment obligations, including balloon payments on maturing debt; • pay dividends; • pay litigation costs and expenses (including any settlements or judgments); and • fund property and/or common stock acquisitions. We expect to be able to satisfy these obligations using one or more of the following sources: • cash flow from operations; • proceeds from real estate dispositions; • utilization of Credit Facility; • cash and cash equivalents balance; • issuance of VEREIT debt and equity securities; and • cash flow from insurance recoveries. Continuous Equity Offering Program On September 19, 2016, the Company registered a continuous equity offering program (the “Program”) pursuant to which the Company can offer and sell, from time to time through September 19, 2019 in “at-the-market” offerings or certain other transactions, shares of Common Stock with an aggregate gross sales price of up to $750.0 million, through its sales agents. The Company intends to use the proceeds from any sale of shares for general corporate purposes, which may include funding potential acquisitions and repurchasing or repaying outstanding indebtedness. As of December 31, 2018, no shares of Common Stock have been issued pursuant to the Program. Share Repurchase Program On May 3, 2018, the Company’s Board of Directors terminated the 2017 Share Repurchase Program and authorized the 2018 Share Repurchase Program, which permits the Company to repurchase up to $200.0 million of its outstanding Common Stock through May 3, 2019, as market conditions warrant. As of December 31, 2018, the Company had $194.4 million available for share repurchases under the 2018 Share Repurchase Program. Additional shares of Common Stock repurchased by the Company, if any, will be returned to the status of authorized but unissued shares of Common Stock. Disposition Activity As part of our effort to optimize our real estate portfolio by focusing on holding core assets, during the year ended December 31, 2018, we disposed of 149 properties, including one property conveyed to a lender in a deed-in-lieu of foreclosure transaction, and one property owned by an unconsolidated joint venture for an aggregate sales price of $560.5 million, of which our share was $521.4 million, resulting in consolidated proceeds of $502.3 million after repayment of the unconsolidated joint venture’s mortgage loan and closing costs. We expect to continue to explore opportunities to sell additional properties to provide us further financial flexibility and fund property acquisitions. Credit Facility Summary and Obligations On May 23, 2018, the Company, as guarantor, and the Operating Partnership, as borrower, entered into a Credit Agreement with Wells Fargo Bank, National Association, as administrative agent, and the other lenders party thereto that allows for maximum borrowings of $2.9 billion, consisting of a $2.0 billion Revolving Credit Facility and a $900.0 million Credit Facility Term Loan, available through February 23, 2019, for up to four borrowings of delayed-draw term loans. As of December 31, 2018, the Revolving Credit Facility had an outstanding balance of $253.0 million and $150.0 million had been drawn on the Credit Facility Term Loan. In connection with entering into the Credit Agreement, the OP repaid all of the outstanding obligations under the 2014 Credit Agreement. 46 The Revolving Credit Facility generally bears interest at an annual rate of London Inter-Bank Offer Rate (“LIBOR”) plus 0.775% to 1.55% or Base Rate plus 0.00% to 0.55% (based upon the General Partner’s then current credit rating). “Base Rate” is defined as the highest of the prime rate, the federal funds rate plus 0.50% or a floating rate based on one month LIBOR plus 1.0%, determined on a daily basis. The Credit Facility Term Loan generally bears interest at an annual rate of LIBOR plus 0.85% to 1.75%, or Base Rate plus 0.00% to 0.75% (based upon the General Partner’s then current credit rating). In addition, the Credit Agreement provides the flexibility for interest rate auctions, pursuant to which, at the Company’s election, the Company may request that lenders make competitive bids to provide revolving loans, which competitive bids may be at pricing levels that differ from the foregoing interest rates. Credit Facility Covenants The Credit Facility requires restrictions on corporate guarantees, as well as the maintenance of certain financial covenants. The key financial covenants in the Credit Facility, as defined and calculated per the terms of the Credit Agreement include maintaining the following: Unsecured Credit Facility Key Covenants Ratio of total indebtedness to total asset value Ratio of adjusted EBITDA to fixed charges Ratio of secured indebtedness to total asset value Ratio of unsecured indebtedness to unencumbered asset value Ratio of unencumbered adjusted NOI to unsecured interest expense Required ≤ 60% ≥ 1.5x ≤ 45% ≤ 60% ≥ 1.75x The Company believes that it was in compliance with the financial covenants pursuant to the Credit Agreement and is not restricted from accessing any borrowing availability under the Credit Facility as of December 31, 2018. Corporate Bonds Summary and Obligations During the year ended December 31, 2018, the Company closed the 2025 Senior Notes offering, consisting of $550.0 million aggregate principal amount of 4.625% Senior Notes due 2025. The OP used the net proceeds from the offering of the notes to repay borrowings under its Revolving Credit Facility. As of December 31, 2018, the OP had $3.4 billion aggregate principal amount of Senior Notes outstanding, with a weighted- average maturity of 5.0 years. The indenture governing the Senior Notes requires that the Company be in compliance with certain key financial covenants, including maintaining the following: Corporate Bond Key Covenants Limitation on incurrence of total debt Limitation on incurrence of secured debt Debt service coverage ratio Maintenance of total unencumbered assets Required ≤ 65% ≤ 40% ≥ 1.5x ≥ 150% There were no material changes to the financial covenants of our Senior Notes during the year ended December 31, 2018. As of December 31, 2018, the Company believes that it was in compliance with these financial covenants based on the covenant limits and calculations in place at that time. On February 6, 2019, the Company’s 2019 Senior Notes matured and the principal outstanding of $750.0 million, plus accrued and unpaid interest thereon, was repaid, utilizing borrowings under the Credit Facility. Convertible Debt Summary and Obligations During the year ended December 31, 2018, the Company’s 2018 Convertible Notes matured and the principal outstanding of $597.5 million, plus accrued and unpaid interest thereon, was repaid with proceeds from the Revolving Credit Facility. 47 As of December 31, 2018, the Company had $402.5 million aggregate principal amount outstanding of convertible senior notes due December 15, 2020 (the “2020 Convertible Notes”). The OP has issued corresponding identical convertible notes to the General Partner. There were no changes to the terms of the 2020 Convertible Notes and the Company believes that it was in compliance with the financial covenants pursuant to the indenture governing the 2020 Convertible Notes as of December 31, 2018. Mortgage Notes Payable and Other Debt Summary and Obligations As of December 31, 2018, we had non-recourse mortgage indebtedness of $1.9 billion, which was collateralized by 459 properties, reflecting a decrease from December 31, 2017 of $153.9 million derived primarily from our disposition activity during the year ended December 31, 2018. Our mortgage indebtedness bore interest at the weighted-average rate of 4.93% per annum and had a weighted-average maturity of 3.4 years. We may in the future incur additional mortgage debt on the properties we currently own or use long-term non-recourse financing to acquire additional properties. The payment terms of our loan obligations vary. In general, only interest amounts are payable monthly with all unpaid principal and interest due at maturity. Some of our loan agreements require that we comply with specific reporting and financial covenants mainly related to debt coverage ratios and loan-to-value ratios. Each loan that has these requirements has specific ratio thresholds that must be met. Restrictions on Loan Covenants Our mortgage loan obligations generally restrict corporate guarantees and require the maintenance of financial covenants, including maintenance of certain financial ratios (such as specified debt to equity and debt service coverage ratios), as well as the maintenance of a minimum net worth. The mortgage loan agreements contain no dividend restrictions except in the event of default or when a distribution would drive liquidity below the applicable thresholds. At December 31, 2018, the Company believes that it was in compliance with the financial covenants under the mortgage loan agreements and had no restrictions on the payment of dividends. Litigation During the year ended December 31, 2018, we entered into settlement agreements with various plaintiffs in connection with litigation filed as a result of the findings of the Audit Committee Investigation for $217.5 million. The Company also entered into settlement agreements for $15.7 million subsequent to December 31, 2018, which was accrued and included in litigation, merger and other non-routine costs, net of insurance recoveries in the consolidated statements of operations for the year ended December 31, 2018. Dividends On November 5, 2018, the Company’s Board of Directors declared a quarterly cash dividend of $0.1375 per share of Common Stock (equaling an annualized dividend rate of $0.55 per share) for the fourth quarter of 2018 to stockholders of record as of December 31, 2018, which was paid on January 15, 2019. An equivalent distribution by the Operating Partnership is applicable per OP unit. Our Series F Preferred Stock, as discussed in Note 11 – Equity to our consolidated financial statements, will pay cumulative cash dividends at the rate of 6.70% per annum on their liquidation preference of $25.00 per share (equivalent to $1.675 per share on an annual basis). As of December 31, 2018, there were approximately 42.8 million shares of Series F Preferred Stock (and approximately 42.8 million corresponding Series F Preferred Units that were issued to the General Partner) and 86,874 Limited Partner Series F Preferred Units that were issued and outstanding. 48 Contractual Obligations The following is a summary of our contractual obligations as of December 31, 2018 (in thousands): Principal payments - mortgage notes Interest payments - mortgage notes (1) (2) Principal payments - Credit Facility Interest payments - Credit Facility (2) Principal payments - corporate bonds Interest payments - corporate bonds Principal payments - convertible debt Interest payments - convertible debt Operating and ground lease commitments Build-to-suit and other commitments (3) Total ____________________________________ Total Less than 1 year 1-3 years 4-5 years More than 5 years $ 1,917,132 $ 167,279 $ 617,957 $ 459,741 $ 672,155 321,914 403,000 58,702 3,400,000 754,473 402,500 29,517 287,159 30,343 93,710 144,935 — 15,918 750,000 120,075 — 15,094 18,479 30,343 — 30,990 400,000 226,151 402,500 14,423 36,120 — 80,830 403,000 11,794 2,439 — — — 2,250,000 202,776 205,471 — — — — 35,890 196,670 — — $ 7,604,740 $ 1,210,898 $ 1,873,076 $ 1,194,031 $ 3,326,735 (1) As of December 31, 2018, we had $50.7 million of variable rate mortgage notes effectively fixed through the use of interest rate swap agreements. We used the effective interest rates fixed under our swap agreements to calculate the debt payment obligations in future periods. (2) (3) Interest payments due in future periods on the $14.0 million of variable rate debt and the Credit Facility payment obligations were calculated using a forward LIBOR curve. Includes one build-to-suit development project and the Company’s share of capital expenditures related an expansion project of the property held within an unconsolidated joint venture. Cash Flow Analysis for the year ended December 31, 2018 Operating Activities – During the year ended December 31, 2018, net cash provided by operating activities decreased $299.4 million to $493.9 million from $793.3 million during the same period in 2017. The decrease was primarily due to an increase in litigation and other non-routine costs, including litigation settlements, paid during the year ended December 31, 2018. In addition, there was a decrease in interest payments due to the repayment of the 2018 Convertible Notes and a reduction of secured debt, offset by the issuance of the 2025 Senior Notes and an increase in net borrowings under the credit facilities during the year ended December 31, 2018 as compared to the same period in 2017. Investing Activities – Net cash provided by investing activities for the year ended December 31, 2018 increased $425.2 million to $151.1 million from $274.1 million net cash used in investing activities during the same period in 2017. The increase was primarily related to a decrease in investments in real estate assets of $198.4 million, net proceeds from disposition of discontinued operations of $122.9 million and an increase in cash proceeds from dispositions of real estate and joint ventures of $56.8 million. Financing Activities – Net cash used in financing activities of $655.4 million decreased $101.2 million during the year ended December 31, 2018 from $756.6 million during the same period in 2017. The decrease was primarily related to a decrease in payments on mortgage notes payable and other debt, including debt extinguishment costs of $286.5 million, which was partially offset by a decrease of $117.1 million in net proceeds related to the credit facilities, corporate bonds and convertible notes and repurchases of Common Stock under the Share Repurchase Programs of $50.2 million with no comparable repurchases during the same period in 2017. Cash Flow Analysis for the year ended December 31, 2017 Operating Activities – During the year ended December 31, 2017, net cash provided by operating activities decreased $4.7 million to $793.3 million from $797.9 million during the same period in 2016. The decrease was primarily due to a decrease in rental receipts related to the disposition of 438 consolidated properties subsequent to January 1, 2016 and an increase in litigation and other non-routine costs paid during the year ended December 31, 2017. This decrease was mostly offset by a decrease in interest payments and insurance recoveries received as compared to the same period in 2016, the receipt of an income tax refund during the year ended December 31, 2017, and an increase in rental receipts related to the acquisition of 96 consolidated properties subsequent to January 1, 2016. Investing Activities – Net cash used in investing activities for the year ended December 31, 2017 changed $1.2 billion to $274.1 million from cash provided by investing activities of $881.6 million during the same period in 2016. The change was primarily related to an increase in investments in real estate assets of $598.8 million and decrease in cash proceeds from dispositions of real estate and joint ventures of $555.2 million. 49 Financing Activities – Net cash used in financing activities of $756.6 million decreased $750.4 million during the year ended December 31, 2017 from $1.5 billion during the same period in 2016. The decrease was primarily due to a decrease in repayments of debt, net of proceeds, of $1.5 billion, which was partially offset by the 2016 Common Stock offering resulting in net proceeds, after underwriting discounts and offering costs, of $702.8 million and an increase in distributions paid of $28.1 million. Election as a REIT The General Partner elected to be taxed as a REIT for U.S. federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code commencing with the taxable year ended December 31, 2011. We believe we are organized and operating in such a manner as to qualify to be taxed as a REIT for the taxable year ended December 31, 2018. As a REIT, the General Partner is generally not subject to federal income tax on taxable income that it distributes to its stockholders so long as it distributes at least 90% of its annual taxable income (computed without regard to the deduction for dividends paid and excluding net capital gains). However, the General Partner, its TRS entities, and the OP are still subject to certain state and local income, franchise and property taxes in the various jurisdictions in which they operate. The General Partner may also be subject to federal income taxes on certain income and excise taxes on its undistributed income. The OP is classified as a partnership for U.S. federal income tax purposes. As a partnership, the OP is not a taxable entity for U.S. federal income tax purposes. Instead, each partner in the OP is required to include its allocable share of the OP’s income, gains, losses, deductions and credits for each taxable year. Under the LPA, the OP is to conduct business in such a manner as to permit the General Partner at all times to qualify as a REIT. A TRS is a subsidiary of a REIT that is subject to federal, state and local income taxes, as applicable. The Company’s use of a TRS enables it to engage in certain business activities while complying with the REIT qualification requirements and to retain any income generated by these businesses for reinvestment without the requirement to distribute those earnings. The Company conducted substantially all of the Cole Capital business activities through a TRS until it sold the Cole Capital business on February 1, 2018. During the year ended December 31, 2018, the Company conducted all of its business in the United States, Puerto Rico and Canada and filed income tax returns in the U.S. federal jurisdiction, the Canadian federal jurisdiction and various state and local jurisdictions. With few exceptions, the Company is no longer subject to routine examinations by taxing authorities for years before 2014. Certain of the Company’s intercompany transactions that have been eliminated in consolidation for financial accounting purposes are also subject to taxation. Inflation We may be adversely impacted by inflation on any leases that do not contain indexed escalation provisions. However, net leases that require the tenant to pay its allocable share of operating expenses, including common area maintenance costs, real estate taxes and insurance, may reduce our exposure to increases in costs and operating expenses resulting from inflation. Related Party Transactions and Agreements Through the closing of the Cole Capital sale, we were contractually responsible for managing the Cole REITs’ affairs on a day-to-day basis, identifying and making acquisitions and investments on the Cole REITs’ behalf, and recommending to each of the Cole REIT’s respective board of directors an approach for providing investors with liquidity. In addition, we distributed the shares of common stock for certain of the Cole REITs and advised them regarding offerings, managed relationships with participating broker-dealers and financial advisors, and provided assistance in connection with compliance matters relating to the offerings. We received compensation and reimbursement for services relating to the Cole REITs’ offerings and the investment, management and disposition of their respective assets, as applicable. See Note 13 – Related Party Transactions and Arrangements to our consolidated financial statements in this report for a further explanation of the various related party transactions, agreements and fees. Off-Balance Sheet Arrangements We have no material off-balance sheet arrangements that have had or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. 50 Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Market Risk The market risk associated with financial instruments and derivative financial instruments is the risk of loss from adverse changes in market prices or interest rates. Our market risk arises primarily from interest rate risk relating to variable-rate borrowings. To meet our short and long-term liquidity requirements, we borrow funds at a combination of fixed and variable rates. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to manage our overall borrowing costs. To achieve these objectives, from time to time, we may enter into interest rate hedge contracts such as swaps, collars and treasury lock agreements in order to mitigate our interest rate risk with respect to various debt instruments. We would not hold or issue these derivative contracts for trading or speculative purposes. Interest Rate Risk As of December 31, 2018, our debt included fixed-rate debt, including debt that has interest rates that are fixed with the use of derivative instruments, with a fair value and carrying value each of $5.7 billion. Changes in market interest rates on our fixed rate debt impact the fair value of the debt, but they have no impact on interest incurred or cash flow. For instance, if interest rates rise 100 basis points, and the fixed rate debt balance remains constant, we expect the fair value of our debt to decrease, the same way the price of a bond declines as interest rates rise. The sensitivity analysis related to our fixed-rate debt assumes an immediate 100 basis point move in interest rates from their December 31, 2018 levels, with all other variables held constant. A 100 basis point increase in market interest rates would result in a decrease in the fair value of our fixed rate debt of $201.3 million. A 100 basis point decrease in market interest rates would result in an increase in the fair value of our fixed-rate debt of $213.8 million. As of December 31, 2018, our debt included variable-rate debt with a fair value of $417.2 million and a carrying value of $417.0 million. The sensitivity analysis related to our variable-rate debt assumes an immediate 100 basis point move in interest rates from their December 31, 2018 levels, with all other variables held constant. A 100 basis point increase or decrease in variable interest rates on our variable-rate debt would increase or decrease our interest expense by $4.2 million annually. See Note 7 – Debt to our consolidated financial statements. As of December 31, 2018, our interest rate swap had a fair value that resulted in assets of $0.5 million. See Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements for further discussion. As the information presented above includes only those exposures that existed as of December 31, 2018, it does not consider exposures or positions arising after that date. The information presented herein has limited predictive value. Future actual realized gains or losses with respect to interest rate fluctuations will depend on cumulative exposures, hedging strategies employed and the magnitude of the fluctuations. These amounts were determined by considering the impact of hypothetical interest rate changes on our borrowing costs and assume no other changes in our capital structure. Credit Risk Concentrations of credit risk arise when a number of tenants are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions. The Company is subject to tenant, geographic and industry concentrations. Any downturn of the economic conditions in one or more of these tenants, geographies or industries could result in a material reduction of our cash flows or material losses to us. The factors considered in determining the credit risk of our tenants include, but are not limited to: payment history; credit status and change in status (credit ratings for public companies are used as a primary metric); change in tenant space needs (i.e., expansion/downsize); tenant financial performance; economic conditions in a specific geographic region; and industry specific credit considerations. We believe that the credit risk of our portfolio is reduced by the high quality of our existing tenant base, reviews of prospective tenants’ risk profiles prior to lease execution and consistent monitoring of our portfolio to identify potential problem tenants. Item 8. Financial Statements and Supplementary Data. The information required by Item 8 is hereby incorporated by reference to our consolidated financial statements beginning on page F-1 of this document. 51 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None. Item 9A. Controls and Procedures. I. Discussion of Controls and Procedures of the General Partner For purposes of the discussion in this Part I of Item 9A, the “Company” refers to the General Partner. Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act that are designed to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that no controls and procedures, no matter how well designed and operated, can provide absolute assurance of achieving the desired control objectives. In accordance with Rules 13a-15(b) and 15d-15(b) of the Exchange Act, management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures as of December 31, 2018 and determined that the disclosure controls and procedures were effective at a reasonable assurance level as of that date. Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management has concluded that our internal control over financial reporting was effective as of December 31, 2018. The effectiveness of our internal control over financial reporting as of December 31, 2018 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report in this Annual Report on Form 10-K. Changes in Internal Control Over Financial Reporting No change occurred in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d -15(f) of the Exchange Act) during the three months ended December 31, 2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. II. Discussion of Controls and Procedures of the Operating Partnership In the information incorporated by reference into this Part II of Item 9A, the term “Company” refers to the Operating Partnership, except as the context otherwise requires. Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act that are designed to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as 52 appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that no controls and procedures, no matter how well designed and operated, can provide absolute assurance of achieving the desired control objectives. In accordance with Rules 13a-15(b) and 15d-15(b) of the Exchange Act, management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures as of December 31, 2018 and determined that the disclosure controls and procedures were effective at a reasonable assurance level as of that date. Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management has concluded that our internal control over financial reporting was effective as of December 31, 2018. Changes in Internal Control Over Financial Reporting No change occurred in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d -15(f) of the Exchange Act) during the three months ended December 31, 2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 53 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of VEREIT, Inc. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of VEREIT, Inc. and subsidiaries (the “Company”) as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements and financial statement schedules as of and for the year ended December 31, 2018, of the Company and our report dated February 20, 2019, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ DELOITTE & TOUCHE LLP Phoenix, Arizona February 20, 2019 54 Item 9B. Other Information. None 55 Item 10. Directors, Executive Officers and Corporate Governance. PART III The information required by this Item will be included in our definitive proxy statement for the 2019 Annual Meeting of Stockholders (the “Proxy Statement”), to be filed within 120 days following the end of our fiscal year, and is incorporated herein by reference. Item 11. Executive Compensation. The information required by this Item will be included in the Proxy Statement and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information required by this Item will be included in the Proxy Statement and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required by this Item will be included in the Proxy Statement and is incorporated herein by reference. Item 14. Principal Accounting Fees and Services. The information required by this Item will be included in the Proxy Statement and is incorporated herein by reference. 56 Item 15. Exhibits and Financial Statement Schedules. Financial Statements PART IV The Financial Statements are included herein at pages F-1 through F-60. Financial Statement Schedules Schedule II - Valuation and Qualifying Accounts is included herein on page F-61. Schedule III - Real Estate and Accumulated Depreciation is included herein on pages F-62 through F-194. Schedule IV - Mortgage Loans Held for Investment is included herein on page F-195. Exhibits The following exhibits are included in this Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (and are numbered in accordance with Item 601 of Regulation S-K): Exhibit No. Description 2.1 2.2 2.3 2.4 2.4.1 2.4.2 2.5 3.1 3.2 3.3 3.4 3.5 3.6 3.7 Agreement and Plan of Merger by and among VEREIT, Inc., VEREIT Operating Partnership, L.P., Tiger Acquisition LLC, American Realty Capital Trust III, Inc. and American Realty Capital Operating Partnership III, L.P., dated as of December 14, 2012 (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on December 17, 2012). Agreement and Plan of Merger, by and among, VEREIT, Inc., VEREIT Operating Partnership, L.P., Safari Acquisition, LLC, CapLease, Inc., CapLease, LP and CLF OP General Partner LLC, dated as of May 28, 2013 (Incorporated by reference to the Company’s Current Report on Form 8-K (File NO. 001-35263), filed with the SEC on May 28, 2013). Purchase and Sale Agreement, by and among, CNL APF Partners, LP and Certain Affiliates as Seller Parties, and VEREIT Operating Partnership, L.P., as Purchaser, dated May 31, 2013. (Incorporated by reference to the Company’s Amended Current Report on Form 8-K/A (File No. 001-35263), filed with the SEC on June 7,2013). Agreement and Plan of Merger, dated as of July 1, 2013, among VEREIT, Inc., American Realty Capital Trust IV, Inc., Thunder Acquisition, LLC, VEREIT Operating Partnership, L.P. and American Realty Capital Operating Partnership IV, L.P. (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on July 2, 2013). Amendment dated as of October 6, 2013 to the Agreement and Plan of Merger, dated as of July 1, 2013, by and among VEREIT, Inc., VEREIT Operating Partnership, L.P., Thunder Acquisition, LLC, American Realty Capital Trust IV, Inc. and American Realty Capital Operating Partnership IV, L.P. (Incorporated by reference to the Company’s First Current Report on Form 8-K (File No. 001-35263), filed with the SEC on October 7, 2013). Second Amendment dated as of October 11, 2013 to the Agreement and Plan of Merger, dated as of July 1, 2013, by and among VEREIT, Inc., VEREIT Operating Partnership, L.P., Thunder Acquisition, LLC, American Realty Capital Trust IV, Inc. and American Realty Capital Operating Partnership IV, L.P. (Incorporated by reference as Annex E to the Company’s Final Prospectus filed Pursuant to Rule 424(b)(3) (Registration No. 333-190056), filed with the SEC on December 4, 2013). Agreement and Plan of Merger, dated as of October 22, 2013, by and among VEREIT, Inc., Cole Real Estate Investments, Inc. and Clark Acquisition, LLC (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on October 23, 2013). Articles of Amendment and Restatement of VEREIT, Inc. (Incorporated by reference to the Company’s Pre-Effective Amendment No. 5 to Form S-11 (Registration No. 333-172205), filed with the SEC on July 5, 2011). Articles Supplementary Relating to the Series A Convertible Preferred Stock of VEREIT, Inc., dated May 10, 2012 (Incorporated by reference to the Company’s Form 8-K (File No. 001-35263), filed with the SEC on May 15, 2012). Articles Supplementary Relating to the Series B Convertible Preferred Stock of VEREIT, Inc., dated July 24, 2012 (Incorporated by reference to the Company’s Form 8-K (File No. 001-35263), filed with the SEC on July 30, 2012). Articles Supplementary for the Series C Convertible Preferred Stock of VEREIT, Inc., dated June 6, 2013 (Incorporated by reference to the Company’s Form 8-K (File No. 001-35263), filed with the SEC on June 12, 2013). Articles of Amendment to Articles of Amendment and Restatement of VEREIT, Inc., effective July 2, 2013 (Incorporated by reference to the Company’s Form 8-K (File No. 001-35263), filed with the SEC on July 9, 2013). Articles Supplementary for the Series D Cumulative Convertible Preferred Stock of VEREIT, Inc., filed November 8, 2013 (Incorporated by reference to the Company’s Form 8-K (File No. 001-35263), filed with the SEC on November 15, 2013). Articles of Amendment to Articles of Amendment and Restatement of VEREIT, Inc., effective December 9, 2013 (Incorporated by reference to the Company’s Amended Current Report on Form 8-K/A (File No. 001-35263), filed with the SEC on December 20, 2013). 57 Exhibit No. Description 3.8 3.9 3.10 3.11 3.12 3.13 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 Articles Supplementary Relating to the 6.70% Series F Cumulative Redeemable Preferred Stock of VEREIT, Inc., dated January 2, 2014 (Incorporated by reference to the Company’s Registration Statement on Form 8-A (File No. 333-190056), filed with the SEC on January 3, 2014). Articles of Amendment to Articles of Amendment and Restatement of VEREIT, Inc., dated July 28, 2015 (Incorporated by reference to the Company’s Form 8-K (File No. 001-35263), filed with the SEC on July 28, 2015). Articles Supplementary to Articles of Amendment and Restatement of VEREIT, Inc., dated August 5, 2015 (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015). Amended and Restated Bylaws of VEREIT, Inc., effective as of January 1, 2016 (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended September 30, 2015 filed with the SEC on November 5, 2015). Certificate of Limited Partnership of VEREIT Operating Partnership, L.P. (Incorporated by reference to the Company’s Registration Statement on Form S-4 (Registration No. 333-197780-01), filed with the SEC on August 1, 2014). Amendment to Certificate of Limited Partnership of VEREIT Operating Partnership, L.P., effective July 28, 2015 (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015). Third Amended and Restated Agreement of Limited Partnership of VEREIT Operating Partnership, L.P., effective January 3, 2014 (Incorporated by reference to the Company’s Amendment No. 2 to its Annual Report on Form 10-K/A (File No. 001-35263), for the year ended December 31, 2013 filed with the SEC on March 2, 2015). First Amendment to Third Amended and Restated Agreement of Limited Partnership of VEREIT Operating Partnership, L.P., dated January 26, 2015 (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015). Second Amendment to Third Amended and Restated Agreement of Limited Partnership of VEREIT Operating Partnership, L.P., dated July 28, 2015 (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015). Indenture, dated as of July 29, 2013, between American Realty Capital Properties, Inc. and U.S. Bank National Association, as trustee (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on July 29, 2013). First Supplemental Indenture, dated as of July 29, 2013, between American Realty Capital Properties, Inc. and U.S. Bank National Association, as trustee (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on July 29, 2013). Second Supplemental Indenture, dated as of December 10, 2013, between American Realty Capital Properties, Inc. and U.S. Bank National Association, as trustee (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on December 11, 2013). Form of 3.75% Convertible Senior Notes due 2020 (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on December 11, 2013). Indenture, dated as of February 6, 2014, among ARC Properties Operating Partnership, L.P., Clark Acquisition, LLC, the guarantors named therein and U.S. Bank National Association, as trustee (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on February 7, 2014). Officers’ Certificate, dated as of February 6, 2014 (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on February 7, 2014). First Supplemental Indenture, dated as of February 9, 2015, by and among ARC Properties Operating Partnership, L.P., American Realty Capital Properties, Inc. and U.S. Bank National Association (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on February 13, 2015). Officer’s Certificate, dated as of June 2, 2016 (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on June 3, 2016). Form of 4.125% Senior Notes due 2021 (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on June 3, 2016). Form of 4.875% Senior Notes due 2026 (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on June 3, 2016). Officers’ Certificate, dated as of August 11, 2017 (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on August 11, 2017). Form of 3.950% Convertible Senior Notes due 2027 (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on August 11, 2017). Officer’s Certificate, dated as of October 16, 2018 (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on October 16, 2018). Form of 4.625% Senior Notes due 2025 (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on October 16, 2018). 58 Exhibit No. Description 10.1 10.2 10.3 10.4† 10.5† 10.6† Credit Agreement dated as of May 23, 2018 by and among VEREIT Operating Partnership, L.P., VEREIT, Inc., the financial institutions from time to time party thereto as lenders and Wells Fargo Bank, National Association, as the administrative agent (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on May 23, 2018). Purchase and Sale Agreement, dated as of November 13, 2017, by and between VEREIT Operating Partnership, L.P. and CCA Acquisition, LLC (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on November 13, 2017). First Amendment to the Purchase and Sale Agreement, dated as of February 1, 2018, by and between VEREIT Operating Partnership, L.P. and CCA Acquisition, LLC (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on February 7, 2018). Equity Plan, effective September 5, 2011 of VEREIT, Inc. (Incorporated by reference to the Company’s Pre-Effective Amendment No. 4 to Form S-11 (Registration No. 333-172205), filed with the SEC on June 13, 2011). First Amendment to VEREIT, Inc.’s Equity Plan, effective November 12, 2012 (Incorporated by reference to the Company’s Annual Report on Form 10-K (File No. 001-35263), for the year ended December 31, 2014 filed with the SEC on March 30, 2015). Second Amendment to VEREIT, Inc.’s Equity Plan, effective February 28, 2013 (Incorporated by reference to the Company’s Annual Report on Form 10-K (File No. 001-35263), for the year ended December 31, 2014 filed with the SEC on March 30, 2015). 10.7†* Form of Equity Plan Time-Based Restricted Stock Unit Award Agreement (CEO). 10.8†* Form of Equity Plan Time-Based Restricted Stock Unit Award Agreement (Executive Officers). 10.9†* Form of Equity Plan Time-Based Restricted Stock Unit Award Agreement (Employees). 10.10†* Form of Equity Plan Performance-Based Restricted Stock Unit Award Agreement (Executive Officers and CEO). 10.11†* Form of Equity Plan Performance-Based Restricted Stock Unit Award Agreement (Employees). 10.12†* Form of Equity Plan Non-Qualified Stock Option Award Agreement (Executive Officers and CEO). 10.13†* Form of Equity Plan Non-Qualified Stock Option Award Agreement (Employees). 10.14† 10.15† 10.16† 10.17† 10.18† 10.19† 10.20† 10.21† 10.22† 10.23† 10.24† 10.25† Form of 2017 Deferred Stock Unit Award Agreement to be entered into with non-executive directors pursuant to the VEREIT, Inc. Equity Plan (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended March 31, 2017 filed with the SEC on May 4, 2017). Form of 2017 Deferred Stock Unit Award Agreement to be entered into with non-executive directors pursuant to the VEREIT, Inc. Equity Plan and the Independent Directors’ Deferred Compensation Program (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended March 31, 2017 filed with the SEC on May 4, 2017). Director Stock Plan of VEREIT, Inc. (Incorporated by reference to the Company’s Pre-Effective Amendment No. 4 to Form S-11 (Registration No. 333-172205), filed with the SEC on June 13, 2011). Form of Indemnification Agreement (Incorporated by reference to the Company’s Pre-effective Amendment No. 4 to Form S-11 Registration Statement (Registration No. 333-172205) filed with the SEC on June 13, 2011). Form of Indemnification Agreement (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on March 16, 2015). Employment Agreement, dated as of March 10, 2015, by and between VEREIT, Inc. and Glenn Rufrano (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on March 16, 2015). Amendment effective February 21, 2018, to the Employment Agreement, dated as of March 10, 2015, by and between VEREIT, Inc. and Glenn Rufrano (Incorporated by reference to the Company’s Annual Report on Form 10-K (File No. 001-35263), for the year ended December 31, 2017 filed with the SEC on February 22, 2018). Employment Letter and Confidentiality and Non-Competition Agreement, effective as of October 5, 2015, by and between VEREIT, Inc. and Michael J. Bartolotta (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended September 31, 2015 filed with the SEC on November 5, 2015). Amendment, effective February 21, 2018, to the Employment Agreement, dated as of October 5, 2015, by and between VEREIT, Inc. and Michael J. Bartolotta (Incorporated by reference to the Company’s Annual Report on Form 10-K (File No. 001-35263), for the year ended December 31, 2017 filed with the SEC on February 22, 2018). Employment Agreement, dated as of May 21, 2015, by and between VEREIT, Inc. and Lauren Goldberg (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015). Amendment effective February 23, 2016, to Employment Agreement between VEREIT, Inc. and Lauren Goldberg, as of May 26, 2015 (Incorporated by reference to the Company’s Annual Report on Form 10-K (File No. 001-35263), for the year ended December 31, 2015 filed with the SEC on February 23, 2016). Amendment, effective February 21, 2018, to the Employment Agreement, dated as of May 21, 2015, by and between VEREIT, Inc. and Lauren Goldberg (Incorporated by reference to the Company’s Annual Report on Form 10-K (File No. 001-35263), for the year ended December 31, 2017 filed with the SEC on February 22, 2018). 59 Exhibit No. 10.26† 10.27† 10.28† 10.29† 10.30† 21.1* 23.1* 23.2* 31.1* 31.2* 31.3* 31.4* 32.1** 32.2** 32.3** 32.4** Description Amended and Restated Employment Letter, dated as of February 23, 2016, by and between VEREIT, Inc. and Paul McDowell (Incorporated by reference to the Company’s Annual Report on Form 10-K (File No. 001-35263), for the year ended December 31, 2015 filed with the SEC on February 23,2016). Amendment, effective February 21, 2018, to the Employment Agreement, dated as of February 23, 2016, by and between VEREIT, Inc. and Paul McDowell (Incorporated by reference to the Company’s Annual Report on Form 10-K (File No. 001-35263), for the year ended December 31, 2017 filed with the SEC on February 22, 2018). Amended and Restated Employment Letter, dated as of February 23, 2016, by and between VEREIT, Inc. and Thomas Roberts (Incorporated by reference to the Company’s Annual Report on Form 10-K (File No. 001-35263), for the year ended December 31, 2015 filed with the SEC on February 23, 2016). Amendment, effective February 21, 2018, to the Employment Agreement, dated as of February 23, 2016, by and between VEREIT, Inc. and Thomas Roberts (Incorporated by reference to the Company’s Annual Report on Form 10-K (File No. 001-35263), for the year ended December 31, 2017 filed with the SEC on February 22, 2018). Separation Letter, dated as of January 31, 2018, by and between William C. Miller and VEREIT, Inc (Incorporated by reference to the Company’s Annual Report on Form 10-K (File No. 001-35263), for the year ended December 31, 2017 filed with the SEC on February 22, 2018). List of Subsidiaries. Consent of Deloitte & Touche LLP. Consent of Deloitte & Touche LLP. Certification of the Chief Executive Officer of VEREIT, Inc. pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Certification of the Chief Financial Officer of VEREIT, Inc. pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Certification of the Chief Executive Officer of VEREIT, Inc., the sole general partner of VEREIT Operating Partnership, L.P., pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Certification of the Chief Financial Officer of VEREIT, Inc., the sole general partner of VEREIT Operating Partnership, L.P., pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Written statements of the Chief Executive Officer of VEREIT, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Written statements of the Chief Financial Officer of VEREIT, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Written statements of the Chief Executive Officer of VEREIT, Inc., the sole general partner of VEREIT Operating Partnership, L.P., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Written statements of the Chief Financial Officer of VEREIT, Inc., the sole general partner of VEREIT Operating Partnership, L.P., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. XBRL Instance Document. 101.INS* 101.SCH* XBRL Taxonomy Extension Schema Document. 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF* XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB* XBRL Taxonomy Extension Label Linkbase Document. 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document. _____________________________ * Filed herewith ** In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. † Management contract or compensatory plan or arrangement. 60 Item 16. Form 10-K Summary. Not Applicable 61 Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, each registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned thereunto duly authorized. SIGNATURES VEREIT, INC. By: /s/ Michael J. Bartolotta Michael J. Bartolotta Executive Vice President and Chief Financial Officer (Principal Financial Officer) VEREIT OPERATING PARTNERSHIP, L.P. By: VEREIT, Inc., its sole general partner /s/ Michael J. Bartolotta By: Michael J. Bartolotta Executive Vice President and Chief Financial Officer (Principal Financial Officer) Dated: February 20, 2019 62 Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Form 10-K has been signed below by the following persons on behalf of each registrant and in the capacities and on the dates indicated. Name Capacity * /s/ Glenn J. Rufrano Chief Executive Officer Glenn J. Rufrano (Principal Executive Officer and Director) Date February 20, 2019 /s/ Michael J. Bartolotta Executive Vice President and Chief Financial Officer February 20, 2019 Michael J. Bartolotta (Principal Financial Officer) /s/ Gavin B. Brandon Senior Vice President and Chief Accounting Officer February 20, 2019 Gavin B. Brandon (Principal Accounting Officer) Director, Non-Executive Chairman February 20, 2019 /s/ Hugh R. Frater Hugh R. Frater /s/ David B. Henry David B. Henry Director /s/ Mary Hogan Preusse Director Mary Hogan Preusse /s/ Richard J. Lieb Richard J. Lieb /s/ Mark S. Ordan Mark S. Ordan Director Director /s/ Eugene A. Pinover Director Eugene A. Pinover /s/ Julie G. Richardson Director Julie G. Richardson _________________________________ February 20, 2019 February 20, 2019 February 20, 2019 February 20, 2019 February 20, 2019 February 20, 2019 * Each person is signing in his or her capacity as an officer and/or director of VEREIT, Inc., which is the sole general partner of VEREIT Operating Partnership, L.P. 63 [This page intentionally left blank] INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Financial Statements Reports of Independent Registered Public Accounting Firms Consolidated Balance Sheets of VEREIT, Inc. as of December 31, 2018 and December 31, 2017 Consolidated Statements of Operations of VEREIT, Inc. for the Years Ended December 31, 2018, 2017 and 2016 Consolidated Statements of Comprehensive Income (Loss) of VEREIT, Inc. for the Years Ended December 31, 2018, 2017 and 2016 Consolidated Statements of Changes in Equity of VEREIT, Inc. for the Years Ended December 31, 2018, 2017 and 2016 Consolidated Statements of Cash Flows of VEREIT, Inc. for the Years Ended December 31, 2018, 2017 and 2016 Consolidated Balance Sheets of VEREIT Operating Partnership, L.P. as of December 31, 2018 and December 31, 2017 Consolidated Statements of Operations of VEREIT Operating Partnership, L.P. for the Years Ended December 31, 2018, 2017 and 2016 Consolidated Statements of Comprehensive Income (Loss) of VEREIT Operating Partnership, L.P. for the Years Ended December 31, 2018, 2017 and 2016 Consolidated Statements of Changes in Equity of VEREIT Operating Partnership, L.P. for the Years Ended December 31, 2018, 2017 and 2016 Consolidated Statements of Cash Flows of VEREIT Operating Partnership, L.P. for the Years Ended December 31, 2018, 2017 and 2016 Notes to Consolidated Financial Statements Schedule II – Valuation and Qualifying Accounts Schedule III – Real Estate and Accumulated Depreciation Schedule IV – Mortgage Loans Held For Investment Page F-2 F-4 F-5 F-6 F-7 F-9 F-11 F-12 F-13 F-14 F-16 F-18 F-61 F-62 F-195 F-1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of VEREIT, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of VEREIT, Inc. and subsidiaries (the “Company”) as of December 31, 2018 and 2017, the related consolidated statements of operations, comprehensive income (loss), changes in equity and cash flows for each of the three years in the period ended December 31, 2018, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 20, 2019, expressed an unqualified opinion on the Company’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ DELOITTE & TOUCHE LLP Phoenix, Arizona February 20, 2019 We have served as the Company’s auditor since 2015. F-2 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the partners of VEREIT Operating Partnership, L.P. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of VEREIT Operating Partnership, L.P and subsidiaries (the "Operating Partnership") as of December 31, 2018 and 2017, the related consolidated statements of operations, comprehensive income (loss), changes in equity, and cash flows, for each of the three years in the period ended December 31, 2018, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Operating Partnership as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Operating Partnership's management. Our responsibility is to express an opinion on the Operating Partnership's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Operating Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Operating Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ DELOITTE & TOUCHE LLP Phoenix, Arizona February 20, 2019 We have served as the Operating Partnership’s auditor since 2015. F-3 VEREIT, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except for share and per share data) ASSETS Real estate investments, at cost: Land Buildings, fixtures and improvements Intangible lease assets Total real estate investments, at cost Less: accumulated depreciation and amortization Total real estate investments, net Investment in unconsolidated entities Cash and cash equivalents Restricted cash Rent and tenant receivables and other assets, net Goodwill Due from affiliates, net Real estate assets held for sale and assets related to discontinued operations, net Total assets LIABILITIES AND EQUITY Mortgage notes payable, net Corporate bonds, net Convertible debt, net Credit facility, net Below-market lease liabilities, net Accounts payable and accrued expenses Deferred rent and other liabilities Distributions payable Due to affiliates Liabilities related to discontinued operations Total liabilities Commitments and contingencies (Note 10) Preferred stock, $0.01 par value, 100,000,000 shares authorized and 42,834,138 issued and outstanding as of each of December 31, 2018 and December 31, 2017 Common stock, $0.01 par value, 1,500,000,000 shares authorized and 967,515,165 and 974,208,583 issued and outstanding as of December 31, 2018 and December 31, 2017, respectively Additional paid-in-capital Accumulated other comprehensive loss Accumulated deficit Total stockholders’ equity Non-controlling interests Total equity Total liabilities and equity December 31, 2018 December 31, 2017 $ $ $ $ $ $ $ 2,843,212 10,749,228 2,012,399 15,604,839 3,436,772 12,168,067 35,289 30,758 22,905 366,092 1,337,773 — 2,609 13,963,493 1,922,657 3,368,609 394,883 401,773 173,479 145,611 69,714 186,623 — — 6,663,349 2,865,855 10,711,845 2,037,675 15,615,375 2,908,028 12,707,347 39,520 34,176 27,662 389,060 1,337,773 6,041 163,999 14,705,578 2,082,692 2,821,494 984,258 185,000 198,551 136,474 62,985 175,301 66 15,881 6,662,702 428 428 9,675 12,615,472 (1,280) (5,467,236) 7,157,059 143,085 7,300,144 13,963,493 $ 9,742 12,654,258 (3,569) (4,776,581) 7,884,278 158,598 8,042,876 14,705,578 The accompanying notes are an integral part of these statements. F-4 VEREIT, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except for per share data) Rental revenue Operating expenses: Acquisition-related Litigation, merger and other non-routine costs, net of insurance recoveries Property operating General and administrative Depreciation and amortization Impairments Total operating expenses Other (expense) income: Interest expense Gain (loss) on extinguishment and forgiveness of debt, net Other income, net Equity in income and gain on disposition of unconsolidated entities Gain (loss) on derivative instruments, net Gain on disposition of real estate and real estate assets held for sale, net Total other expenses, net (Loss) income before taxes Provision for income taxes (Loss) income from continuing operations Income (loss) from discontinued operations, net of income taxes Net (loss) income Net loss (income) attributable to non-controlling interests (1) Net (loss) income attributable to the General Partner Basic and diluted net loss per share from continuing operations attributable to common stockholders Basic and diluted net income (loss) per share from discontinued operations attributable to common stockholders Basic and diluted net loss per share attributable to common stockholders (2) _______________________________________________ (1) Represents net loss (income) attributable to limited partners and consolidated joint venture partners. (2) Amounts may not total due to rounding. Year Ended December 31, 2018 2017 2016 $1,257,867 $1,252,285 $1,335,447 3,632 290,963 126,461 63,933 640,618 54,647 3,402 47,960 128,717 58,603 706,802 50,548 1,321 3,884 144,428 51,927 762,038 182,820 1,180,254 996,032 1,146,418 (280,887) 5,360 (289,766) 18,373 14,735 1,869 355 6,242 2,763 2,976 94,331 (164,237) (86,624) (5,101) (91,725) 3,695 (88,030) 2,256 $ (85,774) $ 61,536 (197,876) 58,377 (6,882) 51,495 (19,117) 32,378 (560) 31,818 (317,376) (771) 5,251 9,783 (1,191) 45,524 (258,780) (69,751) (7,136) (76,887) (123,937) (200,824) 4,961 $ (195,863) $ $ $ (0.17) $ (0.02) $ (0.16) 0.00 $ (0.16) $ (0.02) $ (0.04) $ (0.13) (0.29) The accompanying notes are an integral part of these statements. F-5 VEREIT, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In thousands) Year Ended December 31, 2018 2017 2016 $ (88,030) $ 32,378 $ (200,824) — 313 (205) 2,237 2,345 (85,685) 2,200 (83,485) $ (18) (70) (951) — (1,039) 31,339 (534) 30,805 (7,685) 9,397 (2,271) — (559) (201,383) 4,989 (196,394) $ Net (loss) income Other comprehensive income (loss): Unrealized gain (loss) on interest rate derivatives Reclassification of previous unrealized loss (gain) on interest rate derivatives into net (loss) income Unrealized loss on investment securities, net Reclassification of previous unrealized loss (gain) on investment securities into net (loss) income as other income, net Total other comprehensive income (loss) Total comprehensive (loss) income Comprehensive loss (income) attributable to non-controlling interests (1) Total comprehensive (loss) income attributable to the General Partner $ _______________________________________________ (1) Represents comprehensive loss (income) attributable to limited partners and consolidated joint venture partners. The accompanying notes are an integral part of these statements. F-6 y t i u q E l a t o T - n o N g n i l l o r t n o C s t s e r e t n I - k c o t S l a t o T ’ s r e d l o h y t i u q E t i c i f e D s s o L d e t a l u m u c c A e v i s n e h e r p m o C d e t a l u m u c c A r e h t O l a n o i t i d d A n I - d i a P l a t i p a C r a P e u l a V r e b m u N s e r a h S f o r a P e u l a V r e b m u N s e r a h S f o 9 5 9 , 3 1 7 , 8 $ 2 7 9 , 9 8 1 $ 7 8 9 , 3 2 5 , 8 $ ) 3 3 2 , 5 1 4 , 3 ( $ ) 5 2 0 , 2 ( $ 8 6 7 , 1 3 9 , 1 1 $ 9 4 0 , 9 $ 4 9 3 , 4 8 8 , 4 0 9 8 2 4 $ 8 3 1 , 4 3 8 , 2 4 k c o t S n o m m o C k c o t S d e r r e f e r P . C N I , T I E R E V Y T I U Q E N I S E G N A H C F O S T N E M E T A T S D E T A D I L O S N O C ) a t a d e r a h s r o f t p e c x e , s d n a s u o h t n I ( — 6 7 4 , 2 0 7 — ) 9 5 1 ( ) 2 5 6 , 4 ( 8 2 7 , 0 1 5 7 6 ) 5 3 9 , 5 1 5 ( ) 3 8 1 , 3 1 ( — — 5 7 6 — 9 5 1 6 7 4 , 2 0 7 — ) 2 5 6 , 4 ( 8 2 7 , 0 1 — — — — — ) 5 3 9 , 5 1 5 ( ) 5 3 9 , 5 1 5 ( ) 0 6 2 , 1 ( — ) 0 6 2 , 1 ( ) 0 6 2 , 1 ( ) 2 9 8 , 1 7 ( ) 4 4 1 ( ) 8 4 7 , 1 7 ( ) 8 4 7 , 1 7 ( — — — ) 4 8 3 ( ) 4 2 8 , 0 0 2 ( ) 1 6 9 , 4 ( ) 3 6 8 , 5 9 1 ( ) 3 6 8 , 5 9 1 ( ) 3 8 1 , 3 1 ( — — ) 9 5 5 ( ) 8 2 ( ) 1 3 5 ( — ) 1 3 5 ( — — — — — — — — — — — 9 5 1 6 8 7 , 1 0 7 ) 7 4 6 , 4 ( 1 2 7 , 0 1 — — — — — 4 8 3 — — 0 9 6 — ) 5 ( 7 — — — — — — — — — — — — — — — — 0 5 4 , 5 1 0 0 0 , 0 0 0 , 9 6 ) 1 6 2 , 1 8 4 ( 7 6 0 , 8 2 7 — — — — — — — — — — — — — — — — — — — — — — — — 3 3 5 , 9 1 6 , 8 $ 2 7 1 , 2 7 1 $ 1 6 3 , 7 4 4 , 8 $ ) 3 2 4 , 0 0 2 , 4 ( $ ) 6 5 5 , 2 ( $ 1 7 1 , 0 4 6 , 2 1 $ 1 4 7 , 9 $ 0 5 6 , 6 4 1 , 4 7 9 8 2 4 $ 8 3 1 , 4 3 8 , 2 4 ) 8 1 5 ( ) 8 4 1 , 2 ( 4 5 7 , 6 1 1 0 1 ) 7 5 6 , 5 3 5 ( ) 7 2 2 , 3 1 ( ) 1 7 5 ( ) 2 9 8 , 1 7 ( ) 8 3 8 ( 8 7 3 , 2 3 ) 9 3 0 , 1 ( — — — 1 0 1 — ) 8 1 5 ( ) 8 4 1 , 2 ( 4 5 7 , 6 1 — — — — — ) 7 5 6 , 5 3 5 ( ) 7 5 6 , 5 3 5 ( ) 7 2 2 , 3 1 ( — — — ) 4 4 1 ( ) 8 3 8 ( 0 6 5 ) 6 2 ( ) 1 7 5 ( ) 1 7 5 ( ) 8 4 7 , 1 7 ( ) 8 4 7 , 1 7 ( — 8 1 8 , 1 3 ) 3 1 0 , 1 ( — — 8 1 8 , 1 3 — — — — — — — — — — ) 3 1 0 , 1 ( ) 7 1 5 ( ) 6 4 1 , 2 ( 0 5 7 , 6 1 — — — — — — — — ) 1 ( ) 2 ( 4 — — — — — — — — — — — — — — — — ) 9 5 7 , 8 6 ( ) 0 5 5 , 8 6 2 ( 2 4 2 , 9 9 3 — — — — — — — — — — — — — — — — — — — — — — 6 7 8 , 2 4 0 , 8 $ 8 9 5 , 8 5 1 $ 8 7 2 , 4 8 8 , 7 $ ) 1 8 5 , 6 7 7 , 4 ( $ ) 9 6 5 , 3 ( $ 8 5 2 , 4 5 6 , 2 1 $ 2 4 7 , 9 $ 3 8 5 , 8 0 2 , 4 7 9 8 2 4 $ 8 3 1 , 4 3 8 , 2 4 k c o t S n o m m o C o t s t i n U P O f o n o i s r e v n o C x a t e l t t e s o t k c o t S n o m m o C f o s e s a h c r u p e R n o i t a g i l b o t s e r e t n i g n i l l o r t n o c - n o n m o r f s n o i t u b i r t n o C t e n , n o i t a s n e p m o c d e s a b - y t i u q E s r e d l o h s r e d l o h t s e r e t n i g n i l l o r t n o c - n o n o t s n o i t u b i r t s i D — k c o t S n o m m o C n o d e r a l c e d s n o i t u b i r t s i D e r a h s n o m m o c r e p 5 5 . 0 $ t e n , k c o t S n o m m o C f o e c n a u s s I 6 1 0 2 , 1 y r a u n a J , e c n a l a B r e d n u d e t n a r g s d r a w a n o s t n e l a v i u q e d n e d i v i D n a l P y t i u q E e h t e r a h S 7 1 0 2 r e d n u k c o t S n o m m o C f o s e s a h c r u p e R m a r g o r P e s a h c r u p e R x a t e l t t e s o t k c o t S n o m m o C f o s e s a h c r u p e R n o i t a g i l b o s r e d l o h t s e r e t n i g n i l l o r t n o c - n o n o t s n o i t u b i r t s i D r e d n u d e t n a r g s d r a w a n o s t n e l a v i u q e d n e d i v i D n a l P y t i u q E e h t — k c o t S n o m m o C n o d e r a l c e d s n o i t u b i r t s i D e r a h s n o m m o c r e p 5 5 . 0 $ t s e r e t n i g n i l l o r t n o c - n o n m o r f s n o i t u b i r t n o C t e n , n o i t a s n e p m o c d e s a b - y t i u q E s r e d l o h d n a s r e d l o h e r a h s d e r r e f e r p o t s n o i t u b i r t s i D s r e d l o h t i n u e r u t n e v t n i o j f o n o i t i s o p s i D e m o c n i t e N e m o c n i e v i s n e h e r p m o c r e h t O 7 1 0 2 , 1 3 r e b m e c e D , e c n a l a B d e s a b - y t i u q e r o f t n e m t s u j d a t c e f f e e v i t a l u m u C s e r u t i e f r o f n o i t a s n e p m o c d n a s r e d l o h e r a h s d e r r e f e r p o t s n o i t u b i r t s i D s r e d l o h t i n u 6 1 0 2 , 1 3 r e b m e c e D , e c n a l a B s s o l e v i s n e h e r p m o c r e h t O s s o l t e N F-7 — ) 1 4 2 ( 1 4 2 — — 1 4 2 — 9 3 4 , 2 3 — — k c o t S n o m m o C o t s t i n U P O f o n o i s r e v n o C ) 4 5 1 , 0 5 ( ) 6 2 3 , 2 ( 4 1 3 , 3 1 0 2 1 ) 4 4 1 , 2 3 5 ( ) 8 4 0 , 3 1 ( — — — 0 2 1 — — ) 6 2 3 , 2 ( 4 1 3 , 3 1 — — — ) 4 4 1 , 2 3 5 ( ) 4 4 1 , 2 3 5 ( ) 7 1 9 ( — ) 7 1 9 ( ) 9 8 9 ( ) 2 9 8 , 1 7 ( ) 0 3 0 , 8 8 ( 5 4 3 , 2 6 5 ) 4 4 1 ( ) 6 5 2 , 2 ( ) 8 4 7 , 1 7 ( ) 4 7 7 , 5 8 ( 9 8 2 , 2 — ) 8 4 7 , 1 7 ( ) 4 7 7 , 5 8 ( ) 8 4 0 , 3 1 ( — — — — — — — — — — 9 8 2 , 2 — — — 2 7 — — — ) 4 2 3 , 2 ( 7 0 3 , 3 1 ) 2 ( 7 — — — — — — — — — — — — — — ) 2 0 5 , 4 2 3 ( 1 2 5 , 5 0 8 — — — — — — — — — — — — — — — — — — y t i u q E l a t o T - n o N g n i l l o r t n o C s t s e r e t n I - k c o t S l a t o T ’ s r e d l o h y t i u q E t i c i f e D s s o L d e t a l u m u c c A e v i s n e h e r p m o C d e t a l u m u c c A r e h t O l a n o i t i d d A n I - d i a P l a t i p a C r a P e u l a V r e b m u N s e r a h S f o r a P e u l a V r e b m u N s e r a h S f o k c o t S n o m m o C k c o t S d e r r e f e r P . C N I , T I E R E V ) d e u n i t n o C ( – Y T I U Q E N I S E G N A H C F O S T N E M E T A T S D E T A D I L O S N O C ) a t a d e r a h s r o f t p e c x e , s d n a s u o h t n I ( $ ) 4 5 1 , 0 5 ( $ — $ — $ ) 2 8 0 , 0 5 ( $ ) 2 7 ( $ ) 6 7 8 , 6 0 2 , 7 ( — $ — 4 4 1 , 0 0 3 , 7 $ 5 8 0 , 3 4 1 $ 9 5 0 , 7 5 1 , 7 $ ) 6 3 2 , 7 6 4 , 5 ( $ ) 0 8 2 , 1 ( $ 2 7 4 , 5 1 6 , 2 1 $ 5 7 6 , 9 $ 5 6 1 , 5 1 5 , 7 6 9 8 2 4 $ 8 3 1 , 4 3 8 , 2 4 . s t n e m e t a t s e s e h t f o t r a p l a r g e t n i n a e r a s e t o n g n i y n a p m o c c a e h T e r a h S r e d n u k c o t S n o m m o C f o s e s a h c r u p e R s m a r g o r P e s a h c r u p e R x a t e l t t e s o t k c o t S n o m m o C f o s e s a h c r u p e R n o i t a g i l b o t s e r e t n i g n i l l o r t n o c - n o n m o r f s n o i t u b i r t n o C t e n , n o i t a s n e p m o c d e s a b - y t i u q E s r e d l o h s r e d l o h t s e r e t n i g n i l l o r t n o c - n o n o t s n o i t u b i r t s i D r e d n u d e t n a r g s d r a w a n o s t n e l a v i u q e d n e d i v i D n a l P y t i u q E e h t — k c o t S n o m m o C n o d e r a l c e d s n o i t u b i r t s i D e r a h s n o m m o c r e p 5 5 . 0 $ d n a s r e d l o h e r a h s d e r r e f e r p s r e d l o h t i n u o t s n o i t u b i r t s i D 8 1 0 2 , 1 3 r e b m e c e D , e c n a l a B s s o l e v i s n e h e r p m o c r e h t O s s o l t e N F-8 VEREIT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Cash flows from operating activities: Net (loss) income Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization Gain on real estate assets, net Impairments from held for sale Impairments Equity-based compensation Equity in income of unconsolidated entities and gain on joint venture Distributions from unconsolidated entities Gain on investments (Gain) loss on derivative instruments, net (Gain) loss on extinguishment and forgiveness of debt, net Changes in assets and liabilities: Investment in direct financing leases Rent and tenant receivables and other assets, net Due from affiliates Assets held for sale classified as discontinued operations Accounts payable and accrued expenses Deferred rent and other liabilities Due to affiliates Liabilities related to discontinued operations Net cash provided by operating activities Cash flows from investing activities: Investments in real estate assets Capital expenditures and leasing costs Real estate developments Principal repayments received on investment securities and mortgage notes receivable Investments in unconsolidated entities Return of investment from unconsolidated entities Proceeds from disposition of real estate and joint venture Proceeds from disposition of discontinued operations Investment in leasehold improvements and other assets Deposits for real estate assets Proceeds from sale of investments and other assets Uses and refunds of deposits for real estate assets Proceeds from the settlement of property-related insurance claims Line of credit advances to Cole REITs Line of credit repayments from Cole REITs Net cash provided by (used in) investing activities Cash flows from financing activities: Proceeds from mortgage notes payable Payments on mortgage notes payable and other debt, including debt extinguishment costs Proceeds from credit facility Payments on credit facility Proceeds from corporate bonds Payments on corporate bonds, including extinguishment costs Repayment of convertible notes Payments of deferred financing costs Repurchases of Common Stock under the Share Repurchase Programs Proceeds from 2016 term loan F-9 Year Ended December 31, 2018 2017 2016 $ (88,030) $ 32,378 $ (200,824) 659,948 (96,068) — 54,647 13,314 (1,869) 1,366 (4,092) (355) (5,360) 2,078 (34,096) — (2,492) 1,688 7,162 (66) (13,861) 493,914 (500,625) (22,291) (9,221) 5,761 (771) 48 502,289 122,915 (841) (13,412) 46,966 17,267 1,434 (2,200) 3,800 151,119 745,499 (61,536) 20,027 50,548 16,751 (2,726) 3,646 (65) (2,976) (18,373) 2,097 (21,394) 1,163 13,812 10,742 (395) 50 4,019 793,267 (699,004) (21,694) (14,850) 6,796 — 1,972 445,525 — (1,191) (37,226) 400 36,111 355 (16,400) 25,100 (274,106) 806,548 (55,722) — 303,751 10,728 415 1,433 — 1,191 771 3,976 (52,626) (416) — (3,323) (17,740) (214) — 797,948 (100,194) (16,568) (17,411) 5,417 (25,777) 2,580 1,000,700 — (2,259) (17,856) — 13,305 — (10,300) 50,000 881,637 187 4,652 3,112 (137,887) 1,934,000 (1,716,000) 546,304 — (597,500) (25,471) (50,154) — (424,385) 329,000 (645,107) 600,000 — — (9,575) (518) — (337,022) 1,033,000 (1,993,000) 1,000,000 (1,311,203) — (19,872) — 300,000 VEREIT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS – (Continued) (In thousands) Repayment of 2016 term loan Repurchases of Common Stock to settle tax obligations Proceeds from the issuance of Common Stock, net of underwriters’ discount Payments of equity issuance costs Contributions from non-controlling interest holders Distributions paid Net cash used in financing activities Net change in cash and cash equivalents and restricted cash Cash and cash equivalents and restricted cash, beginning of period Less: cash and cash equivalents of discontinued operations Cash and cash equivalents and restricted cash from continuing operations, beginning of period Cash and cash equivalents, and restricted cash, end of period Less: cash and cash equivalents of discontinued operations Cash and cash equivalents and restricted cash from continuing operations, end of period Reconciliation of Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents at beginning of period Restricted cash at beginning of period Cash and cash equivalents and restricted cash at beginning of period Cash and cash equivalents at end of period Restricted cash at end of period Cash and cash equivalents and restricted cash at end of period $ $ $ $ $ Year Ended December 31, 2018 2017 — $ (2,326) — $ (2,148) — — 120 (606,679) (655,406) (10,373) — — 101 (608,615) (756,595) (237,434) 2016 (300,000) (4,652) 702,765 (280) 675 (580,508) (1,506,985) 172,600 $ 64,036 (2,198) 301,470 (2,973) $ 128,870 (4,968) 61,838 53,663 — 53,663 34,176 27,662 61,838 30,758 22,905 53,663 $ $ $ 298,497 123,902 64,036 (2,198) 61,838 253,479 45,018 298,497 34,176 27,662 61,838 $ $ $ 301,470 (2,973) 298,497 64,135 59,767 123,902 253,479 45,018 298,497 The accompanying notes are an integral part of these statements. F-10 VEREIT OPERATING PARTNERSHIP, L.P. CONSOLIDATED BALANCE SHEETS (In thousands, except for unit data) ASSETS Real estate investments, at cost: Land Buildings, fixtures and improvements Intangible lease assets Total real estate investments, at cost Less: accumulated depreciation and amortization Total real estate investments, net Investment in unconsolidated entities Cash and cash equivalents Restricted cash Rent and tenant receivables and other assets, net Goodwill Due from affiliates, net Real estate assets held for sale and assets related to discontinued operations, net Total assets LIABILITIES AND EQUITY Mortgage notes payable, net Corporate bonds, net Convertible debt, net Credit facility, net Below-market lease liabilities, net Accounts payable and accrued expenses Deferred rent and other liabilities Distributions payable Due to affiliates Liabilities related to discontinued operations Total liabilities Commitments and contingencies (Note 10) General Partner's preferred equity, 42,834,138 General Partner Series F Preferred Units issued and outstanding as of each of December 31, 2018 and December 31, 2017 General Partner's common equity, 967,515,165 and 974,208,583 General Partner OP Units issued and outstanding as of December 31, 2018 and December 31, 2017, respectively Limited Partner's preferred equity, 86,874 Limited Partner Series F Preferred Units issued and outstanding as of each of December 31, 2018 and December 31, 2017 Limited Partner's common equity, 23,715,908 and 23,748,347 Limited Partner OP Units issued and outstanding as of December 31, 2018 and December 31, 2017, respectively Total partners’ equity Non-controlling interests Total equity Total liabilities and equity December 31, 2018 December 31, 2017 $ $ $ $ $ $ 2,843,212 10,749,228 2,012,399 15,604,839 3,436,772 12,168,067 35,289 30,758 22,905 366,092 1,337,773 — 2,609 13,963,493 1,922,657 3,368,609 394,883 401,773 173,479 145,611 69,714 186,623 — — 6,663,349 2,865,855 10,711,845 2,037,675 15,615,375 2,908,028 12,707,347 39,520 34,176 27,662 389,060 1,337,773 6,041 163,999 14,705,578 2,082,692 2,821,494 984,258 185,000 198,551 136,474 62,985 175,301 66 15,881 6,662,702 710,325 782,073 6,446,734 7,102,205 2,883 3,027 138,931 7,298,873 1,271 7,300,144 13,963,493 $ 154,266 8,041,571 1,305 8,042,876 14,705,578 $ The accompanying notes are an integral part of these statements. F-11 VEREIT OPERATING PARTNERSHIP, L.P. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except for per unit data) Rental revenue Operating expenses: Acquisition-related Litigation, merger and other non-routine costs, net of insurance recoveries Property operating General and administrative Depreciation and amortization Impairments Total operating expenses Other (expense) income: Interest expense Gain (loss) on extinguishment and forgiveness of debt, net Other income, net Equity in income and gain on disposition of unconsolidated entities Gain (loss) on derivative instruments, net Gain on disposition of real estate and real estate assets held for sale, net Total other expenses, net (Loss) income before taxes Provision for income taxes (Loss) income from continuing operations Income (loss) from discontinued operations, net of income taxes Net (loss) income Net loss attributable to non-controlling interests (1) Net (loss) income attributable to the OP Basic and diluted net loss per unit from continuing operations attributable to common unitholders Basic and diluted net income (loss) per unit from discontinued operations attributable to common unitholders Basic and diluted net loss per unit attributable to common unitholders (2) _______________________________________________ (1) Represents net loss attributable to consolidated joint venture partners. (2) Amounts may not total due to rounding. Year Ended December 31, 2018 2017 2016 $ 1,257,867 $ 1,252,285 $ 1,335,447 3,632 290,963 126,461 63,933 640,618 54,647 3,402 47,960 128,717 58,603 706,802 50,548 1,321 3,884 144,428 51,927 762,038 182,820 1,180,254 996,032 1,146,418 (280,887) 5,360 14,735 1,869 355 94,331 (164,237) (86,624) (5,101) (91,725) 3,695 (88,030) 154 (87,876) $ (289,766) 18,373 6,242 2,763 2,976 61,536 (197,876) 58,377 (6,882) 51,495 (19,117) 32,378 194 32,572 (317,376) (771) 5,251 9,783 (1,191) 45,524 (258,780) (69,751) (7,136) (76,887) (123,937) (200,824) 14 $ (200,810) (0.17) $ (0.02) $ (0.16) $ 0.00 (0.16) $ (0.02) $ (0.04) $ (0.13) (0.29) $ $ $ $ The accompanying notes are an integral part of these statements. F-12 VEREIT OPERATING PARTNERSHIP, L.P. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In thousands) Net (loss) income Other comprehensive income (loss): Unrealized gain (loss) on interest rate derivatives Reclassification of previous unrealized loss (gain) on interest rate derivatives into net (loss) income Unrealized loss on investment securities, net Reclassification of previous unrealized loss (gain) on investment securities into net (loss) income as other income, net Total other comprehensive income (loss) Total comprehensive (loss) income Comprehensive loss attributable to non-controlling interests (1) Total comprehensive (loss) income attributable to the OP $ _______________________________________________ (1) Represents comprehensive loss attributable to consolidated joint venture partners. Year Ended December 31, 2018 2017 2016 $ (88,030) $ 32,378 $ (200,824) — 313 (205) 2,237 2,345 (85,685) 154 (85,531) $ (18) (70) (951) — (1,039) 31,339 194 31,533 (7,685) 9,397 (2,271) — (559) (201,383) 14 (201,369) $ The accompanying notes are an integral part of these statements. F-13 l a t o T l a t i p a C - n o N g n i l l o r t n o C s t s e r e t n I l a t o T ' s r e n t r a P l a t i p a C l a t i p a C f o r e b m u N s t i n U l a t i p a C f o r e b m u N s t i n U l a t i p a C r e b m u N s t i n U f o l a t i p a C f o r e b m u N s t i n U 9 5 9 , 3 1 7 , 8 $ 7 5 8 , 1 $ 2 0 1 , 2 1 7 , 8 $ 0 0 8 , 4 8 1 $ 7 9 7 , 3 6 7 , 3 2 8 1 4 , 8 9 5 , 7 $ 4 9 3 , 4 8 8 , 4 0 9 5 1 3 , 3 $ 4 7 8 , 6 8 9 6 5 , 5 2 9 $ 8 3 1 , 4 3 8 , 2 4 r e n t r a P d e t i m L i r e n t r a P l a r e n e G r e n t r a P d e t i m L i r e n t r a P l a r e n e G s t i n U n o m m o C s t i n U d e r r e f e r P Y T I U Q E N I S E G N A H C F O S T N E M E T A T S D E T A D I L O S N O C ) a t a d t i n u r o f t p e c x e , s d n a s u o h t n I ( . . P L , P I H S R E N T R A P G N I T A R E P O T I E R E V — ) 2 5 6 , 4 ( 8 2 7 , 0 1 5 7 6 6 7 4 , 2 0 7 — — — — 5 7 6 — — ) 2 5 6 , 4 ( 8 2 7 , 0 1 — — — ) 8 1 1 , 9 2 5 ( ) 5 1 1 ( ) 3 0 0 , 9 2 5 ( ) 8 6 0 , 3 1 ( ) 9 5 5 ( ) 0 6 2 , 1 ( ) 2 9 8 , 1 7 ( ) 4 2 8 , 0 0 2 ( — — ) 4 1 ( — ) 0 6 2 , 1 ( ) 2 9 8 , 1 7 ( — — ) 9 5 5 ( ) 8 2 ( ) 0 1 8 , 0 0 2 ( ) 7 4 9 , 4 ( — — — — — — — — — ) 2 5 6 , 4 ( 8 2 7 , 0 1 ) 5 3 9 , 5 1 5 ( — ) 0 6 2 , 1 ( ) 1 3 5 ( ) 3 6 8 , 5 9 1 ( — — — — — — 0 5 4 , 5 1 ) 1 6 2 , 1 8 4 ( 7 6 0 , 8 2 7 ) 9 5 1 ( ) 0 5 4 , 5 1 ( 9 5 1 6 7 4 , 2 0 7 — — 6 7 4 , 2 0 7 0 0 0 , 0 0 0 , 9 6 — — — — — — — ) 4 4 1 ( — — — — — — — — — — — — — — — — — — — — — ) 8 4 7 , 1 7 ( — — — — — — — — — — 3 3 5 , 9 1 6 , 8 $ 3 0 4 , 2 $ 0 3 1 , 7 1 6 , 8 $ 8 9 5 , 6 6 1 $ 7 4 3 , 8 4 7 , 3 2 0 4 5 , 3 9 5 , 7 $ 0 5 6 , 6 4 1 , 4 7 9 1 7 1 , 3 $ 4 7 8 , 6 8 1 2 8 , 3 5 8 $ 8 3 1 , 4 3 8 , 2 4 ) 8 1 5 ( ) 8 4 1 , 2 ( 4 5 7 , 6 1 1 0 1 — — — 1 0 1 ) 8 1 5 ( ) 8 4 1 , 2 ( 4 5 7 , 6 1 — — — — — ) 4 8 8 , 8 4 5 ( ) 7 6 1 ( ) 7 1 7 , 8 4 5 ( ) 0 6 0 , 3 1 ( ) 1 7 5 ( ) 2 9 8 , 1 7 ( ) 8 3 8 ( ) 9 3 0 , 1 ( 8 7 3 , 2 3 — — ) 8 3 8 ( ) 4 9 1 ( — ) 1 7 5 ( ) 2 9 8 , 1 7 ( — ) 9 3 0 , 1 ( 2 7 5 , 2 3 — — — 4 5 7 ) 6 2 ( — — — — — — — — — — ) 8 1 5 ( ) 8 4 1 , 2 ( 4 5 7 , 6 1 — ) 7 5 6 , 5 3 5 ( ) 1 7 5 ( — — ) 3 1 0 , 1 ( 8 1 8 , 1 3 — — — — — — — ) 9 5 7 , 8 6 ( ) 0 5 5 , 8 6 2 ( 2 4 2 , 9 9 3 — — — — — — ) 4 4 1 ( — — — — — — — — — — — — — — — — — — — — — — ) 8 4 7 , 1 7 ( — — — — — — — — — — 6 7 8 , 2 4 0 , 8 $ 5 0 3 , 1 $ 1 7 5 , 1 4 0 , 8 $ 6 6 2 , 4 5 1 $ 7 4 3 , 8 4 7 , 3 2 5 0 2 , 2 0 1 , 7 $ 3 8 5 , 8 0 2 , 4 7 9 7 2 0 , 3 $ 4 7 8 , 6 8 3 7 0 , 2 8 7 $ 8 3 1 , 4 3 8 , 2 4 ) 2 9 1 , 5 4 5 ( — ) 2 9 1 , 5 4 5 ( ) 8 4 0 , 3 1 ( — ) 4 5 1 , 0 5 ( ) 6 2 3 , 2 ( 4 1 3 , 3 1 0 2 1 — — — — 0 2 1 — ) 1 4 2 ( ) 9 3 4 , 2 3 ( 1 4 2 9 3 4 , 2 3 — ) 4 5 1 , 0 5 ( ) 6 2 3 , 2 ( 4 1 3 , 3 1 — — — — — — — — — — ) 6 2 3 , 2 ( 4 1 3 , 3 1 ) 4 4 1 , 2 3 5 ( — — ) 2 0 5 , 4 2 3 ( 1 2 5 , 5 0 8 ) 4 5 1 , 0 5 ( ) 6 7 8 , 6 0 2 , 7 ( — — — — — — — — — — — — — — — — — — — — — — — — n o i t a g i l b o x a t e l t t e s o t s t i n U P O n o m m o c f o s e s a h c r u p e R o t s t i n U P O n o m m o c ' s r e n t r a p d e t i m i l f o n o i s r e v n o C s t i n U P O n o m m o c s ' r e n t r a P l a r e n e G t e n , n o i t a s n e p m o c d e s a b - y t i u q E y t i u q E e h t r e d n u d e t n a r g s d r a w a n o s t n e l a v i u q e d n e d i v i D g n i l l o r t n o c - n o n d n a s t i n U P O n o m m o c o t s n o i t u b i r t s i D t i n u n o m m o c r e p 5 5 . 0 $ — s t s e r e t n i s r e d l o h t s e r e t n i g n i l l o r t n o c - n o n m o r f s n o i t u b i r t n o C n a l P s t i n U P O n o m m o c f o e c n a u s s I 6 1 0 2 , 1 y r a u n a J , e c n a l a B s t i n U P O d e r r e f e r p o t s n o i t u b i r t s i D 6 1 0 2 , 1 3 r e b m e c e D , e c n a l a B s s o l e v i s n e h e r p m o c r e h t O s s o l t e N y t i u q E e h t r e d n u d e t n a r g s d r a w a n o s t n e l a v i u q e d n e d i v i D g n i l l o r t n o c - n o n d n a s t i n U P O n o m m o c o t s n o i t u b i r t s i D t i n u n o m m o c r e p 5 5 . 0 $ — s t s e r e t n i s r e d l o h t s e r e t n i g n i l l o r t n o c - n o n m o r f s n o i t u b i r t n o C n a l P t s e r e t n i e r u t n e v t n i o j d e t a d i l o s n o c f o n o i t i s o p s i D s t i n U P O d e r r e f e r p o t s n o i t u b i r t s i D t e n , n o i t a s n e p m o c d e s a b - y t i u q E n o i t a g i l b o x a t e l t t e s o t s t i n U P O n o m m o c f o s e s a h c r u p e R e r a h S 7 1 0 2 e h t r e d n u s t i n U P O n o m m o c f o s e s a h c r u p e R m a r g o r P e s a h c r u p e R F-14 n o i t a g i l b o x a t e l t t e s o t s t i n U P O n o m m o c f o s e s a h c r u p e R o t s t i n U P O n o m m o c ' s r e n t r a p d e t i m i l f o n o i s r e v n o C s t i n U P O n o m m o c s ' r e n t r a P l a r e n e G e r a h S r e d n u s t i n U P O n o m m o c f o s e s a h c r u p e R s m a r g o r P e s a h c r u p e R g n i l l o r t n o c - n o n d n a s t i n U P O n o m m o c o t s n o i t u b i r t s i D t i n u n o m m o c r e p 5 5 . 0 $ — s t s e r e t n i s r e d l o h t s e r e t n i g n i l l o r t n o c - n o n m o r f s n o i t u b i r t n o C t e n , n o i t a s n e p m o c d e s a b - y t i u q E 7 1 0 2 , 1 3 r e b m e c e D , e c n a l a B s s o l e v i s n e h e r p m o c r e h t O ) s s o l ( e m o c n i t e N . . P L , P I H S R E N T R A P G N I T A R E P O T I E R E V r e n t r a P d e t i m L i r e n t r a P l a r e n e G r e n t r a P d e t i m L i r e n t r a P l a r e n e G s t i n U n o m m o C s t i n U d e r r e f e r P ) d e u n i t n o C ( – Y T I U Q E N I S E G N A H C F O S T N E M E T A T S D E T A D I L O S N O C ) a t a d t i n u r o f t p e c x e , s d n a s u o h t n I ( ) ) ) 2 9 8 , 1 7 ( 0 3 0 , 8 8 ( 5 4 3 , 2 7 1 9 ( $ — — — ) 4 5 1 ( $ ) 7 1 9 ( $ ) 2 9 8 , 1 7 ( ) 6 7 8 , 7 8 ( 5 4 3 , 2 — — 6 5 ) 2 0 1 , 2 ( $ — — — — — ) 4 7 7 , 5 8 ( 9 8 2 , 2 ) 7 1 9 ( $ — — — — l a t o T l a t i p a C - n o N g n i l l o r t n o C s t s e r e t n I l a t o T ' s r e n t r a P l a t i p a C l a t i p a C f o r e b m u N s t i n U l a t i p a C f o r e b m u N s t i n U ) 4 4 1 ( — — l a t i p a C — $ — — — — — — ) 8 4 7 , 1 7 ( — $ — — — — r e b m u N s t i n U f o l a t i p a C f o r e b m u N s t i n U 4 4 1 , 0 0 3 , 7 $ 1 7 2 , 1 $ 3 7 8 , 8 9 2 , 7 $ 1 3 9 , 8 3 1 $ 8 0 9 , 5 1 7 , 3 2 4 3 7 , 6 4 4 , 6 $ 5 6 1 , 5 1 5 , 7 6 9 3 8 8 , 2 $ 4 7 8 , 6 8 5 2 3 , 0 1 7 $ 8 3 1 , 4 3 8 , 2 4 y t i u q E e h t r e d n u d e t n a r g s d r a w a n o s t n e l a v i u q e d n e d i v i D n a l P s t i n U P O d e r r e f e r p o t s n o i t u b i r t s i D e m o c n i e v i s n e h e r p m o c r e h t O 8 1 0 2 , 1 3 r e b m e c e D , e c n a l a B s s o l t e N . s t n e m e t a t s e s e h t f o t r a p l a r g e t n i n a e r a s e t o n g n i y n a p m o c c a e h T F-15 VEREIT OPERATING PARTNERSHIP, L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Cash flows from operating activities: Net (loss) income Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization Gain on real estate assets, net Impairments from held for sale Impairments Equity based compensation Equity in income of unconsolidated entities Distributions from unconsolidated entities Gain on investments (Gain) loss on derivative instruments, net (Gain) loss on extinguishment of debt and forgiveness of debt Changes in assets and liabilities: Investment in direct financing leases Rent and tenant receivables and other assets, net Due from affiliates Assets held for sale classified as discontinued operations Accounts payable and accrued expenses Deferred rent and other liabilities Due to affiliates Liabilities related to discontinued operations Net cash provided by operating activities Cash flows from investing activities: Investments in real estate assets Capital expenditures and leasing costs Real estate developments Principal repayments received on investment securities and mortgage notes receivable Investments in unconsolidated entities Return of investment from unconsolidated entities Proceeds from disposition of real estate and joint venture Proceeds from disposition of discontinued operations Investment in leasehold improvements and other assets Deposits for real estate assets Proceeds from sale of investments and other assets Uses and refunds of deposits for real estate assets Proceeds from the settlement of property-related insurance claims Line of credit advances to Cole REITs Line of credit repayments from Cole REITs Net cash provided by (used in) investing activities Cash flows from financing activities: Proceeds from mortgage notes payable Payments on mortgage notes payable and other debt, including debt extinguishment costs Proceeds from credit facility Payments on credit facility Proceeds from corporate bonds Payments on corporate bonds, including extinguishment costs Repayment of convertible notes Payments of deferred financing costs Proceeds from 2016 term loan Repayment of 2016 term loan F-16 Year Ended December 31, 2018 2017 2016 $ (88,030) $ 32,378 $ (200,824) 659,948 (96,068) — 54,647 13,314 (1,869) 1,366 (4,092) (355) (5,360) 2,078 (34,096) — (2,492) 1,688 7,162 (66) (13,861) 493,914 (500,625) (22,291) (9,221) 5,761 (771) 48 502,289 122,915 (841) (13,412) 46,966 17,267 1,434 (2,200) 3,800 151,119 745,499 (61,536) 20,027 50,548 16,751 (2,726) 3,646 (65) (2,976) (18,373) 2,097 (21,394) 1,163 13,812 10,742 (395) 50 4,019 793,267 (699,004) (21,694) (14,850) 6,796 — 1,972 445,525 — (1,191) (37,226) 400 36,111 355 (16,400) 25,100 (274,106) 806,548 (55,722) — 303,751 10,728 415 1,433 — 1,191 771 3,976 (52,626) (416) — (3,323) (17,740) (214) — 797,948 (100,194) (16,568) (17,411) 5,417 (25,777) 2,580 1,000,700 — (2,259) (17,856) — 13,305 — (10,300) 50,000 881,637 187 4,652 3,112 (137,887) 1,934,000 (1,716,000) 546,304 — (597,500) (25,471) — — (424,385) 329,000 (645,107) 600,000 — — (9,575) — — (337,022) 1,033,000 (1,993,000) 1,000,000 (1,311,203) — (19,872) 300,000 (300,000) VEREIT OPERATING PARTNERSHIP, L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS – (Continued) (In thousands) Repurchases of Common Stock under the Share Repurchase Programs Repurchases of Common Stock to settle tax obligations Proceeds from the issuance of common OP Units, net of underwriters’ discount Payments of equity issuance costs Contributions from non-controlling interest holders Distributions paid Net cash used in financing activities Net change in cash and cash equivalents and restricted cash Cash and cash equivalents and restricted cash, beginning of period Less: cash and cash equivalents of discontinued operations Cash and cash equivalents and restricted cash from continuing operations, beginning of period Cash and cash equivalents, and restricted cash, end of period Less: cash and cash equivalents of discontinued operations Cash and cash equivalents and restricted cash from continuing operations, end of period Reconciliation of Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents at beginning of period Restricted cash at beginning of period Cash and cash equivalents and restricted cash at beginning of period Cash and cash equivalents at end of period Restricted cash at end of period Cash and cash equivalents and restricted cash at end of period $ $ $ $ $ Year Ended December 31, 2018 2017 2016 (50,154) $ (2,326) (518) $ (2,148) — (4,652) — — 120 (606,679) (655,406) (10,373) — — 101 (608,615) (756,595) (237,434) 702,765 (280) 675 (580,508) (1,506,985) 172,600 $ 64,036 (2,198) 301,470 (2,973) $ 128,870 (4,968) 61,838 53,663 — 53,663 34,176 27,662 61,838 30,758 22,905 53,663 $ $ $ 298,497 123,902 64,036 (2,198) 61,838 253,479 45,018 298,497 34,176 27,662 61,838 $ $ $ 301,470 (2,973) 298,497 64,135 59,767 123,902 253,479 45,018 298,497 The accompanying notes are an integral part of these statements. F-17 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 Note 1 – Organization VEREIT is a Maryland corporation, incorporated on December 2, 2010, that qualified as a real estate investment trust (“REIT”) for U.S. federal income tax purposes beginning in the taxable year ended December 31, 2011. The OP is a Delaware limited partnership of which the General Partner is the sole general partner. VEREIT’s common stock, par value $0.01 per share (“Common Stock”), and its 6.70% Series F Cumulative Redeemable Preferred Stock, par value $0.01 per share (“Series F Preferred Stock”) trade on the New York Stock Exchange (“NYSE”) under the trading symbols, “VER” and “VER PRF,” respectively. As used herein, the terms the “Company,” “we,” “our” and “us” refer to VEREIT, together with its consolidated subsidiaries, including the OP. VEREIT is a full-service real estate operating company which owns and manages one of the largest portfolios of single-tenant commercial properties in the U.S. VEREIT’s business model provides equity capital to creditworthy corporations in return for long-term leases on their properties. The Company actively manages its portfolio considering a number of metrics including property type, concentration and key economic factors for appropriate balance and diversity. Substantially all of the Company’s operations are conducted through the OP. VEREIT is the sole general partner and holder of 97.6% of the common equity interests in the OP as of December 31, 2018 with the remaining 2.4% of the common equity interests owned by unaffiliated investors and certain former directors, officers and employees of ARC Properties Advisors, LLC (the “Former Manager”). Under the limited partnership agreement of the OP, as amended (the “LPA”), after holding units of limited partner interests in the OP (“OP Units”), including Series F Preferred Units, for a period of one year and meeting the other requirements in the LPA, unless an earlier redemption is otherwise consented to by VEREIT, holders of OP Units, including Series F Preferred Units, have the right to redeem the units for the cash value of a corresponding number of shares of VEREIT’s Common Stock or VEREIT’s Series F Preferred Stock, as applicable, or, at the option of VEREIT, a corresponding number of shares of VEREIT’s Common Stock or Series F Preferred Stock. The remaining rights of the holders of OP Units are limited, however, and do not include the ability to replace the General Partner or to approve the sale, purchase or refinancing of the OP’s assets. The actions of the OP and its relationship with the General Partner are governed by the LPA. The General Partner does not have any significant assets other than its investment in the OP. Therefore, the assets and liabilities of the General Partner and the OP are the same. Additionally, pursuant to the LPA, all administrative expenses and expenses associated with the formation, continuity, existence and operation of the General Partner incurred by the General Partner on the OP’s behalf shall be treated as expenses of the OP. Further, when the General Partner issues any equity instrument that has been approved by the General Partner’s Board of Directors, the LPA requires the OP to issue to the General Partner equity instruments with substantially similar terms, to protect the integrity of the Company’s umbrella partnership REIT structure, pursuant to which each holder of interests in the OP has a proportionate economic interest in the OP reflecting its capital contributions thereto. OP Units and Series F Preferred Units issued to the General Partner are referred to as “General Partner OP Units” and “General Partner Series F Preferred Units,” respectively. OP Units and Series F Preferred Units issued to parties other than the General Partner are referred to as “Limited Partner OP Units” and “Limited Partner Series F Preferred Units,” respectively. The LPA also provides that the OP issue debt with terms and provisions consistent with debt issued by the General Partner. The LPA will be amended to provide for the issuance of any additional class of equivalent equity instruments to the extent the General Partner’s Board of Directors authorizes the issuance of any new class of equity securities. As discussed in Note 4 —Discontinued Operations, on February 1, 2018, the Company completed the sale of its investment management segment, Cole Capital. The assets, liabilities and related financial results of substantially all of the Cole Capital segment are reflected in the financial statements as discontinued operations. Note 2 – Summary of Significant Accounting Policies Basis of Accounting The consolidated financial statements of the Company presented herein include the accounts of the General Partner and its consolidated subsidiaries, including the OP. All intercompany transactions have been eliminated upon consolidation. The financial statements are prepared on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of the Company and its consolidated subsidiaries and consolidated joint venture arrangements. The portions of the consolidated joint venture arrangements not owned by the Company are presented F-18 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) as non-controlling interests in VEREIT’s and the OP’s consolidated balance sheets, statements of operations, statements of comprehensive income (loss) and statements of changes in equity. In addition, as described in Note 1 – Organization, certain third parties have been issued OP Units. Holders of OP Units are considered to be non-controlling interest holders in the OP and their ownership interest in the limited partner’s share is presented as non-controlling interests in VEREIT’s consolidated balance sheets, statements of operations, statements of comprehensive income (loss) and statements of changes in equity. Further, a portion of the earnings and losses of the OP are allocated to non-controlling interest holders based on their respective ownership percentages. Upon conversion of OP Units to Common Stock, any difference between the fair value of shares of Common Stock issued and the carrying value of the OP Units converted is recorded as a component of equity. As of each of December 31, 2018 and 2017, there were approximately 23.7 million Limited Partner OP Units outstanding. For legal entities being evaluated for consolidation, the Company must first determine whether the interests that it holds and fees it receives qualify as variable interests in the entity. A variable interest is an investment or other interest that will absorb portions of an entity’s expected losses or receive portions of the entity’s expected residual returns. The Company’s evaluation includes consideration of fees paid to the Company where the Company acts as a decision maker or service provider to the entity being evaluated. If the Company determines that it holds a variable interest in an entity, it evaluates whether that entity is a variable interest entity (“VIE”). VIEs are entities where investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or where equity investors, as a group, lack one of the following characteristics: (a) the power to direct the activities that most significantly impact the entity’s economic performance, (b) the obligation to absorb the expected losses of the entity, or (c) the right to receive the expected returns of the entity. The Company then qualitatively assesses whether it is (or is not) the primary beneficiary of a VIE, which is generally defined as the party who has a controlling financial interest in the VIE. Consideration of various factors include, but are not limited to, the Company’s ability to direct the activities that most significantly impact the entity’s economic performance and its obligation to absorb losses from or right to receive benefits of the VIE that could potentially be significant to the VIE. The Company consolidates any VIEs when the Company is determined to be the primary beneficiary of the VIE and the difference between consolidating the VIE and accounting for it using the equity method could be material to the Company’s consolidated financial statements. The Company continually evaluates the need to consolidate these VIEs based on standards set forth in U.S. GAAP. Reclassification As described below, the following items previously reported have been reclassified to conform with the current period’s presentation. The operating expense reimbursements line item has been combined into rental revenue for prior periods presented to be consistent with the current year presentation. The investment in direct financing leases, net, investment securities, at fair value and mortgage notes receivable, net line items from prior periods have been combined into the rent and tenant receivables and other assets, net caption on the consolidated balance sheets. Investments in the Cole REITs, as defined in “Investment in Cole REITs” section herein, has also been reclassified as of December 31, 2017 to rent and tenant receivables and other assets, net from investment in unconsolidated entities to be consistent with the current year presentation. Refer to Note 5 – Rent and Tenant Receivables and Other Assets, Net for reclassification amounts and additional information. The distributions declared on Common Stock line item from prior periods has been updated to exclude distributions on restricted stock units (“Restricted Stock Units”) and deferred stock units (“Deferred Stock Units”) on the consolidated statements of changes in equity for all periods presented. These amounts are now included in the line item dividend equivalents on awards granted under the Equity Plan (as defined in Note 12 – Equity-based Compensation), which also includes dividend equivalents on restricted shares of Common Stock (“Restricted Shares”). The dividend equivalents on Restricted Shares were previously included in the line item distributions to participating securities in the consolidated statements of changes in equity. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding goodwill and intangible asset impairments, real estate investment impairment, allocation of purchase price of real estate asset acquisitions and income taxes. F-19 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Real Estate Investments The Company records acquired real estate at cost and makes assessments as to the useful lives of depreciable assets. The Company considers the period of future benefit of the asset to determine the appropriate useful lives. Depreciation is computed using a straight-line method over the estimated useful life of 40 years for buildings, five to 15 years for building fixtures and improvements and the remaining lease term for intangible lease assets. Allocation of Purchase Price of Real Estate Assets The Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets and liabilities acquired based on their relative fair values. Tangible assets include land, buildings, fixtures and improvements on an as-if vacant basis. The Company utilizes various estimates, processes and information to determine the as-if vacant property value. Identifiable intangible assets and liabilities include amounts allocated to acquired leases for above-market and below-market lease rates and the value of in-place leases. In estimating fair values for purposes of allocating purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. The Company also considers information obtained about each property as a result of its pre- acquisition due diligence, as well as subsequent marketing and leasing activities, in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed. The aggregate value of intangible assets related to in-place leases is primarily the difference between the property valued with existing in-place leases adjusted to market rental rates and the property valued as if vacant. Factors considered by the Company in its analysis of the in-place lease intangibles include an estimate of carrying costs during the expected lease-up period for each property, taking into account current market conditions and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up period, which typically ranges from six to 18 months. The Company also estimates costs to execute similar leases, including leasing commissions, legal and other related expenses. The value of in-place leases is amortized over the initial term of the respective leases. If a tenant terminates its lease, then the unamortized portion of the in-place lease value is charged to expense. Above-market and below-market in-place lease values for owned properties are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between the contractual amounts to be paid pursuant to the in-place leases and management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease, including any bargain renewal periods. Above- market leases are amortized as a reduction to rental revenue over the remaining terms of the respective leases. Below-market leases are amortized as an increase to rental revenue over the remaining terms of the respective leases, including any bargain renewal periods. The determination of the fair values of the real estate assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The use of alternative estimates may result in a different allocation of the Company’s purchase price, which could materially impact the Company’s results of operations. In January 2017, the Company elected to early adopt ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions of assets or businesses. During the years ended December 31, 2018 and 2017, all real estate acquisitions qualified as asset acquisitions, and external acquisition costs related to asset acquisitions were capitalized and allocated to tangible and intangible assets and liabilities as described above. Prior to January 1, 2017, external costs related to property acquisitions were expensed as incurred. Internal costs, such as employee salaries, related to activities necessary to complete, or affect, self-originating asset acquisitions or business combinations are classified as acquisition-related expenses in the accompanying consolidated statements of operations for all periods presented. Assets Held for Sale Upon classifying a real estate investment as held for sale, the Company will no longer recognize depreciation expense related to the depreciable assets of the property. Assets held for sale are recorded at the lower of carrying value or estimated fair value, less the estimated cost to dispose of the assets. See Note 3– Real Estate Investments and Related Intangibles for further discussion regarding properties held for sale. If circumstances arise that the Company previously considered unlikely and, as a result, the Company decides not to sell a property previously classified as held for sale, the Company will reclassify the property as held and used. The Company measures and records a property that is reclassified as held and used at the lower of (i) its carrying value before the property was classified F-20 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) as held for sale, adjusted for any depreciation expense that would have been recognized had the property been continuously classified as held and used or (ii) the estimated fair value at the date of the subsequent decision not to sell. Development Activities Project costs, which include interest expense, associated with the development, construction and lease-up of a real estate project are capitalized as construction in progress. Once the development and construction of the building is substantially completed, the amounts capitalized to construction in progress are transferred to (i) land and (ii) buildings, fixtures and improvements and are depreciated over their respective useful lives. Discontinued Operations The Company reports discontinued operations when a component of an entity or group of components that has been disposed of or classified as held for sale represents a strategic shift that has or will have a major effect on an entity’s operations and financial results. The results of operations for assets meeting the definition of discontinued operations are reflected in the Company’s consolidated statements of operations as discontinued operations for all periods presented. See Note 4 — Discontinued Operations for further discussion regarding discontinued operations. Investment in Unconsolidated Entities Unconsolidated Joint Ventures The Company accounts for its investment in unconsolidated joint venture arrangements using the equity method of accounting as the Company has the ability to exercise significant influence, but not control, over operating and financing policies of these investments. The equity method of accounting requires the investment to be initially recorded at cost and subsequently adjusted for the Company’s share of equity in the joint ventures’ earnings and distributions. The Company records its proportionate share of net income (loss) from the unconsolidated joint ventures in equity in income and gain on disposition of unconsolidated entities in the consolidated statements of operations. See Note 3– Real Estate Investments and Related Intangibles for further discussion on investments in unconsolidated joint ventures. Investment in Cole REITs As of December 31, 2017, the Company owned equity investments in Cole Credit Property Trust IV, Inc. (“CCPT IV”), CIM Income NAV, Inc. (formerly known as Cole Real Estate Income Strategy (Daily NAV), Inc.) (“INAV”), Cole Office & Industrial REIT (CCIT II), Inc. (“CCIT II”), Cole Office & Industrial REIT (CCIT III), Inc. (“CCIT III”), and Cole Credit Property Trust V, Inc. (“CCPT V” and collectively with CCPT IV, INAV, CCIT II and CCIT III, the “Cole REITs”). On February 1, 2018, the Company sold certain of its equity investments to CCA Acquisition, LLC (the “Cole Purchaser”), an affiliate of CIM Group, LLC, retaining interests in CCIT II, CCIT III and CCPT V. Subsequent to the sale of Cole Capital and the adoption of ASU 2016-01 (as defined in “Recent Accounting Pronouncements” section below), the Company carries these investments at fair value, as the Company does not exert significant influence over CCIT II, CCIT III or CCPT V, and any changes in the fair value are recognized in other income, net in the accompanying consolidated statement of operations for the year ended December 31, 2018. Prior to the sale of Cole Capital, the Company accounted for these investments using the equity method of accounting, which required the investment to be initially recorded at cost and subsequently adjusted for the Company’s share of equity in the respective Cole REIT’s earnings and distributions. The Company recorded its proportionate share of net income or loss from the Cole REITs in equity in income and gain on disposition of unconsolidated entities in the consolidated statement of operations for the year ended December 31, 2018. Leasehold Improvements and Property and Equipment The Company leases its corporate office facilities under operating leases. Leasehold improvements related to these are recorded at cost less accumulated amortization. Leasehold improvements are amortized over the lesser of the estimated useful life or remaining lease term. Property and equipment, which typically include computer hardware and software, furniture and fixtures, among other items, are stated at cost less accumulated depreciation. Property and equipment are depreciated on a straight-line method over the estimated useful lives of the assets, which range from three to seven years. The Company reassesses the useful lives of its property and equipment and adjusts the future monthly depreciation expense based on the new useful life, as applicable. If the Company disposes of an asset, the asset and related accumulated depreciation are written off upon disposal. F-21 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Goodwill In the case of a business combination, after identifying all tangible and intangible assets and liabilities, the excess consideration paid over the fair value of the assets and liabilities acquired and assumed, respectively, represents goodwill. In connection with prior mergers, the Company recorded goodwill as a result of the merger consideration exceeding the net assets acquired. As of December 31, 2018 and 2017, the carrying value of goodwill was $1.3 billion. Prior to the adoption of ASU 2017-01 in January 2017, in the event the Company disposed of a property, or classified a property as an asset held for sale, that constituted a business under U.S. GAAP, the Company allocated a portion of the real estate investments reporting unit’s goodwill to that property in determining the gain or loss on the disposal of the property. The amount of goodwill allocated to the business was based on the relative fair value of the business to the fair value of the reporting unit. During the year ended December 31, 2016, the Company allocated $73.2 million of goodwill to dispositions and held for sale assets, which included $2.3 million of goodwill allocated to the cost basis of two properties foreclosed upon. The allocated goodwill of $73.2 million was included in gain on disposition of real estate and real estate assets held for sale, net, in the consolidated statement of operations. Impairments Real Estate Assets The Company performs quarterly impairment review procedures, primarily through continuous monitoring of events and changes in circumstances that could indicate the carrying value of its real estate assets may not be recoverable. Impairment indicators that the Company considers include, but are not limited to, decrease in net operating income, bankruptcy or other credit concerns of a property’s major tenant or tenants, such as history of late payments, rental concessions and other factors, as well as significant decreases in a property’s revenues due to lease terminations, vacancies, co-tenancy clauses or reduced lease rates. When impairment indicators are identified or if a property is considered to have a more likely than not probability of being disposed of within the next 12 to 24 months, the Company assesses the recoverability of the assets by determining whether the carrying value of the assets will be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. U.S. GAAP requires us to utilize the Company’s expected holding period of our properties when assessing recoverability. In the event that such expected undiscounted future cash flows do not exceed the carrying value, the Company will adjust the real estate assets to their respective fair values and recognize an impairment loss. Generally, fair value is determined using a discounted cash flow analysis and recent comparable sales or leasing transactions. The assumptions and uncertainties utilized in the evaluation of the impairment of real estate assets are discussed in Note 6 – Fair Value Measures. Goodwill The Company evaluates goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate the carrying value may not be recoverable. The Company’s annual testing date is during the fourth quarter. In 2017, the Company adopted ASU 2017-04, Intangibles – Goodwill and Others (Topic 350): Simplifying the Test for Goodwill Impairment, which allows the Company to test goodwill for impairment by comparing the carrying value of net assets to their respective fair value. If the fair value is determined to be less than the carrying value, an impairment charge will be recorded for the difference between the fair value and the carrying value. The Company estimates the fair value using discounted cash flows and relevant competitor multiples. The evaluation of goodwill for potential impairment requires the Company’s management to exercise significant judgment and to make certain assumptions. While the Company believes its assumptions are reasonable, there are no guarantees as to actual results. Changes in assumptions based on actual results may have a material impact on the Company’s financial results. The analysis performed for the annual goodwill tests during the years ended December 31, 2018, 2017 and 2016 resulted in no impairment. Goodwill related to discontinued operations is discussed in Note 4 — Discontinued Operations. F-22 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Investment in Unconsolidated Entities The Company is required to determine whether an event or change in circumstances has occurred that may have a significant adverse effect on the fair value of any of its investment in the unconsolidated entities. If an event or change in circumstance has occurred, the Company is required to evaluate its investment in the unconsolidated entity for potential impairment and determine if the carrying value of its investment exceeds its fair value. An impairment charge is recorded when an impairment is deemed to be other-than-temporary. To determine whether an impairment is other-than-temporary, the Company considers whether it has the ability and intent to hold the investment until the carrying value is fully recovered. The evaluation of an investment in an unconsolidated entity for potential impairment requires the Company’s management to exercise significant judgment and to make certain assumptions. The use of different judgments and assumptions could result in different conclusions. No impairments of unconsolidated entities were identified during the years ended December 31, 2018, 2017 and 2016. Leasehold Improvements and Property and Equipment Leasehold improvements and property and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. If this review indicates that the carrying value of the asset is not recoverable, the Company records an impairment loss, measured at fair value by estimated discounted cash flows or market appraisals. The evaluation of leasehold improvements and property and equipment for potential impairment requires the Company’s management to exercise significant judgment and to make certain assumptions. The use of different judgments and assumptions could result in different conclusions. No impairments of leasehold improvements and property and equipment were identified during the years ended December 31, 2018, 2017 and 2016. Cash and Cash Equivalents Cash and cash equivalents include cash in bank accounts, as well as investments in highly-liquid money market funds with original maturities of three months or less. The Company deposits cash with several high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) up to an insurance limit of $250,000. At times, the Company’s cash and cash equivalents may exceed federally insured levels. Although the Company bears risk on amounts in excess of those insured by the FDIC, it has not experienced and does not anticipate any losses due to the high quality of the institutions where the deposits are held. Restricted Cash The Company had $22.9 million and $27.7 million, respectively, in restricted cash as of December 31, 2018 and 2017. Restricted cash primarily consists of reserves related to lease expirations, as well as maintenance, structural and debt service reserves. In accordance with certain debt agreements, rent from certain of the Company’s tenants is deposited directly into a lockbox account, from which the monthly debt service payments are disbursed to the lender and the excess funds are then disbursed to the Company. Included in restricted cash at December 31, 2018 was $21.5 million in lender reserves and $1.4 million held in restricted lockbox accounts. Included in restricted cash at December 31, 2017 was $26.4 million in lender reserves and $1.3 million held in restricted lockbox accounts. Investment in Direct Financing Leases The Company has acquired certain properties that are subject to leases that qualify as direct financing leases in accordance with U.S. GAAP due to the significance of the lease payments from the inception of the leases compared to the fair value of the property or due to bargain purchase options. Investments in direct financing leases represent the fair value of the remaining lease payments on the leases and the estimated fair value of any expected residual property value at the end of the lease term. The fair value of the remaining lease payments is estimated using a discounted cash flow analysis based on interest rates that would represent the Company’s incremental borrowing rate for similar types of debt. The expected residual property value at the end of the lease term is estimated using market data and assessments of the remaining useful lives of the properties at the end of the lease terms, among other factors. Income from direct financing leases is calculated using the effective interest method over the remaining term of the lease. F-23 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Deferred Financing Costs Deferred financing costs represent commitment fees, legal fees and other costs associated with obtaining commitments for financing. Deferred financing costs, other than those associated with the Revolving Credit Facility (as defined in Note 7 –Debt), are presented on the consolidated balance sheets as a direct deduction from the carrying amount of the related debt liability rather than as an asset. These costs are amortized to interest expense over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are written off when the associated debt is refinanced or repaid before maturity. Costs incurred in connection with potential financial transactions that are not completed are expensed in the period in which it is determined the financing will not be completed. Convertible Debt The Company has an outstanding aggregate balance of $402.5 million related to the 2020 Convertible Notes (as defined in Note 7 – Debt ). The 2020 Convertible Notes are convertible into cash or shares of the Company’s Common Stock at the Company’s option. In accordance with U.S GAAP, the 2020 Convertible Notes are accounted for as a liability with a separate equity component recorded for the conversion option. A liability was recorded for the 2020 Convertible Notes on the issuance date at fair value based on a discounted cash flow analysis using current market rates for debt instruments with similar terms. The difference between the initial proceeds from the 2020 Convertible Notes and the estimated fair value of the debt instruments resulted in a debt discount, with an offset recorded to additional paid-in capital representing the equity component. The debt discount is being amortized to interest expense over the respective term of the 2020 Convertible Notes. Derivative Instruments The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such agreements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for purposes other than interest rate risk management. The Company records all derivatives on the consolidated balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. The accounting for subsequent changes in the fair value of these derivatives depends on whether each has been designated and qualifies for hedge accounting treatment. If the Company elects not to apply hedge accounting treatment, any changes in the fair value of these derivative instruments is recognized immediately in gain (loss) on derivative instruments, net in the consolidated statements of operations and consolidated statements of comprehensive income (loss). If the derivative is designated and qualifies for hedge accounting treatment, the change in the estimated fair value of the derivative is recorded in other comprehensive income (loss) to the extent that it is effective. Any ineffective portion of a derivative’s change in fair value will be immediately recognized in earnings. As of December 31, 2018, the Company had one interest rate derivative that was not designated as a qualifying hedging relationship with a fair value of $0.5 million associated with a loan with a notional value of $50.7 million. As of December 31, 2017, the Company had two interest rate derivatives that were not designated as qualifying hedging relationships with an aggregate fair value of $0.6 million associated with loans with an aggregate notional value of $78.9 million. The fair value of the interest rate derivatives is included in rent and tenant receivables and other assets, net in the accompanying consolidated balance sheets. Revenue Recognition In May 2014, the U.S. Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”) (Topic 606), which supersedes the revenue recognition requirements in Revenue Recognition, F-24 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Accounting Standards Codification (“ASC”) (Topic 605) and requires an entity to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted ASU 2014-09 and the related ASUs (collectively, the “Revenue ASUs”) during the first quarter of 2018 using the modified retrospective approach, which allows a cumulative effect adjustment to beginning retained earnings equal to initially applying the Revenue ASUs to all contracts with customers not completed as of the date of adoption. Adoption of the Revenue ASUs did not result in a cumulative effect adjustment to retained earnings as all contracts not completed as of adoption within the scope of Topic 606 have the same revenue recognition timing and measurement under Topic 605. Revenues generated through leasing arrangements are excluded from the Revenue ASUs as discussed below. Revenue Recognition - Real Estate The Company’s rental revenue is recognized when earned and collectability is reasonably assured and includes rental revenues and property operating expense reimbursements that each tenant pays in accordance with the terms of each lease. Rental revenue also includes amortization of above and below-market leases. Many of the leases have rent escalations and the rental revenue is recognized on a straight-line basis, which requires the Company to record a receivable that will only be received if the tenant makes all rent payments required through the expiration of the initial lease term. Straight-line rent receivables are included in rent and tenant receivables and other assets, net, in the consolidated balance sheets. See Note 5 – Rent and Tenant Receivables and Other Assets, Net. For leases that have contingent rental revenue based on a percentage of the tenant’s sales, the Company recognizes contingent rental revenue when the specified target is achieved. The Company continually reviews receivables related to rent and unbilled rent receivables and determines collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. In the event that the collectability of a receivable is uncertain, the Company will record an increase in the allowance for uncollectible accounts in the consolidated balance sheets and bad debt expense in property operating expenses in the consolidated statements of operations. The Company suspends revenue recognition when the collectability of amounts due pursuant to a lease is no longer reasonably assured. Revenue Recognition - Cole Capital As discussed in Note 4 —Discontinued Operations, on February 1, 2018, the Company completed the sale of its investment management segment, Cole Capital. The assets, liabilities and related financial results of substantially all of the Cole Capital segment are reflected in the financial statements as discontinued operations. Cole Capital earned securities sales commissions, dealer manager fees, distribution and stockholder servicing fees, real estate acquisition fees, financing coordination fees, property management fees, advisory fees, asset management fees and performance fees for services relating to the Cole REITs’ offerings and the investment and management of their respective assets, in accordance with the respective dealer manager and advisory agreements. The Company was also reimbursed for certain costs incurred in providing these services, which were recorded as revenue as the expenses were incurred subject to revenue constraint due to the limitations on the amount that was reimbursable based on the terms of the respective dealer manager and advisory agreements. Refer to Note 13 – Related Party Transactions and Arrangements for a disaggregation of Cole Capital revenues. Revenue Recognition - Other The Company entered into a services agreement (the “Services Agreement”) with the Cole Purchaser, pursuant to which the Company will continue to provide certain services to the Cole Purchaser and the Cole REITs, including operational real estate support, (“Transition Services Revenues”) through March 31, 2019 (or, if later, the date of the last government filing other than a tax filing made by any of the Cole REITs with respect to its 2018 fiscal year). Under the terms of the Services Agreement, the Company will be entitled to receive reimbursement for certain of the services provided. The Company recorded Transition Services Revenues as costs associated with providing such services were incurred, which coincided with the timing in which the performance obligations of the contract had been met. During the period from February 1, 2018 through December 31, 2018, the Company incurred $15.0 million of such costs and recognized revenues of $15.0 million, which are recorded in other income, net in the consolidated statement of operations. The Company may also receive additional fees over the next six years if future revenues of Cole Capital exceed a specified dollar threshold (the “Net Revenue Payments”), up to an aggregate of $80.0 million in Net Revenue Payments. F-25 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Litigation, Merger and Other Non-Routine Costs, Net of Insurance Recoveries External costs incurred in relation to prior mergers and litigation resulting therefrom are included in litigation, merger and other non-routine costs, net of insurance recoveries in the consolidated statements of operations. The Company has also incurred legal fees and other costs associated with litigations and investigations resulting from the Audit Committee Investigation (defined below), which are considered non-routine. The Company has directors’ and officers’ insurance and the insurance carriers have paid certain defense costs subject to standard reservation of rights under the respective policies. Litigation, merger and other non-routine costs, net of insurance recoveries include the following costs (amounts in thousands): Merger Related Costs: Transfer taxes(1) Litigation and other non-routine costs: Audit Committee Investigation and related matters (2) Legal fees and expenses (3) Litigation settlements (4) Total costs Insurance recoveries (5) Total ___________________________________ Year Ended December 31, 2018 2017 2016 $ $ $ — $ (1,595) $ 562 59,755 530 233,246 293,531 (2,568) 290,963 $ $ 49,434 421 — 48,260 (300) 47,960 $ $ 24,207 311 — 25,080 (21,196) 3,884 (1) The negative balance for the year ended December 31, 2017 is a result of estimated costs accrued in prior periods that exceeded actual expenses incurred. (2) Includes all fees and costs associated with various litigations and investigations prompted by the results of the 2014 investigation conducted by the audit committee (the “Audit Committee”) of the Company’s Board of Directors (the “Audit Committee Investigation”), including fees and costs incurred pursuant to the Company’s advancement obligations, litigation related thereto and in connection with related insurance recovery matters, net of accrual reversals. During the year ended December 31, 2018, the Company reversed an accrual of $10.9 million, as the Company was legally released from certain advancement obligations, and the accrued amounts were paid directly by the Company’s insurers to the payees subsequent to December 31, 2018. There were no reversals in the years ended December 31, 2017 and 2016. (3) Includes legal fees and expenses associated with litigation resulting from prior mergers and related insurance recovery matters and excludes amounts presented in income from discontinued operations, net of income taxes in the consolidated statements of operations for the year ended December 31, 2018. (4) Refer to Note 10 – Commitments and Contingencies for additional information. (5) $2.3 million recorded during the year ended December 31, 2018 relates to litigation resulting from prior mergers. Loss Contingencies The Company records a liability in the consolidated financial statements for loss contingencies when a loss is known or considered probable and the amount is reasonably estimable. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a material loss is reasonably possible but not known or probable, and is reasonably estimable, the estimated loss or range of loss is disclosed. Equity-based Compensation The Company has an equity-based incentive award plan for non-executive directors, officers, other employees and advisors or consultants who provide services to the Company, as applicable, and a non-executive director restricted share plan, which are accounted for under U.S. GAAP for share-based payments. The expense for such awards is recognized over the vesting period or when the requirements for exercise of the award have been met. See Note 12 – Equity-based Compensation for additional information on these plans. Per Share Data Income (loss) per basic share of Common Stock is calculated by dividing net income (loss) less dividends on unvested Restricted Shares of Common Stock and dividends on preferred stock by the weighted-average number of shares of Common Stock issued and outstanding during such period. Diluted income (loss) per share of Common Stock considers the effect of potentially dilutive shares of Common Stock outstanding during the period. Income Taxes The General Partner elected to be taxed as a REIT for U.S. federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code commencing with the taxable year ended December 31, 2011. We believe we are organized and operating in such a manner as to qualify to be taxed as a REIT for the taxable year ended December 31, 2018. As a REIT, the F-26 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) General Partner is generally not subject to federal income tax on taxable income that it distributes to its stockholders so long as it distributes at least 90% of its annual taxable income (computed without regard to the deduction for dividends paid and excluding net capital gains). However, the General Partner, its TRS entities, and the OP are still subject to certain state and local income, franchise and property taxes in the various jurisdictions in which they operate. The General Partner may also be subject to federal income taxes on certain income and excise taxes on its undistributed income. The OP is classified as a partnership for U.S. federal income tax purposes. As a partnership, the OP is not a taxable entity for U.S. federal income tax purposes. Instead, each partner in the OP is required to include its allocable share of the OP’s income, gains, losses, deductions and credits for each taxable year. Under the LPA, the OP is to conduct business in such a manner as to permit the General Partner at all times to qualify as a REIT. A TRS is a subsidiary of a REIT that is subject to federal, state and local income taxes, as applicable. The Company’s use of a TRS enables it to engage in certain business activities while complying with the REIT qualification requirements and to retain any income generated by these businesses for reinvestment without the requirement to distribute those earnings. The Company conducted substantially all of the Cole Capital business activities through a TRS until it sold the Cole Capital business on February 1, 2018. During the year ended December 31, 2018, the Company conducted all of its business in the United States, Puerto Rico and Canada and filed income tax returns in the U.S. federal jurisdiction, the Canadian federal jurisdiction and various state and local jurisdictions. With few exceptions, the Company is no longer subject to routine examinations by taxing authorities for years before 2014. Certain of the Company’s intercompany transactions that have been eliminated in consolidation for financial accounting purposes are also subject to taxation. The Company provides for income taxes in accordance with current authoritative accounting and tax guidance. The tax provision or benefit related to significant or unusual items is recognized in the quarter in which those items occur. In addition, the effect of changes in enacted tax laws, rates or tax status is recognized in the quarter in which the change occurs. The accounting estimates used to compute the provision for or benefit from income taxes may change as new events occur, additional information is obtained or the tax environment changes. During the years ended December 31, 2018, 2017 and 2016, the Company recognized state and local income and franchise tax expense of $4.7 million, $6.9 million and $6.0 million, respectively, which are included in provision for income taxes in the accompanying consolidated statements of operations. In addition, the Company recorded a provision for federal income taxes of $0.4 million and $1.1 million for the years ended December 31, 2018 and 2016 related to a TRS entity, which is also included in provision for income taxes in the accompanying consolidated statements of operations. No provision for federal income taxes related to a TRS entity was recorded for the year ended December 31, 2017. The provision for or benefit from income taxes attributable to the Cole Capital business, substantially all of which was conducted through a TRS entity, is included in discontinued operations for all periods presented, as discussed in Note 4 — Discontinued Operations. The Company had no unrecognized tax benefits as of or during the years ended December 31, 2018, 2017 or 2016. Any interest and penalties related to unrecognized tax benefits would be recognized in provision for income taxes in the accompanying consolidated statements of operations. As of December 31, 2018, the OP and the General Partner had no material uncertain income tax positions. Recent Accounting Pronouncements Adopted Accounting Standards In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income (loss). An entity may choose to measure equity investments that do not have a readily determinable fair value at costs minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issue. ASU 2016-01 is effective for fiscal years, and interim periods within, beginning after December 15, 2017 and requires prospective treatment of equity securities without readily determinable fair values. The Company adopted ASU 2016-01 as of January 1, 2018 and recorded a $5.1 million gain, which is included in other income, net in the accompanying consolidated statements of operations, on measuring the Company’s investments in the Cole REITs at fair value after the investments were no longer accounted for using the equity method. F-27 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) In February 2017, the FASB issued ASU 2017-05, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”), which clarifies the following: 1) nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty; 2) an entity should allocate consideration to each distinct asset by applying the guidance in Topic 606 on allocating the transaction price to performance obligations; and 3) requires entities to derecognize a distinct nonfinancial asset or distinct in substance nonfinancial asset in a partial sale transaction when it (a) does not have (or ceases to have) a controlling financial interest in the legal entity that holds the asset in accordance with Subtopic 810 and (b) transfers control of the asset in accordance with Topic 606. The adoption of this standard will result in higher gains on the sale of partial real estate interests, including contributions of nonfinancial assets to a joint venture or other noncontrolling investee, due to recognizing the full gain when the derecognition criteria are met and recording the retained noncontrolling interest at its fair value. ASU 2017-05 is effective for annual periods, and interim periods therein, beginning after December 15, 2017. ASU 2017-05 was adopted during the first quarter of fiscal year 2018, in conjunction with the Revenue ASUs, using the modified retrospective approach. The Company also elected the practical expedient to only apply the guidance to contracts that were not completed upon adoption. At adoption, the Company did not have any contracts that were not completed within the scope of ASU 2017-05 and as such, the adoption of ASU 2017-05 did not impact the Company’s financial statements. Accounting Standards Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, which will require that a lessee recognize assets and liabilities on the balance sheet for all leases with a lease term of more than 12 months, with the result being the recognition of a right of use (“ROU”) asset and a lease liability and the disclosure of key information about the entity’s leasing arrangements. The lessor accounting model under ASU 2016-02 is similar to existing guidance, however it limits the capitalization of initial direct leasing costs, such as internally generated costs. The Company expects to elect all practical expedients permitted under ASC Topic 842, other than the hindsight practical expedient, which permits entities to use hindsight in determining the lease terms. Accordingly, the Company will retain distinction between a finance lease (i.e., capital leases under existing guidance) and an operating lease and account for its existing operating leases as operating leases under the new guidance, without reassessing (a) whether the contracts contain a lease under ASC Topic 842, (b) whether classification of the operating leases would be different in accordance with ASC Topic 842, or (c) whether the unamortized initial direct costs before transition adjustments would have met the definition of initial direct costs in ASC Topic 842 at lease commencement. In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842. The amendments help address transition guidance as it relates to land easements. As the Company plans to elect this practical expedient, it will only evaluate new or modified land easements upon adoption of Topic 842. In July 2018, the FASB issued ASU 2018-10, Leases (Topic 842), which contained targeted improvements to amend inconsistencies and clarify guidance that were brought about by stakeholders. Additionally, in July 2018, the FASB issued ASU 2018-11, Leases (Topic 842), which provided the following practical expedients: (1) a transition method that allows entities to apply the new standard at the adoption date and to recognize a cumulative-effect adjustment to the opening balance of retained earnings effective at the adoption date; and (2) the option for lessors to not separate lease and non-lease components provided that certain criteria are met. The Company plans to elect the practical expedients included in ASU 2018-11. As the Company is not electing the hindsight practical expedient, the Company does not expect to have a cumulative effect adjustment to retained earnings upon adoption. In December 2018, the FASB issued ASU 2018-20, Narrow-Scope Improvements for Lessors, Leases (Topic 842). This ASU 2018-20 provides an election for lessors to exclude sales and related taxes from consideration in the contract, requires lessors to exclude from revenue and expense lessor costs paid directly to a third party by lessees, and clarifies lessors’ accounting for variable payments related to both lease and nonlease components. The Company is currently evaluating the impact of adoption, and anticipates this standard will have a material impact on its consolidated balance sheets. However, the Company does not expect adoption will have a material impact on its consolidated statements of operations. While the Company is continuing to assess potential impacts of the standard, it currently expects the most significant impact will be the recognition of ROU assets and lease liabilities for operating leases. Our initial ROU asset and liability will be approximately $223.0 million. The Company expects its accounting for capital leases to remain substantially unchanged. Leases pursuant to which the Company is the lessee primarily consist of approximately 200 leases, of which the majority are ground leases. The Company will adopt ASU 2016-12 and its related amendments beginning January 1, 2019. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13”). ASU 2016-13 is intended to improve financial reporting by requiring more timely recognition of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. ASU 2016-13 requires that financial F-28 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The amendments in ASU 2016-13 require the Company to measure all expected credit losses based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets and eliminates the “incurred loss” methodology under current U.S. GAAP. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses (“ASU 2018-19”). This ASU clarifies that receivables from operating leases are accounted for using the lease guidance and not as financial instruments. ASU 2016-13 and ASU 2018-19 are effective for fiscal years, and interim periods within, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within, beginning after December 15, 2018. The Company is currently evaluating the impact these amendments will have on its consolidated financial statements. Note 3– Real Estate Investments and Related Intangibles Property Acquisitions During the year ended December 31, 2018, the Company acquired controlling financial interests in 52 commercial properties for an aggregate purchase price of $502.7 million (the “2018 Acquisitions”), which includes one land parcel for build-to-suit development, further discussed below, $2.1 million related to an outstanding tenant improvement allowance recorded as a payable as of the acquisition date and for which the Company received a credit at close, and $2.6 million of external acquisition-related expenses that were capitalized. During the year ended December 31, 2017, the Company acquired a controlling interest in 88 commercial properties and three land parcels for an aggregate purchase price of $748.8 million (the “2017 Acquisitions”), which includes $3.3 million of external acquisition-related expenses that were capitalized and includes 22 properties acquired in a nonmonetary exchange discussed below. During the year ended December 31, 2016, the Company acquired a controlling interest in eight commercial properties for an aggregate purchase price of $100.2 million (the “2016 Acquisitions”). Prior to the adoption of ASU 2017-01, costs related to property acquisitions were expensed as incurred. The Company has not included pro forma information for the Company's 2016 Acquisitions, which were acquired prior to the adoption of ASU 2017-01 and met the definition of a business combination, as they did not have a material impact on the Company's financial position or results of operations. The following table presents the allocation of the fair values of the assets acquired and liabilities assumed during the periods presented (in thousands): Real estate investments, at cost: Land Buildings, fixtures and improvements Total tangible assets Acquired intangible assets: In-place leases and other intangibles (1) Above-market leases (2) Assumed intangible liabilities: Below-market leases (3) Total purchase price of assets acquired ____________________________________ Year Ended December 31, 2018 2017 2016 $ $ 86,285 350,942 437,227 $ 110,634 523,445 634,079 62,791 2,750 105,940 10,445 23,187 67,865 91,052 9,613 — (116) 502,652 $ (1,680) 748,784 $ (471) 100,194 $ (1) The weighted average amortization period for acquired in-place leases and other intangibles is 16.3 years, 15.8 years and 13.8 years for 2018 Acquisitions, 2017 Acquisitions and 2016 Acquisitions, respectively. (2) The weighted average amortization period for acquired above-market leases is 10.8 years and 18.0 years for 2018 Acquisitions and 2017 Acquisitions, respectively. There were no acquired above-market leases during the year ended December 31, 2016. (3) The weighted average amortization period for acquired intangible lease liabilities is 9.9 years, 13.8 years and 10.0 years for 2018 Acquisitions, 2017 Acquisitions and 2016 Acquisitions, respectively. As of December 31, 2018, the Company invested $3.5 million, including $0.5 million of external acquisition-related expenses that were capitalized, in one build-to-suit development project. The Company’s estimated remaining committed investment is $24.9 million, and the project is expected to be completed within the next 12 months. F-29 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Future Lease Payments The following table presents future minimum base rent payments due to the Company over the next five years and thereafter. These amounts exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes among other items (in thousands): 2019 2020 2021 2022 2023 Thereafter Total Future Minimum Operating Lease Base Rent Payments $ $ 1,107,610 1,080,639 1,042,346 972,564 890,327 5,387,232 10,480,718 Future Minimum Direct Financing Lease Payments (1) 2,448 $ 2,135 2,014 1,925 1,541 707 10,770 $ ____________________________________ (1) Related to 25 properties which are subject to direct financing leases and, therefore, revenue is recognized as direct financing lease income on the discounted cash flows of the lease payments. Amounts reflected are the minimum base rental cash payments due to the Company under the lease agreements on these respective properties. Property Dispositions and Real Estate Assets Held for Sale During the year ended December 31, 2018, the Company disposed of 149 properties, including one property conveyed to a lender in a deed-in-lieu of foreclosure transaction as discussed in Note 7 – Debt, for an aggregate gross sales price of $526.4 million, of which our share was $504.3 million after the profit participation payments related to the disposition of 34 Red Lobster properties. The dispositions resulted in proceeds of $496.7 million after closing costs. The Company recorded a gain of $96.2 million related to the sales which is included in gain on disposition of real estate and real estate assets held for sale, net in the accompanying consolidated statements of operations. During the year ended December 31, 2018, the Company also disposed of one property owned by an unconsolidated joint venture for a gross sales price of $34.1 million, of which our share was $17.1 million based on our ownership interest in the joint venture, resulting in proceeds of $5.6 million after debt repayments of $20.4 million and closing costs. The Company recorded a gain of $0.7 million related to the sale and liquidation of the joint venture, which is included in equity in income and gain on disposition of unconsolidated entities in the accompanying consolidated statements of operations. During the year ended December 31, 2017, the Company disposed of 137 properties, including one property owned by a consolidated joint venture, six properties transferred to the lender in either a deed-in-lieu of foreclosure or foreclosure sale transaction as discussed in Note 7 – Debt, and 15 properties disposed of in connection with a nonmonetary exchange discussed below, for an aggregate gross sales price of $594.9 million, of which our share was $574.4 million after the profit participation payment related to the disposition of 31 Red Lobster properties and the consolidated joint venture partner’s share of the sales price. The dispositions resulted in proceeds of $445.5 million after a mortgage loan assumption of $66.0 million and closing costs. Additionally, the Company’s tax provision for the year ended December 31, 2017 included $1.7 million of Canadian tax gain on the sale of certain Canadian properties. The Company recorded a gain of $64.7 million, which is included in gain on disposition of real estate and real estate assets held for sale, net in the accompanying consolidated statements of operations. During the year ended December 31, 2016, the Company disposed of 301 properties, for an aggregate gross sales price of $1.08 billion, of which our share was $1.04 billion after the profit participation payment related to the disposition of 70 Red Lobster properties. The dispositions resulted in proceeds of $958.4 million after a mortgage loan assumption of $55.0 million and closing costs. The Company recorded a gain of $45.7 million, which included $67.8 million of goodwill allocated to the cost basis of such properties, which is included in gain on disposition of real estate and real estate assets held for sale, net in the accompanying consolidated statements of operations. F-30 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) During the year ended December 31, 2016, the Company also disposed of one property owned by an unconsolidated joint venture for a gross sales price of $113.5 million, of which our share was $102.1 million based on our ownership interest in the joint venture, resulting in proceeds of $42.3 million after debt repayments of $57.0 million and closing costs. The Company recorded a gain of $10.2 million related to the sale, which is included in equity in income and gain on disposition of unconsolidated entities in the accompanying consolidated statements of operations. As of December 31, 2018, there were five properties classified as held for sale with a carrying value of $2.6 million, included in assets related to real estate assets held for sale and discontinued operations, net in the accompanying consolidated balance sheet, which are expected to be sold in the next 12 months as part of the Company’s portfolio management strategy. As of December 31, 2017, there were 30 properties classified as held for sale. During the year ended December 31, 2018, the Company recorded a loss of $1.9 million related to held for sale properties. During the year ended December 31, 2017, the Company recorded a loss of $3.1 million related to held for sale properties. During the year ended December 31, 2016, the Company recorded a loss of $5.1 million related to held for sale properties, which included $3.2 million of goodwill allocated to the cost basis of such properties. Intangible Lease Assets and Liabilities Intangible lease assets and liabilities of the Company consisted of the following as of December 31, 2018 and 2017 (amounts in thousands, except weighted-average useful life): Intangible lease assets: In-place leases and other intangibles, net of accumulated amortization of $703,909 and $599,680, respectively Leasing commissions, net of accumulated amortization of $4,048 and $2,902, respectively Above-market lease assets and deferred lease incentives, net of accumulated amortization of $105,936 and $88,335, respectively Total intangible lease assets, net Intangible lease liabilities: Below-market leases, net of accumulated amortization of $89,905 and $73,916, respectively Weighted-Average Useful Life December 31, 2018 December 31, 2017 15.5 10.7 16.4 18.8 $ $ $ 980,971 $ 1,091,433 15,660 13,876 201,875 1,198,506 $ 241,449 1,346,758 173,479 $ 198,551 The aggregate amount of above and below-market leases and deferred lease incentives amortized and included as a net decrease to rental revenue was $4.2 million for the year ended December 31, 2018 and $5.4 million for each of the years ended December 31, 2017 and 2016, respectively. The aggregate amount of in-place leases, leasing commissions and other lease intangibles amortized and included in depreciation and amortization expense was $139.6 million, $154.2 million and $170.0 million for the years ended December 31, 2018, 2017 and 2016, respectively. The following table provides the projected amortization expense and adjustments to rental revenue related to the intangible lease assets and liabilities for the next five years as of December 31, 2018 (amounts in thousands): In-place leases and other intangibles: Total projected to be included in amortization expense $ 126,457 $ 119,161 $ 111,335 $ 97,159 $ 86,311 2019 2020 2021 2022 2023 Leasing commissions: Total projected to be included in amortization expense 1,911 1,778 1,620 1,556 1,359 Above-market lease assets and deferred lease incentives: Total projected to be deducted from rental revenue 20,870 20,456 20,027 19,213 18,270 Below-market lease liabilities: Total projected to be included in rental revenue 17,973 16,821 15,656 14,809 13,924 F-31 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Nonmonetary Exchange During the year ended December 31, 2017, the Company completed a nonmonetary exchange through the simultaneous acquisition of 22 Bob Evans properties and disposition of 15 Red Lobster properties. Pursuant to Nonmonetary Transactions, ASC (Topic 845), the cost of a nonmonetary asset acquired in exchange for another nonmonetary asset is the fair value of the asset surrendered to obtain the acquired nonmonetary asset, and a gain or loss should be recognized on the exchange. The fair value of the asset received should be used to measure the cost if the fair value of the asset received is more reliable than the fair value of the asset surrendered. The Company estimated the fair value of the Bob Evans and Red Lobster properties using valuation techniques consistent with the income approach and concluded that the fair value was $50.1 million. As the fair value of the assets received exceeded the book value of the assets surrendered, the Company recorded a gain of $7.4 million, which is included in gain on disposition of real estate and real estate assets held for sale, net in the accompanying consolidated statements of operations. Consolidated Joint Ventures The Company had an interest in one consolidated joint venture that owned one property as of December 31, 2018 and 2017. As of December 31, 2018 and 2017, the consolidated joint venture had total assets of $32.5 million and $33.7 million, of which $29.9 million and $30.7 million, respectively, were real estate investments, net of accumulated depreciation and amortization. The property was secured by a mortgage note payable, which was non-recourse to the Company and had a balance of $14.0 million and $14.9 million, as of December 31, 2018 and 2017, respectively. The Company has the ability to control operating and financing policies of the consolidated joint venture. There are restrictions on the use of these assets as the Company would generally be required to obtain the approval of the joint venture partner in accordance with the joint venture agreement for any major transactions. The Company and the joint venture partner are subject to the provisions of the joint venture agreement, which includes provisions for when additional contributions may be required to fund certain cash shortfalls. Unconsolidated Joint Ventures As of December 31, 2018, the Company held an investment in an unconsolidated joint venture that owned one property with a carrying value of $35.3 million. As of December 31, 2017, the Company held investments in two unconsolidated joint ventures that each owned one property with an aggregate carrying value of $39.5 million. During the year ended December 31, 2018, the Company disposed of one property owned by an unconsolidated joint venture as previously discussed in the “Property Dispositions and Real Estate Assets Held for Sale” section herein. The Company had a 90% legal ownership interest in the unconsolidated joint venture at December 31, 2018 and December 31, 2017 and accounts for its investment using the equity method of accounting as the Company has the ability to exercise significant influence, but not control, over operating and financing policies of the investment. The equity method of accounting requires the investment to be initially recorded at cost and subsequently adjusted for the Company’s share of equity in earnings and distributions from the joint venture. During the year ended December 31, 2018 the Company recognized $1.2 million of net income from unconsolidated joint ventures. During the years ended December 31, 2017 and 2016 the Company recognized $3.3 million and $0.9 million of net income, respectively, from two unconsolidated joint ventures. The Company’s legal ownership interest may, at times, not equal the Company’s economic interest because of various provisions in certain joint venture agreements regarding distributions of cash flow based on capital account balances, allocations of profits and losses and payments of preferred returns. The carrying amount of the unconsolidated joint venture was greater than the underlying equity in net assets by $4.7 million as of December 31, 2018. The carrying amount of the unconsolidated joint ventures was greater than the underlying equity in net assets by $8.6 million as of December 31, 2017. This difference relates to a purchase price allocation of goodwill and a step up in fair value of the investment assets acquired in connection with mergers. The step up in fair value was allocated to the individual investment assets and is being amortized in accordance with the Company’s depreciation policy. The Company and the unconsolidated joint venture partner are subject to the provisions of the applicable joint venture agreement, which includes provisions for when additional contributions may be required to fund certain cash shortfalls, including the Company’s share of expansion project capital expenditures. F-32 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Note 4 — Discontinued Operations On November 13, 2017, the Company entered into a purchase and sale agreement (as amended by that certain First Amendment to the Purchase and Sale Agreement, dated as of February 1, 2018, the “Cole Capital Purchase and Sale Agreement”). On February 1, 2018, the Company completed the sale of its investment management segment, Cole Capital, under the terms of the Cole Capital Purchase and Sale Agreement. Substantially all of the Cole Capital segment’s operations were conducted through Cole Capital Advisors, Inc. (“CCA”), an Arizona corporation and a wholly owned subsidiary of the OP. The OP sold all of the issued and outstanding shares of common stock of CCA and certain of CCA’s subsidiaries to the Cole Purchaser, for approximately $120.0 million paid in cash at closing. The Company could also receive up to an aggregate of $80.0 million in Net Revenue Payments. There were no Net Revenue Payments received or earned for 2018. Substantially all of the Cole Capital segment financial results are reflected in the financial statements as discontinued operations. The following is a summary of the assets and liabilities related to discontinued operations and real estate assets held for sale as of December 31, 2018 and 2017 (in thousands): Carrying amount of major classes of assets included in discontinued operations: Cash Intangible assets, net (1) Other assets, net (2) Goodwill (3) Due from Cole REITs, net Loss recognized on classification as held for sale (4) Assets related to discontinued operations, net Carrying amount of major classes of liabilities included in discontinued operations: Accounts payable and accrued expenses Other liabilities Due to Cole REITs Liabilities related to discontinued operations ___________________________________ December 31, 2018 December 31, 2017 $ $ $ $ — $ — — — — — — $ — $ — — — $ 2,198 9,892 6,975 124,812 1,284 (19,509) 125,652 14,269 1,512 100 15,881 (1) The intangible assets consisted of management and advisory contracts that the Company had with certain Cole REITs. Accumulated amortization was $44.1 million as of December 31, 2017. (2) Includes program development costs of $3.3 million as of December 31, 2017, which were net of reserves of $7.6 million. (3) The Company performed the annual goodwill test using the $120.0 million cash proceeds provided for under the Cole Capital Purchase and Sale Agreement, plus the estimated fair value of the Net Revenue Payments and determined the carrying amount exceeded the estimated fair value. As such, no goodwill impairment was recorded during the year ended December 31, 2017. (4) The Company recognized a loss of $20.0 million on classification of the discontinued operations as held for sale, of which $0.5 million represented estimated costs to sell that were subsequently accrued in accounts payable and accrued expenses as of December 31, 2017. In determining the loss recognized on classification as held for sale, the Company elected to account for the future Net Revenue Payments as a gain contingency. Under this approach, the Company will not recognize any Net Revenue Payments until realized. F-33 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) The following is a summary of the financial information for discontinued operations for the years ended December 31, 2018, 2017 and 2016 (in thousands): Revenues: Offering-related fees and reimbursements Transaction service fees and reimbursements Management fees and reimbursements Total revenues Operating expenses: Cole Capital reallowed fees and commissions Transaction costs (1) General and administrative Amortization of intangible assets Goodwill and intangible asset impairments Total operating expenses Other income, net Loss on disposition and assets held for sale Income (loss) before taxes Benefit from (provision for) income taxes Income (loss) from discontinued operations, net of income taxes ____________________________________ Year Ended December 31, 2018 2017 2016 1,027 334 6,452 7,813 $ 16,096 $ 36,526 13,929 76,214 106,239 $ $ 12,533 68,686 117,745 602 (654) 4,450 — — 4,398 — (1,815) 1,600 2,095 3,695 $ 23,174 9,879 — 3,802 82,558 63,783 26,148 14,490 120,931 — 252,811 91,954 292 464 (20,027) — (134,774) (5,278) (13,839) 10,837 (19,117) $ (123,937) $ $ $ (1) The negative balance for the year ended December 31, 2018 is a result of estimated costs accrued in prior periods that exceeded actual expenses incurred. The following is a summary of cash flows related to discontinued operations for the years ended December 31, 2018, 2017 and 2016 (in thousands): Cash flows related to discontinued operations: Cash flows (used in) provided by operating activities Cash flows provided by investing activities Income Taxes Year Ended December 31, 2018 2017 2016 $ $ (10,468) $ $ 122,915 33,232 $ 35,251 — $ — Cole Capital’s business, substantially all of which was conducted through a TRS, recognized a benefit of $2.1 million for the year ended December 31, 2018, a provision of $13.8 million the year ended December 31, 2017 and a benefit of $10.8 million for the year ended December 31, 2016. F-34 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) The following table presents the reconciliation of the (benefit from) provision for income taxes with the amount computed by applying the statutory federal income tax rate to loss before income taxes for the years ended December 31, 2018, 2017 and 2016 (in thousands): Income (loss) before taxes Less: Income from non-taxable entities Income (loss) attributable to taxable subsidiaries before income taxes Federal provision at statutory rate Impairment of goodwill Nondeductible portion of transaction costs and loss recognized on classification as held for sale Impact of change in federal tax rate Impact of valuation allowance State income taxes and other Total (benefit from) provision for income taxes - Cole Capital $ Year Ended December 31, 2018 2017 $ 1,600 (685) (5,278) $ (9,523) 2016 (134,774) (9,008) 915 $ (14,801) $ (143,782) $ $ 192 — (719) — (1,158) (410) (2,095) $ (5,180) — 8,283 3,481 6,165 1,090 13,839 $ (50,324) 42,327 — — — (2,840) (10,837) The following table presents the components of the (benefit from) provision for income taxes for the years ended December 31, 2018, 2017 and 2016 (in thousands): Current Federal State $ Total current (benefit from) provision for income taxes Deferred Federal State Total deferred (benefit from) provision for income taxes Total (benefit from) provision for income taxes - Cole Capital $ Year Ended December 31, 2018 2017 2016 (74) $ (166) (240) (1,756) (99) (1,855) (2,095) $ (120) $ 602 482 12,016 1,341 13,357 13,839 $ 2,244 (2,762) (518) (9,021) (1,298) (10,319) (10,837) F-35 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Note 5 – Rent and Tenant Receivables and Other Assets, Net Rent and tenant receivables and other assets, net consisted of the following as of December 31, 2018 and 2017 (in thousands): December 31, 2018 December 31, 2017 Straight-line rent receivable, net (1) Accounts receivable, net (2) Deferred costs, net (3) Investment in direct financing leases, net Mortgage notes receivable, net (4) Leasehold improvements, property and equipment, net (5) Investment in Cole REITs Prepaid expenses Other assets, net Income tax receivable Restricted escrow deposits Investment securities, at fair value(6) Total ___________________________________ $ $ 259,106 36,939 17,515 13,254 10,164 9,754 7,844 5,022 3,594 1,760 1,140 — 366,092 $ $ 230,529 36,921 5,746 19,539 20,294 12,089 3,264 6,493 5,003 3,213 4,995 40,974 389,060 (1) Allowance for uncollectible accounts included in straight-line rent receivable, net was $1.0 million and $2.0 million as of December 31, 2018 and 2017, respectively. As of December 31, 2018, the allowance related to suspended revenue recognition was $0.1 million. As of December 31, 2017, there was no allowance related to suspended revenue recognition. (2) In the event that the collectability of a receivable is uncertain, the Company will record an increase in the allowance for uncollectible accounts in the consolidated balance sheets and bad debt expense in property operating expenses in the consolidated statements of operations. Allowance for uncollectible accounts was $5.3 million and $6.3 million as of December 31, 2018 and 2017, respectively. The Company suspends revenue recognition when the collectability of amounts due pursuant to a lease is no longer reasonably assured. As of December 31, 2018 and 2017, the allowance related to suspended revenue recognition was $9.1 million and $12.6 million, respectively. (3) Amortization expense for deferred costs related to the revolving credit facilities totaled $7.3 million for the year ended December 31, 2018 and $10.4 million for each of the years ended December 31, 2017 and 2016. Accumulated amortization for deferred costs related to the Revolving Credit Facility, as defined in Note 7 – Debt, was $47.6 million and $40.3 million as of December 31, 2018 and 2017, respectively. (4) As of December 31, 2018, the Company owned five mortgage notes receivable with a weighted-average interest rate of 6.4% and weighted-average years to maturity of 12.1 years. During the year ended December 31, 2018, the Company sold three mortgage notes receivable with an aggregate carrying value of $8.8 million at December 31, 2017, resulting in a net gain of $1.7 million, which is included in other income, net in the accompanying consolidated statements of operations. (5) Amortization expense for leasehold improvements totaled $1.2 million for each of the years ended December 31, 2018 and 2017, with no related write-offs. Amortization expense for leasehold improvements totaled $2.3 million for the year ended December 31, 2016, inclusive of write-offs of $1.0 million. Accumulated amortization was $5.9 million and $4.7 million as of December 31, 2018 and 2017, respectively. Depreciation expense for property and equipment totaled $2.3 million, $1.8 million and $3.4 million for the years ended December 31, 2018, 2017 and 2016, respectively, inclusive of write-offs of $0.8 million, $0.6 million and $1.2 million for the years ended December 31, 2018, 2017 and 2016, respectively. Accumulated depreciation was $7.0 million and $5.7 million as of December 31, 2018 and 2017, respectively. (6) During the year ended December 31, 2018, two commercial mortgage-backed securities (“CMBS”) were repaid and six CMBS were sold for an aggregate gross sales price of $36.0 million for a net realized loss of $2.2 million, which is included in other income, net in the accompanying consolidated statements of operations. Note 6 – Fair Value Measures The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. U.S. GAAP guidance defines three levels of inputs that may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. Level 3 – Unobservable inputs reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. F-36 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. Changes in the type of inputs may result in a reclassification for certain assets. The Company does not expect that changes in classifications between levels will be frequent. Items Measured at Fair Value on a Recurring Basis The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2018 and 2017, aggregated by the level in the fair value hierarchy within which those instruments fall (in thousands): Level 1 Level 2 Level 3 Balance as of December 31, 2018 Assets: Derivative assets Investment in Cole REITs Total assets Assets: CMBS Derivative assets Total assets $ $ $ $ — $ — — $ 544 — 544 $ $ — $ 7,844 7,844 Level 1 Level 2 Level 3 — $ — — $ — $ 627 627 $ 40,974 — 40,974 544 7,844 8,388 Balance as of December 31, 2017 40,974 627 41,601 $ $ $ CMBS – The Company’s CMBS were carried at fair value and were valued using Level 3 inputs. The Company used estimated non-binding quoted market prices from the trading desks of financial institutions that are dealers in such securities for similar CMBS tranches that actively participate in the CMBS market. Broker quotes are only indicative of fair value and may not necessarily represent what the Company would receive in an actual trade for the applicable instrument. Management determined that the prices were representative of fair value through its knowledge and experience in the market. The significant unobservable input used in valuing the CMBS was the discount rate or market yield used to discount the estimated future cash flows expected to be received from the underlying investment, which include both future principal and interest payments. Significant increases or decreases in the discount rate or market yield would result in a decrease or increase in the fair value measurement. The following risks were included in the consideration and selection of discount rates or market yields: risk of default, rating of the investment and comparable company investments. Derivative Assets and Liabilities – The Company’s derivative financial instruments relate to interest rate swaps. The valuation of derivative instruments is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and implied volatilities. In addition, credit valuation adjustments are incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the counterparties. Although the Company determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of December 31, 2018 and 2017, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives. As a result, the Company determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. F-37 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Investment in Cole REITs – The fair values of CCIT II and CCPT V were estimated using the net asset value per share. The Company determined that the CCIT III per share primary offering price net of selling commissions and dealer manager fees approximated fair value. Each of the Cole REIT’s share redemption programs includes restrictions that limit the number of shares redeemed by the respective Cole REIT. CCIT II has estimated that it will commence a liquidity event over the next three to five years. CCPT V has estimated that it will commence a liquidity event over the next three to six years following the termination of its initial public offering. CCIT III has estimated that it will commence a liquidity event five to seven years following the termination of its initial public offering. Subsequent to December 31, 2018, CCIT III terminated its primary offering, however it continues to issue shares pursuant to its distribution reinvestment plan. The following are reconciliations of the changes in assets and liabilities with Level 3 inputs in the fair value hierarchy for the year ended December 31, 2018 (in thousands): Beginning balance, January 1, 2018 Total gains and losses Unrealized loss included in other comprehensive income, net Realized loss included in other income, net Unrealized gain included in other income, net Purchases, issuance, settlements Return of principal received Amortization included in net income, net Sale of investments Ending Balance, December 31, 2018 ____________________________________ CMBS $ 40,974 Investment in Cole REITs (1) 3,264 $ (205) (34) — (4,864) 157 (36,028) $ — $ — — 5,102 — — (522) 7,844 (1) As discussed in Note 2 – Summary of Significant Accounting Policies, as of December 31, 2017, the Company accounted for its investment in Cole REITs using the equity method of accounting. Subsequent to the sale of Cole Capital, the Company retained interests in CCIT II, CCIT III and CCPT V, which were carried at fair value as of December 31, 2018. The following are reconciliations of the changes in assets and liabilities with Level 3 inputs in the fair value hierarchy for the year ended December 31, 2017 (in thousands): Beginning balance, January 1, 2017 Total gains and losses Unrealized loss included in other comprehensive income, net Purchases, issuance, settlements Return of principal received Amortization included in net income, net Ending Balance, December 31, 2017 CMBS $ 47,215 (951) (4,388) (902) 40,974 $ F-38 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Items Measured at Fair Value on a Non-Recurring Basis Certain financial and nonfinancial assets and liabilities are measured at fair value on a non-recurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. Real Estate Investments – The Company performs quarterly impairment review procedures, primarily through continuous monitoring of events and changes in circumstances that could indicate the carrying value of its real estate assets may not be recoverable. As part of the Company’s quarterly impairment review procedures, net real estate assets representing 70 properties were deemed to be impaired and their carrying values totaling $134.0 million were reduced to their estimated fair value of $79.4 million, resulting in impairment charges of $54.6 million during the year ended December 31, 2018. The impairment charges relate to certain office, retail and restaurant properties that, during 2018, management identified for potential sale or determined, based on discussions with the current tenants, would not be re-leased. During the year ended December 31, 2017, net real estate assets related to 69 properties, with carrying values totaling $161.9 million, were deemed to be impaired and their carrying values were reduced to their estimated fair values of $111.4 million, resulting in impairment charges of $50.5 million. The majority of the impairment charges relate to certain office, restaurant and other properties that, during 2017, management identified for potential sale or determined, based on discussions with the current tenants, would not be re-leased. During the year ended December 31, 2016 net real estate assets related to 153 properties, with carrying values totaling $668.2 million, were deemed to be impaired and their carrying values were reduced to their estimated fair values of $485.4 million, resulting in impairment charges of $182.8 million. A majority of the impairment charges related to properties identified by management for potential sale as part of its portfolio management strategy to reduce exposure to office properties. Additionally, a tenant of 59 restaurants filed for bankruptcy. The Company estimates fair values using Level 3 inputs and uses a combined income and market approach, specifically using discounted cash flow analysis and recent comparable sales transactions. The evaluation of real estate assets for potential impairment requires the Company’s management to exercise significant judgment and make certain key assumptions, including, but not limited to, the following: (1) capitalization rate; (2) discount rates; (3) number of years property will be held; (4) property operating expenses; and (5) re-leasing assumptions including number of months to re-lease, market rental revenue and required tenant improvements. There are inherent uncertainties in making these estimates such as market conditions and performance and sustainability of the Company’s tenants. For the Company’s impairment tests for the real estate assets during the year ended December 31, 2018, the Company used a range of discount rates from 7.4% to 8.5% with a weighted-average rate of 7.9% and capitalization rates from 6.9% to 8.5% with a weighted-average rate of 7.8%. The following table presents the impairment charges by asset class recorded during the years ended December 31, 2018, 2017 and 2016 (dollar amounts in thousands): Properties impaired Asset classes impaired: Investment in real estate assets, net Investment in direct financing leases, net Below-market lease liabilities, net Total impairment loss Year Ended December 31, 2018 2017 2016 70 69 153 $ $ 53,562 1,381 (296) 54,647 $ $ 50,087 553 (92) 50,548 $ $ 183,240 — (421) 182,819 F-39 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Fair Value of Financial Instruments The fair value of short-term financial instruments such as cash and cash equivalents, restricted cash, due to affiliates and accounts payable approximate their carrying value in the accompanying consolidated balance sheets due to their short-term nature and are classified as Level 1 under the fair value hierarchy. The fair values of the Company’s financial instruments are reported below (dollar amounts in thousands): Level Carrying Amount at December 31, 2018 Fair Value at December 31, 2018 Carrying Amount at December 31, 2017 Fair Value at December 31, 2017 Assets: Mortgage notes receivable, net 1, 3 Liabilities (1): Mortgage notes payable and other debt, net Corporate bonds, net Convertible debt, net Credit facility Total liabilities 2 2 2 2 $ $ $ 10,164 $ 10,164 $ 20,294 $ 28,272 1,933,209 3,395,885 398,591 403,000 6,130,685 $ $ 1,961,496 3,368,928 396,905 403,000 6,130,329 $ $ 2,095,690 2,848,768 992,218 185,000 6,121,676 $ $ 2,144,522 2,922,027 1,012,349 185,000 6,263,898 _______________________________________________ (1) Current and prior period liabilities’ carrying and fair values exclude net deferred financing costs. Mortgage notes receivable, net – The fair value of the Company’s mortgage notes receivable at December 31, 2017 were valued using Level 3 inputs, which were estimated with a discounted cash flow analysis, utilizing scheduled cash flows and discount rates estimated by management to approximate market interest rates. As discussed in Note 16 – Subsequent Events, the Company sold four of the remaining five mortgage notes receivable subsequent to December 31, 2018. In connection with the Company’s decision to sell and classify them as held for sale, the fair value of the Company’s mortgage notes receivable at December 31, 2018 were estimated using signed purchase and sale agreements for the four sold subsequent to December 31, 2018 and for the one remaining mortgage note receivable, the fair value was estimated using bids obtained by third-party valuation services that utilize observable market inputs. This resulted in transfers from Level 3 to Level 1. Debt – The fair value is estimated by an independent third party using a discounted cash flow analysis, based on management’s estimates of observable market interest rates. Corporate bonds and convertible debt are valued using quoted market prices in active markets with limited trading volume when available. F-40 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Note 7 – Debt As of December 31, 2018, the Company had $6.1 billion of debt outstanding, including net premiums and net deferred financing costs, with a weighted-average years to maturity of 4.2 years and a weighted-average interest rate of 4.3%. The following table summarizes the carrying value of debt as of December 31, 2018 and 2017, and the debt activity for the year ended December 31, 2018 (in thousands): Balance as of December 31, 2017 Debt Issuances Repayments, Extinguishment and Assumptions Accretion and Amortization Balance as of December 31, 2018 Year Ended December 31, 2018 Mortgage notes payable: Outstanding balance Net premiums (1) Deferred costs Mortgages notes payable, net Corporate bonds: Outstanding balance Discount (2) Deferred costs Corporate bonds, net Convertible debt: Outstanding balance Discount (2) Deferred costs Convertible debt, net Credit facility: Outstanding balance Deferred costs (3) Credit facility, net $ $ 2,071,038 24,652 (12,998) 2,082,692 $ 187 — (43) 144 (154,093) $ (191) 30 (154,254) — $ (8,384) 2,459 (5,925) 2,850,000 (1,232) (27,274) 2,821,494 1,000,000 (7,782) (7,960) 984,258 185,000 — 185,000 550,000 (3,696) (4,825) 541,479 — — — — — — — — (597,500) — — (597,500) 1,934,000 (1,236) 1,932,764 (1,716,000) — (1,716,000) — 813 4,823 5,636 — 3,873 4,252 8,125 — 9 9 1,917,132 16,077 (10,552) 1,922,657 3,400,000 (4,115) (27,276) 3,368,609 402,500 (3,909) (3,708) 394,883 403,000 (1,227) 401,773 Total debt $ 6,073,444 $ 2,474,387 $ (2,467,754) $ 7,845 $ 6,087,922 ____________________________________ (1) Net premiums on mortgage notes payable were recorded upon the assumption of the respective mortgage notes in relation to the various mergers and acquisitions. Amortization of these net premiums is recorded as a reduction to interest expense over the remaining term of the respective mortgage notes using the effective-interest method. (2) Discounts on the corporate bonds and convertible debt were recorded based upon the fair value of the respective debt instruments as of the respective issuance dates. Amortization of these discounts is recorded as an increase to interest expense over the remaining term of the respective debt instruments using the effective-interest method. (3) Deferred costs relate to the Credit Facility Term Loan. F-41 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Mortgage Notes Payable The Company’s mortgage notes payable consisted of the following as of December 31, 2018 (dollar amounts in thousands): Fixed-rate debt (4) Variable-rate debt Total Encumbered Properties 458 1 459 Gross Carrying Value of Collateralized Properties (1) 3,760,194 $ 33,384 3,793,578 $ Outstanding Balance 1,903,095 14,037 1,917,132 $ $ Weighted-Average Interest Rate (2) (5) 4.92% 5.72% 4.93% Weighted-Average Years to Maturity (3) 3.5 0.6 3.4 ____________________________________ (1) Gross carrying value is gross real estate assets, including investment in direct financing leases, net of gross real estate liabilities. (2) Weighted average interest rate is computed using the interest rate in effect until the anticipated repayment date. Should the loan not be repaid at the anticipated repayment date, the applicable interest rate will increase as specified in the respective loan agreement until the extended maturity date. (3) Weighted average years remaining to maturity is computed using the anticipated repayment date as specified in each loan agreement, where applicable. (4) Includes $50.7 million of variable-rate debt fixed by way of interest rate swap arrangements. (5) Weighted-average interest rate for variable-rate debt represents the interest rate in effect as of December 31, 2018. The Company’s mortgage loan agreements generally restrict corporate guarantees and require the maintenance of financial covenants, including maintenance of certain financial ratios (such as debt service coverage ratios and minimum net operating income). The mortgage loan agreements contain no dividend restrictions except in the event of default or when a distribution would drive liquidity below the applicable thresholds. At December 31, 2018, the Company believes that it was in compliance with the financial covenants under the mortgage loan agreements and had no restrictions on the payment of dividends. On April 12, 2018, the Company entered into a deed-in-lieu of foreclosure agreement with the lender of a mortgage loan, secured by one property, with an outstanding balance of $16.2 million at the time of default and conveyed all interest in the property to satisfy the mortgage loan. As a result of the deed-in-lieu of foreclosure transaction, the Company recognized a gain on forgiveness of debt of $5.2 million, which is included in gain (loss) on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations. During the year ended December 31, 2017, the Company entered into deed-in-lieu of foreclosure agreements or completed the foreclosure with the lenders of three mortgage loans, secured by six properties, which resulted in a gain on forgiveness of debt of $20.5 million. The following table summarizes the scheduled aggregate principal repayments due on mortgage notes subsequent to December 31, 2018 (in thousands): 2019 2020 2021 2022 2023 Thereafter Total Total 167,279 265,189 352,768 314,898 144,843 672,155 1,917,132 $ $ F-42 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Corporate Bonds As of December 31, 2018, the OP had $3.40 billion aggregate principal amount of senior unsecured notes (the “Senior Notes”) outstanding comprised of the following (dollar amounts in thousands): Outstanding Balance December 31, 2018 Interest Rate Maturity Date 2019 Senior Notes 2021 Senior Notes 2024 Senior Notes 2025 Senior Notes 2026 Senior Notes 2027 Senior Notes Total balance and weighted-average interest rate $ $ 750,000 400,000 500,000 550,000 600,000 600,000 June 1, 2021 3.000% February 6, 2019 4.125% 4.600% February 6, 2024 4.625% November 1, 2025 4.875% 3.950% August 15, 2027 June 1, 2026 3,400,000 4.129% On October 16, 2018, the Company closed a senior note offering, consisting of $550.0 million aggregate principal amount of the Operating Partnership’s 4.625% Senior Notes due 2025 (the “2025 Senior Notes”). The Senior Notes are guaranteed by the General Partner. The OP may redeem all or a part of any series of the Senior Notes at any time, at its option, for the redemption prices set forth in the indenture governing the Senior Notes. If the redemption date is 30 or fewer days prior to the maturity date with respect to the 2019 Senior Notes and the 2021 Senior Notes, is 60 or fewer days prior to the maturity date with respect to the 2025 Senior Notes or is 90 or fewer days prior to the maturity date with respect to the 2024 Senior Notes, the 2026 Senior Notes and the 2027 Senior Notes, the redemption price will equal 100% of the principal amount of the Senior Notes of the applicable series to be redeemed, plus accrued and unpaid interest on the amount being redeemed to, but excluding, the applicable redemption date. The Senior Notes are registered under the Securities Act of 1933, as amended and are freely transferable. The indenture governing our Senior Notes requires us to maintain financial ratios which include maintaining (i) a maximum limitation on incurrence of total debt less than or equal to 65% of Total Assets (as defined in the indenture), (ii) maximum limitation on incurrence of secured debt less than or equal to 40% of Total Assets (as defined in the indenture), (iii) a minimum debt service coverage ratio of at least 1.5x and (iv) a minimum unencumbered asset value of at least 150% of the aggregate principal amount of all of the outstanding Unsecured Debt (as defined in the indenture). As of December 31, 2018, the Company believes that it was in compliance with the financial covenants of our Senior Notes based on the covenant limits and calculations in place at that time. Convertible Debt During the year ended December 31, 2018, the Company’s convertible senior notes due August 1, 2018 (the “2018 Convertible Notes”) matured and the principal outstanding of $597.5 million, plus accrued and unpaid interest thereon, was repaid. The interest rate on the 2018 Convertible Notes was 3.00% annually. As of December 31, 2018, the Company had convertible senior notes due December 15, 2020 (the “2020 Convertible Notes”) with a balance of $402.5 million outstanding, which excludes the carrying value of the conversion options recorded within additional paid-in capital of $12.8 million and the unamortized discount of $3.9 million. The discount will be amortized over the remaining term of 2.0 years. The 2020 Convertible Notes bear interest at an annual rate of 3.75%. The 2020 Convertible Notes may be converted into cash, shares of the Company’s Common Stock or a combination thereof, in limited circumstances prior to June 15, 2020, and may be converted into such consideration at any time on or after June 15, 2020. As of December 31, 2018, the conversion rate was 66.7249 shares of the Company’s Common Stock per $1,000 principal amount of 2020 Convertible Notes, which reflects adjustments to the initial conversion rate pursuant to the terms of the applicable indenture as a result of cash dividend payments. There were no changes to the terms of the 2020 Convertible Notes during the year ended December 31, 2018 and the Company believes that it was in compliance with the financial covenants pursuant to the indenture governing the 2020 Convertible Notes as of December 31, 2018. F-43 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Credit Facility On May 23, 2018, the General Partner, as guarantor, and the OP, as borrower, entered into a credit agreement with Wells Fargo Bank, National Association as administrative agent and other lenders party thereto (the “Credit Agreement”). The Credit Agreement provides for a $2.0 billion unsecured revolving credit facility (the “Revolving Credit Facility”) and a $900.0 million unsecured term loan facility (the “Credit Facility Term Loan,” together with the Revolving Credit Facility, the “Credit Facility”), which is available through February 23, 2019, for up to four borrowings of delayed-draw term loans. In connection with entering into the Credit Agreement, the OP repaid all of the outstanding obligations under the amended and restated credit agreement dated as of June 30, 2014 (as amended, the “2014 Credit Agreement”) and the 2014 Credit Agreement was terminated. The 2014 Credit Agreement provided for a $2.3 billion revolving credit facility and was scheduled to terminate on June 30, 2018. As of December 31, 2018, the outstanding balance under the Revolving Credit Facility was $253.0 million. As of December 31, 2018, $150.0 million had been drawn on the Credit Facility Term Loan. The maximum aggregate dollar amount of letters of credit that may be outstanding at any one time under the Credit Facility is $50.0 million. The Revolving Credit Facility generally bears interest at an annual rate of London Inter-Bank Offer Rate (“LIBOR”) plus 0.775% to 1.55% or Base Rate plus 0.00% to 0.55% (based upon the General Partner’s then current credit rating). “Base Rate” is defined as the highest of the prime rate, the federal funds rate plus 0.50% or a floating rate based on one month LIBOR plus 1.0%, determined on a daily basis. The Credit Facility Term Loan generally bears interest at an annual rate of LIBOR plus 0.85% to 1.75%, or Base Rate plus 0.00% to 0.75% (based upon the General Partner’s then current credit rating). In addition, the Credit Agreement provides the flexibility for interest rate auctions, pursuant to which, at the Company’s election, the Company may request that lenders make competitive bids to provide revolving loans, which competitive bids may be at pricing levels that differ from the foregoing interest rates. In the event of default, at the election of a majority of the lenders (or automatically upon a bankruptcy event of default with respect to the OP or the General Partner), the commitments of the lenders under the Credit Facility will terminate, and payment of any unpaid amounts in respect of the Credit Facility will be accelerated. The Revolving Credit Facility terminates on May 23, 2022, unless extended in accordance with the terms of the Credit Agreement. The Credit Agreement provides for two six-month extension options with respect to the Revolving Credit Facility, exercisable at the OP’s election and subject to certain customary conditions, as well as certain customary “amend and extend” provisions. Any term loans outstanding under the Credit Facility Term Loan mature on May 23, 2023. At any time, upon timely notice by the OP and subject to any breakage fees, the OP may prepay borrowings under the Credit Facility (subject to certain limitations applicable to the prepayment of any loans obtained through an interest rate auction, as described above). The OP incurs a facility fee equal to 0.10% to 0.30% per annum (based upon the General Partner’s then current credit rating) multiplied by the commitments (whether or not utilized) in respect of the Revolving Credit Facility. In addition, the OP incurs a ticking fee equal to 0.25% multiplied by unused commitments in respect of the Credit Facility Term Loan. The OP also incurs customary administrative agent, letter of credit issuance, letter of credit fronting, extension and other fees. The Credit Facility requires restrictions on corporate guarantees, as well as the maintenance of financial covenants, including the maintenance of certain financial ratios (such as specified debt to equity and debt service coverage ratios). The key financial covenants in the Credit Facility, as defined and calculated per the terms of the Credit Agreement, include maintaining (i) a maximum leverage ratio less than or equal to 60%, (ii) a minimum fixed charge coverage ratio of at least 1.5x, (iii) a secured leverage ratio less than or equal to 45%, (iv) a total unencumbered asset value ratio less than or equal to 60% and (v) a minimum unencumbered interest coverage ratio of at least 1.75x. The Company believes that it was in compliance with the financial covenants pursuant to the Credit Agreement and is not restricted from accessing any borrowing availability under the Credit Facility as of December 31, 2018. In connection with entering into the Credit Agreement, the Company capitalized an aggregate $20.7 million in lender fees and third-party costs in respect of the Revolving Credit Facility and the Credit Facility Term Loan, which will be amortized over the respective terms. Deferred financing costs, net of accumulated amortization, related to the Revolving Credit Facility are included in rent and other tenant receivables and other assets, net in the accompanying consolidated balance sheets. Deferred financing costs, net of accumulated amortization, related to the Credit Facility Term Loan outstanding balance are included in credit facility, net in the accompanying consolidated balance sheets. F-44 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Note 8 – Supplemental Cash Flow Disclosures Supplemental cash flow information was as follows for the years ended December 31, 2018, 2017 and 2016 (in thousands): Supplemental disclosures: Cash paid for interest Cash paid for income taxes Cash received from federal income tax refund Non-cash investing and financing activities: Accrued capital expenditures, tenant improvements and real estate developments Accrued deferred financing costs Distributions declared and unpaid Accrued equity issuance costs Mortgage note payable relieved by foreclosure or a deed-in-lieu of foreclosure Mortgage notes payable assumed in real estate disposition Real estate investments received from a ground lease expiration and other lease related transactions Real estate investments received from a property-related legal settlement Nonmonetary exchanges: Real estate investments received Real estate investments relinquished and gain on disposition Rent and tenant receivables, intangible lease liability and other assets, net Note 9 – Accounts Payable and Accrued Expenses Year Ended December 31, 2018 2017 2016 267,400 5,589 2,939 12,648 67 148,383 $ $ $ $ $ $ 260,951 11,280 16,686 $ $ $ 317,170 20,279 — 6,578 $ 7,701 — $ 3 149,768 $ 149,281 — $ $ 16,200 — $ $ 100,388 — $ 66,000 1,386 $ — $ 259 775 $ $ $ — $ — $ — $ $ 50,204 (47,474) $ (2,511) $ 9 38,050 55,000 — — — — — $ $ $ $ $ $ $ $ $ $ $ $ $ $ Accounts payable and accrued expenses consisted of the following as of December 31, 2018 and 2017 (in thousands): Accrued interest Accrued real estate taxes Accrued legal fees Accounts payable Accrued other Total Note 10 – Commitments and Contingencies Litigation December 31, 2018 43,916 $ 25,208 32,715 2,673 41,099 145,611 $ December 31, 2017 47,116 $ 26,131 30,854 2,570 29,803 136,474 $ The Company is involved in various routine legal proceedings and claims incidental to the ordinary course of its business. There are no material legal proceedings pending against the Company, except as follows: Government Investigations and Litigation Relating to the Audit Committee Investigation As previously reported, on October 29, 2014, the Company filed a Current Report on Form 8-K (the “October 29 8-K”) reporting the Audit Committee’s conclusion, based on the preliminary findings of its investigation, that certain previously issued consolidated financial statements of the Company, including those included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2014 and June 30, 2014, and related financial information should no longer be relied upon. The Company also reported that the Audit Committee had based its conclusion on the preliminary findings of its investigation into concerns regarding accounting practices and other matters that F-45 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) were first reported to the Audit Committee in early September 2014 and that the Audit Committee believed that an error in the calculation of adjusted funds from operations for the first quarter of 2014 had been identified but intentionally not corrected when the Company reported its financial results for the three and six months ended June 30, 2014. Prior to the filing of the October 29 8-K, the Audit Committee previewed for the SEC the information contained in the filing. Subsequent to that filing, the SEC provided notice that it had commenced a formal investigation and issued subpoenas calling for the production of various documents. In addition, the United States Attorney’s Office for the Southern District of New York contacted counsel for the Audit Committee and counsel for the Company with respect to this matter, and the Secretary of the Commonwealth of Massachusetts issued a subpoena calling for the production of various documents. The Company has been cooperating with these regulators in their investigations. In connection with these investigations, on September 8, 2016, the United States Attorney’s Office for the Southern District of New York announced the filing of criminal charges against the Company’s former Chief Financial Officer and former Chief Accounting Officer (the “Criminal Action”), as well as the fact that the former Chief Accounting Officer pleaded guilty to the charges filed. Also on September 8, 2016, the SEC announced the filing of a civil complaint against the same two individuals in the United States District Court for the Southern District of New York. On June 30, 2017, following a jury trial, the former Chief Financial Officer was convicted of the charges filed. Both the former Chief Accounting Officer and the former Chief Financial Officer have entered into settlement agreements with the SEC resolving the charges brought against them. The United States Attorney’s Office has indicated that it does not intend to bring criminal charges against the Company arising from its investigation. In addition, the Company has not been in contact with the Massachusetts regulator since June 2015 and believes the investigation is concluded. In March 2018, investigative staff of the SEC’s enforcement division inquired whether the Company wished to discuss a resolution of potential civil charges the SEC may bring with respect to certain matters investigated by the staff stemming from the announcement made on October 29, 2014. The Company has been cooperating with the SEC staff’s investigation since its inception and is engaged in such discussions with the staff. The timing and substance of the ultimate resolution of these discussions is unknown. As discussed below, the Company and certain of its former officers and directors have been named as defendants in a number of lawsuits filed following the October 29 8-K, including class actions, individual actions and derivative actions seeking money damages and other relief under the federal securities laws and state laws in both federal and state courts in New York, Maryland and Arizona. Between October 30, 2014 and January 20, 2015, the Company and certain of its former officers and directors, among other individuals and entities, were named as defendants in ten securities class action complaints filed in the United States District Court for the Southern District of New York. The court consolidated these actions under the caption In re American Realty Capital Properties, Inc. Litigation, No. 15-MC-00040 (AKH) (the “SDNY Consolidated Securities Class Action”). The plaintiffs filed a second amended class action complaint on December 11, 2015, which asserted claims for violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On September 8, 2016, the court issued an order directing plaintiffs to file a third amended complaint to reflect certain prior rulings by the court in connection with various motions to dismiss. The third amended complaint was filed on September 30, 2016 and the defendants were not required to file new answers. On August 31, 2017, the court issued an order granting plaintiffs’ motion for class certification. Defendants’ petitions seeking leave to appeal the court’s order granting class certification were denied on January 24, 2018. Fact depositions were concluded at the end of 2018 and at a status conference in November 2018, the court ordered all summary judgment motions to be filed by February 8, 2019, with briefing on all motions to be completed by April 5, 2019. The next status conference with the court is scheduled for April 17, 2019 and trial is scheduled for September 9, 2019. F-46 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) The Company, certain of its former officers and directors, and the OP, among others, were also named as defendants in thirteen individual securities fraud actions filed in the United States District Court for the Southern District of New York: Jet Capital Master Fund, L.P. v. American Realty Capital Properties, Inc., et al., No. 15-cv-307 (the “Jet Capital Action”); Twin Securities, Inc. v. American Realty Capital Properties, Inc., et al., No. 15-cv-1291; HG Vora Special Opportunities Master Fund, Ltd v. American Realty Capital Properties, Inc., et al., No. 15-cv-4107; BlackRock ACS US Equity Tracker Fund, et al. v. American Realty Capital Properties, Inc. et al., No. 15-cv-08464; PIMCO Funds: PIMCO Diversified Income Fund, et al. v. American Realty Capital Properties, Inc. et al., No. 15-cv-08466; Clearline Capital Partners LP, et al. v. American Realty Capital Properties, Inc. et al., No. 15-cv-08467; Pentwater Equity Opportunities Master Fund Ltd., et al. v. American Realty Capital Properties, Inc. et al., No. 15- cv-08510; Archer Capital Master Fund, et al. v. American Realty Capital Properties, Inc. et al, No. 16-cv-05471; Atlas Master Fund et al. v. American Realty Capital Properties, Inc. et al., No. 16-cv-05475; Eton Park Fund, L.P. v. American Realty Capital Properties, Inc., et al., No. 16-cv-09393; Reliance Standard Life Insurance Company, et al, v. American Realty Capital Properties, Inc. et al, No. 17-cv-02796; Fir Tree Capital Opportunity Master Fund, L.P. et al. v. American Realty Capital Properties, Inc. et al., No. 17-cv-04975; and Cohen & Steers Institutional Realty Shares, Inc. et al v. American Realty Capital Properties, Inc. et al., No. 18-cv-06770, (collectively, the “Opt-Out Actions”). The Opt-Out Actions assert claims arising out of allegedly false and misleading statements in connection with the purchase or sale of the Company’s securities. The Company entered into a series of agreements dated September 30 through October 26, 2018, to settle twelve of the thirteen pending Opt-Out Actions (the “Opt Out Settlement Agreements”) brought by plaintiffs holding shares of common stock and swaps referencing common stock representing approximately 18% of VEREIT’s outstanding shares of common stock outstanding at the end of the period covered by the litigations, for an aggregate payment of $127.5 million. The Opt Out Settlement Agreements contain mutual releases by both Plaintiffs and the Company, although the Company retains the right to pursue any and all claims against the other defendants in each Action and/or third parties, including claims for contribution for amounts paid in the settlement. The Opt Out Settlement Agreements do not contain any admission of liability, wrongdoing or responsibility by any of the parties. The only remaining opt out action is the Jet Capital Action, which is proceeding on the same summary judgment and trial schedule as the SDNY Consolidated Securities Class Action. On October 27, 2015, the Company and certain of its former officers, among others, were also named as defendants in an individual securities fraud action filed in the United States District Court for the District of Arizona, captioned Vanguard Specialized Funds, et al. v. VEREIT, Inc. et al., No. 15-cv-02157 (the “Vanguard Action”, and such plaintiffs, “Plaintiffs”). The Vanguard Action asserted claims arising out of allegedly false and misleading statements in connection with the purchase or sale of the Company’s securities. On June 7, 2018, the Company entered into a Settlement Agreement and Release (the “Settlement Agreement”) to settle the Vanguard Action. Pursuant to the terms of the Settlement Agreement, the Plaintiffs filed a motion to dismiss all claims against the Company and the other defendants with prejudice, which was granted by the court on June 19, 2018, and the Company paid Plaintiffs the sum of $90 million in connection with the settlement of the claims. The Settlement Agreement contains mutual releases by both Plaintiffs and the Company, although the Company retains the right to pursue any and all claims against the other defendants in the Action and/or third parties, including claims for contribution for amounts paid in the settlement. The Settlement Agreement does not contain any admission of liability, wrongdoing or responsibility by any of the parties. Vanguard’s holdings accounted for approximately 13% of the Company’s outstanding shares of common stock held at the end of the period covered by the various pending shareholder actions. In addition to the settlement of the opt-out actions and the Vanguard Action discussed above, on February 5, 2019, the Company entered into a series of agreements to settle claims with shareholders who decided not to participate as class members in the SDNY Consolidated Securities Class Action. Pursuant to the terms of the settlement agreements, the shareholders released all claims that were the subject matter of the SDNY Consolidated Securities Class Action and the Company made payments totaling $15.7 million. In total, the Company has now settled claims of shareholders who held shares of common stock and swaps referencing common stock representing approximately 33.5% of VEREIT’s outstanding shares of common stock held at the end of the period covered by the various pending shareholder actions for payments totaling $233.2 million, which is recorded in “Litigation, merger and other non-routine costs, net of insurance recoveries” in the accompanying consolidated statement of operations for the year ended December 31, 2018. The Company was also named as a nominal defendant, and certain of its former officers and directors were named as defendants, in shareholder derivative actions filed in the United States District Court for the Southern District of New York: Witchko v. Schorsch, et al., No. 15-cv-06043 (the “Witchko Action”); and Serafin, et al. v. Schorsch, et al., No. 15-cv-08563 (the “Serafin Action”). The court consolidated the Witchko Action and the Serafin Action (together the “SDNY Derivative Action”) and the plaintiffs designated the complaint filed in the Witchko Action as the operative complaint in the SDNY Derivative Action. The SDNY Derivative Action seeks money damages and other relief on behalf of the Company for alleged breaches of fiduciary duty, among other claims. On February 12, 2016, the Company and other defendants filed a motion to dismiss the SDNY Derivative Action due to plaintiffs’ failure to plead facts demonstrating that the Board’s decision to refuse plaintiffs’ pre-suit demands was wrongful and not a protected F-47 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) business judgment. On June 9, 2016, the court granted in part and denied in part the Company’s and other defendants’ motions to dismiss. Plaintiffs filed an amended complaint on June 30, 2016, and the Company and other defendants filed answers to the amended complaint on July 22, 2016. Discovery and summary judgment briefing in the Witchko Action is being coordinated with the SDNY Consolidated Securities Class Action. On December 3, 2015, the Company was named as a nominal defendant and certain of its former officers and directors were named as defendants in a shareholder derivative action filed in the Circuit Court for Baltimore City in Maryland, Frampton v. Schorsch, et al., No. 24-C-15-006269 (the “Frampton Action”). The Frampton Action seeks money damages and other relief on behalf of the Company for, among other things, alleged breaches of fiduciary duty and contribution and indemnification. By order dated November 4, 2016, the Frampton Action was stayed pending resolution of the SDNY Derivative Action. On June 10, 2016, the Company was named as a nominal defendant, and certain of its former officers and directors, among others, were named as defendants, in a shareholder derivative action filed in the Supreme Court of the State of New York, Kosky v. Schorsch, et al., No. 653093/2016 (the “Kosky Action”). The Kosky Action seeks money damages and other relief on behalf of the Company for, among other things, alleged breaches of fiduciary duty, negligence, and breach of contract. On October 6, 2016, the parties filed a stipulation staying the Kosky Action until resolution of the SDNY Consolidated Securities Class Action. On October 6, 2016, the Company was named as a nominal defendant, and certain of its former officers and directors, among others, were named as defendants, in a shareholder derivative action filed in the United States District Court for the District of Maryland, captioned Meloche v. Schorsch, et al., 16-cv-03366 (the “Meloche Action”). An amended complaint was filed on January 17, 2017. The Meloche Action seeks money damages and other relief on behalf of the Company for alleged breaches of fiduciary duty and negligence. By order dated May 16, 2017, the Meloche Action was stayed until resolution of the SDNY Derivative Action. There can be no assurance as to whether or how the completed settlements may affect any potential future resolution of any other pending lawsuit or claims, the timing of any such resolution, or the amount at which any other matter may be resolved. The Company has not reserved amounts for the SEC investigation, the on-going class action and the remaining opt out action discussed above because it believes that any probable loss or reasonably possible range of loss is not reasonably estimable at this time. With respect to the class action specifically, which represents substantially all of the remaining shares with alleged claims, although the Company believes a loss is probable, it is currently unable to reasonably estimate a possible range of loss because the litigation involves significant uncertainties, including, but not limited to, the complexity of the facts, the legal theories and the nature of the claims, the information to be produced in discovery, which has not yet concluded, the applicable methodology for determining any damages for each of the different types of claims, the extent to which members of the class would or would not file a claim, and the uncertainty inherent in a class action where the trading history and other relevant characteristics of the claimants are not currently known. The ultimate resolution of all of these matters, the timing and substance of which is unknown, may materially impact the Company’s business, financial condition, liquidity and results of operations. Cole Litigation Matter In December 2013, Realistic Partners filed a putative class action lawsuit against the Company and the then-members of its board of directors in the Supreme Court for the State of New York, captioned Realistic Partners v. American Realty Capital Partners, et al., No. 654468/2013. The plaintiff alleged, among other things, that the board of the Company breached its fiduciary duties in connection with the transactions contemplated under the Cole Merger Agreement (in connection with the merger between a wholly owned subsidiary of Cole Credit Property Trust III, Inc. and Cole Holdings Corporation) and that Cole Credit Property Trust III, Inc. aided and abetted those breaches. In January 2014, the parties entered into a memorandum of understanding regarding settlement of all claims asserted on behalf of the alleged class of the Company’s stockholders. The proposed settlement terms required the Company to make certain additional disclosures related to the Cole Merger, which were included in a Current Report on Form 8- K filed by the Company with the SEC on January 17, 2014. The memorandum of understanding also contemplated that the parties would enter into a stipulation of settlement, which would be subject to customary conditions, including confirmatory discovery and court approval following notice to the Company’s stockholders, and provided that the defendants would not object to a payment of up to $625,000 for attorneys’ fees. If the parties enter into a stipulation of settlement, which has not occurred, a hearing will be scheduled at which the court will consider the fairness, reasonableness and adequacy of the settlement. There can be no assurance that the parties will enter into a stipulation of settlement, that the court will approve any proposed settlement, or that any eventual settlement will be under the same terms as those contemplated by the memorandum of understanding. F-48 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Contractual Lease Obligations The following table reflects the minimum base rent payments due from the Company over the next five years and thereafter for certain ground lease obligations, which are substantially reimbursable by our tenants, and office lease obligations (in thousands): 2019 2020 2021 2022 2023 Thereafter Total Purchase Commitments Future Minimum Base Rent Payments Ground Leases Office Leases $ $ 13,942 13,740 13,542 13,699 14,077 196,369 265,369 $ $ 4,537 4,451 4,387 4,419 3,695 301 21,790 The Company enters into purchase and sale agreements and deposits funds into escrow towards the purchase of real estate assets, some of which are expected to be assigned to one of the Cole REITs at or prior to the closing of the respective acquisition. As of December 31, 2018, the Company was a party to five purchase and sale agreements with unaffiliated third-party sellers to purchase a 100% interest in eight properties, subject to meeting certain criteria, for an aggregate purchase price of $81.7 million, exclusive of closing costs. As of December 31, 2018, the Company had $1.1 million of property escrow deposits held by escrow agents in connection with these future property acquisitions, which may be forfeited if the transactions are not completed under certain circumstances. In accordance with the Services Agreement, the Company will be reimbursed by the assigned Cole REIT for amounts escrowed when the property is assigned to the respective Cole REIT. Environmental Matters In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. The Company has not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition, in each case, that it believes will have a material adverse effect on the results of operations. Note 11 – Equity Common Stock and General Partner OP Units The General Partner is authorized to issue up to 1.5 billion shares of Common Stock. As of December 31, 2018, the General Partner had approximately 967.5 million shares of Common Stock issued and outstanding. Additionally, the Operating Partnership had approximately 967.5 million General Partner OP Units issued and outstanding as of December 31, 2018, corresponding to the General Partner’s outstanding shares of Common Stock. Common Stock Continuous Offering Program On September 19, 2016, the Company registered a continuous equity offering program (the “Program”) pursuant to which the Company can offer and sell, from time to time through September 19, 2019 in “at-the-market” offerings or certain other transactions, shares of Common Stock with an aggregate gross sales price of up to $750.0 million, through its sales agents. As of December 31, 2018, no shares of Common Stock have been issued pursuant to the Program. Preferred Stock and Preferred OP Units Series F Preferred Stock As of December 31, 2018, there were approximately 42.8 million shares of Series F Preferred Stock (and approximately 42.8 million corresponding General Partner Series F Preferred Units) and 86,874 Limited Partner Series F Preferred Units issued and outstanding. The Series F Preferred Stock pays cumulative cash dividends at the rate of 6.70% per annum on their liquidation preference of $25.00 per share (equivalent to $1.675 per share on an annual basis). The Series F Preferred Stock was not redeemable by the F-49 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Company before January 3, 2019, the fifth anniversary of the date on which such Series F Preferred Stock was issued (the “Initial Redemption Date”), except under circumstances intended to preserve the General Partner’s status as a REIT for federal and/or state income tax purposes and except upon the occurrence of a change of control. On and after the Initial Redemption Date, the General Partner may, at its option, redeem shares of the Series F Preferred Stock, in whole or from time to time in part, at a redemption price of $25.00 per share plus, subject to exceptions, any accrued and unpaid dividends thereon to the date fixed for redemption. The shares of Series F Preferred Stock have no stated maturity, are not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless the General Partner redeems or otherwise repurchases them or they become convertible and are converted into Common Stock (or, if applicable, alternative consideration). The Series F Preferred Stock trades on the NYSE under the symbol VER PRF. The Series F Preferred Units contain the same terms as the Series F Preferred Stock. For federal income tax purposes, distributions to stockholders are characterized as ordinary dividends, capital gain distributions, or nontaxable distributions. Nontaxable distributions will reduce U.S stockholders’ basis (but not below zero) in their shares. The following table shows the character of the Series F Preferred Stock distributions paid on a percentage basis for the years ended December 31, 2018, 2017 and 2016: Ordinary dividends Capital gain distributions Total Limited Partner OP Units Year Ended December 31, 2018 2017 2016 100.0% —% 100% 95.0% 5.0% 100% 95.0% 5.0% 100% As of December 31, 2018 the Operating Partnership had approximately 23.7 million Limited Partner OP Units outstanding. As of December 31, 2018, the Company has received redemption requests totaling approximately 13.1 million Limited Partner OP Units from certain affiliates of the Former Manager, which would have been redeemable for a corresponding number of shares of Common Stock. The Company believes it has potential claims against recipients of those OP Units and has engaged in discussions with affiliates of the Former Manager regarding the redemption requests. Pending any resolution, the Company does not currently intend to satisfy any of the redemption requests. In light of the potential claims, since October 15, 2015, the OP has not paid distributions in respect of a substantial portion of the outstanding Limited Partner OP Units when the Common Stock dividends were otherwise paid. Common Stock Dividends The Company declared quarterly dividends to stockholders of record each quarter from the first quarter of the year ended December 31, 2016 through the third quarter of the year ended December 31, 2018 of $0.1375 per share of Common Stock (representing an annualized dividend rate of $0.55 per share). The Company’s Board of Directors declared a quarterly cash dividend of $0.1375 per share of Common Stock (equaling an annualized dividend rate of $0.55 per share) for the fourth quarter of 2018 on November 5, 2018 to stockholders of record as of December 31, 2018, which was paid on January 15, 2019. An equivalent distribution by the Operating Partnership is applicable per OP unit. For federal income tax purposes, distributions to stockholders are characterized as ordinary dividends, capital gain distributions, or nontaxable distributions. Nontaxable distributions will reduce U.S stockholders’ basis (but not below zero) in their shares. The following table shows the character of the Common Stock distributions paid on a percentage basis for the years ended December 31, 2018, 2017 and 2016: Ordinary dividends Nondividend distributions Capital gain distributions Total Year Ended December 31, 2018 2017 2016 13.8% 86.2% —% 100% 60.0% 37.0% 3.0% 100% 95.0% —% 5.0% 100% F-50 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Share Repurchase Program On May 12, 2017, the Company’s Board of Directors authorized the repurchase of up to $200.0 million of the Company’s outstanding Common Stock over the subsequent 12 months, as market conditions warranted (the “2017 Share Repurchase Program”). On May 3, 2018, the Company’s Board of Directors terminated the 2017 Share Repurchase Program and authorized a new program (the “2018 Share Repurchase Program,” collectively with the 2017 Share Repurchase Program, the “Share Repurchase Programs”) that permits the Company to repurchase up to $200.0 million of its outstanding Common Stock through May 3, 2019, as market conditions warrant. Repurchases can be made through open market purchases, privately negotiated transactions, structured or derivative transactions, including accelerated stock repurchase transactions, or other methods of acquiring shares in accordance with applicable securities laws and other legal requirements. The Share Repurchase Programs do not obligate the Company to make any repurchases at a specific time or in a specific situation. Repurchases are subject to prevailing market conditions, the trading price of the stock, the Company’s financial performance and other conditions. Shares of Common Stock repurchased by the Company under the Share Repurchase Programs, if any, will be returned to the status of authorized but unissued shares of Common Stock. During the period from May 12, 2017 through December 31, 2017, the Company repurchased approximately 69,000 shares of Common Stock in multiple open market transactions, at a weighted average share price of $7.50 for an aggregate purchase price of $0.5 million as part of the 2017 Share Repurchase Program. During the period from January 1, 2018 through May 2, 2018, the Company repurchased approximately 6.4 million shares of Common Stock in multiple open market transactions, at a weighted average share price of $6.94 for an aggregate purchase price of $44.6 million, for a total of $45.1 million of shares repurchased as part of the 2017 Share Repurchase Program. From May 3, 2018 through December 31, 2018, the Company repurchased approximately 0.8 million shares of Common Stock in multiple open market transactions, at a weighted average share price of $6.95 for an aggregate purchase price of $5.6 million as part of the 2018 Share Repurchase Program, which are currently deemed to be authorized but unissued shares of Common Stock. As of December 31, 2018, the Company had $194.4 million available for share repurchases under the 2018 Share Repurchase Program. Common Stock Repurchases to Settle Tax Obligations Under the General Partner’s Equity Plan (as defined in Note 12 – Equity-based Compensation), participants have the option to have the General Partner repurchase shares vesting from awards made under the Equity Plan in order to satisfy the minimum federal and state tax withholding obligations. During the year ended December 31, 2018, the General Partner repurchased approximately 0.3 million shares to satisfy the federal and state tax withholding obligations on behalf of employees that made this election. Note 12 – Equity-based Compensation Equity Plans The General Partner has an equity-based incentive award plan (the “Equity Plan”), which provides for the grant of stock options (“Stock Options”), stock appreciation rights, Restricted Shares, Restricted Stock Units, Deferred Stock Units, dividend equivalent rights and other stock-based awards to non-executive directors, officers, other employees and advisors or consultants who provide services to the Company, as applicable, and a non-executive director restricted share plan, which are accounted for under U.S. GAAP for share-based payments. The expense for such awards is recognized over the requisite service period. Restricted Shares provide for rights identical to those of Common Stock. Restricted Stock Units do not provide for any rights of a common stockholder prior to the vesting of such Restricted Stock Units. Restricted Shares are considered issued and outstanding. As is the case when fully vested shares of Common Stock are issued from the Equity Plan, for each Restricted Share awarded under the Equity Plan, the Operating Partnership issues a General Partner OP Unit to the General Partner with identical terms. Upon vesting or settlement of Restricted Stock Units or Deferred Stock Units, respectively, the Operating Partnership issues a General Partner OP Unit to the General Partner for each share of Common Stock issued as a result of such vesting. F-51 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) The General Partner has authorized and reserved a total number of shares equal to 10.0% of the total number of issued and outstanding shares of Common Stock (on a fully diluted basis assuming the redemption of all OP Units for shares of Common Stock) to be issued at any time under the Equity Plan for equity incentive awards. As of December 31, 2018, the General Partner had cumulatively awarded under its Equity Plan approximately 4.0 million Restricted Shares, net of the forfeiture of 3.7 million Restricted Shares through that date, 5.3 million Restricted Stock Units, net of the forfeiture/cancellation of 1.8 million Restricted Stock Units through that date, 0.5 million Deferred Stock Units, and 2.8 million Stock Options, net of forfeiture/cancellation of approximately 40,000 Stock Options through that date, collectively representing approximately 12.5 million shares of Common Stock. Accordingly, as of such date, approximately 86.6 million additional shares were available for future issuance. At December 31, 2018, a total of 45,000 shares were awarded under the non-executive director restricted share plan out of the 99,000 shares reserved for issuance. Restricted Shares The Company has issued Restricted Shares to certain employees and non-executive directors beginning in 2011. In addition, the Company issued Restricted Shares to employees of affiliates of the Former Manager prior to 2015. The fair value of the Restricted Shares granted to employees under the Equity Plan is generally determined using the closing stock price on the grant date and is expensed over the requisite service period on a straight-line basis. The fair value of Restricted Shares granted to non- executive directors and employees of affiliates of the Former Manager under the Equity Plan was measured based upon the fair value of goods or services received or the equity instruments granted, whichever was more reliably determinable, and was expensed in full at the date of grant. During the years ended December 31, 2018, 2017 and 2016, the Company recorded $0.6 million, $2.0 million and $2.7 million, respectively, of compensation expense related to the Restricted Shares. As of December 31, 2018, there was $0.1 million of unrecognized compensation expense related to the Restricted Shares with a weighted-average remaining term of 0.1 years. The following table details the activity of the Restricted Shares during the year ended December 31, 2018: Unvested shares, December 31, 2017 Vested Forfeited Unvested shares, December 31, 2018 Time-Based Restricted Stock Units Restricted Shares Weighted-Average Grant Date Fair Value 234,428 (159,210) (4,218) 71,000 $ $ 13.98 13.97 13.66 14.04 Under the Equity Plan, the Company may award Restricted Stock Units to employees that will vest if the recipient maintains employment over the requisite service period (the “Time-Based Restricted Stock Units”). The fair value of the Time-Based Restricted Stock Units granted to employees under the Equity Plan is generally determined using the closing stock price on the grant date and is expensed over the requisite service period on a straight-line basis, which is generally three years. During the years ended December 31, 2018, 2017 and 2016, the Company recorded $5.1 million, $6.3 million and $3.4 million, respectively, of compensation expense related to the Time-Based Restricted Stock Units. As of December 31, 2018, there was $5.6 million of unrecognized compensation expense related to the Time-Based Restricted Stock Units with a weighted-average remaining term of 1.8 years. Deferred Stock Units The Company may award Deferred Stock Units to non-executive directors under the Equity Plan. Each Deferred Stock Unit represents the right to receive one share of Common Stock. The Deferred Stock Units provide for immediate vesting on the grant date and will be settled with Common Stock either on the earlier of the date on which the respective director separates from the Company, dies or the third anniversary of the grant date, or if granted pursuant to the director’s voluntary election to participate in the director’s deferred compensation program, on the date the director separates from the Company (or upon a change of control or death). The fair value of the Deferred Stock Units is determined using the closing stock price on the grant date and is expensed over the requisite service period or on the grant date for awards with no requisite service period. During the years ended December 31, 2018, 2017 and 2016, the Company recorded approximately $1.2 million, $1.0 million and $0.8 million, respectively, of expense related to Deferred Stock Units. As of December 31, 2018, there is no unrecognized compensation expense related to the Deferred Stock Units. F-52 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) The following table details the activity of the Time-Based Restricted Stock Units and Deferred Stock Units during the year ended December 31, 2018. Unvested units, December 31, 2017 Granted Vested Forfeited Unvested units, December 31, 2018 Long-Term Incentive Awards Time-Based Restricted Stock Units 1,312,865 770,014 (755,810) (36,054) 1,291,015 Weighted-Average Grant Date Fair Value 8.61 $ 6.76 8.66 7.44 7.51 $ Deferred Stock Units Weighted-Average Grant Date Fair Value — 6.95 6.95 — — — $ 181,873 (181,873) — — $ The General Partner may award long-term incentive-based Restricted Stock Units (the “LTI Target Awards”) to employees under the Equity Plan. Vesting of the LTI Target Awards is based upon the General Partner’s level of achievement of total stockholder return (“TSR”), including both share price appreciation and Common Stock dividends, as measured equally against a market index and against a peer group generally over a three year period. The fair value and derived service period of the LTI Target Awards as of their grant date is determined using a Monte Carlo simulation which takes into account multiple input variables that determine the probability of satisfying the required TSR, as outlined in the award agreements. This method requires the input of assumptions, including the future dividend yield, the expected volatility of the Common Stock and the expected volatility of the market index constituents and the peer group. Compensation expense is recognized on a straight-line basis over the requisite service period regardless of whether the necessary TSR is attained, provided that the requisite service condition has been achieved. During the years ended December 31, 2018, 2017 and 2016, the Company recorded $5.8 million, $7.4 million and $4.6 million, respectively, of expense related to the LTI Target Awards. As of December 31, 2018, there was $6.1 million of unrecognized compensation expense related to the LTI Target Awards with a weighted-average remaining term of 1.7 years. The following table details the activity of the LTI Target Awards during the year ended December 31, 2018. Unvested units, December 31, 2017 Granted Vested Forfeited Unvested units, December 31, 2018 Stock Options LTI Target Awards 1,574,229 894,441 (327,693) (524,014) 1,616,963 Weighted-Average Grant Date Fair Value 7.98 $ 6.44 7.14 7.14 7.57 $ The General Partner may award Stock Options to employees that will vest if the recipient maintains constant employment through the end of the requisite service period. The fair value of the Stock Options as of their grant date is determined using the Black-Scholes option pricing model, which requires the input of assumptions including expected terms, expected volatility, dividend yield and risk free rate. Expected term was calculated using the midpoint between the three year cliff vesting period and the 10-year contractual term. Expected volatilities were based on both historical and implied volatilities. The risk-free interest rate was based on zero-coupon yields derived from the U.S. Treasury Constant Maturity yield curve in effect as of the grant date. F-53 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) The following inputs and assumptions were used to calculate the weighted-average fair values of the options granted: Expected term (in years) Volatility Dividend yield Risk-free rate Grant date fair value Year Ended December 31, 2018 6.5 27.39% 7.21% 2.75% 0.76 $ Compensation expense is recognized on a straight-line basis over the service period above. During the year ended December 31, 2018, the Company recorded $0.6 million of expense related to Stock Options. As of December 31, 2018, there was $1.5 million of unrecognized compensation expense related to Stock Options with a weighted-average remaining term of 2.1 years. The following table details the activity of the Stock Options during the year ended December 31, 2018. Outstanding, December 31, 2017 Granted Forfeited Outstanding, December 31, 2018 Stock Options Weighted-Average Exercise Price — $ 2,802,639 (39,474) 2,763,165 $ — 6.84 6.84 6.84 Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value — $ — — 9.14 $ — — — 856,581 Note 13 – Related Party Transactions and Arrangements Cole Capital Through February 1, 2018, the Company was contractually responsible for managing the Cole REITs’ affairs on a day-to-day basis, identifying and making acquisitions and investments on the Cole REITs’ behalf, and recommending to the respective Board of Directors of each of the Cole REITs an approach for providing investors with liquidity. In addition, the Company was responsible for raising capital for certain Cole REITs, advised them regarding offerings, managed relationships with participating broker- dealers and financial advisors, and provided assistance in connection with compliance matters relating to the offerings. The Company received compensation and reimbursement for services relating to the Cole REITs’ offerings and the investment, management and disposition of their respective assets, as applicable. As discussed in Note 4 —Discontinued Operations, on February 1, 2018, the Company completed the sale of Cole Capital. The assets and liabilities transferred pursuant to the Cole Capital Purchase and Sale Agreement and related financial results are reflected in the consolidated balance sheets and consolidated statements of operations as discontinued operations for all periods presented. As a result of the sale of Cole Capital, the Cole REITs are no longer affiliated with the Company. F-54 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) The table below reflects the revenue earned from the Cole REITs (including closed programs, as applicable) and unconsolidated joint ventures for the years ended December 31, 2018, 2017 and 2016 (in thousands). Offering-related fees and reimbursements Selling commissions (2) Dealer manager and distribution fees (3) Reimbursement revenue Offering-related fees and reimbursements Transaction service fees and reimbursements Acquisition fees Financing coordination fee Reimbursement revenues Transaction service fees and reimbursements Management fees and reimbursements Asset and property management fees and leasing fees (4) Advisory and performance fee revenue Reimbursement revenues Management fees and reimbursements Interest income on Affiliate Lines of Credit Total related party revenues ___________________________________ Year Ended December 31, 2018 (1) 2017 2016 $ 407 431 189 1,027 119 — 215 334 161 5,023 1,429 6,613 28 $ 7,746 $ 5,021 3,329 16,096 11,049 100 2,780 13,929 220 57,765 18,449 76,434 262 19,943 8,300 8,283 36,526 9,513 220 2,800 12,533 220 51,099 17,587 68,906 453 $ 8,002 $ 106,721 $ 118,418 (1) Represents the revenue earned during the period from January 1, 2018 through January 31, 2018, unless otherwise noted. (2) The Company reallowed 100% of selling commissions to participating broker-dealers from January 1, 2018 through January 31, 2018 and during the years ended December 31, 2017 and 2016. (3) During the years ended December 31, 2018, 2017 and 2016, the Company reallowed $0.2 million, $2.1 million and $3.2 million, respectively, of dealer manager fees and/or distribution and stockholder servicing fees to participating broker-dealers as a marketing and due diligence expense reimbursement. (4) Represents asset and property management fees and leasing fees related to properties owned through the Company’s unconsolidated joint ventures for the years ended December 31, 2018, 2017 and 2016. Investment in the Cole REITs On February 1, 2018, the Company sold certain of its equity investments, recognizing a gain of $0.6 million, which is included in other income, net in the accompanying consolidated statement of operations for the year ended December 31, 2018, to the Cole Purchaser, retaining interests in CCIT II, CCIT III and CCPT V. As of December 31, 2018 and 2017, the Company owned aggregate equity investments of $7.8 million and $3.3 million, respectively, in the Cole REITs. During the year ended December 31, 2018, the Company recognized a gain of $5.1 million related to the change in fair value from the carrying value at December 31, 2017, which is included in other income, net in the accompanying consolidated statement of operations. Prior to the sale of Cole Capital, the Company accounted for these investments using the equity method of accounting, which required the investment to be initially recorded at cost and subsequently adjusted for the Company’s share of equity in the respective Cole REIT’s earnings and distributions. The Company recorded its proportionate share of net income or loss from the Cole REITs in equity in income and gain on disposition of unconsolidated entities in the consolidated statement of operations for the years ended December 31, 2017 and 2016. During the years ended December 31, 2017 and 2016, the Company recognized a net loss of $0.5 million and $1.3 million from the Cole REITs, respectively. Due to Cole REITs As of December 31, 2017, due to affiliates was $0.1 million, related to amounts due to the Cole REITs, which is included in due to affiliates in the accompanying consolidated balance sheet. F-55 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Due from Cole REITs As of December 31, 2017, $4.4 million was expected to be collected from affiliates, excluding any outstanding balances from a line of credit with one of the Cole REITs, discussed below, related to services provided by the Company and expenses subject to reimbursement by the Cole REITs in accordance with their respective advisory and property management agreements. On September 23, 2016, the Company entered into a $30.0 million revolving line of credit with Cole Corporate Income Operating Partnership III, LP, the operating partnership of CCIT III, as modified on March 28, 2017 (the “Subordinate Promissory Note”). The Subordinate Promissory Note matured September 30, 2018 and no amounts were outstanding as of December 31, 2018. As of December 31, 2017, $1.6 million was outstanding, which is included in due from affiliates, net in the accompanying consolidated balance sheet. Note 14 – Net Income (Loss) Per Share/Unit The General Partner’s unvested Restricted Shares contain non-forfeitable rights to dividends and are considered to be participating securities in accordance with U.S. GAAP and, therefore, are included in the computation of earnings per share under the two-class computation method. Under the two-class computation method, net losses are not allocated to participating securities unless the holder of the security has a contractual obligation to share in the losses. The unvested Restricted Shares are not allocated losses as the awards do not have a contractual obligation to share in losses of the General Partner. The two-class computation method is an earnings allocation formula that determines earnings per share for each class of shares of Common Stock and participating securities according to dividends declared (or accumulated) and participation rights in undistributed earnings. Net (Loss) Income Per Share The following is a summary of the basic and diluted net (loss) income per share computation for the General Partner for the years ended December 31, 2018, 2017 and 2016 (dollar amounts in thousands): (Loss) income from continuing operations Noncontrolling interests’ share in continuing operations Net (loss) income from continuing operations attributable to the General Partner Dividends to preferred shares and units Net loss from continuing operations available to the General Partner Earnings allocated to participating securities Income (loss) from discontinued operations, net of income taxes (Income) loss from discontinued operations attributable to limited partners Net loss available to common stockholders used in basic and diluted net loss per share Year Ended December 31, 2018 2017 2016 $ (91,725) $ 2,344 $ 51,495 (1,005) (76,887) 1,908 (89,381) (71,892) (161,273) (42) 3,695 (88) 50,490 (71,892) (21,402) (491) (19,117) 445 (74,979) (71,892) (146,871) (492) (123,937) 3,053 $ (157,708) $ (40,565) $ (268,247) Weighted average number of Common Stock outstanding - basic and diluted 969,092,268 974,098,652 931,422,844 Basic and diluted net loss per share from continuing operations attributable to common stockholders Basic and diluted net income (loss) per share from discontinued operations attributable to common stockholders Basic and diluted net loss per share attributable to common stockholders (1) _______________________________________________ $ $ $ (1) Amounts may not total due to rounding. (0.17) $ (0.02) $ (0.16) 0.00 $ (0.16) $ (0.02) $ (0.04) $ (0.13) (0.29) F-56 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) The following were excluded from diluted net loss per share attributable to common stockholders, as the effect would have been antidilutive: Weighted average unvested Restricted Shares and Restricted Stock Units (1) Weighted average Stock Options (2) OP Units ___________________________________ Year Ended December 31, 2018 420,369 — 23,725,506 2017 310,965 — 23,748,347 2016 868,252 — 23,763,797 (1) Net of assumed repurchases in accordance with the treasury stock method of 2.0 million for the year ended year ended December 31, 2018 and 1.6 million for each of the years ended December 31, 2017 and 2016. (2) Net of assumed repurchases in accordance with the treasury stock method of 2.4 million for the year ended December 31, 2018. Net (Loss) Income Per Unit The following is a summary of the basic and diluted net (loss) income per unit attributable to common unitholders, which includes all common General Partner unitholders and limited partner unitholders, for the years ended December 31, 2018, 2017 and 2016 (dollar amounts in thousands): (Loss) income from continuing operations Noncontrolling interests’ share in continuing operations Net (loss) income from continuing operations attributable to the Operating Partnership Dividends to preferred units Net loss from continuing operations available to the Operating Partnership Earnings allocated to participating units Income (loss) from discontinued operations, net of income taxes Net loss available to common unitholders used in basic and diluted net loss per unit $ $ Year Ended December 31, 2018 2017 2016 (91,725) $ 154 51,495 $ 194 (76,887) 14 (91,571) $ (71,892) (163,463) (42) 3,695 $ 51,689 (71,892) (20,203) (491) (19,117) (76,873) (71,892) (148,765) (492) (123,937) $ (159,810) $ (39,811) $ (273,194) Weighted average number of common units outstanding - basic 992,817,774 997,846,999 955,181,238 Basic and diluted net loss per unit from continuing operations attributable to common unitholders Basic and diluted net income (loss) per unit from discontinued operations attributable to common unitholders Basic and diluted net loss per unit attributable to common unitholders (1) _______________________________________________ $ $ $ (1) Amounts may not total due to rounding. (0.17) $ (0.02) $ (0.16) 0.00 $ (0.16) $ (0.02) $ (0.04) $ (0.13) (0.29) The following were excluded from diluted net loss per unit attributable to common unitholders, as the effect would have been antidilutive: Weighted average unvested Restricted Shares and Restricted Stock Units (1) Weighted average Stock Options (2) ___________________________________ Year Ended December 31, 2018 2017 2016 420,369 — 310,965 — 868,252 — (1) Net of assumed repurchases in accordance with the treasury stock method of 2.0 million for the year ended year ended December 31, 2018 and 1.6 million for each of the years ended December 31, 2017 and 2016. (2) Net of assumed repurchases in accordance with the treasury stock method of 2.4 million shares for the year ended December 31, 2018. F-57 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Note 15 – Quarterly Results (Unaudited) Presented below is a summary of the unaudited quarterly financial information for the year ended December 31, 2018 for the General Partner (in thousands, except share and per share amounts): Rental revenue (1) Net income (loss) from continuing operations Income (loss) from discontinued operations, net of income taxes Net income (loss) Net income (loss) attributable to the General Partner Basic and diluted net income (loss) per share from continuing operations attributable to common stockholders (2) Basic and diluted net income (loss) per share from discontinued operations attributable to common stockholders (2) Basic and dilutive net income (loss) per share attributable to common stockholders (2) _______________________________________________ March 31, 2018 $ 315,074 29,036 3,501 32,537 31,795 Quarters Ended June 30, 2018 September 30, 2018 December 31, 2018 $ $ 315,664 (74,691) 224 (74,467) (72,670) 313,866 (73,942) — (73,942) (72,117) $ 313,263 27,872 (30) 27,842 27,218 $ $ $ 0.01 (3) $ (0.09) $ (0.09) $ 0.01 (3) 0.00 (3) $ 0.00 $ — $ (0.00) 0.01 (3) $ (0.09) $ (0.09) $ 0.01 (3) (1) Represents revenue from continuing operations as presented on the statement of operations in accordance with U.S. GAAP. Substantially all of Cole Capital is presented as discontinued operations and the Company’s remaining financial results are reported as a single segment for all periods presented. (2) The sum of the quarterly net income (loss) per share amounts may not agree to the full year net loss per share amounts. The Company calculates net income (loss) per share based on the weighted-average number of outstanding shares of Common Stock during the reporting period. The average number of shares fluctuates throughout the year and can therefore produce a full year result that does not agree to the sum of the individual quarters. (3) Represents dilutive net income per share attributable to common stockholders. Presented below is a summary of the unaudited quarterly financial information for the year ended December 31, 2018 for the OP (in thousands, except share and per share amounts): Rental revenue (1) Net income (loss) from continuing operations Income (loss) from discontinued operations, net of income taxes Net income (loss) Net income (loss) attributable to the OP Basic and diluted net income (loss) per unit from continuing operations attributable to common unitholders (2) Basic and diluted net income (loss) per unit from discontinued operations attributable to common unitholders (2) Basic and dilutive net income (loss) per unit attributable to common unitholders (2) _______________________________________________ March 31, 2018 315,074 29,036 3,501 32,537 32,577 0.01 0.00 0.01 $ $ $ $ $ $ $ $ Quarters Ended June 30, 2018 315,664 (74,691) 224 (74,467) (74,451) $ September 30, 2018 313,866 (73,942) — (73,942) (73,885) $ December 31, 2018 313,263 27,872 (30) 27,842 27,883 (0.09) $ (0.09) $ 0.01 0.00 $ — $ (0.00) (0.09) $ (0.09) $ 0.01 (1) Represents revenue from continuing operations as presented on the statement of operations in accordance with U.S. GAAP. Substantially all of Cole Capital is presented as discontinued operations and the Company’s remaining financial results are reported as a single segment for all periods presented. (2) The sum of the quarterly net income (loss) per unit amounts may not agree to the full year loss income per unit amounts. The Company calculates net income (loss) per unit based on the weighted-average number of outstanding units during the reporting period. The average number of units fluctuates throughout the year and can therefore produce a full year result that does not agree to the sum of the individual quarters. F-58 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Presented below is a summary of the unaudited quarterly financial information for the year ended December 31, 2017 for the General Partner (in thousands, except share and per share amounts): Rental revenue (1) Net income (loss) from continuing operations Income (loss) from discontinued operations, net of income taxes Net income (loss) Net income (loss) attributable to the General Partner Basic and diluted net (loss) income per share from continuing operations attributable to common stockholders (2) Basic and diluted net income (loss) per share from discontinued operations attributable to common stockholders (2) Basic and dilutive net (loss) income per share attributable to common stockholders (2) (4) $ $ $ _______________________________________________ Quarters Ended March 31, 2017 320,898 $ June 30, 2017 308,245 $ September 30, 2017 306,543 $ 11,935 29,550 2,855 14,790 14,438 4,636 34,186 33,408 12,489 4,005 16,494 16,094 December 31, 2017 316,599 (2,479) $ (30,613) (33,092) (32,122) (0.01) $ 0.01 (3) $ (0.01) $ (0.02) 0.00 $ 0.01 (3) $ 0.00 $ (0.03) (0.00) $ 0.02 (3) $ (0.00) $ (0.05) (1) Represents revenue from continuing operations as presented on the statement of operations in accordance with U.S. GAAP. Substantially all of Cole Capital is presented as discontinued operations and the Company’s remaining financial results are reported as a single segment for all periods presented. (2) The sum of the quarterly net income (loss) per share amounts may not agree to the full year loss per share amounts. The Company calculates net income (loss) per share based on the weighted-average number of outstanding shares of Common Stock during the reporting period. The average number of shares fluctuates throughout the year and can therefore produce a full year result that does not agree to the sum of the individual quarters. (3) Represents dilutive net income per share attributable to common stockholders. (4) Amounts may not total due to rounding. Presented below is a summary of the unaudited quarterly financial information for the year ended December 31, 2017 for the OP (in thousands, except share and per share amounts): Rental revenue (1) Net income (loss) from continuing operations Income (loss) from discontinued operations, net of income taxes Net income (loss) Net income (loss) attributable to the OP Basic and diluted net (loss) income per unit from continuing operations attributable to common unitholders (2) Basic and diluted net income (loss) per unit from discontinued operations attributable to common unitholders (2) Basic and dilutive net (loss) income per unit attributable to common unitholders (2) (3) _______________________________________________ $ $ $ $ Quarters Ended March 31, 2017 320,898 11,935 2,855 14,790 14,797 $ June 30, 2017 308,245 29,550 4,636 34,186 34,200 $ September 30, 2017 306,543 12,489 4,005 16,494 16,485 $ December 31, 2017 316,599 (2,479) (30,613) (33,092) (32,910) (0.01) $ 0.00 $ 0.01 0.01 (0.00) $ 0.02 $ $ $ (0.01) $ (0.02) 0.00 $ (0.03) (0.00) $ (0.05) (1) Represents revenue from continuing operations as presented on the statement of operations in accordance with U.S. GAAP. Substantially all of Cole Capital is presented as discontinued operations and the Company’s remaining financial results are reported as a single segment for all periods presented. (2) The sum of the quarterly net income (loss) per unit amounts may not agree to the full year net loss per unit amounts. The Company calculates net income (loss) per unit based on the weighted-average number of outstanding units during the reporting period. The average number of units fluctuates throughout the year and can therefore produce a full year result that does not agree to the sum of the individual quarters. (3) Amounts may not total due to rounding. F-59 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2018 – (Continued) Note 16 – Subsequent Events The following events occurred subsequent to December 31, 2018: Insurance Settlement On January 23, 2019, the Company signed a settlement and release agreement (the “Insurance Settlement and Release Agreement”) with certain insurance carriers and subsequently received $48.4 million of insurance recoveries. The Company did not record these insurance recoveries as a receivable prior to the finalization of the Insurance Settlement and Release Agreement in the accompanying consolidated balance sheets for the years ended December 31, 2018 and 2017, because it was not probable that the Company would receive these insurance recoveries as of December 31, 2018 and 2017. Real Estate Investment Activity From January 1, 2019 through February 8, 2019 the Company disposed of eight properties for an aggregate gross sales price of $9.2 million, of which four were held for sale with an aggregate carrying value of $1.9 million as of December 31, 2018. The Company’s share of the aggregate sales price was $8.6 million with an estimated gain of $2.5 million. In addition, the Company acquired three properties for an aggregate purchase price of $36.8 million, excluding capitalized external acquisition-related expenses. Debt Activity On February 6, 2019, the Company’s 2019 Senior Notes matured and the principal outstanding of $750.0 million, plus accrued and unpaid interest thereon, was repaid, utilizing borrowings under its Credit Facility. On January 24, 2019, the Company entered into interest rate swap agreements with an aggregate $900.0 million notional amount, effective on February 6, 2019 and maturing on January 31, 2023. Based on the General Partner’s then credit rating and interest rate of LIBOR + 1.35%, the swap agreements effectively fixed the Credit Facility Term Loan interest rate at approximately 3.84%. Mortgage Notes Receivable, Net On January 15, 2019, the Company sold four mortgage notes receivable for $8.3 million. Common Stock Dividend On February 20, 2019, the Company’s Board of Directors declared a quarterly cash dividend of $0.1375 per share of Common Stock (equaling an annualized dividend rate of $0.55 per share) for the first quarter of 2019 to stockholders of record as of March 29, 2019, which will be paid on April 15, 2019. An equivalent distribution by the Operating Partnership is applicable per OP Unit. Preferred Stock Dividend On February 20, 2019, the Company’s Board of Directors declared a monthly cash dividend to holders of the Series F Preferred Stock for April 2019 through June 2019 with respect to the periods included in the table below. The corresponding record and payment dates for each month's Series F Preferred Stock dividend are also shown in the table below. The dividend for the Series F Preferred Stock accrues daily on a 360-day annual basis equal to an annualized dividend rate of $1.675 per share, or $0.1395833 per 30-day month. Period March 15, 2019 - April 14, 2019 April 15, 2019 - May 14, 2019 May 15, 2019 - June 14, 2019 Record Date April 1, 2019 May 1, 2019 June 1, 2019 Payment Date April 15, 2019 May 15, 2019 June 17, 2019 F-60 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS December 31, 2018 (in thousands) Schedule II – Valuation and Qualifying Accounts Description Year Ended December 31, 2018 Reserve for program development costs (1) Allowance for doubtful accounts and other reserves Unsecured note reserve Total Year Ended December 31, 2017 Reserve for program development costs (1) Allowance for doubtful accounts and other reserves Unsecured note reserve Total Year Ended December 31, 2016 Reserve for program development costs (1) Allowance for doubtful accounts and other reserves Unsecured note reserve Total _______________________________________________ (1) Classified as discontinued operations. Balance at Beginning of Year Additions Deductions 651 (2) $ (8,283) (8,905) (15,300) $ (32,488) Balance at End of Year $ $ — 6,309 — 6,309 $ $ $ $ $ $ 7,632 12,683 (3) 15,300 35,615 31,652 7,576 15,300 54,528 34,798 6,595 15,300 56,693 $ $ $ 2,531 — 3,182 9,328 6,956 — $ 16,284 $ 26,191 2,318 — $ 28,509 $ (33,348) (4) $ (1,849) — $ (35,197) $ 7,632 12,683 (3) 15,300 35,615 $ (29,337) (5) $ (1,337) — $ (30,674) $ 31,652 7,576 15,300 54,528 (2) Represents additions to the reserve during the period from January 1, 2018 through January 31, 2018, prior to the sale of Cole Capital. (3) Includes $1.0 million classified as discontinued operations. (4) Deductions related to the return of the Company's interest in two funds not yet in offering ($1.3 million) and the closing of CCPT V's primary offering ($32.0 million). (5) Deductions related to the closing of CCIT II’s primary offering. F-61 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2018 (in thousands) Property City State Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 24 Hour Fitness Woodlands TX $ — $ 2,690 $ 7,463 $ 126 $ 10,279 $ (2,677) 9/24/2013 2002 7-Eleven Sarasota 7-Eleven La Feria 7-Eleven Pharr 7-Eleven Rio Hondo 7-Eleven Gloucester 7-Eleven Hampton 7-Eleven Hampton FL TX TX TX VA VA VA AAA Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Oklahoma City OK Oneonta Oxford Valley El Dorado Springdale Auburndale Pensacola AL AL AL AR AR FL FL Statesboro GA Indianapolis Lafayette Mansura Minden IN IN LA LA Battle Creek MI Benton Harbor MI Redford Kennett Greenwood Magnolia Charlotte MI MO MS MS NC Bowling Green OH Kent OH North Olmsted OH — — — — — — — — 614 — 409 — 624 205 278 141 238 513 2,647 1,351 — — — 550 — — — — 434 319 — 1,473 579 564 614 449 159 351 235 404 81 323 286 217 125 203 156 287 308 326 245 218 1,312 219 281 293 144 69 161 1,312 1,970 2,531 2,640 578 624 644 3,639 32,567 1,080 748 827 743 916 5,127 924 1,163 1,071 652 497 1,043 843 924 698 473 967 2,791 1,201 928 1,080 753 F-62 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,624 2,189 2,812 2,933 722 693 805 (410) 11/19/2012 2000 (602) 2/15/2013 2008 (773) 2/15/2013 1995 (807) 2/15/2013 2008 (179) 12/24/2012 1985 (193) 12/24/2012 1986 (200) 12/24/2012 1959 36,206 (8,038) 2/7/2014 2009 1,285 1,026 968 981 1,429 6,478 1,083 1,514 1,306 1,056 578 1,366 1,129 1,141 823 676 1,123 3,078 1,509 1,254 1,325 971 (294) 2/7/2014 2008 (189) 2/7/2014 1989 (213) 2/7/2014 2009 (212) 2/7/2014 2000 (258) 2/7/2014 2009 (1,373) 2/7/2014 2009 (237) 2/7/2014 1979 (307) 2/7/2014 2008 (270) 2/7/2014 1998 (203) 2/7/2014 1989 (146) 2/7/2014 2000 (320) 2/7/2014 2008 (222) 2/7/2014 1995 (246) 2/7/2014 1997 (209) 2/7/2014 1972 (136) 2/7/2014 1999 (266) 2/19/2014 2006 (687) 2/7/2014 2000 (299) 2/7/2014 1994 (262) 2/7/2014 2009 (311) 2/7/2014 1999 (224) 2/7/2014 1960 Property City State Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Aaron's Abbott Laboratories Shawnee OK Bloomsburg Meadville Columbia Marion PA PA SC SC Chattanooga TN Copperas Cove TX Haltom City Humble Killeen Kingsville Livingston Mexia Mission Odessa Pasadena Port Lavaca Texas City Richmond Waukegan TX TX TX TX TX TX TX TX TX TX TX VA IL AR AL Abuelo's Rogers Academy Sports Mobile Academy Sports Montgomery AL Academy Sports Fayetteville Academy Sports Dalton AR GA Academy Sports Bossier City LA Academy Sports Johnson City TN Academy Sports Smyrna Academy Sports Austin Academy Sports Fort Worth Academy Sports Killeen Academy Sports Laredo TN TX TX TX TX — 400 — — 319 — — — — — 599 — — 549 — — — — — — — — — 303 224 237 576 100 480 423 858 548 815 345 173 126 324 99 444 160 275 508 1,135 856 1,224 1,010 685 1,075 1,341 1,024 1,146 3,244 1,040 1,498 1,186 954 768 1,231 1,274 2,156 1,435 — — — — — — — — — — — — — — — — — — — 1,438 1,080 1,461 1,586 785 1,555 1,764 1,882 1,694 4,059 1,385 1,671 1,312 1,278 867 1,675 1,434 2,431 1,943 (311) 2/7/2014 2008 (219) 2/7/2014 1996 (326) 2/7/2014 1994 (259) 2/7/2014 1977 (177) 2/7/2014 2008 (252) 2/7/2014 1989 (347) 2/7/2014 2007 (291) 2/7/2014 2008 (304) 2/7/2014 2008 (840) 2/7/2014 1981 (270) 2/7/2014 2009 (388) 2/7/2014 2008 (309) 2/7/2014 2007 (246) 2/7/2014 2009 (206) 2/7/2014 2006 (325) 2/7/2014 2009 (333) 2/7/2014 2007 (556) 2/7/2014 2008 (422) 2/7/2014 1988 4,734 21,319 1,917 27,970 (5,703) 11/5/2013 1980 825 1,311 1,869 7,290 1,900 4,965 998 — — — 2,906 1,902 2,109 5,044 4,216 — 2,072 3,165 2,779 — 2,782 — — — — — — — — — — — — 3,121 8,742 8,254 9,501 6,654 9,461 8,342 (697) 6/27/2013 2003 (1,818) 11/1/2013 2012 (1,802) 2/7/2014 2009 (2,862) 12/28/2012 2012 (2,107) 2/20/2013 2012 (1,702) 2/7/2014 2008 (399) 12/19/2016 2015 10,543 (2,064) 11/1/2013 2012 12,971 (1,935) 2/7/2014 1988 10,401 (1,863) 2/7/2014 2009 8,100 (1,266) 2/7/2014 2009 10,893 (1,884) 2/7/2014 2008 2,296 7,431 6,385 7,601 5,656 6,555 6,440 8,434 8,755 8,329 5,321 8,111 F-63 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Accomplishments Through People Columbus GA Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Birmingham Birmingham Calera Dothan Enterprise Opelika Brooklyn AL AL AL AL AL AL CT — — — — — — — — 170 455 330 723 326 280 289 324 Bonita Springs FL 1,561 1,219 Lehigh Acres FL 1,425 Albany Cairo Hazlehurst Hinesville Perry GA GA GA GA GA Thomasville GA Auburn Bedford Clinton Fort Wayne Fort Wayne Franklin Mishawaka Richmond IN IN IN IN IN IN IN IN Salina KS Barbourville KY Bardstown KY Brandenburg KY Crestwood Florence Frankfort KY KY KY Georgetown KY — — — — — — — 760 — — — 738 — — — — — — 1,030 — — — 379 210 140 113 352 209 251 337 100 182 193 200 511 429 377 195 194 272 186 400 550 833 510 — 58 — — (7) (6) — — — — 65 (24) 55 — (1) (30) — — — — — — — — — — 234 — — — — — — 373 494 723 326 420 1,156 1,429 1,552 2,016 629 326 451 430 487 377 1,347 1,386 729 450 371 1,256 1,373 1,616 782 1,098 1,090 742 1,546 1,280 1,034 1,323 F-64 170 886 824 — 6/27/2013 1987 (115) 2/28/2013 1997 (151) 2/28/2013 1999 1,446 (224) 12/27/2012 2008 645 694 1,445 1,753 2,771 2,395 904 442 619 782 695 598 1,684 1,486 911 643 571 1,767 1,802 1,993 977 1,292 1,596 928 1,946 1,830 1,867 1,833 (100) 12/31/2012 1997 (129) 12/31/2012 1995 (348) 4/24/2013 2013 (242) 11/7/2014 2006 (432) 2/7/2014 2007 (513) 2/7/2014 2008 (196) 12/31/2012 1995 (97) 12/31/2012 1993 (140) 12/31/2012 1998 (133) 12/31/2012 1994 (151) 12/31/2012 1994 (112) 12/31/2012 1997 (446) 3/29/2012 2007 (346) 2/7/2014 2007 (216) 6/5/2013 2004 (137) 2/28/2013 1998 (113) 2/28/2013 1998 (305) 2/7/2014 2010 (342) 2/7/2014 2007 (396) 2/7/2014 2007 (235) 4/30/2013 2006 (330) 4/15/2013 2006 (342) 12/10/2012 2005 (230) 12/10/2012 2005 (374) 2/7/2014 2009 (328) 2/7/2014 2008 (254) 2/7/2014 2007 (315) 2/7/2014 2007 Property City State Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Hardinsburg KY Inez Leitchfield Louisville KY KY KY West Liberty KY Rayne Brownstown Caro Charlotte Flint LA MI MI MI MI Grand Rapids MI Howell Livonia Manistee Monroe Romulus Sault Ste. Marie South Lyon Tecumseh Washington Twnshp Tupelo Candler Charlotte Eden MI MI MI MI MI MI MI MI MI MS NC NC NC Granite Falls NC Rocky Mount NC Lakewood Woodbury Bethel Canton Dayton Delaware NJ NJ OH OH OH OH — — — 740 — — — — — — 657 830 — — — — — — — — — — — — — — — — 730 629 — 696 94 130 104 336 249 122 482 117 123 133 368 439 210 348 549 422 75 402 281 645 258 399 723 320 251 348 750 446 234 443 470 502 845 1,174 939 1,289 996 490 1,760 665 697 534 1,296 1,471 643 1,043 1,434 1,568 671 1,607 1,214 1,711 427 1,202 883 746 1,005 836 1,750 1,784 1,305 1,206 1,349 1,274 F-65 — — (5) — — 84 — (9) 92 (3) — — 49 — — — 80 — — — — — — — — — — — — — — — 939 1,304 1,038 1,625 1,245 696 2,242 773 912 664 1,664 1,910 902 1,391 1,983 1,990 826 2,009 1,495 2,356 685 1,601 1,606 1,066 1,256 1,184 2,500 2,230 1,539 1,649 1,819 1,776 (262) 12/10/2012 2007 (375) 8/22/2012 2010 (289) 12/10/2012 2005 (312) 2/7/2014 2009 (300) 4/15/2013 2006 (150) 5/21/2013 2000 (430) 2/7/2014 2008 (225) 11/23/2011 2002 (238) 11/23/2011 2002 (181) 11/23/2011 2002 (307) 2/7/2014 2008 (356) 2/7/2014 2008 (219) 12/12/2011 2003 (314) 4/15/2013 2007 (353) 2/7/2014 2007 (394) 2/7/2014 2007 (240) 11/23/2011 2003 (390) 2/7/2014 2008 (290) 5/27/2014 2009 (421) 2/7/2014 2008 (136) 2/20/2014 1998 (299) 2/7/2014 2012 (226) 2/7/2014 2001 (219) 7/16/2013 2004 (321) 8/9/2012 2010 (244) 2/21/2014 2005 (559) 8/22/2012 2010 (578) 6/20/2012 2007 (325) 2/7/2014 2008 (315) 2/7/2014 2008 (344) 2/7/2014 2007 (322) 2/7/2014 2008 Initial Costs (1) Encumbrances at December 31, 2018 State Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts City Eaton Franklin Holland Massillon Salem Springfield Toledo Twinsburg Van Wert Vermilion Warren OH OH OH OH OH OH OH OH OH OH OH — — 638 — 660 — 610 610 — — — — Oklahoma City OK Sapulpa OK 704 Chambersburg PA Selinsgrove Titusville Chapin Chesterfield Greenwood Rock Hill Sweetwater Alton Deer Park Houston Houston Houston Houston Houston Houston Humble Huntsville Kingwood PA PA SC SC SC SC TN TX TX TX TX TX TX TX TX TX TX TX — — — — — — — — — — 800 800 — — — — — — — 157 218 131 218 267 461 116 486 33 337 83 208 362 553 99 207 395 131 210 506 360 169 295 343 248 837 285 225 189 420 327 419 471 873 1,453 1,987 1,147 1,075 1,375 1,004 630 1,079 745 1,178 1,300 830 891 1,172 922 745 630 915 839 958 1,507 1,029 991 685 1,405 1,293 1,666 1,404 1,278 1,392 F-66 — — — — — — — — — — (2) — — — — — — — — 44 — (3) — — — — — — — — — — 628 1,091 1,584 2,205 1,414 1,536 1,491 1,490 663 1,416 826 1,386 1,662 1,383 990 1,379 1,317 876 840 1,465 1,199 1,124 1,802 1,372 1,239 1,522 1,690 1,518 1,855 1,824 1,605 1,811 (140) 6/13/2013 1987 (279) 8/9/2012 1984 (355) 2/7/2014 2008 (493) 2/7/2014 2007 (286) 2/7/2014 2009 (333) 12/31/2012 2005 (336) 2/7/2014 2009 (257) 2/7/2014 2009 (187) 6/13/2013 1995 (287) 2/7/2014 2006 (244) 4/12/2012 2003 (377) 8/9/2012 2007 (308) 2/7/2014 2007 (253) 2/28/2013 1997 (264) 6/3/2013 2003 (364) 12/12/2012 2010 (299) 6/20/2012 2007 (241) 6/27/2012 2008 (209) 3/9/2012 1995 (229) 2/7/2014 1995 (262) 11/29/2012 2006 (301) 10/18/2012 2006 (361) 2/7/2014 2008 (355) 9/30/2011 2006 (342) 9/30/2011 2006 (219) 8/21/2012 2007 (338) 2/7/2014 2006 (310) 2/7/2014 2008 (397) 2/7/2014 2008 (338) 2/7/2014 2007 (308) 2/7/2014 2008 (336) 2/7/2014 2009 Property City State Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Aetna Life Insurance AGCO Albertson's Lubbock Pasadena Spring Webster Appleton TX TX TX TX WI Fort Atkinson WI Janesville Kenosha Milwaukee WI WI WI St. Mary's WV Fresno Duluth Lake Havasu City Albertson's Mesa Albertson's Phoenix Albertson's Scottsdale Albertson's Tucson Albertson's Tucson Albertson's Yuma Albertson's Denver Albertson's Fort Collins Albertson's Alexandria Albertson's Baton Rouge LA Albertson's Baton Rouge LA Albertson's Bossier City Albertson's Lafayette LA LA Albertson's Albuquerque NM Albertson's Farmington NM Albertson's Las Cruces Albertson's Los Lunas NM NM CA GA AZ AZ AZ AZ AZ AZ AZ CO CO LA — — — — — — 939 — — — — 265 382 388 385 498 353 299 569 610 309 1,259 1,146 1,616 1,452 1,228 824 1,695 465 1,473 928 — — — — — — — — — — 1,524 1,528 2,004 1,837 1,726 1,177 1,994 1,034 2,083 1,237 (306) 2/7/2014 2008 (369) 7/6/2012 2008 (365) 2/7/2014 2007 (348) 2/7/2014 2008 (313) 2/7/2014 2007 (240) 8/26/2013 2004 (420) 2/7/2014 2007 (141) 3/13/2013 2004 (364) 2/7/2014 2008 (288) 12/28/2012 2007 3,405 22,343 2,917 28,665 (2,453) 11/5/2013 1969 — — — — — — — — — — — — — — — — — — — 18,345 (3,112) 2/7/2014 1999 6,671 6,089 7,084 (1,546) 2/7/2014 2003 (1,145) 2/7/2014 1997 (1,268) 2/7/2014 1998 10,815 (2,193) 2/7/2014 1991 10,414 (2,138) 2/7/2014 2000 5,229 8,026 7,344 7,900 7,447 8,772 9,768 7,074 9,482 6,338 3,947 7,307 5,875 (1,023) 2/7/2014 1994 (1,802) 2/7/2014 2003 (1,429) 2/7/2014 2002 (1,815) 2/7/2014 1996 (1,729) 2/7/2014 1990 (1,998) 2/7/2014 1991 (2,253) 2/7/2014 1985 (1,421) 2/7/2014 1988 (2,300) 2/7/2014 2000 (1,316) 2/7/2014 1978 (889) 2/7/2014 2002 (1,996) 2/7/2014 1997 (1,602) 2/7/2014 1991 8,600 3,503 14,842 — — — — — — — — — — — — — — — — — — 1,275 1,944 2,456 2,872 2,710 1,642 1,574 2,058 1,288 1,423 1,711 1,932 1,949 1,556 2,950 1,442 1,588 1,105 5,396 4,145 4,628 7,943 7,704 3,587 6,452 5,286 6,612 6,024 7,061 7,836 5,125 7,926 3,388 2,505 5,719 4,770 F-67 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Albertson's Abilene Albertson's El Paso Albertson's Fort Worth Albertson's Fort Worth Albertson's Fort Worth Albertson's Fort Worth Albertson's Midland Albertson's Odessa Albertson's Weatherford Ale House Orlando TX TX TX TX TX TX TX TX TX FL Ale House St. Petersburg FL Aliberto's Mexican Food Amazon Holbrook West Columbia Amazon Charleston Amazon Chattanooga Amec Foster Wheeler Amega West Houston West Alexander Amega West Midland AZ SC TN TN TX PA TX — — — — — — — — — — — — — — — — 1,187 1,375 2,146 1,833 1,833 1,174 1,002 947 1,820 290 930 32 6,373 6,447 4,678 7,311 4,528 6,255 9,885 8,867 5,771 — — — — — — — — — 3,647 (1,300) 3,116 96 3,112 53,103 38,500 2,678 50,880 40,800 1,995 54,332 2,524 30,398 117 591 751 424 1,787 379 14,260 23,261 Ameriprise Ashwaubenon WI 10,998 Amesbury Truth Statesville NC — AON Lincolnshire IL 92,517 5,336 124,777 Apple Market St. Joseph MO Applebee's Auburn Applebee's Oxford Applebee's Phenix City AL AL AL Applebee's West Memphis AR Applebee's Arvada Applebee's Applebee's Applebee's Brighton Colorado Springs Colorado Springs Applebee's Greeley Applebee's Northglenn CO CO CO CO CO CO — — — — — — — — — — — 639 1,155 1,162 1,488 388 754 657 499 629 559 578 1,638 1,732 2,157 2,232 1,536 1,760 1,972 1,996 1,888 2,235 1,734 F-68 — — — — — — — — — 19 — — — — — — — — — — — — 7,560 7,822 6,824 9,144 6,361 7,429 (1,748) 2/7/2014 1984 (1,835) 2/7/2014 1978 (1,353) 2/7/2014 2000 (1,977) 2/7/2014 2004 (1,267) 2/7/2014 2002 (1,659) 2/7/2014 1988 10,887 (2,667) 2/7/2014 1984 9,814 7,591 2,637 4,046 128 (2,364) 2/7/2014 1985 (1,610) 2/7/2014 2001 (377) 6/27/2013 1995 (938) 6/27/2013 1995 (28) 6/27/2013 1981 56,215 (12,464) 2/7/2014 2012 53,558 (11,810) 2/7/2014 2011 56,327 (12,917) 2/7/2014 2011 32,922 (7,773) 11/5/2013 1998 1,904 970 (384) 6/12/2014 2010 (86) 6/12/2014 1979 15,011 (3,854) 1/25/2013 2000 23,704 (762) 10/24/2017 2017 130,113 (38,558) 11/16/2012 1998 2,277 2,887 3,319 3,720 1,924 2,514 2,629 2,495 2,517 2,794 2,312 (407) 3/28/2014 1981 (540) 7/31/2013 1993 (644) 8/30/2013 1995 (696) 7/31/2013 1999 (448) 2/7/2014 2006 (549) 7/31/2013 1996 (615) 7/31/2013 1998 (622) 7/31/2013 1995 (589) 7/31/2013 1994 (697) 7/31/2013 1995 (541) 7/31/2013 1993 Property City State Applebee's Pueblo Applebee's Pueblo Applebee's Thornton Applebee's Bradenton Applebee's Brandon Applebee's Crestview Applebee's Crystal River Applebee's Davenport Applebee's Inverness Applebee's Lakeland Applebee's Lakeland Applebee's Largo Applebee's New Port Richey Applebee's Plant City Applebee's Riverview CO CO CO FL FL FL FL FL FL FL FL FL FL FL FL Applebee's St. Petersburg FL Applebee's Temple Terrace Applebee's Valrico FL FL Applebee's Wesley Chapel FL Applebee's Winter Haven FL Applebee's Augusta Applebee's Dublin Applebee's Evans GA GA GA Applebee's Milledgeville GA Applebee's Savannah GA Applebee's Clinton Applebee's Fort Dodge Applebee's Marshalltown Applebee's Mason City Applebee's Muscatine Applebee's Boise Applebee's Garden City IA IA IA IA IA ID ID Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 752 960 681 2,475 2,453 943 1,328 1,506 1,977 1,283 1,959 2,334 1,695 2,079 1,849 2,329 2,396 1,202 3,272 2,130 1,254 1,171 1,426 1,174 1,329 490 — 660 340 330 948 628 2,257 2,879 2,043 3,713 3,647 1,752 2,467 4,517 2,965 2,383 3,638 3,501 3,147 2,869 3,434 3,493 3,594 3,274 3,272 2,603 2,329 1,431 2,649 1,761 2,468 1,184 1,363 1,175 1,495 1,266 1,761 2,512 F-69 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 3,009 3,839 2,724 6,188 6,100 2,695 3,795 6,023 4,942 3,666 5,597 5,835 4,842 4,948 5,283 5,822 5,990 4,476 6,544 4,733 3,583 2,602 4,075 2,935 3,797 1,674 1,363 1,835 1,835 1,596 2,709 3,140 (698) 8/30/2013 1998 (898) 7/31/2013 1998 (632) 8/30/2013 1994 (1,158) 7/31/2013 1994 (1,107) 6/27/2013 1997 (546) 7/31/2013 2000 (770) 7/31/2013 2001 (1,409) 7/31/2013 2007 (925) 7/31/2013 2000 (743) 7/31/2013 1997 (1,135) 7/31/2013 2000 (1,092) 7/31/2013 1995 (982) 7/31/2013 1998 (871) 6/27/2013 2001 (1,071) 7/31/2013 2006 (1,090) 7/31/2013 1994 (1,121) 7/31/2013 1993 (994) 6/27/2013 1998 (1,021) 7/31/2013 2000 (812) 7/31/2013 1999 (726) 7/31/2013 1987 (446) 7/31/2013 1998 (826) 7/31/2013 2004 (549) 7/31/2013 1999 (770) 7/31/2013 1994 (356) 6/27/2013 1995 (655) 6/27/2013 1995 (354) 6/27/2013 1995 (450) 6/27/2013 1995 (381) 6/27/2013 1995 (549) 7/31/2013 1998 (777) 8/30/2013 2003 Property City State Applebee's Nampa Applebee's Pocatello Applebee's Marion Applebee's Sterling Applebee's Swansea Applebee's Newton Applebee's Fall River Applebee's Adrian Applebee's Kalamazoo ID ID IL IL IL KS MA MI MI Applebee's Farmington MO Applebee's Joplin Applebee's Rolla Applebee's St. Charles Applebee's Horn Lake MO MO MO MS Applebee's Ocean Springs MS Applebee's Alamogordo NM Applebee's Hobbs NM Applebee's Rio Rancho NM Applebee's Roswell NM Applebee's North Canton OH Applebee's Clackamas Applebee's Gresham OR OR Applebee's Lake Oswego OR Applebee's Roseburg Applebee's Tualatin OR OR Applebee's Chambersburg PA Applebee's Greenville Applebee's Bartlett SC TN Applebee's Corpus Christi TX Applebee's Edinburg Applebee's Mcallen TX TX Applebee's New Braunfels TX Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 729 612 855 390 727 504 275 407 575 574 754 671 781 584 673 271 600 645 405 152 901 853 1,352 717 1,116 591 600 315 563 898 1,114 566 2,915 1,837 1,527 1,291 1,741 1,569 1,558 2,351 2,644 2,242 1,829 2,272 1,075 1,642 — — — — — — — — — — — — — — 1,708 (1,359) 2,438 3,401 3,654 2,295 838 2,103 2,560 1,652 1,673 2,072 2,416 — — — — — — — — — — — 2,166 (1,527) — — — — — 2,201 2,926 2,058 1,988 1,486 F-70 3,644 2,449 2,382 1,681 2,468 2,073 1,833 2,758 3,219 2,816 2,583 2,943 1,856 2,226 1,022 2,709 4,001 4,299 2,700 990 3,004 3,413 3,004 2,390 3,188 3,007 1,239 2,516 3,489 2,956 3,102 2,052 (909) 7/31/2013 2000 (573) 7/31/2013 1998 (469) 2/7/2014 1998 (389) 6/27/2013 1995 (518) 2/7/2014 1998 (476) 6/27/2013 1998 (486) 7/31/2013 1994 (701) 2/7/2014 1995 (691) 2/7/2014 1994 (664) 2/7/2014 1999 (587) 2/7/2014 1994 (674) 2/7/2014 1997 (261) 6/23/2014 1990 (473) 2/7/2014 2005 (13) 6/27/2013 2000 (754) 8/30/2013 2000 (1,061) 7/31/2013 2002 (1,140) 7/31/2013 1995 (716) 7/31/2013 1998 (255) 6/27/2013 1992 (656) 7/31/2013 1997 (792) 8/30/2013 2004 (515) 7/31/2013 1993 (518) 8/30/2013 2000 (646) 7/31/2013 2002 (628) 2/7/2014 1995 (70) 6/27/2013 1995 (615) 2/7/2014 2005 (888) 6/27/2013 2000 (625) 6/27/2013 2006 (603) 6/27/2013 1993 (451) 6/27/2013 1995 Property City State Applebee's San Antonio Applebee's Tyler Applebee's Norton Applebee's Wytheville Applebee's Richland Applebee's Vancouver Applebee's Vancouver TX TX VA VA WA WA WA Apria Healthcare Indianapolis IN Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Alexander City AL Arab Guntersville AL AL Hampton Cove AL Phoenix Arvada Apopka AZ CO FL Merritt Island FL Orange Park Orlando Rockledge Atlanta Canton FL FL FL GA GA Douglasville GA Kennesaw GA Richmond Hill GA Savannah Suwanee GA GA Mount Vernon IL Avon Fort Wayne Indianapolis Indianapolis New Albany IN IN IN IN IN Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 732 696 848 564 1,112 791 718 981 527 40 142 310 559 190 464 297 420 251 381 1,207 370 370 583 430 293 370 911 500 529 530 370 456 1,796 2,904 433 923 2,064 1,846 1,675 3,922 401 887 503 986 618 1,465 697 552 1,256 585 571 987 1,200 1,692 840 755 293 1,561 764 812 647 1,236 1,130 470 F-71 — — — — — — — 775 — — — — 200 — — — — — — — — — — — — — — — — — — — 2,528 3,600 1,281 1,487 3,176 2,637 2,393 5,678 928 927 645 1,296 1,377 1,655 1,161 849 1,676 836 952 2,194 1,570 2,062 1,423 1,185 586 1,931 1,675 1,312 1,176 1,766 1,500 926 (545) 6/27/2013 2003 (830) 2/7/2014 1990 (297) 2/7/2014 2006 (386) 2/7/2014 2000 (644) 7/31/2013 2003 (571) 8/30/2013 2001 (522) 7/31/2013 2001 (1,077) 5/19/2014 1993 (119) 6/27/2013 1999 (260) 6/27/2013 1995 (149) 6/27/2013 1995 (289) 6/27/2013 1995 (188) 6/27/2013 1995 (430) 6/27/2013 1995 (195) 7/31/2013 1985 (155) 7/31/2013 1984 (368) 6/27/2013 1995 (164) 7/31/2013 1985 (160) 7/31/2013 1984 (277) 7/31/2013 1984 (352) 6/27/2013 1995 (496) 6/27/2013 1995 (249) 6/27/2013 1984 (224) 6/27/2013 1984 (82) 7/31/2013 1985 (458) 6/27/2013 1995 (226) 6/27/2013 1999 (238) 6/27/2013 1995 (182) 7/31/2013 1987 (362) 6/27/2013 1995 (331) 6/27/2013 1995 (139) 6/27/2013 2005 Property City State Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's New Albany Scottsburg Winchester Kansas City Salina Topeka IN IN IN KS KS KS Hopkinsville KY Louisville KY Alma Chesterfield Davison Flint Flint MI MI MI MI MI Grand Rapids MI Grandville Midland Port Huron Saginaw South Haven Walker Waterford Wyoming Corinth Fayetteville Jonesville Kernersville Columbus Willard Allentown Carlisle Hanover MI MI MI MI MI MI MI MI MS NC NC NC OH OH PA PA PA Chattanooga TN — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 325 526 341 280 540 270 432 336 380 210 420 110 230 230 1,133 340 210 310 260 360 180 1,513 753 420 350 280 400 230 600 200 400 201 465 445 511 364 300 433 528 625 408 841 631 1,422 1,428 1,289 755 753 868 1,110 573 1,002 962 648 429 2,001 908 774 1,155 599 1,652 472 921 469 F-72 — — — — 64 — — — — — — — — — — — — — — — — — — — — — — — — — — — 790 971 852 644 904 703 960 961 788 1,051 1,051 1,532 1,658 1,519 1,888 1,093 1,078 1,420 833 1,362 1,142 2,161 1,182 2,421 1,258 1,054 1,555 829 2,252 672 1,321 670 (138) 6/27/2013 1995 (132) 6/27/2013 1989 (143) 7/31/2013 1988 (107) 6/27/2013 1995 (4) 6/27/2013 1995 (127) 6/27/2013 1995 (148) 7/31/2013 1985 (232) 5/30/2013 1979 (120) 6/27/2013 1995 (247) 6/27/2013 1995 (185) 6/27/2013 1995 (417) 6/27/2013 1995 (419) 6/27/2013 1995 (44) 6/27/2013 1995 (212) 7/31/2013 1982 (221) 6/27/2013 1995 (254) 6/27/2013 1995 (326) 6/27/2013 1995 (168) 6/27/2013 1995 (294) 6/27/2013 1995 (282) 6/27/2013 1995 (182) 7/31/2013 1970 (127) 6/27/2013 1984 (587) 6/27/2013 1995 (266) 6/27/2013 1995 (227) 6/27/2013 1995 (339) 6/27/2013 1995 (176) 6/27/2013 1995 (484) 6/27/2013 1995 (139) 6/27/2013 1995 (270) 6/27/2013 1995 (132) 7/31/2013 1998 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Arby's Arby's Memphis Amarillo Art Van Furniture Avon Art Van Furniture Mentor Art Van Furniture Middleburg Heights TN TX OH OH OH Art Van Furniture North Canton OH Art Van Furniture Hanover Art Van Furniture Johnstown Art Van Furniture Lancaster PA PA PA Ashley Furniture Jeffersontown KY At Home At Home Rogers Gilbert AR AZ At Home Stockbridge GA At Home Shreveport At Home Wixom At Home Blaine At Home Jackson At Home Clarksville At Home Memphis At Home Fort Worth At Home Richmond At Home & Gabes Florence LA MI MN MS TN TN TX TX KY Schaumburg IL AT&T AT&T — — — — — — — — — — — — — — — — — — — — — — — 449 260 925 1,090 1,440 545 703 386 2,156 1,966 2,589 4,053 2,057 2,093 3,329 3,023 2,661 1,649 4,790 2,641 4,605 6,794 2,364 835 627 10,031 9,582 5,529 8,636 4,108 2,582 6,030 2,368 10,042 8,351 8,967 12,311 11,339 9,220 7,245 7,625 4,048 10,723 7,273 5,968 9,305 Richardson TX 10,882 1,891 31,118 AutoZone Chicago AutoZone Yorkville AutoZone Pearl River AutoZone Hernando AutoZone Blanchester AutoZone Hamilton AutoZone Hartville AutoZone Mt. Orab IL IL LA MS OH OH OH OH — — 719 — 535 814 614 679 698 383 239 141 341 507 197 258 1,047 1,534 1,193 833 838 1,283 1,156 1,219 F-73 — — — — — — 178 174 384 — — — — — — — — — — — — — 635 725 — — — — — — — — 1,284 887 (234) 7/31/2013 1998 (184) 6/27/2013 1995 10,956 (330) 11/22/2017 2016 10,672 (314) 11/22/2017 2009 6,969 9,181 4,989 3,142 8,570 4,334 12,631 12,404 (178) 11/22/2017 1973 (289) 11/22/2017 2007 (132) 11/22/2017 1996 (93) 11/22/2017 1969 (202) 11/22/2017 1978 (584) 9/26/2014 1970 (64) 10/3/2018 2018 (54) 10/3/2018 2017 11,024 (2,391) 2/7/2014 1998 14,404 (175) 7/3/2018 2018 14,668 (172) 7/3/2018 2017 12,243 (255) 2/8/2018 2001 9,906 9,274 8,838 (191) 2/8/2018 1995 (112) 7/3/2018 1992 (130) 2/8/2018 2005 13,364 (280) 2/8/2018 2015 11,878 (48) 10/3/2018 2017 12,762 (728) 12/14/2016 1992 12,304 (2,371) 9/24/2014 1989 33,734 (8,005) 11/5/2013 1986 1,745 1,917 1,432 974 1,179 1,790 1,353 1,477 (315) 4/30/2013 1995 (411) 5/19/2014 2006 (311) 2/7/2014 2007 (194) 2/7/2014 2003 (217) 2/7/2014 2008 (326) 2/7/2014 2008 (297) 2/7/2014 2008 (307) 2/7/2014 2009 Property City State AutoZone Trenton AutoZone Rapid City AutoZone Nashville Bahama Breeze Pittsburgh Bahama Breeze Memphis Bandana's Bar-B- Q Restaurant Bandana's Bar-B- Q Restaurant Bandana's Bar-B- Q Restaurant Collinsville Arnold Fenton OH SD TN PA TN IL MO MO Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 504 571 861 — — — — — 306 375 555 1,590 2,370 340 460 470 812 969 1,270 1,753 1,313 627 433 314 — — — — — — — — 1,118 1,344 1,825 3,343 3,683 967 893 784 (208) 2/7/2014 2008 (240) 2/7/2014 2008 (323) 2/7/2014 2009 (281) 7/28/2014 2004 (181) 7/28/2014 1998 (189) 6/27/2013 1995 (130) 6/27/2013 1995 (97) 8/30/2013 1986 F-74 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 2,195 491 3,198 (648) 1/8/2014 1980 San Antonio TX 9,108 1,666 19,092 Property City State Bank of America Merced Bank of America Asheville Bank of America Charlotte Banner Life Insurance Urbana Beall's Lakeland CA NC NC MD FL Becton, Dickinson and Company Bed Bath & Beyond Bed Bath & Beyond Stockton Windsor Benihana Anchorage CA VA AK Benihana Miami Beach FL Benihana Stuart Benihana Alpharetta Benihana Schaumburg Benihana Benihana Wheeling Farmington Hills FL GA IL IL MI Benihana Maple Grove MN Benihana Dallas TX — — — 512 383 62 195 642 19,600 2,733 31,483 — 2,033 4,809 40,278 2,761 52,454 — — — — — — — — — — 3,032 1,391 3,775 1,661 1,151 2,319 1,896 2,025 1,319 2,988 59,649 1,877 433 1,917 1,485 1,396 1,273 2,049 2,604 1,275 — — — — 94 — 3 — — — — — — — — — Best Buy Montgomery AL 3,148 1,370 5,749 (4,403) Best Buy Coral Springs FL Best Buy Bourbonnais Best Buy Indianapolis Best Buy Richmond Best Buy Marquette IL IN IN MI Best Buy Norton Shores MI Best Buy Chesterfield MO Best Buy Southaven Best Buy Tupelo Best Buy Pineville Best Buy Findlay Best Buy Kenosha Best Buy/Party City BHC Marketing Silverdale The Woodlands MS MS NC OH WI WA TX — — — — — — — — — — — — — — 2,715 1,724 665 549 836 1,568 1,537 2,045 484 1,818 3,313 1,925 3,687 4,724 4,843 5,156 4,775 4,429 4,207 4,099 4,123 4,318 1,934 7,970 — — — — 614 — — — — — 578 704 (56) 1/8/2014 1993 (182) 1/8/2014 1983 34,216 (7,122) 2/7/2014 2011 6,842 (1,132) 7/16/2014 2006 20,852 (4,750) 11/5/2013 2008 55,215 (18,668) 8/17/2012 2003 62,684 (1,586) 12/20/2017 2001 3,268 4,208 3,578 2,636 3,715 3,169 4,074 3,923 4,263 2,716 7,558 6,880 5,440 4,978 5,657 5,667 5,660 6,363 2,418 9,788 (578) 2/7/2014 1998 (199) 2/7/2014 1972 (615) 2/7/2014 1976 (227) 2/7/2014 2003 (450) 2/7/2014 1992 (258) 2/7/2014 2001 (723) 2/7/2014 2012 (794) 2/7/2014 2006 (462) 2/7/2014 1975 (74) 2/7/2014 2003 (1,466) 2/7/2014 1993 (1,566) 2/7/2014 1991 (1,270) 2/7/2014 2009 (1,206) 2/7/2014 2011 (1,362) 2/7/2014 2010 (1,088) 2/7/2014 2001 (1,138) 2/7/2014 2012 (1,212) 2/7/2014 2007 (489) 5/19/2014 2005 (2,122) 2/7/2014 1994 37,568 2,497 43,378 (1,989) 2/15/2017 1996 — — 28 7,428 (1,462) 2/7/2014 2008 14,257 (308) 3/27/2018 1991 45,084 (9,782) 11/5/2013 2009 5,503 10,570 40,332 F-75 Property City State Big Lots Chester Big O Tires Phoenix VA AZ Big O Tires Los Lunas NM Bi-Lo's Grocery Greenwood Bi-Lo's Grocery Mt Pleasant SC SC IL FL FL FL MA MA MA MD PA CA CO Joliet Boynton Beach Jacksonville Pembroke Pines Greenfield Leominster Uxbridge California Binny's Beverage Depot BJ's Wholesale Club BJ's Wholesale Club BJ's Wholesale Club BJ's Wholesale Club BJ's Wholesale Club BJ's Wholesale Club BJ's Wholesale Club BJ's Wholesale Club BJ's Wholesale Club BJ's Wholesale Club BJ's Wholesale Club BJ's Wholesale Club BJ's Wholesale Club Lancaster Black Angus Dublin Black Bear DIner Colorado Springs Black Meg 43 Copperas Cove TX Blue Goose Cantina Mexican Grapevine Bob Evans Newark Bob Evans East Peoria Bob Evans Indianapolis Bob Evans Jackson Bob Evans Muskegon Bob Evans Amherst Bob Evans Brunswick Bob Evans Cincinnati Bob Evans Cincinnati TX DE IL IN MI MI OH OH OH OH Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — 782 — — — — — — 335 206 316 533 4,093 1,834 5,569 5,929 3,373 1,367 1,265 4,212 169 — — — 8,594 (2,968) 1,585 10,931 16,348 8,446 5,104 7,661 8,416 2,168 14,002 — 3,585 21,344 12,645 5,538 36,445 — 6,882 10,196 775 (15) — — — — — — — — — — 3,877 1,573 1,581 4,745 9,719 4,194 (1,014) 2/24/2014 2013 (334) 2/7/2014 2010 (437) 6/1/2012 2006 (1,130) 2/7/2014 1999 — 2/7/2014 2003 (523) 2/7/2014 2011 16,485 (2,793) 2/7/2014 2001 22,277 (3,653) 2/7/2014 2003 12,765 (2,031) 2/7/2014 1997 16,170 (2,997) 2/7/2014 1997 24,929 (4,541) 2/7/2014 1993 41,983 (7,153) 2/7/2014 2006 17,078 (2,550) 2/7/2014 2003 20,376 (3,427) 2/7/2014 2001 19,184 (3,406) 2/7/2014 1995 29,670 (5,237) 2/7/2014 1993 19,048 (2,770) 2/7/2014 1995 13,621 3,400 16,782 — — — — — — — — — — — — — 620 480 151 572 869 717 430 980 550 163 1,147 563 601 2,467 809 151 868 810 1,142 708 1,305 860 1,557 1,088 1,706 1,529 F-76 — — — (106) — — — — — — — — — — 20,182 (4,003) 2/7/2014 1996 3,087 1,289 196 1,440 1,679 1,859 1,138 2,285 1,410 1,720 2,235 2,269 2,130 (743) 6/27/2013 1995 (243) 6/27/2013 1995 (3) 6/27/2013 1979 (264) 6/27/2013 1999 (37) 6/26/2017 1996 (60) 6/26/2017 1993 (38) 6/26/2017 2002 (62) 6/26/2017 2005 (42) 6/26/2017 2001 (77) 6/26/2017 1987 (58) 6/26/2017 1992 (91) 6/26/2017 2003 (82) 6/26/2017 2002 Westminster MD 13,978 6,516 13,860 Auburn Portsmouth Deptford ME NH NJ — — 2,674 4,216 16,510 25,454 11,004 6,558 12,490 North Canton OH 6,787 456 8,668 422 9,546 (3,260) 2/20/2013 1998 Property City State Bob Evans Lancaster Bob Evans Lima Bob Evans Marion Bob Evans Medina Bob Evans Mentor OH OH OH OH OH Bob Evans Mount Vernon OH Bob Evans Bob Evans Stow Troy OH OH Bob Evans Wapakoneta OH Bob Evans Willoughby Bob Evans Xenia OH OH Bob Evans Phoenixville PA Bob Evans Wilkes-Barre PA Bob's Stores Randolph Bojangles Winder Bojangles Biscoe Bojangles Boone Bojangles Denver Bojangles Dobson Bojangles Hickory Bojangles Indian Trail Bojangles Morganton Bojangles Roanoke Rapids Bojangles Southport Bojangles Statesville Bojangles Taylorsville Bojangles Troutman Bojangles Chapin Bojangles Clinton Bojangles Fountain Inn Bojangles Greenwood Bojangles Moncks Corner MA GA NC NC NC NC NC NC NC NC NC NC NC NC SC SC SC SC SC Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 626 366 469 496 626 343 418 512 253 675 337 495 373 2,840 645 247 278 1,013 251 749 655 566 442 505 646 436 718 577 397 287 440 505 1,546 1,631 1,657 1,050 929 1,338 1,416 1,255 1,479 1,262 1,433 438 714 6,826 1,198 986 833 1,881 1,004 1,789 1,217 1,321 1,032 1,179 1,937 1,108 1,077 1,071 926 1,150 1,320 1,179 F-77 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,172 1,997 2,126 1,546 1,555 1,681 1,834 1,767 1,732 1,937 1,770 933 1,087 9,666 1,843 1,233 1,111 2,894 1,255 2,538 1,872 1,887 1,474 1,684 2,583 1,544 1,795 1,648 1,323 1,437 1,760 1,684 (79) 6/26/2017 1998 (84) 6/26/2017 2000 (87) 6/26/2017 2008 (57) 6/26/2017 2000 (49) 6/26/2017 1999 (72) 6/26/2017 2011 (76) 6/26/2017 2002 (66) 6/26/2017 1992 (80) 6/26/2017 2001 (66) 6/26/2017 2005 (76) 6/26/2017 1988 (20) 6/26/2017 1999 (34) 6/26/2017 2003 (2,073) 11/5/2013 1965 (475) 7/30/2012 2011 (381) 11/29/2012 2010 (330) 7/27/2012 1980 (528) 7/31/2013 1997 (398) 7/30/2012 2010 (530) 6/27/2013 1973 (483) 7/27/2012 2011 (524) 7/27/2012 2010 (409) 7/27/2012 2011 (467) 7/30/2012 2011 (544) 7/31/2013 1988 (328) 6/27/2013 1987 (386) 10/10/2013 2012 (422) 8/9/2012 2009 (367) 7/27/2012 2009 (412) 10/10/2013 2012 (500) 2/28/2013 1995 (456) 11/29/2012 2010 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Bojangles Walterboro Bonefish Grill Lakeland SC FL Bonefish Grill Independence OH Bonefish Grill Gainesville VA Boston Market Indianapolis Boston Market Indianapolis Boston Market Fayetteville Boston Market Raleigh IN IN NC NC — — — — — — — — 454 750 895 751 930 410 460 280 Brick House Tavern & Tap W. Windsor NJ 1,043 1,307 Bridgestone Tire Kansas City MO Bruegger's Bagels Iowa City Bruegger's Bagels Durham Bruegger's Bagels Raleigh Buca di Beppo Italian Buca di Beppo Italian Buffalo Wild Wings Bunge North America Wheeling Westlake Langhorne Fort Worth Burger King Anchorage Burger King Andalusia Burger King Atmore Burger King Brewton Burger King Dothan Burger King Dothan Burger King Enterprise Burger King Evergreen Burger King Monroeville Burger King Burger King Opp Troy Burger King Sierra Vista Burger King Tucson Burger King Denver Burger King Clearwater IA NC NC IL OH PA TX AK AL AL AL AL AL AL AL AL AL AL AZ AZ CO FL — — — — — — — — — — — — — — — — — — — — — — — 651 40 312 230 450 370 815 1,100 427 181 181 307 628 594 437 172 325 214 461 260 300 872 981 1,363 1,897 2,252 1,325 — — — — — 350 — — — — — (8) — — — — — — — — — — (15) — — — — — — — 250 — — 1,070 1,520 1,015 1,498 1,954 379 728 654 1,272 887 815 8,433 489 1,025 723 920 1,167 1,104 655 689 604 857 1,383 1,041 1,307 1,242 591 F-78 1,817 2,647 3,147 2,076 1,280 1,480 1,980 1,295 2,805 2,605 411 1,040 884 1,722 1,257 1,630 9,533 916 1,206 904 1,227 1,780 1,698 1,092 861 929 1,071 1,844 1,301 1,857 2,114 1,572 (526) 11/29/2012 2010 (561) 2/7/2014 2003 (691) 2/7/2014 2006 (586) 2/7/2014 2004 (63) 6/27/2013 1995 (314) 6/27/2013 1995 (446) 6/27/2013 1995 (298) 6/27/2013 1995 (356) 2/7/2014 1998 (611) 5/31/2013 2008 (111) 6/27/2013 1995 (204) 7/31/2013 1926 (192) 6/27/2013 1995 (383) 6/27/2013 1995 (267) 6/27/2013 1995 (254) 7/31/2013 1999 (2,314) 11/5/2013 2005 (145) 6/27/2013 1982 (288) 7/31/2013 2000 (203) 7/31/2013 2000 (258) 7/31/2013 1993 (328) 7/31/2013 1983 (310) 7/31/2013 1999 (184) 7/31/2013 1985 (193) 7/31/2013 1997 (169) 7/31/2013 1997 (241) 7/31/2013 1994 (388) 7/31/2013 1984 (292) 7/31/2013 1994 (387) 6/27/2013 1995 (368) 6/27/2013 1994 (175) 6/27/2013 1980 Initial Costs (1) Encumbrances at December 31, 2018 State Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property Burger King City Defuniak Springs Burger King Largo Burger King Niceville Burger King Panama City Burger King Springfield Burger King Tallahassee Burger King Tallahassee Burger King Alpharetta Burger King Alpharetta Burger King Alpharetta Burger King Alpharetta Burger King Atlanta Burger King Augusta Burger King Bainbridge Burger King Cairo Burger King Fort Oglethorpe Burger King Martinez Burger King Roswell Burger King Thomson Burger King Valdosta Burger King Des Moines Burger King Perry Burger King Red Oak Burger King Shenandoah Burger King Stuart Burger King Maywood Burger King Springfield Burger King Gary Burger King Cut Off Burger King Gonzales FL FL FL FL FL FL FL GA GA GA GA GA GA GA GA GA GA GA GA GA IA IA IA IA IA IL IL IN LA LA Burger King Lake Charles LA Burger King Lake Charles LA — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 362 683 598 319 324 720 843 635 1,128 795 501 380 693 347 245 170 909 495 748 564 1,160 557 334 313 607 860 354 544 726 380 456 610 1,087 412 399 956 971 720 454 865 977 943 1,219 499 2,080 1,042 981 2,175 1,350 1,156 876 376 949 680 1,002 582 911 1,051 677 606 1,088 465 456 746 F-79 — — — — — — — — — — — — — — — — — — — — — — — — — (357) (562) — — — — — 1,449 1,095 997 1,275 1,295 1,440 1,297 1,500 2,105 1,738 1,720 879 2,773 1,389 1,226 2,345 2,259 1,651 1,624 940 2,109 1,237 1,336 895 1,518 1,554 469 1,150 1,814 845 912 (305) 7/31/2013 1989 (122) 6/27/2013 1984 (112) 7/31/2013 1994 (268) 7/31/2013 1998 (272) 7/31/2013 1995 (202) 7/31/2013 1998 (127) 7/31/2013 1980 (256) 6/27/2013 1998 (290) 6/27/2013 1993 (279) 6/27/2013 1997 (361) 6/27/2013 2001 (146) 6/27/2013 1995 (584) 7/31/2013 1986 (292) 7/31/2013 1998 (275) 7/31/2013 1997 (638) 6/27/2013 1995 (400) 6/27/2013 1998 (324) 7/31/2013 1998 (260) 6/27/2013 1988 (106) 7/31/2013 1987 (266) 7/31/2013 1987 (191) 7/31/2013 1997 (281) 7/31/2013 1988 (163) 7/31/2013 1988 (256) 7/31/2013 1997 (160) 7/31/2013 2003 (6) 6/27/2013 1995 (179) 6/27/2013 1987 (305) 7/31/2013 1990 (130) 7/31/2013 1990 (128) 7/31/2013 1980 1,356 (209) 7/31/2013 1990 Property City State Burger King Metairie Burger King Opelousas Burger King Raceland Burger King Amesbury Burger King Springfield Burger King Caribou Burger King Belding Burger King Detroit LA LA LA MA MA ME MI MI Burger King Grand Rapids MI Burger King Grand Rapids MI Burger King Grand Rapids MI Burger King Holland Burger King Hudsonville Burger King L'Anse Burger King Sparta Burger King Walker Burger King Warren MI MI MI MI MI MI Burger King Hastings MN Burger King Kansas City MO Burger King Brandon Burger King Clarksdale Burger King Cleveland Burger King Greenville Burger King Greenville Burger King Greenwood Burger King Grenada MS MS MS MS MS MS MS Burger King Philadelphia MS Burger King Yazoo City MS Burger King Asheville Burger King Chadbourn Burger King Claremont Burger King Clinton NC NC NC NC Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 728 964 356 835 983 770 221 614 490 260 346 420 451 32 640 305 248 328 444 649 865 688 573 351 692 536 402 489 728 353 646 494 392 964 533 1,217 516 440 411 331 545 780 807 707 676 616 570 711 745 608 1,036 1,513 865 1,606 1,337 820 1,038 805 939 909 595 797 646 801 F-80 — — — — — — — — — — — (668) — — — — — 200 — — — — — — — — — — — — — — 1,120 1,928 889 2,052 1,499 1,210 632 945 1,035 1,040 1,153 459 1,127 648 1,210 1,016 993 1,136 1,480 2,162 1,730 2,294 1,910 1,171 1,730 1,341 1,341 1,398 1,323 1,150 1,292 1,295 (110) 7/31/2013 1990 (271) 7/31/2013 1978 (150) 7/31/2013 2000 (360) 6/27/2013 1977 (153) 6/27/2013 1974 (129) 6/27/2013 1995 (115) 7/31/2013 1994 (93) 7/31/2013 1988 (160) 6/27/2013 1995 (229) 6/27/2013 1995 (226) 7/31/2013 1985 — 6/27/2013 1995 (190) 7/31/2013 1988 (173) 7/31/2013 1999 (167) 6/27/2013 1995 (199) 7/31/2013 1973 (209) 7/31/2013 1987 (179) 7/31/2013 1990 (291) 7/31/2013 1984 (448) 6/27/2013 1981 (243) 7/31/2013 1988 (451) 7/31/2013 1985 (375) 7/31/2013 2004 (230) 7/31/2013 1993 (291) 7/31/2013 1988 (226) 7/31/2013 1989 (263) 7/31/2013 1993 (255) 7/31/2013 1993 (167) 7/31/2013 1982 (236) 6/27/2013 1999 (191) 6/27/2013 2000 (237) 6/27/2013 1999 Property City State Burger King Durham Burger King Wilmington Burger King Blair Burger King Wahoo Burger King Dover Burger King Nashua Burger King Edison Burger King Elko Burger King Albany NC NC NE NE NH NH NJ NV NY Burger King Central Square NY Burger King Cohoes Burger King Hamburg Burger King Irondequoit NY NY NY Burger King Montgomery NY Burger King Schenectady NY Burger King Syracuse Burger King Dayton Burger King Mansfield Burger King New Philadelphia Burger King Willoughby Burger King Ardmore NY OH OH OH OH OK Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — 522 1,443 1,359 1,305 2,111 1,310 1,555 1,261 1,180 1,689 833 786 1,647 1,522 1,316 1,212 1,035 957 1,198 1,415 1,293 (103) 6/27/2013 1995 (258) 6/27/2013 1999 (305) 7/31/2013 1987 (311) 7/31/2013 1990 (282) 6/27/2013 1970 (184) 7/31/2013 2008 (315) 6/27/2013 1995 (294) 6/27/2013 1995 (249) 6/27/2013 1995 (349) 6/27/2013 1995 (165) 6/27/2013 1995 (113) 6/27/2013 1974 (185) 7/31/2013 1980 (306) 6/27/2013 1995 (275) 6/27/2013 1995 (170) 7/31/2013 1986 (131) 7/31/2013 1990 (215) 7/31/2013 1985 (219) 7/31/2013 1986 (295) 6/27/2013 1995 (300) 6/27/2013 1995 — — — — — — — — — — — — — — — — — — — — — 170 573 272 196 1,159 655 480 260 330 500 270 403 988 480 380 606 569 191 419 410 270 352 870 1,087 1,109 952 655 1,075 1,001 850 1,189 563 383 659 1,042 936 606 466 766 779 1,005 1,023 F-81 Property City State Burger King Roseburg OR Burger King Harrisburg Burger King Old Forge Burger King Gaffney Burger King Greenville PA PA SC SC Burger King North Augusta SC Burger King North Augusta SC Burger King Chattanooga Burger King Gallatin Burger King Austin Burger King Laredo Burger King Texas City TN TN TX TX TX Burger King Spanaway WA Burger King Germantown WI Burger King Marshfield Burger King Rhinelander Burger King Weston WI WI WI Burger King Bluefield WV Burlington Rogers Burlington West Valley City Cabela's Rogers Cabela's Thornton Cabela's Grandville AR UT AR CO MI Cabela's Oklahoma City OK Cabela's Lacey Cactus Wellhead Williston Cactus Wellhead Dubois Cactus Wellhead Center Cactus Wellhead Pleasanton Cadbury Holdings Whippany California Pizza Kitchen Paradise Valley WA ND PA TX TX NJ AZ California Pizza Kitchen Alpharetta GA Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 350 619 390 370 420 256 450 740 199 666 684 421 509 644 232 260 329 210 1,460 2,331 3,419 3,677 3,269 3,383 3,393 72 129 115 144 2,767 2,285 1,279 886 412 905 880 571 1,451 1,050 1,591 463 999 1,026 782 1,628 1,300 885 606 718 1,163 6,379 5,821 17,605 19,099 20,328 11,590 — — 126 — — — — — — (517) — 300 — — — — — — — — — — — — 1,236 1,031 1,421 1,250 991 1,707 1,500 2,331 662 1,148 1,710 1,503 2,137 1,944 1,117 866 1,047 1,373 7,839 8,152 (260) 6/27/2013 1995 (116) 7/31/2013 1985 (74) 6/27/2013 1995 (258) 6/27/2013 1995 (167) 6/27/2013 1995 (407) 7/31/2013 1985 (295) 7/31/2013 1985 (467) 6/27/2013 1995 (130) 7/31/2013 1984 (135) 6/27/2013 1998 (288) 7/31/2013 2002 (241) 7/31/2013 1984 (482) 6/27/2013 1997 (385) 6/27/2013 1986 (262) 6/27/2013 1986 (170) 7/31/2013 1986 (213) 6/27/2013 1987 (341) 6/27/2013 1995 (149) 3/7/2018 2015 (257) 11/30/2017 2017 21,024 (647) 9/25/2017 2012 22,776 (685) 9/25/2017 2012 23,597 (739) 9/25/2017 2013 14,973 (421) 9/25/2017 2015 20,158 (29) 23,522 (769) 9/25/2017 2007 — — — — — — — 3,807 2,671 2,001 3,052 (713) 7/24/2014 2011 (513) 6/12/2014 2012 (380) 6/12/2014 2011 (592) 6/12/2014 2011 40,785 (9,275) 11/5/2013 2004 3,765 4,528 (480) 2/7/2014 1994 (946) 2/7/2014 1994 3,735 2,542 1,886 2,908 38,018 1,480 3,249 F-82 Initial Costs (1) Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City California Pizza Kitchen California Pizza Kitchen California Pizza Kitchen State GA Atlanta Schaumburg IL Grapevine Captain D's Statesboro Captain D's Florence Captain D's Southaven Captain D's Memphis Captain D's Duncanville Cargill Blair Carl's Jr. Purcell CarMax Henderson CarMax Austin Carrabba's Scottsdale Carrabba's Louisville Carrabba's Tampa Carrabba's Duluth Carrabba's Bowie Carrabba's Brooklyn Carrabba's Washington Twnshp Carrabba's Columbia TX GA KY MS TN TX NE OK NV TX AZ CO FL GA MD OH OH SC Carrabba's Johnson City TN Cashland Celina OH Castle Dental Murfreesboro TN Cequent Change Healthcare Operations Mosinee Nashville Charleston's Carmel Checkers Huntsville Checkers Hollywood Checkers Jacksonville Checkers Lauderhill Checkers Miami WI TN IN AL FL FL FL FL Encumbrances at December 31, 2018 — — — — — — — — 2,401 — — Land 2,307 1,180 1,544 350 248 270 230 295 627 77 1,857 3,179 2,250 401 325 564 338 246 4,989 513 8,542 10,396 9,900 5,461 16,940 — — — — — — — — — — — — 4,700 — — — — — — 1,350 1,083 1,650 836 1,429 1,187 906 1,159 771 108 256 1,847 1,400 2,085 2,881 1,036 2,212 1,859 2,164 2,536 132 256 1,416 3,259 688 140 689 160 731 280 621 10,417 3,016 — 2,220 1,096 1,951 — F-83 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 4,164 4,359 3,794 751 573 834 568 541 (587) 2/7/2014 1993 (928) 2/7/2014 1995 (670) 2/7/2014 1994 (118) 6/27/2013 1995 (96) 6/27/2013 1981 (165) 6/27/2013 1995 (99) 6/27/2013 1995 (73) 6/27/2013 1982 5,616 (1,080) 2/7/2014 2009 590 (152) 6/27/2013 1980 18,938 (2,837) 2/7/2014 2002 22,401 (4,158) 2/7/2014 2004 3,197 2,483 3,735 3,717 2,465 3,399 2,765 3,323 3,307 240 512 (398) 2/7/2014 2000 (407) 2/7/2014 2000 (632) 2/7/2014 1994 (849) 2/7/2014 2004 (563) 2/7/2014 2003 (619) 2/7/2014 2002 (568) 2/7/2014 2001 (626) 2/7/2014 2000 (795) 2/7/2014 2003 (41) 7/31/2013 1995 (80) 7/31/2013 1996 4,675 (499) 2/21/2014 1992 11,105 (2,126) 2/7/2014 2010 3,156 689 2,380 1,827 2,231 621 (908) 6/27/2013 1995 — 6/27/2013 1995 (668) 6/27/2013 1995 (308) 7/31/2013 1993 (587) 6/27/2013 1995 — 7/31/2013 1993 Property City State Checkers Orlando Checkers Plantation Checkers Tampa FL FL FL Checkers Fayetteville GA Chedder's Casual Cafe Chedder's Casual Cafe Bolingbrook IL Lubbock Chevy's Miami Chevy's Children's Courtyard Childtime Childcare Childtime Childcare Childtime Childcare Childtime Childcare Chilis Chilis Chilis Chilis Greenbelt MD Grand Prairie TX Modesto Bedford CA OH Oklahoma City OK Oklahoma City OK East Peoria Flanders Mt. Laurel Amarillo Encumbrances at December 31, 2018 — — — — — — — — — — — — — — Land 1,033 220 736 681 1,344 1,053 1,455 530 367 280 111 124 108 1,023 1,508 1,402 1,447 1,332 TX FL IL NJ NJ TX TX TX ND IL AL AL AL AL FL GA GA SC SC SC SC China Buffet Alvin China Buffet Angleton China Town Buffet Bismarck Chipper's Grill Streator Church's Chicken Atmore Church's Chicken Bay Minette Church's Chicken Flomaton Church's Chicken Jackson Church's Chicken Orlando Church's Chicken Augusta Church's Chicken Augusta Church's Chicken Charleston Church's Chicken Charleston Church's Chicken Columbia Church's Chicken Columbia Initial Costs (1) Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction — 1,461 — — 1,760 2,345 783 2,399 1,055 1,524 852 796 793 2,347 842 1,792 1,893 299 272 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — (486) (393) 1,033 1,681 736 681 3,104 3,398 2,238 2,929 1,422 1,804 963 920 901 3,370 2,244 3,124 2,704 409 399 — 7/31/2013 1995 (440) 6/27/2013 1995 — 6/27/2013 1995 — 6/27/2013 1995 (534) 6/27/2013 1997 (712) 6/27/2013 1997 (244) 7/31/2013 1995 (722) 6/27/2013 1995 (277) 2/7/2014 1999 (387) 2/7/2014 1988 (240) 2/7/2014 1979 (222) 2/7/2014 1985 (214) 2/7/2014 1986 (713) 6/27/2013 2003 (398) 2/7/2014 2003 (360) 2/7/2014 2004 (590) 7/31/2013 1984 (91) 6/27/2013 1982 (82) 6/27/2013 1982 2,966 (601) 7/31/2013 2000 445 718 891 691 846 634 853 654 765 667 388 266 (77) 6/27/2013 1995 (161) 7/31/2013 1976 (212) 7/31/2013 2003 (145) 7/31/2013 1981 (202) 7/31/2013 1982 (107) 7/31/2013 1984 (167) 7/31/2013 1976 (128) 7/31/2013 1984 (97) 7/31/2013 1973 (47) 7/31/2013 1979 (6) 7/31/2013 1978 (6) 7/31/2013 1977 — — — — — — — — — — — — — — — — 811 110 127 1,038 1,928 190 144 134 173 127 254 256 196 421 500 437 231 255 574 757 518 719 380 597 458 344 167 437 428 F-84 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Church's Chicken Greenville Church's Chicken Greenville Church's Chicken Church's Chicken North Charleston North Charleston Church's Chicken Orangeburg Church's Chicken Spartanburg Chuze Fitness Cigna Cigna Highlands Ranch Phoenix Plano Circle K Phoenix Circle K Martinez Circle K Martinez Circle K Thomson Circle K Akron Citizens Bank Colchester Citizens Bank Deep River Citizens Bank East Lyme Citizens Bank Hamden Citizens Bank Higganum Citizens Bank Montville Citizens Bank Stonington Citizens Bank Lewes Citizens Bank Wilmington Citizens Bank Ludlow Citizens Bank Malden Citizens Bank Malden Citizens Bank Medford Citizens Bank Milton SC SC SC SC SC SC CO AZ TX AZ GA GA GA OH CT CT CT CT CT CT CT DE DE MA MA MA MA MA Citizens Bank New Bedford MA Citizens Bank Randolph Citizens Bank Somerville MA MA Citizens Bank South Dennis MA — — — — — — — — — — — — — — — — — — — — — — — — — 1,697 1,194 2,244 — 1,383 — — 254 325 302 407 407 350 2,850 6,194 472 487 302 407 271 525 4,795 16,215 10,036 42,676 344 348 293 637 675 185 453 258 581 171 413 190 102 299 810 488 484 589 619 297 480 561 — 1,377 813 329 340 1,254 1,049 1,812 1,032 475 971 2,342 1,079 916 299 540 596 1,935 1,094 2,476 694 1,439 561 1,294 F-85 — (458) — — (299) (431) — — — — — — — — — — — — — — — — — — — — — — — — — — 726 354 604 814 379 444 (132) 7/31/2013 2009 (7) 7/31/2013 1984 (85) 7/31/2013 1976 (114) 7/31/2013 1977 (5) 7/31/2013 1985 (9) 7/31/2013 1978 7,645 (1,168) 2/7/2014 2007 22,409 (3,797) 2/7/2014 2012 52,712 (10,111) 2/7/2014 2009 1,721 1,161 622 977 1,929 1,234 2,265 1,290 1,056 1,142 2,755 1,269 1,018 598 1,350 1,084 2,419 1,683 3,095 991 1,919 1,122 1,294 (450) 5/4/2012 1986 (260) 8/28/2012 2003 (80) 9/26/2014 1993 (86) 9/26/2014 1990 (398) 9/27/2012 1996 (319) 9/28/2012 2012 (550) 9/28/2012 1851 (313) 9/28/2012 1972 (144) 9/28/2012 1995 (358) 8/1/2010 1995 (711) 9/28/2012 1984 (328) 9/28/2012 1984 (267) 2/22/2013 1968 (94) 4/26/2012 1967 (164) 9/28/2012 1995 (181) 9/28/2012 1920 (587) 9/28/2012 1988 (332) 9/28/2012 1938 (735) 12/14/2012 1968 (211) 9/28/2012 1983 (437) 9/28/2012 1979 (170) 9/28/2012 1940 (384) 12/14/2012 1986 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — 187 390 350 574 434 385 303 410 283 261 168 309 312 178 747 724 816 3,250 2,461 2,184 707 2,322 — — — — — — — — 1,602 (1,227) 1,476 951 1,748 935 1,009 — — — — — 934 1,114 1,166 3,824 2,895 2,569 1,010 2,732 658 1,737 1,119 2,057 1,247 1,187 (213) 5/10/2013 1975 (220) 9/28/2012 1974 (242) 12/14/2012 1991 (1,205) 8/1/2010 1970 (861) 8/1/2010 1977 (764) 8/1/2010 1974 (210) 12/14/2012 1962 (849) 8/1/2010 1975 (8) 8/1/2010 1980 (550) 8/1/2010 1959 (354) 8/1/2010 1980 (651) 8/1/2010 1960 (277) 12/14/2012 1980 (372) 8/1/2010 1963 Property City State Citizens Bank Springfield Citizens Bank Winthrop Citizens Bank Woburn Citizens Bank Clinton Township Citizens Bank Dearborn Citizens Bank Dearborn Citizens Bank Farmington MA MA MA MI MI MI MI Citizens Bank Grosse Pointe MI Citizens Bank Lathrup Village Citizens Bank Livonia Citizens Bank Richmond Citizens Bank St. Clair Shores Citizens Bank Troy Citizens Bank Warren MI MI MI MI MI MI F-86 Property City State Citizens Bank Keene Citizens Bank Manchester Citizens Bank Manchester Citizens Bank Pelham Citizens Bank Pittsfield Citizens Bank Rollinsford Citizens Bank Salem Citizens Bank Haddon Heights Citizens Bank Albany Citizens Bank Amherst Citizens Bank East Aurora Citizens Bank Johnstown Citizens Bank Port Jervis Citizens Bank Rochester Citizens Bank Vails Gate Citizens Bank Whitesboro Citizens Bank Alliance Citizens Bank Boardman Citizens Bank Broadview Heights Citizens Bank Brunswick Citizens Bank Cleveland Citizens Bank Cleveland Citizens Bank Cleveland Citizens Bank Fairlawn Citizens Bank Lakewood Citizens Bank Louisville Citizens Bank Massillon Citizens Bank Northfield Citizens Bank Parma NH NH NH NH NH NH NH NJ NY NY NY NY NY NY NY NY OH OH OH OH OH OH OH OH OH OH OH OH OH Citizens Bank Parma Heights OH Citizens Bank Rocky River OH Citizens Bank South Russell OH Encumbrances at December 31, 2018 1,885 — — — — — — — — — — — — — — — — — — — — — — 1,885 — — — — — — — — Initial Costs (1) Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 132 640 — 113 160 78 328 316 232 238 162 163 143 166 284 130 204 280 201 186 239 210 182 511 196 191 287 317 475 426 283 106 2,511 782 1,568 340 908 444 1,312 948 1,315 1,348 919 923 811 943 1,610 739 1,156 1,589 1,140 1,057 1,357 1,190 1,031 2,045 1,111 1,080 1,624 1,797 581 638 1,602 957 F-87 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,643 1,422 1,568 453 1,068 522 1,640 1,264 1,547 1,586 1,081 1,086 954 1,109 1,894 869 1,360 1,869 1,341 1,243 1,596 1,400 1,213 2,556 1,307 1,271 1,911 2,114 1,056 1,064 1,885 1,063 (745) 12/14/2012 1900 (237) 9/28/2012 1941 (465) 12/14/2012 1995 (107) 4/26/2012 1983 (335) 8/1/2010 1976 (164) 8/1/2010 1977 (389) 12/14/2012 1980 (266) 7/23/2013 1965 (460) 8/1/2010 1960 (478) 8/1/2010 1965 (326) 8/1/2010 1996 (323) 8/1/2010 1973 (292) 8/1/2010 1995 (335) 8/1/2010 1962 (563) 8/1/2010 1995 (259) 8/1/2010 1995 (433) 8/1/2010 1972 (595) 8/1/2010 1984 (411) 8/1/2010 1982 (396) 8/1/2010 2004 (508) 8/1/2010 1973 (446) 8/1/2010 1950 (386) 8/1/2010 1930 (607) 12/14/2012 1979 (389) 8/1/2010 1985 (404) 8/1/2010 1960 (608) 8/1/2010 1995 (663) 8/1/2010 1969 (172) 12/14/2012 1971 (189) 12/14/2012 1957 (560) 8/1/2010 1972 (284) 12/14/2012 1981 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Citizens Bank Wadsworth Citizens Bank Willoughby Citizens Bank Aliquippa Citizens Bank Allison Park Citizens Bank Altoona Citizens Bank Ambridge Citizens Bank Beaver Falls Citizens Bank Butler Citizens Bank Camp Hill Citizens Bank Carnegie Citizens Bank Dallas Citizens Bank Dillsburg Citizens Bank Erie Citizens Bank Glenside Citizens Bank Greensburg Citizens Bank Havertown Citizens Bank Homestead Citizens Bank Kingston Citizens Bank Kittanning Citizens Bank Lancaster Citizens Bank Latrobe OH OH PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA Citizens Bank Lower Burrell PA Citizens Bank Mechanicsbur g Citizens Bank Mercer Citizens Bank Milford Citizens Bank Mount Lebanon PA PA PA PA Citizens Bank Mountain Top PA Citizens Bank Narberth Citizens Bank Oakmont Citizens Bank Oil City Citizens Bank Philadelphia Citizens Bank Pittsburgh PA PA PA PA PA — — — — — — — — — — — — — 1,257 — — — — — — — — 1,620 — — 1,577 — — — — — — 158 395 138 314 153 215 138 286 430 73 213 232 168 343 45 219 202 404 56 383 148 180 288 105 513 215 111 420 199 110 266 215 893 — 2,239 (1,565) 782 733 459 — — — 1,217 (1,282) — — — — — — — — — — — — — — — — — — — — — — — — — — 553 1,144 645 1,396 1,205 926 671 1,370 861 875 807 943 1,060 468 591 722 2,590 314 769 1,939 631 2,381 1,127 623 1,065 1,219 F-88 1,051 1,069 920 1,047 612 150 691 1,430 1,075 1,469 1,418 1,158 839 1,713 906 1,094 1,009 1,347 1,116 851 739 902 2,878 419 1,282 2,154 742 2,801 1,326 733 1,331 1,434 (334) 8/1/2010 1960 (6) 8/1/2010 1920 (232) 12/14/2012 1953 (222) 9/28/2012 1972 (136) 12/14/2012 1971 (7) 8/1/2010 1925 (168) 9/28/2012 1995 (339) 12/14/2012 1966 (191) 12/14/2012 1971 (414) 12/14/2012 1920 (366) 9/28/2012 1949 (275) 12/14/2012 1935 (199) 12/14/2012 1954 (391) 5/22/2013 1958 (255) 12/14/2012 1957 (266) 9/28/2012 2003 (245) 9/28/2012 1960 (280) 12/14/2012 1977 (314) 12/14/2012 1889 (142) 9/28/2012 1967 (175) 12/14/2012 1969 (214) 12/14/2012 1980 (786) 9/28/2012 1900 (93) 12/14/2012 1964 (228) 12/14/2012 1981 (589) 9/28/2012 1960 (187) 12/14/2012 1980 (833) 8/1/2010 1935 (334) 12/14/2012 1967 (185) 12/14/2012 1965 (316) 12/14/2012 1971 (370) 9/28/2012 1970 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Citizens Bank Pittsburgh Citizens Bank Pittsburgh Citizens Bank Pittsburgh Citizens Bank Pittsburgh Citizens Bank Pittsburgh Citizens Bank Pittsburgh Citizens Bank Pittsburgh Citizens Bank Pittsburgh Citizens Bank Reading Citizens Bank Reading Citizens Bank Temple Citizens Bank Turtle Creek Citizens Bank Tyrone Citizens Bank Upper Darby Citizens Bank Warrendale PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA Citizens Bank West Hazleton PA Citizens Bank Wexford PA Citizens Bank Coventry Citizens Bank Cranston Citizens Bank East Greenwich Citizens Bank Johnston RI RI RI RI Citizens Bank N. Providence RI 1,445 Citizens Bank N. Providence RI Citizens Bank Providence Citizens Bank Rumford Citizens Bank Wakefield Citizens Bank Warren Citizens Bank Warwick Citizens Bank Middlebury Citizens Bank St. Albans Coborn's Liquor Store Coborn's Liquor Store Stanley Tioga RI RI RI RI RI VT VT ND ND — — — — — — — — — — — — — 2,262 1,244 — 918 — — — — — — — — — — — — — — 256 389 146 470 516 206 196 268 269 267 268 308 146 411 611 279 180 559 411 227 343 200 223 300 352 517 328 767 1,168 — — 2,770 (1,725) 2,661 1,204 1,852 1,110 2,413 — — — — — 1,524 (1,542) 802 626 923 583 617 916 2,509 719 559 1,234 680 1,030 1,800 892 899 654 959 609 (586) — — — — — — — — — — — — — — — — — 1,023 1,557 1,191 3,131 1,720 2,058 1,306 2,681 251 483 894 1,231 729 1,028 1,527 2,788 899 1,118 1,645 907 1,373 2,000 1,115 1,199 1,006 1,476 937 (233) 9/28/2012 1970 (346) 12/14/2012 1940 (9) 12/14/2012 1900 (789) 12/14/2012 1979 (357) 12/14/2012 1970 (549) 12/14/2012 1923 (329) 12/14/2012 1980 (716) 12/14/2012 1970 — 4/12/2013 1904 — 12/14/2012 1970 (190) 9/28/2012 1936 (280) 9/28/2012 1970 (173) 12/14/2012 1967 (183) 12/14/2012 1966 (272) 12/14/2012 1981 (762) 9/28/2012 1900 (213) 12/14/2012 1975 (170) 9/28/2012 1968 (366) 12/14/2012 1967 (202) 12/14/2012 1959 (313) 9/28/2012 1972 (534) 12/31/2012 1971 (265) 12/14/2012 1971 (267) 12/14/2012 1960 (194) 12/14/2012 1977 (291) 9/28/2012 1976 (185) 9/28/2012 1980 1,870 8,828 697 11,395 (2,501) 9/24/2013 1995 363 141 1,163 1,065 544 798 5,037 4,581 F-89 — — — — 907 939 6,200 5,646 (161) 12/14/2012 1969 (287) 8/1/2010 1989 (1,254) 2/21/2014 2014 (920) 6/26/2014 2014 Property City State Codale Codale Codale Logan Orem West Valley Comcast Englewood Community Bank Whitehall CompUSA Arlington ConAgra Foods Milton Conn's Hurst Cooper Tire & Rubber Franklin Cork & Pig San Angelo Cost Plus La Quinta County of Yolo, CA Woodland Cracker Barrel Braselton Cracker Barrel Bremen Cracker Barrel Columbus Cracker Barrel Greensboro Cracker Barrel Mebane UT UT UT CO NY TX PA TX IN TX CA CA GA GA GA NC NC Cracker Barrel Rocky Mount NC Cracker Barrel Fort Mill Cracker Barrel Piedmont Cracker Barrel Abilene Cracker Barrel San Antonio Cracker Barrel Sherman Cracker Barrel Bristol Cracker Barrel Emporia SC SC TX TX TX VA VA Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — 420 637 2,684 1,490 106 1,770 2,437 3,007 5,171 25,881 5,060 600 1,467 — — 5,656 27,242 497 1,990 14,883 4,438 33,994 — — — 769 1,211 2,640 2,935 1,294 2,677 1,012 — — 912 1,632 2,514 1,106 — — — — — — — 1,274 1,301 1,630 1,374 1,725 557 1,241 2,435 972 2,306 4,786 13,681 2,403 2,361 3,153 2,495 2,054 2,334 2,721 2,927 2,933 3,005 3,744 1,703 2,267 1,489 2,164 7,949 6,114 2,890 3,057 4,533 F-90 — — — — — 127 — 117 — 43 — — — — — — — — — — — — — — — — — — — 84 — 4 3,427 5,808 (76) 3/30/2018 2010 (184) 3/30/2018 1995 28,565 (575) 3/30/2018 2008 6,550 (1,368) 11/5/2013 1999 706 4,031 (210) 8/1/2011 1995 (495) 2/7/2014 1992 32,898 (6,218) 2/7/2014 1991 2,604 (548) 5/19/2014 1999 38,432 (10,526) 11/5/2013 2009 3,118 5,997 (721) 7/31/2013 2005 (1,254) 2/7/2014 2007 16,321 (3,299) 11/5/2013 2001 3,697 3,373 4,065 4,127 3,160 3,608 4,022 4,557 4,307 4,730 4,301 2,944 3,239 3,025 3,092 8,468 6,114 4,213 4,102 6,048 (928) 11/13/2012 2005 (912) 11/13/2012 2006 (896) 2/7/2014 2003 (735) 2/7/2014 2005 (793) 11/13/2012 2004 (707) 2/7/2014 2006 (810) 2/7/2014 2006 (869) 2/7/2014 2005 (875) 2/7/2014 2005 (840) 2/7/2014 2005 (1,065) 2/7/2014 2007 (615) 2/7/2014 2006 (876) 11/13/2012 2004 (653) 2/7/2014 2004 (836) 11/13/2012 2005 (2,892) 6/12/2014 2013 (1,693) 11/5/2013 1976 (922) 5/31/2013 2003 (908) 2/7/2014 2008 (1,390) 10/1/2013 2012 Cracker Barrel Waynesboro VA — 1,536 Cracker Barrel Woodstock Crest Production Services Crozer-Keystone Health CVS CVS CVS VA TX PA AL 2,262 — 176 928 519 — — 1,239 Pleasanton Ridley Park Hoover Meridianville AL 1,900 1,045 Phoenix AZ 5,025 1,511 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS Phoenix City Of Industry Fresno Palmdale Sacramento Norwich Dover Auburndale Boca Raton Ft. Myers Gulf Breeze Jacksonville Lakeland Naples New Port Richey St. Cloud Alpharetta Ringgold Stockbridge Vidalia Northbrook Edinburgh Evansville Franklin Mishawaka Tipton Lawrence Mandeville AZ CA CA CA CA CT DE FL FL FL FL FL FL FL FL FL GA GA GA GA IL IN IN IN IN IN KS LA 3,015 901 2,500 1,224 5,045 1,890 5,226 2,493 4,724 2,163 5,454 1,998 2,046 4,081 1,565 1,418 2,625 — 3,025 2,335 1,079 545 3,715 2,240 2,258 2,675 587 — 1,595 1,149 2,626 1,534 — 572 1,948 1,346 — — — — — — 2,258 — 2,908 855 368 420 227 310 409 311 837 4,020 2,385 2,704 3,202 4,409 4,630 4,016 5,995 — 2,038 3,560 3,502 — 4,323 2,347 4,164 2,966 1,875 858 2,939 1,283 1,105 15 — 16 17 19 15 — — — — — — 16 — — 78 (9) — — 3 3,620 4,426 6,315 7,140 6,198 8,008 4,081 3,456 3,560 5,837 545 6,563 2,950 4,164 4,115 3,487 1,421 4,285 2,138 1,476 (830) 10/1/2013 2012 (819) 2/7/2014 2009 (1,352) 10/1/2013 2012 (1,420) 10/1/2013 2012 (1,232) 10/1/2013 2012 (1,838) 10/1/2013 2011 — 2/7/2014 2010 (557) 2/7/2014 1999 (1,069) 2/7/2014 2009 (1,054) 2/7/2014 2009 — 2/7/2014 2009 (1,197) 2/7/2014 2009 (721) 10/1/2013 2012 (1,149) 2/7/2014 2009 (802) 2/7/2014 2004 (603) 4/12/2013 2002 (289) 9/28/2012 1994 (868) 2/7/2014 2007 (419) 2/28/2013 1998 (374) 9/28/2012 2000 55 — (5) — 68 — 16 2,005 3,287 3,092 4,941 2,105 5,229 5,316 (457) 2/24/2014 1998 (830) 2/7/2014 2000 (986) 3/29/2012 1999 (1,241) 2/7/2014 2007 (514) 2/24/2014 1998 (1,206) 2/7/2014 2009 (895) 10/1/2013 2012 1,530 3,060 2,787 4,532 1,726 4,392 2,915 F-91 3,471 41,765 1,139 46,375 (9,396) 2/7/2014 1980 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS Metairie LA 4,121 1,895 New Orleans LA 3,719 2,439 Slidell Hingham Malden Detroit LA MA MA MI Harper Woods MI Independence MO 4,355 1,142 5,695 1,873 5,360 1,757 — — — 270 499 780 St. Joseph MO 3,015 1,022 Southaven Southaven Beaufort Eden Kernersville Weaverville Cherry Hill Edison MS MS NC NC NC NC NJ NJ 3,030 1,849 4,270 1,281 2,781 — — 378 836 960 3,098 1,998 — — 2,255 3,318 Lawrenceville NJ 5,170 2,674 Albuquerque NM 3,719 975 Albuquerque NM 3,920 1,029 Las Cruces NM 4,925 1,295 North Las Vegas Sparks Henrietta Mineola Warren NV NV NY NY OH Oklahoma City OK The Village Tulsa Freeland Mechanicsbur g New Castle OK OK PA PA PA 3,268 1,374 — — 2,280 — — 3,425 2,446 982 486 965 — 560 569 520 950 122 3,582 1,155 — 412 3,519 2,439 4,568 5,619 5,271 2,427 2,829 3,121 3,067 3,217 4,100 3,404 1,450 1,313 4,307 — — 6,412 3,899 4,118 5,178 3,207 5,894 1,180 5,120 1,622 1,609 4,730 2,216 1,096 3,465 2,337 F-92 16 16 16 15 14 (5) — — 16 — — 16 — — — — — — 16 17 17 — — 63 — — — — 16 — — 45 5,430 4,894 5,726 7,507 7,042 2,692 3,328 3,901 4,105 5,066 5,381 3,798 2,286 2,273 6,305 2,255 3,318 9,086 4,890 5,164 6,490 4,581 6,380 2,208 5,120 2,182 2,178 5,250 3,182 1,218 4,620 2,794 (1,080) 10/1/2013 2012 (749) 10/1/2013 2012 (1,401) 10/1/2013 2012 (1,723) 10/1/2013 2012 (1,616) 10/1/2013 2012 (791) 2/28/2013 1999 (923) 2/28/2013 1999 (877) 5/19/2014 2000 (941) 10/1/2013 2012 (1,044) 2/7/2014 2009 (1,303) 2/7/2014 2009 (1,044) 10/1/2013 2011 (399) 2/7/2014 1998 (359) 2/7/2014 1998 (1,268) 2/7/2014 2009 — 2/7/2014 2011 — 2/7/2014 2008 (1,733) 2/7/2014 2009 (1,196) 10/1/2013 2011 (1,263) 10/1/2013 2011 (1,588) 10/1/2013 2012 (1,094) 8/22/2012 2004 (1,633) 2/7/2014 2009 (394) 11/8/2012 1997 (1,354) 2/7/2014 2008 (440) 2/7/2014 2008 (417) 2/7/2014 1996 (1,290) 2/7/2014 2009 (681) 10/1/2013 2010 (374) 8/8/2012 2004 (1,156) 11/29/2012 2008 (786) 10/31/2012 1999 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Shippensburg PA 1,859 CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS Titusville Towanda Anderson Cayce Columbia Greenville Greenville Piedmont Jackson Knoxville Nashville Converse Dumas Duncanville Edinburg Elsa Ft . Worth Gainesville San Antonio San Antonio San Antonio San Juan Hardy Lynchburg Madison Heights Norfolk Portsmouth Roanoke PA PA SC SC SC SC SC SC TN TN TN TX TX TX TX TX TX TX TX TX TX TX VA VA VA VA VA VA Virginia Beach VA Williamsburg VA 351 670 — 623 1,750 — 169 1,108 836 — 878 — — 2,278 — — — 3,082 1,209 2,613 1,190 — 203 3,538 1,390 2,312 — — 846 670 1,179 2,814 915 4,147 2,453 2,215 341 3,806 1,996 4,422 2,034 2,660 2,345 2,035 1,748 868 610 686 914 1,592 1,015 2,399 697 3,367 1,230 2,269 3,114 4,115 — 825 683 907 628 — 68 — — — — — — — 16 16 83 15 16 — — 16 15 — 15 15 16 16 — 99 68 16 16 14 14 16 — 1,988 683 877 1,389 2,701 2,811 1,520 1,816 1,206 2,822 2,210 1,148 3,243 2,537 2,681 3,060 2,744 3,679 3,334 2,993 3,778 2,605 2,441 2,059 2,987 2,589 2,789 3,690 2,474 3,868 5,137 3,947 F-93 2,339 1,421 877 2,012 4,451 2,811 1,689 2,924 2,042 4,047 3,416 1,434 4,648 3,399 3,351 4,239 3,675 6,147 3,675 5,004 5,827 3,489 3,067 2,745 4,000 3,672 3,502 4,936 3,313 4,565 6,060 4,575 (649) 2/8/2013 2002 (389) 2/7/2014 1998 (282) 4/24/2013 2003 (367) 2/7/2014 1998 (819) 2/7/2014 2009 (882) 7/2/2013 2006 (496) 2/28/2013 1997 (517) 2/7/2014 1998 (314) 2/7/2014 1998 (866) 10/1/2013 2012 (679) 10/1/2013 2011 (389) 9/28/2012 1996 (995) 10/1/2013 2011 (779) 10/1/2013 2011 (759) 5/19/2014 2000 (877) 2/7/2014 2008 (842) 10/1/2013 2011 (1,129) 10/1/2013 2011 (882) 2/7/2014 2003 (919) 10/1/2013 2011 (1,159) 10/1/2013 2011 (800) 10/1/2013 2012 (750) 10/1/2013 2012 (656) 5/16/2013 2005 (829) 2/7/2014 1999 (707) 2/7/2014 1997 (856) 10/1/2013 2011 (1,132) 10/1/2013 2012 (760) 10/1/2013 2011 (1,186) 10/1/2013 2012 (1,575) 10/1/2013 2011 (1,078) 2/7/2014 1947 Dahl's Des Moines IA Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Dahl's Dahl's Dahl's Des Moines Des Moines Johnston Dairy Queen Mauldin Dairy Queen Alto Dairy Queen Pineland Dairy Queen Silsbee Dairy Queen Woodville DaVita Dialysis Osceola DaVita Dialysis Casselberry DaVita Dialysis Palatka DaVita Dialysis Sanford DaVita Dialysis Augusta IA IA IA SC TX TX TX TX AR FL FL FL GA DaVita Dialysis Douglasville GA DaVita Dialysis Ft. Wayne DaVita Dialysis Hiawatha IN KS DaVita Dialysis New Orleans LA DaVita Dialysis Allen Park MI DaVita Dialysis Grand Rapids MI DaVita Dialysis Clinton DaVita Dialysis St. Pauls DaVita Dialysis Akron DaVita Dialysis Cincinnati MO NC OH OH DaVita Dialysis Georgetown OH DaVita Dialysis Willow Grove PA DaVita Dialysis Hartsville DaVita Dialysis Beeville SC TX — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,163 2,871 3,202 133 50 40 60 98 137 392 207 530 118 119 394 69 511 209 215 128 138 312 219 125 311 126 99 1,649 11,761 6,644 — 110 120 100 65 1,232 2,320 1,173 2,793 1,818 1,858 2,963 1,302 2,237 1,885 1,794 896 1,246 1,994 878 706 3,886 1,136 1,879 DaVita Dialysis Federal Way WA 17,751 1,929 22,357 Denny's Denny's Mesa Peoria Denny's Phoenix Denny's Scottsdale AZ AZ AZ AZ — — — — 1,089 310 825 736 891 457 1,237 491 F-94 — — — — — — — — — — — — 47 — (7) — — 151 — — — — 55 (1) 51 — — — — — — — 2,812 (454) 2/7/2014 1959 14,632 (3,132) 2/7/2014 2011 9,846 (1,817) 2/7/2014 2000 133 160 160 160 163 1,369 2,712 1,380 3,323 1,983 1,977 3,350 1,371 2,748 2,245 2,009 1,024 1,384 2,306 1,152 830 4,248 1,262 1,978 — 6/27/2013 1995 (32) 6/27/2013 1995 (35) 6/27/2013 1995 (29) 6/27/2013 1995 (18) 7/31/2013 1980 (318) 3/28/2013 2009 (537) 2/7/2014 2007 (294) 6/5/2013 2013 (602) 2/7/2014 2005 (346) 2/7/2014 2000 (354) 2/7/2014 2001 (592) 2/7/2014 2008 (330) 5/30/2013 2012 (392) 9/30/2014 2010 (563) 12/31/2012 1955 (393) 2/7/2014 1997 (211) 2/26/2014 2003 (306) 8/2/2013 2006 (433) 3/31/2014 1932 (229) 3/28/2013 2008 (182) 3/28/2013 2009 (776) 2/7/2014 1989 (288) 5/30/2013 2013 (559) 12/31/2012 1979 24,286 (7,988) 11/21/2012 2000 1,980 767 2,062 1,227 (278) 7/31/2013 1994 (139) 6/27/2013 1995 (386) 7/31/2013 2005 (153) 7/31/2013 1980 Initial Costs (1) Property City State Denny's Denny's Tempe Tempe Denny's Idaho Falls Denny's Merriam Denny's Topeka AZ AZ ID KS KS Denny's Bloomington MN Denny's Branson MO Denny's Kansas City MO Denny's N. Kansas City MO Denny's Denny's Sedalia Black Mountain Denny's Mooresville Denny's Henrietta Denny's Watertown Denny's Fremont Denny's Marion Denny's Ontario Denny's Greenville Denny's Pasadena Dick's Sporting Goods Dick's Sporting Goods Dick's Sporting Goods Dick's Sporting Goods Fort Gratiot Moore Charleston Jackson DJO, LLC Vista Dollar General Andalusia Dollar General Birmingham Dollar General Bremen Dollar General Butler MO NC NC NY NY OH OH OR SC TX MI OK SC TN CA AL AL AL AL Dollar General Childersburg AL Dollar General Chunchula Dollar General Cullman Dollar General Cullman AL AL AL Encumbrances at December 31, 2018 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Land 378 1,567 196 390 630 1,184 620 750 630 500 210 250 361 330 320 115 240 570 500 722 1,243 3,733 1,346 3,732 317 156 59 338 328 174 331 221 Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — 9 — — — — — — — 623 2,411 628 1,540 1,076 1,184 2,829 1,436 1,567 1,283 715 1,091 602 1,437 1,295 505 1,307 1,124 1,816 8,465 (73) 6/27/2013 1980 (263) 7/31/2013 1995 (124) 6/27/2013 1995 (346) 6/27/2013 1995 (134) 6/27/2013 1995 — 7/31/2013 1995 (665) 6/27/2013 1995 (207) 6/27/2013 1995 (282) 6/27/2013 1995 (236) 6/27/2013 1995 (152) 6/27/2013 1995 (253) 6/27/2013 1995 (75) 7/31/2013 1970 (333) 6/27/2013 1995 (293) 6/27/2013 1995 (118) 6/27/2013 1989 (321) 6/27/2013 1995 (167) 6/27/2013 1995 (396) 6/27/2013 1995 (2,113) 2/7/2014 2010 11,669 (2,798) 2/7/2014 2012 8,758 7,452 (1,419) 2/7/2014 2005 (1,633) 2/7/2014 2007 20,600 (10,384) 8/15/2014 2006 1,240 1,038 1,076 1,431 1,314 871 1,111 1,082 (111) 7/24/2014 2014 (286) 6/6/2012 2012 (214) 9/29/2014 2014 (297) 3/28/2014 2014 (273) 2/7/2014 2013 (229) 4/26/2012 2012 (212) 3/28/2014 2013 (165) 9/26/2014 2014 245 844 432 1,150 446 — 2,209 686 937 783 505 841 241 1,107 975 390 1,067 554 1,316 7,743 10,426 5,025 6,106 16,868 914 882 1,017 1,093 986 697 780 861 F-95 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Dollar General Frisco City Dollar General Gardendale Dollar General Hartselle Dollar General Headland Dollar General Mobile Dollar General Moulton Dollar General Mt. Vernon Dollar General Ohatchee Dollar General Phenix City Dollar General Phenix City Dollar General Red Level Dollar General Sylacauga Dollar General Tarrant Dollar General Troy Dollar General Tuscaloosa Dollar General Vance Dollar General Ash Flat Dollar General Batesville Dollar General Batesville Dollar General Beebe Dollar General Bella Vista Dollar General Bergman Dollar General Blytheville Dollar General Carlisle Dollar General Des Arc Dollar General Dumas Dollar General Flippin Dollar General Gassville AL AL AL AL AL AL AL AL AL AL AL AL AL AL AL AL AR AR AR AR AR AR AR AR AR AR AR AR Dollar General Green Forest AR Dollar General Higden AR Dollar General Lake Village AR Dollar General Lepanto AR — — — — — — — — — — 300 — — — 300 — — — — — — — — — — — — — — — — — 121 142 473 387 207 517 260 97 267 386 120 120 217 67 133 191 44 32 42 51 129 113 30 13 56 46 53 54 52 52 64 43 836 805 983 1,091 1,039 1,207 1,402 942 929 1,104 680 968 869 963 756 731 132 285 374 478 302 639 285 245 508 412 64 325 303 469 362 389 F-96 — — — — — — — — — — — — — — — — 25 7 78 52 35 — 50 (2) 53 24 1 21 38 80 29 — 957 947 1,456 1,478 1,246 1,724 1,662 1,039 1,196 1,490 800 1,088 1,086 1,030 889 922 201 324 494 581 466 752 365 256 617 482 118 400 393 601 455 432 (231) 2/26/2014 2014 (257) 8/9/2012 2012 (273) 2/7/2014 2013 (222) 8/13/2014 2014 (284) 2/7/2014 2013 (397) 4/26/2012 2012 (386) 2/7/2014 2013 (207) 4/17/2014 2014 (252) 2/7/2014 2012 (304) 2/7/2014 2013 (233) 10/31/2011 2010 (262) 2/7/2014 2013 (294) 12/12/2011 2011 (263) 2/7/2014 2013 (256) 12/30/2011 2011 (199) 3/28/2014 2014 (43) 6/19/2012 1997 (84) 7/25/2013 1998 (112) 7/25/2013 1999 (138) 7/25/2013 1999 (103) 11/10/2011 2005 (206) 7/2/2012 2011 (85) 7/25/2013 2000 (83) 11/10/2011 2005 (153) 7/25/2013 1999 (122) 7/25/2013 2000 (21) 6/19/2012 1994 (94) 7/25/2013 1999 (104) 11/10/2011 2005 (142) 7/25/2013 1995 (108) 7/25/2013 1995 (114) 7/25/2013 1995 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Dollar General Little Rock Dollar General Marvell Dollar General Maynard Dollar General Mcgehee Dollar General Quitman Dollar General Searcy Dollar General Tuckerman Dollar General White Hall Dollar General Wooster Dollar General Grand Ridge Dollar General Kissimmee Dollar General Lakeland Dollar General Molino Dollar General Palatka Dollar General Panama City Dollar General Guyton Dollar General Lyerly Dollar General Shiloh Dollar General Thomaston Dollar General Cedar Falls Dollar General Center Point Dollar General Chariton Dollar General Eagle Grove Dollar General Estherville Dollar General Hampton Dollar General Lake Mills Dollar General Nashua AR AR AR AR AR AR AR AR AR FL FL FL FL FL FL GA GA GA GA IA IA IA IA IA IA IA IA 13 107 — 29 — 65 80 — — — — — — — 1 — — — — — — — — — — — — 498 511 727 282 471 357 409 431 738 760 1,714 2,223 1,185 1,309 452 1,065 1,243 893 1,280 958 908 1,099 1,002 1,129 939 809 904 (121) 7/25/2013 1995 (112) 7/25/2013 1995 (203) 12/4/2012 1995 (69) 7/25/2013 1998 (122) 7/25/2013 2001 (79) 7/25/2013 1998 (88) 7/25/2013 1999 (114) 7/25/2013 1999 (206) 12/4/2012 1995 (231) 12/30/2011 2010 (268) 2/7/2014 2011 (484) 2/7/2014 2012 (345) 10/31/2011 2011 (311) 5/7/2014 2013 (92) 6/19/2012 1987 (252) 6/3/2013 2011 (267) 2/7/2014 2012 (218) 8/13/2014 2014 (268) 2/7/2014 2013 (251) 8/28/2013 2013 (240) 12/31/2012 2012 (298) 8/31/2012 2012 (265) 7/9/2013 2013 (284) 10/25/2012 2012 (250) 2/1/2012 2012 (243) 2/1/2012 2012 (244) 9/6/2012 2012 — — — — — — — — — 300 970 — 400 — — — — — — — — — — — — — — 73 40 73 25 45 29 49 43 74 76 643 413 178 113 139 213 251 150 308 96 136 165 100 226 188 81 136 412 364 654 228 426 263 280 388 664 684 1,071 1,810 1,007 1,196 312 852 992 743 972 862 772 934 902 903 751 728 768 F-97 Property City State Dollar General Ottumwa IA Dollar General Altamont Dollar General Carthage Dollar General Desoto Dollar General Fairbury Dollar General Galatia Dollar General Henry Dollar General Jacksonville Dollar General Jonesboro Dollar General Lexington Dollar General Mackinaw Dollar General Mahomet Dollar General Marion Dollar General Minonk Dollar General Mount Morris Dollar General Park Forest Dollar General Pittsburg Dollar General Rockford Dollar General Roodhouse Dollar General Savanna Dollar General South Pekin Dollar General Bainbridge Dollar General Medaryville Dollar General Monroeville Dollar General Porter Dollar General Rensselaer Dollar General Richland Dollar General Schneider Dollar General Auburn Dollar General Cottonwood Falls Dollar General Erie Dollar General Garden City IL IL IL IL IL IL IL IL IL IL IL IL IL IL IL IL IL IL IL IL IN IN IN IN IN IN IN KS KS KS KS Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 143 211 48 138 96 87 104 145 77 100 149 292 153 56 97 390 97 464 207 273 104 131 96 112 243 111 156 124 42 89 42 136 812 844 908 784 867 1,008 934 823 309 899 1,011 877 867 1,034 877 1,036 915 597 829 1,093 933 765 914 636 995 957 887 1,010 801 802 790 771 F-98 — — — — — — — — — — — — — — — — — 27 — — — — — — — — — — — — — — 955 1,055 956 922 963 1,095 1,038 968 386 999 1,160 1,169 1,020 1,090 974 1,426 1,012 1,088 1,036 1,366 1,037 896 1,010 748 1,238 1,068 1,043 1,134 843 891 832 907 (250) 1/31/2013 2012 (280) 3/9/2012 2012 (290) 8/31/2012 2012 (238) 3/26/2013 2013 (257) 6/7/2013 2013 (186) 7/29/2014 2014 (279) 5/23/2013 2013 (263) 8/31/2012 2012 (105) 11/10/2011 2007 (285) 9/21/2012 2012 (280) 2/25/2014 2013 (255) 8/22/2013 2013 (275) 9/24/2012 1995 (196) 7/2/2014 2014 (272) 12/17/2012 2012 (183) 8/1/2014 2013 (248) 3/31/2014 2014 (125) 6/18/2014 2014 (257) 12/31/2012 1995 (339) 12/31/2012 2012 (272) 8/14/2013 2013 (144) 9/22/2014 2010 (273) 7/31/2014 2014 (215) 12/22/2011 2011 (124) 5/29/2014 2014 (202) 7/30/2014 2014 (122) 4/30/2014 2014 (186) 9/17/2014 2014 (256) 8/31/2012 2009 (256) 8/31/2012 2009 (252) 8/31/2012 2009 (246) 8/31/2012 2010 Property City State Dollar General Harper Dollar General Humboldt Dollar General Kingman Dollar General Medicine Lodge Dollar General Minneapolis Dollar General Pomona Dollar General Sedan Dollar General Syracuse Dollar General Berea Dollar General Coldiron KS KS KS KS KS KS KS KS KY KY Dollar General East Bernstadt KY Dollar General Eubank Dollar General Monticello Dollar General Nancy Dollar General Whitesburg Dollar General Bastrop Dollar General Choudrant Dollar General Converse Dollar General Doyline Dollar General Gardner Dollar General Grambling Dollar General Jonesville Dollar General Keithville KY KY KY KY LA LA LA LA LA LA LA LA Dollar General Lake Charles LA Dollar General Lake Charles LA Dollar General Mangham Dollar General Dollar General Monroe Mount Hermon Dollar General New Iberia Dollar General Patterson Dollar General Sarepta LA LA LA LA LA LA Dollar General St. Martinville LA Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — 300 — — — — — — — — 300 400 400 — — — — 91 44 142 40 43 42 42 43 138 187 141 137 251 81 211 148 83 84 88 138 597 103 83 102 406 40 97 94 315 259 131 175 818 828 804 765 816 796 792 817 781 747 799 775 867 733 845 838 745 756 793 784 719 929 750 919 770 759 869 842 736 1,035 743 1,028 F-99 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 909 872 946 805 859 838 834 860 919 934 940 912 1,118 814 1,056 986 828 840 881 922 1,316 1,032 833 1,021 1,176 799 966 936 1,051 1,294 874 1,203 (261) 8/31/2012 2009 (264) 8/31/2012 2010 (257) 8/31/2012 2010 (244) 8/31/2012 2010 (261) 8/31/2012 2010 (254) 8/31/2012 2010 (253) 8/31/2012 2009 (261) 8/31/2012 2010 (233) 5/30/2013 2012 (223) 5/30/2013 2013 (238) 5/30/2013 2012 (231) 5/30/2013 2013 (229) 4/25/2014 2012 (241) 4/26/2012 2011 (252) 5/30/2013 2012 (246) 7/1/2013 2013 (249) 2/6/2012 2011 (240) 9/26/2012 2012 (248) 11/27/2012 2012 (260) 3/8/2012 2012 (208) 2/7/2014 2012 (295) 9/27/2012 2012 (242) 7/26/2012 2012 (306) 2/29/2012 2012 (213) 2/7/2014 2012 (253) 2/6/2012 2011 (290) 2/6/2012 2011 (281) 2/6/2012 2009 (242) 4/26/2012 2011 (340) 4/26/2012 2011 (238) 8/9/2012 2011 (284) 2/7/2014 2012 Property City State Dollar General Thibodaux LA Dollar General West Monroe LA Dollar General Zachary Dollar General Adams Dollar General Bangor Dollar General Bronson Dollar General Cadillac Dollar General Camden Dollar General Carleton Dollar General Covert Dollar General Durand Dollar General East Jordan Dollar General Flint Dollar General Flint Dollar General Gaylord Dollar General Iron River Dollar General Manchester Dollar General Manistique Dollar General Melvindale LA MA MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI Dollar General Mount Morris MI Dollar General Negaunee Dollar General Rapid City Dollar General Romulus Dollar General Roscommon Dollar General Wakefield Dollar General Albert Lea Dollar General Annandale Dollar General Barnesville Dollar General Cohasset Dollar General Ely Dollar General Hawley Dollar General Melrose MI MI MI MI MI MN MN MN MN MN MN MN Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 234 153 248 254 173 97 187 138 222 37 181 125 83 91 172 86 213 155 242 110 87 179 199 87 88 223 212 86 87 174 89 96 1,146 869 743 1,016 691 436 747 781 666 704 726 709 743 820 687 777 853 876 967 988 779 716 794 781 794 551 848 841 964 944 803 863 F-100 — — — — — — — — — — — — — — — — — — — — — — — — — 161 — — — — — — 1,380 1,022 991 1,270 864 533 934 919 888 741 907 834 826 911 859 863 1,066 1,031 1,209 1,098 866 895 993 868 882 935 1,060 927 1,051 1,118 892 959 (318) 2/7/2014 2012 (288) 3/9/2012 1995 (244) 4/26/2012 2011 (291) 10/10/2013 2012 (222) 7/10/2012 2012 (211) 8/6/2014 1965 (247) 3/16/2012 2012 (238) 2/27/2013 2013 (221) 3/16/2012 2011 (225) 8/30/2012 2012 (237) 5/18/2012 2012 (228) 7/10/2012 2012 (243) 5/18/2012 2012 (258) 10/31/2012 2012 (221) 7/10/2012 2012 (248) 8/30/2012 2012 (261) 2/27/2013 2013 (268) 2/27/2013 2012 (314) 6/26/2012 2012 (302) 2/27/2013 2012 (249) 8/30/2012 2012 (219) 2/27/2013 2012 (243) 2/27/2013 2011 (250) 8/30/2012 2012 (246) 12/19/2012 2012 (115) 5/30/2014 1960 (247) 8/2/2013 2013 (231) 2/26/2014 2014 (250) 5/2/2014 2013 (128) 4/30/2014 2014 (230) 10/16/2013 2013 (268) 12/17/2012 2012 Property City Dollar General Milaca State MN Dollar General Montgomery MN Dollar General Olivia MN Dollar General Pequot Lakes MN Dollar General Richmond Dollar General Roseau Dollar General Rush City Dollar General Springfield Dollar General Staples Dollar General Virginia MN MN MN MN MN MN Dollar General Appleton City MO Dollar General Ash Grove Dollar General Ashland Dollar General Aurora Dollar General Auxvasse Dollar General Belton Dollar General Berkeley Dollar General Bernie Dollar General Billings Dollar General Bloomfield Dollar General Cardwell Dollar General Carterville MO MO MO MO MO MO MO MO MO MO MO Dollar General Caruthersville MO Dollar General Caulfield Dollar General Clarkton Dollar General Clever Dollar General Conway Dollar General De Soto Dollar General Diamond Dollar General Doolittle MO MO MO MO MO MO MO Dollar General Eagle Rock MO Dollar General Edina MO Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — 300 — — — — — — — — — — — 300 — — — — — 102 87 98 155 96 143 126 88 150 147 22 35 70 98 72 105 132 35 139 23 89 10 98 139 19 136 37 101 44 137 133 127 916 783 884 880 836 808 716 795 848 831 124 315 398 881 650 948 748 314 790 215 805 192 878 789 354 542 694 912 175 778 786 722 F-101 — — — — — — — — — — — — 135 — — — — — — — — — — — — — — — — — — — 1,018 (265) 9/24/2013 2013 870 982 (243) 12/17/2012 2012 (272) 1/31/2013 2012 1,035 (257) 8/22/2013 2013 932 951 842 883 998 978 146 350 603 979 722 (230) 2/20/2014 2014 (232) 10/30/2013 2013 (230) 7/25/2012 2012 (247) 12/26/2012 2012 (245) 9/4/2013 2013 (256) 1/14/2013 2012 (42) 11/10/2011 2004 (107) 11/10/2011 2006 (139) 11/10/2011 2006 (269) 2/28/2013 2013 (221) 11/22/2011 2011 1,053 (303) 8/3/2012 2012 880 349 929 238 894 202 976 928 373 678 731 (236) 10/9/2012 2012 (107) 11/10/2011 2007 (226) 10/17/2013 2013 (72) 11/10/2011 2005 (257) 8/24/2012 2012 (65) 11/10/2011 2004 (279) 9/27/2012 2012 (245) 12/31/2012 2012 (121) 11/10/2011 2007 (176) 6/19/2012 2010 (236) 11/22/2011 2011 1,013 (279) 2/14/2013 2013 219 915 919 849 (60) 11/10/2011 2005 (227) 8/2/2013 2013 (216) 2/26/2014 2014 (229) 9/13/2012 2012 Property City State Dollar General Eldon Dollar General Ellsinore Dollar General Gower Dollar General Hallsville MO MO MO MO Dollar General Hawk Point MO Dollar General Humansville MO Dollar General Jennings Dollar General Joplin MO MO Dollar General Kansas City MO Dollar General King City Dollar General Laurie Dollar General Lawson Dollar General Lebanon Dollar General Lebanon Dollar General Lexington Dollar General Licking Dollar General Lilbourn Dollar General Lonedell Dollar General Malden MO MO MO MO MO MO MO MO MO MO Dollar General Marble Hill MO Dollar General Marionville MO Dollar General Marthasville MO Dollar General Maysville Dollar General Morehouse MO MO Dollar General New Haven MO Dollar General Oak Grove Dollar General Oran Dollar General Osceola Dollar General Ozark Dollar General Ozark Dollar General Pacific Dollar General Palmyra MO MO MO MO MO MO MO Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — 300 — — — — — 300 — — — — — 300 300 — — — — — — — — — 52 30 118 29 177 69 445 144 313 33 102 29 177 278 149 76 62 208 108 104 89 41 107 87 176 27 83 93 190 149 151 40 986 579 668 263 709 277 826 816 731 625 918 162 708 835 846 688 554 833 974 935 797 782 607 783 702 106 747 835 758 842 853 225 F-102 — — — (6) — — — — — — — 6 — — — — — — — — — — — — — 64 — — — — — (3) 1,038 (301) 2/14/2013 2013 609 786 286 886 346 1,271 960 1,044 658 1,020 197 885 (197) 11/10/2011 2010 (214) 8/31/2012 2012 (88) 11/10/2011 2004 (226) 8/24/2012 2012 (90) 6/19/2012 2007 (266) 7/13/2012 2012 (232) 11/12/2013 2013 (232) 9/21/2012 2012 (213) 11/22/2011 2010 (261) 11/15/2013 2013 (55) 11/10/2011 2003 (224) 9/24/2012 2012 1,113 (265) 9/21/2012 2012 995 764 616 1,041 1,082 1,039 886 823 714 870 878 197 830 928 948 991 1,004 262 (244) 9/13/2013 2013 (234) 11/22/2011 2010 (189) 11/10/2011 2010 (251) 4/26/2013 2013 (284) 8/2/2013 2013 (297) 9/11/2012 2012 (251) 10/31/2012 2012 (261) 2/1/2012 2011 (208) 10/31/2011 2010 (248) 9/7/2012 2012 (231) 4/27/2012 2012 (37) 6/19/2012 1999 (247) 3/30/2012 2012 (255) 2/19/2013 2012 (249) 4/27/2012 2012 (267) 9/24/2012 2012 (277) 6/6/2012 2012 (73) 6/19/2012 2003 Property City Dollar General Plattsburg Dollar General Qulin State MO MO Dollar General Robertsville MO Dollar General Rocky Mount MO Dollar General Rolla Dollar General Savannah Dollar General Sedadia Dollar General Senath Dollar General Seneca Dollar General Shelbina Dollar General Sikeston Dollar General Sikeston Dollar General Springfield Dollar General St. Clair Dollar General St. James Dollar General St. Louis Dollar General St. Louis Dollar General St. Louis Dollar General St. Louis Dollar General Stanberry Dollar General Steele Dollar General Strafford Dollar General Vienna MO MO MO MO MO MO MO MO MO MO MO MO MO MO MO MO MO MO MO Dollar General West Plains MO Dollar General Willow Springs Dollar General Windsor Dollar General Edwards Dollar General Greenville Dollar General Hickory Dollar General Jackson Dollar General Meridian Dollar General Meridian MO MO MS MS MS MS MS MS Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — 400 — — — — — 300 — — — — — — 300 300 — — — — 44 30 131 88 209 270 273 61 47 101 56 144 378 220 81 372 260 215 445 111 31 51 78 90 24 86 75 82 77 198 178 40 843 573 744 789 835 811 637 552 189 911 1,056 819 702 879 244 692 606 1,219 1,039 629 598 471 704 769 213 829 671 739 692 793 713 754 F-103 — (8) — — — — — — 180 — — — — — — — — — — — — — — — 23 — — — — — — — 887 595 875 877 1,044 1,081 910 613 416 1,012 1,112 963 1,080 1,099 325 1,064 866 1,434 1,484 740 629 522 782 859 260 915 746 821 769 991 891 794 (269) 8/9/2012 2012 (194) 11/10/2011 2009 (238) 8/24/2012 2011 (252) 8/31/2012 2012 (243) 8/21/2013 2013 (236) 8/23/2013 2013 (202) 9/7/2012 2012 (179) 6/19/2012 2010 (73) 6/19/2012 1962 (272) 5/22/2013 2013 (352) 2/24/2012 2011 (262) 8/24/2012 2012 (228) 6/14/2012 2012 (297) 12/30/2011 1995 (79) 6/19/2012 1999 (221) 8/31/2012 2012 (192) 9/26/2012 2012 (367) 4/30/2013 1995 (322) 12/14/2012 2012 (214) 11/22/2011 2010 (204) 11/10/2011 2009 (158) 11/10/2011 2009 (235) 2/24/2012 2011 (211) 2/20/2014 2014 (69) 6/19/2012 2002 (228) 2/20/2014 2014 (227) 12/30/2011 2011 (250) 12/30/2011 2011 (223) 7/2/2012 2011 (252) 9/27/2012 2011 (226) 9/13/2012 2011 (239) 9/13/2012 2011 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Dollar General Moorhead Dollar General Natchez MS MS — — 107 166 606 664 — — 713 830 (198) 5/1/2012 2011 (215) 6/12/2012 2012 F-104 Property City State Dollar General Soso Dollar General Stonewall Dollar General Stringer MS MS MS Dollar General Walnut Grove MS Dollar General Edenton Dollar General Fayetteville NC NC Dollar General Hendersonville NC Dollar General Hickory Dollar General Morganton Dollar General Ocean Isle Beach Dollar General Tryon Dollar General Vass NC NC NC NC NC Dollar General Farmington NM Dollar General Farmington NM Dollar General Modena Dollar General Fairfield Dollar General Forest Dollar General Gratis Dollar General Greenfield Dollar General Hicksville Dollar General Loudonville Dollar General Lowell Dollar General Lucasville NY OH OH OH OH OH OH OH OH Dollar General New Charlisle OH Dollar General New Matamoras Dollar General Payne Dollar General Pemberville OH OH OH Dollar General Pleasant City OH Dollar General Powhatan Point Dollar General Sandusky Dollar General Toledo OH OH OH Dollar General Wheelersburg OH Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — 300 — 300 — — — 400 — 300 — — — — 300 — 400 — — — — — 300 300 — 300 — — — — 116 116 116 71 240 216 360 89 472 341 139 226 269 224 249 131 76 161 110 156 236 157 223 215 123 81 146 131 138 210 252 395 658 655 655 641 1,025 647 1,034 804 1,108 633 789 528 807 898 996 1,272 681 1,042 986 1,490 945 1,114 893 860 696 729 1,059 740 784 1,700 1,149 1,132 F-105 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 774 771 771 712 1,265 863 1,394 893 1,580 974 928 754 1,076 1,122 1,245 1,403 757 1,203 1,096 1,646 1,181 1,271 1,116 1,075 819 810 (216) 4/12/2012 2011 (211) 7/2/2012 2011 (211) 7/2/2012 2011 (217) 12/30/2011 2011 (283) 2/28/2014 2013 (216) 2/6/2012 2011 (282) 2/7/2014 2013 (257) 8/13/2012 2012 (306) 2/7/2014 2013 (211) 2/6/2012 2011 (252) 8/13/2012 2012 (176) 2/6/2012 2011 (256) 9/6/2012 2012 (264) 7/11/2013 2013 (286) 10/10/2013 2012 (330) 2/7/2014 2013 (234) 10/31/2011 2010 (288) 2/18/2014 2013 (329) 2/23/2012 2011 (389) 2/7/2014 2012 (307) 6/6/2012 2012 (292) 2/7/2014 2012 (292) 5/16/2012 2012 (277) 7/10/2012 2012 (239) 10/31/2011 2010 (250) 10/31/2011 2010 1,205 (282) 2/7/2014 2012 871 922 1,910 1,401 1,527 (254) 10/31/2011 2010 (230) 7/2/2013 2014 (443) 2/7/2014 2012 (303) 2/7/2014 2012 (311) 2/25/2014 1925 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Dollar General Broken Bow OK Dollar General Calera Dollar General Commerce Dollar General Hartshorne Dollar General Lexington Dollar General Maud Dollar General Maysville Dollar General Ponca City OK OK OK OK OK OK OK Dollar General Rush Spring OK Dollar General Sand Springs OK Dollar General Sand Springs OK Dollar General Sand Springs OK Dollar General Tahlequah Dollar General Wagoner Dollar General Pleasantville Dollar General Sykesville Dollar General Wattsburg Dollar General Holly Hill Dollar General West Union Dollar General Doyle Dollar General Manchester OK OK PA PA PA SC SC TN TN Dollar General Mcminnville TN Dollar General Pleasant Hill TN 300 Dollar General Adkins Dollar General Amarillo Dollar General Amarillo Dollar General Amarillo Dollar General Avinger Dollar General Beeville Dollar General Belton Dollar General Belton Dollar General Blessing TX TX TX TX TX TX TX TX TX — — — — — — — — — — — — — — — — — — — — — — — — — — 331 136 38 100 85 76 41 145 87 143 43 198 123 31 163 68 96 1,983 259 — — — — 46 75 114 120 39 157 97 153 198 44 90 89 145 83 — — (6) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,325 770 341 898 761 688 785 1,161 779 811 819 791 1,101 1,076 941 1,075 1,031 2,333 868 679 646 679 747 889 877 866 794 830 810 804 821 745 F-106 1,656 (309) 5/19/2014 2012 906 373 998 846 764 826 (246) 8/31/2012 2010 (115) 11/10/2011 2006 (287) 8/31/2012 2010 (243) 8/31/2012 2010 (220) 8/31/2012 2010 (251) 8/31/2012 2010 1,306 (302) 2/7/2014 2012 866 954 862 989 1,224 1,107 1,104 1,143 1,127 2,592 914 754 760 799 786 1,046 974 1,019 992 874 900 893 966 828 (249) 8/31/2012 2010 (234) 9/3/2013 2013 (237) 9/3/2013 2013 (229) 9/3/2013 2012 (285) 2/7/2014 2012 (280) 2/7/2014 2012 (254) 3/24/2014 2013 (289) 3/24/2014 2013 (277) 3/24/2014 2014 (707) 3/6/2013 2013 (255) 7/3/2013 2011 (217) 8/22/2012 2012 (208) 7/26/2012 2012 (219) 7/12/2012 2012 (253) 12/30/2011 2011 (276) 12/31/2012 2012 (255) 8/13/2013 2013 (252) 8/2/2013 2013 (233) 7/11/2013 2013 (242) 8/8/2013 2013 (253) 11/19/2012 2012 (246) 2/28/2013 2013 (260) 9/13/2012 2012 (231) 12/18/2012 2012 Property City State Dollar General Boling Dollar General Brookeland Dollar General Bryan Dollar General Bryan Dollar General Bryan Dollar General Buchanan Dam TX TX TX TX TX TX Dollar General Canyon Lake TX Dollar General Cedar Creek Dollar General Como TX TX Dollar General Corpus Christi TX Dollar General Diana Dollar General Donna Dollar General Donna Dollar General Donna Dollar General Edinburg Dollar General Edinburg Dollar General Elmendorf Dollar General Ganado Dollar General Gladewater Dollar General Gordonville Dollar General Kyle Dollar General Kyle Dollar General La Marque Dollar General Lacy Lakeview Dollar General Laredo Dollar General Littleriver Acdmy Dollar General Lubbock Dollar General Lubbock Dollar General Lubbock Dollar General Lubbock Dollar General Lyford Dollar General Lytle TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 300 — 92 93 148 193 185 145 149 291 76 270 186 136 200 145 136 102 94 95 184 38 132 101 102 146 253 122 267 199 148 41 80 243 831 840 840 772 740 820 843 680 683 809 743 768 799 820 769 914 847 857 736 717 747 910 917 826 758 693 801 796 841 825 724 971 F-107 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 923 933 988 965 925 965 992 971 759 (242) 8/13/2013 2013 (245) 8/15/2013 2013 (266) 9/14/2012 2012 (245) 9/14/2012 2012 (236) 8/31/2012 2009 (260) 9/28/2012 2012 (265) 10/12/2012 2012 (213) 11/16/2012 2012 (225) 4/20/2012 2012 1,079 (251) 12/26/2012 2012 929 904 999 965 905 (217) 8/27/2013 2013 (244) 9/11/2012 2012 (252) 10/12/2012 2012 (252) 1/31/2013 2012 (244) 9/7/2012 2012 1,016 (268) 7/16/2013 2013 941 952 920 755 879 1,011 1,019 972 1,011 815 1,068 995 989 866 804 (267) 10/23/2012 2012 (250) 8/13/2013 2013 (235) 8/31/2012 2009 (236) 4/20/2012 2012 (237) 9/26/2012 2012 (257) 12/6/2013 2013 (293) 8/31/2012 2010 (258) 11/16/2012 2012 (244) 7/31/2012 2012 (228) 4/27/2012 2012 (256) 8/31/2012 2010 (232) 8/28/2013 2013 (251) 5/16/2013 2013 (226) 2/20/2014 2014 (245) 12/30/2011 2010 1,214 (278) 10/30/2013 2013 Property City State Dollar General Mercedes Dollar General Mission Dollar General Moody Dollar General Mount Pleasant TX TX TX TX Dollar General New Braunfels TX Dollar General New Braunfels TX Dollar General New Braunfels TX Dollar General Orange Dollar General Poteet Dollar General Presidio Dollar General Progreso Dollar General Dollar General Rio Grande City Rio Grande City Dollar General Roma Dollar General San Antonio Dollar General San Antonio Dollar General San Antonio Dollar General San Antonio Dollar General San Antonio Dollar General San Antonio Dollar General San Antonio Dollar General San Benito Dollar General San Juan Dollar General San Leon Dollar General Silsbee Dollar General Skidmore TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX Dollar General Sullivan City TX Dollar General Texarkana Dollar General Troy Dollar General Tyler Dollar General Tyler Dollar General Victoria TX TX TX TX TX Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — 400 — 400 300 — 500 — — — — — — — — — — — — — — — — — — 215 158 41 214 205 95 156 277 96 72 169 137 163 253 252 222 163 271 239 220 333 202 169 87 43 90 165 136 93 219 602 91 859 894 781 858 818 855 883 1,150 864 1,370 957 779 652 1,010 756 888 926 812 956 880 776 807 956 786 810 811 876 772 841 875 956 817 F-108 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,074 1,052 822 1,072 1,023 950 1,039 1,427 960 1,442 1,126 916 815 1,263 1,008 1,110 1,089 1,083 1,195 1,100 1,109 1,009 1,125 873 853 901 (250) 8/2/2013 2013 (271) 3/27/2013 2013 (231) 6/11/2013 2013 (274) 8/31/2012 2009 (261) 8/31/2012 2012 (261) 2/14/2013 2013 (253) 10/30/2013 2013 (290) 2/7/2014 2012 (296) 10/31/2011 2010 (415) 3/28/2013 2013 (328) 10/31/2011 2010 (267) 10/31/2011 2010 (218) 2/1/2012 2011 (347) 10/31/2011 2010 (238) 10/22/2012 2012 (280) 10/22/2012 2012 (283) 2/14/2013 2013 (242) 5/23/2013 2013 (290) 3/11/2013 2013 (259) 7/9/2013 2013 (226) 8/13/2013 2013 (235) 8/23/2013 2013 (272) 11/15/2013 2013 (249) 9/25/2012 2012 (261) 7/6/2012 2012 (248) 2/14/2013 2013 1,041 (240) 2/26/2014 2014 908 934 1,094 1,558 908 (221) 10/25/2013 2013 (267) 9/12/2012 2012 (280) 8/31/2012 2010 (266) 2/7/2014 2013 (252) 1/31/2013 2013 Property City State Dollar General Vidor Dollar General Waco Dollar General Weslaco Dollar General Weslaco Dollar General Burkeville Dollar General Danville Dollar General Hopewell Dollar General Hot Springs Dollar General Richmond Dollar General Mellen Dollar General Minong TX TX TX TX VA VA VA VA VA WI WI Dollar General Solon Springs WI Dollar General Chelyan Dollar General Cowen Dollar General Elkview Dollar General Mcmechen Dollar General Millwood Dollar General Oceana WV WV WV WV WV WV Dollar Tree Huntsville AL Dollar Tree Beverly Hills FL Dollar Tree Bonita Springs FL Dollar Tree Chiefland Dollar Tree Fort Myers FL FL Dollar Tree Ormond Beach FL Dollar Tree Oviedo Dollar Tree Des Moines Dollar Tree Lombard FL IA IL Dollar Tree Baton Rouge LA Dollar Tree Burton Dollar Tree Winona MI MS Dollar Tree Hoosick Falls NY Dollar Tree Caldwell TX Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — 300 500 400 400 300 300 300 — — — — — — — — — — 973 — — — — — 866 — — — — 192 215 205 160 155 584 283 242 79 38 76 273 196 274 91 98 317 476 409 672 322 189 573 469 152 1,008 377 131 146 181 138 1,182 767 862 822 906 621 713 661 726 711 727 685 1,092 783 823 819 881 1,023 1,092 965 918 1,123 1,344 860 848 863 543 716 1,164 585 724 552 F-109 — — — — — — — — — — — — — — — — — — — — — — — — — 6 — — — — — 1,182 959 1,077 1,027 1,066 776 1,297 944 968 790 765 761 1,365 979 1,097 910 979 1,340 1,568 1,374 1,590 1,445 1,533 1,433 1,317 1,021 1,551 1,093 1,295 731 905 (298) 2/7/2014 2012 (245) 8/31/2012 2012 (273) 9/24/2012 2012 (236) 10/16/2013 2013 (296) 5/8/2012 2012 (207) 2/6/2012 2011 (238) 2/6/2012 2011 (220) 2/6/2012 2011 (242) 2/6/2012 2011 (241) 12/30/2011 2011 (246) 12/30/2011 2011 (232) 12/30/2011 2011 (316) 9/27/2013 2013 (241) 1/16/2013 2012 (240) 8/2/2013 2013 (252) 1/9/2013 2012 (259) 7/2/2013 2013 (192) 11/20/2014 2014 (199) 8/29/2014 2014 (182) 8/28/2014 2013 (261) 2/7/2014 2013 (302) 3/31/2014 2013 (353) 2/7/2014 2002 (255) 6/4/2013 2008 (234) 2/19/2014 2013 (252) 8/30/2013 1995 (153) 12/12/2013 1967 (202) 2/7/2014 2003 (317) 2/7/2014 2003 (188) 7/31/2012 2012 (218) 4/26/2013 2013 387 1,077 (180) 5/29/2012 2012 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — 811 1,099 1,088 857 230 3,254 3,208 3,671 4,067 846 — — — — — 4,065 4,307 4,759 4,924 1,076 (4) 12/13/2018 2018 (68) 4/27/2018 2018 (159) 10/20/2017 2017 (123) 12/14/2017 2017 (248) 6/27/2013 1995 26,437 3,520 39,639 (6,281) 36,878 (3,778) 11/5/2013 2006 — — — — 1,480 9,117 314 10,911 (379) 11/17/2017 2017 357 190 127 436 724 982 — — — 793 914 (122) 7/31/2013 1990 (212) 6/27/2013 1995 1,109 (199) 6/25/2014 2014 Property City State Duluth Trading Co South Portland ME Duluth Trading Co West Fargo Duluth Trading Co Avon Duluth Trading Co Waukesha Dunkin Donuts/ Baskin-Robbins Dearborn Heights Earhart Corporate Center Ann Arbor ND OH WI MI MI Eastchase Central Montgomery AL Eegee's Tucson Einstein Bros. Bagels Elite Production Services Dearborn Cuero AZ MI TX EMC Corporation Bedford MA 50,684 16,594 75,137 203 91,934 (17,067) 2/7/2014 2001 Energy Maintenance Services US Pasadena Evans Exchange Evans TX GA — 393 6,420 3,452 2,878 9,821 — 18 3,271 (583) 6/12/2014 2011 13,291 (2,530) 2/7/2014 2009 Experian Schaumburg IL Express Energy Services Pleasanton TX Express Scripts St. Louis MO Exterran Energy Solutions Fort Worth Eyemart Express Port Arthur Family Dollar Bessemer Family Dollar Camden Family Dollar Grove Hill Family Dollar Hayneville Family Dollar Hoover Family Dollar Huntsville Family Dollar Jemison Family Dollar Marion Family Dollar Millbrook TX TX AL AL AL AL AL AL AL AL AL Family Dollar Montgomery AL Family Dollar Montgomery AL Family Dollar Wilmer Family Dollar El Dorado Family Dollar El Dorado AL AR AR — — — — 5,935 26,003 (5,777) 26,161 (3,003) 2/7/2014 1986 413 5,706 1,360 5,541 32,333 5,704 — — — 5,954 (1,125) 6/12/2014 2012 38,039 (11,521) 1/25/2012 2011 7,064 (1,164) 9/5/2014 2011 8,077 3,331 14,992 152 18,475 (3,619) 2/7/2014 2008 — — — — — — 757 — — — 959 — — 663 295 137 144 172 368 628 143 247 316 218 533 221 151 49 1,301 851 741 722 1,153 924 997 780 1,052 847 936 791 806 1,003 F-110 — — — — — — — — — — — — — — 1,596 (292) 6/16/2014 2014 988 885 894 1,521 1,552 1,140 1,027 1,368 1,065 1,469 1,012 957 1,052 (206) 5/29/2014 2014 (139) 7/24/2014 2013 (189) 5/7/2014 2013 (218) 8/29/2014 2014 (154) 1/12/2015 2014 (273) 2/7/2014 2011 (148) 7/30/2014 2014 (197) 8/28/2014 2013 (160) 8/28/2014 2013 (261) 2/7/2014 2010 (190) 5/29/2014 2014 (175) 8/28/2014 1988 (257) 2/7/2014 2002 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — 571 467 — 974 — 603 — — — — — — — 247 155 125 123 603 454 126 98 302 110 400 302 303 416 845 758 629 1,015 882 313 785 895 571 772 584 281 712 1,229 — — — — — — — — — — — — — — 1,092 (226) 2/7/2014 2011 913 754 1,138 1,485 767 911 993 873 882 984 583 1,015 1,645 (195) 2/7/2014 2002 (161) 2/7/2014 2002 (190) 8/28/2014 2013 (248) 2/7/2014 2002 (98) 2/7/2014 2003 (214) 2/7/2014 2000 (168) 8/28/2014 2013 (164) 2/7/2014 2001 (169) 8/28/2014 2001 (168) 2/7/2014 2004 (88) 2/7/2014 2003 (153) 8/28/2014 2004 (226) 8/28/2014 2013 Property City State Family Dollar Hot Springs Family Dollar Jacksonville Family Dollar Little Rock Family Dollar Ash Fork Family Dollar Avondale AR AR AR AZ AZ Family Dollar Casa Grande AZ Family Dollar Coolidge Family Dollar Duncan AZ AZ Family Dollar Fort Mohave AZ Family Dollar Golden Valley AZ Family Dollar Guadalupe AZ Family Dollar Mohave Valley AZ Family Dollar Phoenix Family Dollar Phoenix AZ AZ F-111 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Family Dollar Phoenix Family Dollar Phoenix Family Dollar Dacano Family Dollar Fort Lupton Family Dollar Rangely Family Dollar New Britain Family Dollar Wilmington Family Dollar Altha Family Dollar Anthony Family Dollar Apopka Family Dollar Auburndale Family Dollar Belleview Family Dollar Bristol Family Dollar Bunnell Family Dollar Cape Coral Family Dollar Citra Family Dollar Clearwater Family Dollar Deland Family Dollar Deltona Family Dollar Deltona Family Dollar Fort Meade Family Dollar Fountain Family Dollar Gainesville Family Dollar Graceville Family Dollar Jacksonville Family Dollar Jacksonville Family Dollar Lake Alfred Family Dollar Lake City Family Dollar Lake Panasoffkee Family Dollar Lakeland Family Dollar Largo Family Dollar Middleburg AZ AZ CO CO CO CT DE FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL — 1,109 1,040 757 916 — — — — — 1,127 — — 631 — — — — 1,057 686 1,042 417 — 1,002 — 1,028 789 — 622 — 732 — — 504 155 154 66 484 540 126 242 518 314 332 202 188 675 47 425 492 171 206 211 202 423 367 271 545 484 186 237 339 844 274 767 1,079 959 1,180 593 1,280 1,218 727 1,037 1,402 951 829 727 936 1,190 1,038 1,006 1,293 1,074 1,578 606 825 1,263 810 1,121 1,173 1,006 872 696 785 962 822 F-112 — — — — — 26 — — — — — — — — — — — — — — — — (16) — — — — — — — — — 1,876 1,583 1,114 1,334 659 1,790 1,758 853 1,279 1,920 1,265 1,161 929 1,124 1,865 1,085 1,431 1,785 1,245 1,784 817 1,027 1,670 1,177 1,392 1,718 1,490 1,058 933 1,124 1,806 1,096 (228) 2/7/2014 2003 (298) 2/7/2014 2003 (267) 2/7/2014 2003 (326) 2/7/2014 1961 (194) 5/4/2012 2010 (231) 10/14/2014 2013 (199) 4/21/2015 2015 (206) 2/7/2014 2011 (200) 10/30/2014 2014 (355) 2/7/2014 2011 (177) 8/28/2014 2013 (219) 2/7/2014 2013 (208) 2/7/2014 2011 (178) 8/28/2014 2013 (322) 3/5/2014 2013 (192) 8/28/2014 2013 (183) 8/22/2014 2014 (333) 2/7/2014 2011 (262) 2/7/2014 2004 (397) 2/7/2014 2011 (144) 2/7/2014 2000 (157) 8/28/2014 2014 (322) 2/7/2014 2011 (217) 4/30/2014 2013 (278) 2/7/2014 2011 (303) 2/7/2014 2008 (151) 12/23/2014 2014 (224) 2/7/2014 2011 (189) 3/25/2014 2013 (217) 2/7/2014 2003 (266) 2/7/2014 2013 (243) 6/4/2013 2008 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Family Dollar Milton Family Dollar Mulberry Family Dollar Ocala Family Dollar Ocala Family Dollar Ocala Family Dollar Okeechobee Family Dollar Orlando Family Dollar Orlando FL FL FL FL FL FL FL FL Family Dollar Ormond Beach FL Family Dollar Palatka FL 644 — — — 968 894 — — — — Family Dollar Pembroke Park FL 1,141 Family Dollar Pensacola Family Dollar Pensacola Family Dollar Plant City Family Dollar Plant City Family Dollar Sebring Family Dollar St Petersburg Family Dollar Tallahassee Family Dollar Tampa Family Dollar Tampa Family Dollar Tampa FL FL FL FL FL FL FL FL FL FL Family Dollar Winter Haven FL Family Dollar Zellwood Family Dollar Abbeville Family Dollar Acworth Family Dollar Alma Family Dollar Claxton Family Dollar Cordele Family Dollar Fayetteville Family Dollar Helena FL GA GA GA GA GA GA GA Family Dollar Jeffersonville GA Family Dollar Lenox GA — 559 — 1,173 — 1,093 — 1,005 1,168 — — — — — — — — — — — — 544 131 108 344 554 655 349 291 675 316 656 69 146 279 712 492 690 632 531 773 552 534 272 163 489 79 322 136 217 242 153 90 683 1,156 816 1,251 984 580 1,294 1,286 1,152 1,054 944 1,085 907 1,040 1,113 1,063 1,000 871 1,062 1,057 792 942 1,005 768 901 954 665 1,049 1,203 790 926 809 F-113 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,227 1,287 924 1,595 1,538 1,235 1,643 1,577 1,827 1,370 1,600 1,154 1,053 1,319 1,825 1,555 1,690 1,503 1,593 1,830 1,344 1,476 1,277 931 1,390 1,033 987 1,185 1,420 1,032 1,079 899 (163) 2/7/2014 2010 (214) 8/28/2014 2013 (161) 8/28/2014 2005 (316) 2/7/2014 2006 (266) 2/7/2014 2011 (187) 2/7/2014 2011 (236) 8/28/2014 2014 (235) 8/28/2014 2013 (294) 2/7/2014 2011 (281) 4/25/2014 2014 (284) 2/7/2014 2006 (198) 8/28/2014 2013 (218) 2/7/2014 2003 (264) 2/7/2014 2004 (307) 2/7/2014 2005 (208) 6/24/2014 2014 (279) 2/7/2014 2011 (249) 2/7/2014 2011 (287) 2/7/2014 2008 (291) 2/7/2014 2011 (212) 2/7/2014 2013 (117) 8/8/2014 2014 (183) 8/22/2014 2014 (152) 5/29/2014 2014 (172) 8/28/2014 2013 (177) 8/28/2014 1982 (175) 5/14/2014 2014 (204) 4/30/2014 2014 (208) 11/20/2014 2014 (218) 2/19/2014 2013 (171) 8/15/2014 2014 (253) 11/9/2012 2012 Property City State Family Dollar Lindale Family Dollar Macon Family Dollar Macon Family Dollar Marietta Family Dollar Marietta Family Dollar Omega Family Dollar Richland Family Dollar Riverdale Family Dollar Vienna Family Dollar Des Moines Family Dollar Fort Dodge Family Dollar Arco Family Dollar Homedale Family Dollar Kimberly GA GA GA GA GA GA GA GA GA IA IA ID ID ID Family Dollar Mount Vernon IL Family Dollar Pulaski Family Dollar University Park Family Dollar Brookston Family Dollar Indianapolis Family Dollar Lake Village Family Dollar Mitchell Family Dollar Princeton Family Dollar Seymour Family Dollar Terre Haute Family Dollar Greensburg Family Dollar Kansas City Family Dollar Kansas City Family Dollar Kansas City Family Dollar Topeka Family Dollar Wichita IL IL IN IN IN IN IN IN IN KS KS KS KS KS KS Family Dollar Bowling Green KY Family Dollar Carlisle KY Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — 673 — — — — — — 822 408 — 973 — — — — — 613 — — 526 — 394 — — — 982 — — — — 227 300 230 366 582 167 125 310 62 411 152 76 59 219 117 31 295 126 375 154 101 300 238 235 80 290 352 154 177 216 334 157 966 893 851 749 1,126 716 859 1,188 721 871 449 684 1,387 657 1,050 588 688 715 707 752 1,119 486 764 427 718 1,170 1,026 1,367 1,405 1,035 951 871 F-114 — — — — — — — — — — — — — — — — — — — — — — — — — (5) — — — — — — 1,193 1,193 1,081 1,115 1,708 883 984 1,498 783 1,282 601 760 1,446 876 1,167 619 983 841 1,082 906 1,220 786 1,002 662 798 1,455 1,378 1,521 1,582 1,251 1,285 1,028 (184) 8/28/2014 2014 (169) 8/28/2014 2013 (230) 2/7/2014 2011 (207) 2/19/2014 2013 (210) 8/28/2014 2013 (194) 3/12/2014 2013 (162) 8/28/2014 2014 (213) 9/26/2014 2014 (196) 3/12/2014 2013 (241) 2/7/2014 2003 (131) 2/7/2014 2002 (217) 9/18/2012 2012 (376) 2/7/2014 2006 (197) 4/10/2013 2013 (309) 7/11/2013 2012 (182) 12/31/2012 2012 (197) 10/29/2013 2013 (225) 10/1/2012 2012 (175) 2/7/2014 2003 (393) 4/30/2014 2013 (214) 8/28/2014 2014 (137) 2/7/2014 2000 (213) 2/7/2014 2003 (115) 2/7/2014 2011 (208) 9/9/2013 2012 (225) 11/6/2014 1995 (200) 12/18/2014 1995 (361) 2/7/2014 2002 (383) 2/7/2014 2004 (191) 8/28/2014 2013 (178) 8/28/2014 2013 (166) 8/28/2014 2014 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Family Dollar Garrison Family Dollar Rockholds Family Dollar Abbeville Family Dollar Alexandria Family Dollar Arcadia Family Dollar Avondale Family Dollar Chalmette Family Dollar Farmerville Family Dollar Kentwood KY KY LA LA LA LA LA LA LA — — 740 458 — — — 722 683 Family Dollar New Orleans LA 1,146 Family Dollar Shreveport Family Dollar Tickfaw Family Dollar Westwego Family Dollar Lynn Family Dollar Barryton Family Dollar Birch Run Family Dollar Brooklyn Family Dollar Detroit Family Dollar Detroit Family Dollar Detroit Family Dollar Flint Family Dollar Hudson Family Dollar Jackson Family Dollar Kentwood Family Dollar Monroe Family Dollar Newaygo Family Dollar Pontiac Family Dollar Remus Family Dollar Saginaw Family Dollar Tustin Family Dollar Crosby Family Dollar Ely LA LA LA MA MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI MN MN 892 — — 1,222 — — — — — — — 833 — 739 — 689 962 — — — — — 134 121 141 168 51 381 751 110 117 547 177 181 332 400 32 81 150 130 106 110 162 108 93 389 243 317 136 49 164 33 49 231 737 988 949 579 704 1,255 615 968 877 1,252 1,177 543 1,052 1,547 599 729 634 1,169 956 1,051 1,027 1,020 525 919 1,061 677 1,249 992 1,086 633 928 1,008 F-115 — — — — — — — — — — — — — — — 86 — — — — — — — — — — — — — — — — 871 1,109 1,090 747 755 1,636 1,366 1,078 994 1,799 1,354 724 1,384 1,947 631 896 784 1,299 1,062 1,161 1,189 1,128 618 1,308 1,304 994 1,385 1,041 1,250 666 977 (214) 2/20/2014 2012 (190) 8/28/2014 2014 (263) 2/7/2014 2005 (155) 2/7/2014 2005 (207) 2/20/2014 2010 (234) 8/28/2014 2013 (201) 5/3/2012 2011 (263) 2/7/2014 2003 (244) 2/7/2014 2003 (337) 2/7/2014 2005 (317) 2/7/2014 2005 (180) 3/30/2012 2011 (201) 8/28/2014 2013 (407) 2/7/2014 2003 (186) 12/18/2012 2012 (227) 7/11/2013 1950 (176) 2/7/2014 2002 (365) 11/27/2012 2011 (285) 5/2/2013 1964 (205) 8/28/2014 2005 (306) 2/26/2014 2014 (295) 2/7/2014 2005 (152) 9/12/2013 2007 (227) 2/7/2014 2001 (200) 8/28/2014 2013 (197) 2/7/2014 2002 (347) 2/7/2014 2003 (289) 1/2/2014 2012 (304) 2/7/2014 2003 (196) 12/18/2012 1995 (273) 7/11/2013 1985 1,239 (286) 2/27/2014 2014 Property City State Family Dollar Intrnatnl Falls MN Family Dollar St. Peter Family Dollar Berkeley MN MO Family Dollar Kansas City MO Family Dollar Kansas City MO Family Dollar Kansas City MO Family Dollar Marble Hill MO Family Dollar Raytown Family Dollar St Louis Family Dollar St Louis Family Dollar St Louis Family Dollar St. Louis Family Dollar Bassfield Family Dollar Biloxi Family Dollar Canton Family Dollar Carriere Family Dollar D'Iberville Family Dollar Drew Family Dollar Greenville Family Dollar Gulfport Family Dollar Gulfport Family Dollar Gulfport Family Dollar Gulfport Family Dollar Hattiesburg Family Dollar Horn Lake Family Dollar Kiln Family Dollar Laurel Family Dollar Natchez Family Dollar Okolona Family Dollar Pearl MO MO MO MO MO MS MS MS MS MS MS MS MS MS MS MS MS MS MS MS MS MS MS Family Dollar Philadelphia MS Family Dollar Anaconda MT Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — 409 969 683 1,211 970 — — — 972 — — — — — — — — — — — — — — — — — — — — — — 32 93 179 277 119 142 38 415 168 215 258 445 96 310 210 200 241 11 125 209 270 218 312 225 225 106 225 289 64 342 53 164 608 566 1,391 812 1,705 1,338 719 — 671 1,357 1,310 1,038 752 575 1,142 599 561 1,039 872 626 629 654 1,237 674 676 650 723 749 578 1,001 897 1,058 F-116 — — — — — — — 1,287 (4) — — — — — — — 1 — — — — — — — — — — — — — — — 640 659 1,570 1,089 1,824 1,480 757 1,702 835 1,572 1,568 1,483 848 885 (176) 9/30/2013 1966 (146) 2/7/2014 1960 (357) 2/7/2014 2003 (215) 2/7/2014 2003 (458) 2/7/2014 2004 (357) 2/7/2014 2004 (210) 8/29/2013 2013 (203) 2/20/2015 2014 (219) 4/2/2012 2006 (351) 2/7/2014 2003 (339) 2/7/2014 2003 (327) 10/23/2012 2012 (217) 2/19/2014 2013 (190) 3/30/2012 2012 1,352 (213) 8/28/2014 2013 799 803 (199) 3/30/2012 2012 (183) 5/21/2012 2012 1,050 (228) 8/28/2014 1989 997 835 899 872 (238) 2/7/2014 2011 (204) 5/21/2012 2012 (200) 9/20/2012 2012 (204) 11/15/2012 2012 1,549 (338) 2/7/2014 2007 899 901 756 948 1,038 642 1,343 950 1,222 (207) 1/30/2013 2012 (216) 8/22/2012 2012 (203) 11/14/2012 2012 (209) 2/19/2014 2013 (184) 8/28/2014 1982 (186) 7/31/2012 2012 (186) 8/28/2014 2013 (171) 8/28/2014 2014 (207) 9/30/2014 2014 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — 246 250 132 251 322 291 352 490 412 225 267 215 221 243 151 146 164 428 185 — — — 932 767 694 985 1,066 992 781 682 785 832 802 603 1,013 894 900 935 773 953 1,064 — — — — — — — — — — — — — — — — 1,019 1,203 1,196 1,183 1,089 985 1,337 1,556 1,404 1,006 949 1,000 1,053 1,045 754 1,159 1,058 1,328 1,120 (182) 1/8/2015 2014 (134) 8/20/2014 2014 (247) 3/19/2015 1995 (180) 8/28/2014 2014 (141) 8/28/2014 2013 (132) 8/28/2014 2012 (262) 4/15/2014 2014 (198) 7/2/2014 2014 (186) 6/25/2014 2014 (186) 5/29/2014 2014 (185) 3/14/2014 2013 (149) 8/28/2014 2014 (158) 8/28/2014 2013 (152) 8/28/2014 2013 (174) 9/11/2013 1995 (195) 6/20/2014 2014 (165) 9/19/2014 2014 (240) 4/17/2014 2014 (222) 5/29/2014 2014 Property City Family Dollar Ennis State MT Family Dollar Three Forks MT Family Dollar Whitehall MT Family Dollar Asheboro Family Dollar Boiling Springs Family Dollar Burlington Family Dollar Charlotte Family Dollar Charlotte Family Dollar Charlotte Family Dollar Ellerbe Family Dollar Fayetteville Family Dollar Hickory Family Dollar Hiddenite Family Dollar Liberty Family Dollar Lumberton Family Dollar Lumberton Family Dollar Parkton Family Dollar Raeford Family Dollar Raeford NC NC NC NC NC NC NC NC NC NC NC NC NC NC NC NC F-117 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Family Dollar Troy Family Dollar Fort Yates Family Dollar New Town Family Dollar Rolla Family Dollar Madison Family Dollar Omaha Family Dollar Omaha Family Dollar Rushville Family Dollar Lancaster Family Dollar Stratford NC ND ND ND NE NE NE NE NH NJ — — — — — — — — — — Family Dollar Alamorgordo NM 524 Family Dollar Belen Family Dollar Carrizozo Family Dollar Chimayo Family Dollar Cloudcroft Family Dollar Clovis Family Dollar Gallup Family Dollar Hernandez Family Dollar Logan Family Dollar Lovington NM NM NM NM NM NM NM NM NM Family Dollar Mountainair NM Family Dollar Roswell Family Dollar Springer Family Dollar Velarde Family Dollar Waterflow Family Dollar Battle Mountain Family Dollar Carlin NM NM NM NM NV NV Family Dollar Cold Springs NV Family Dollar Hawthorne Family Dollar Las Vegas Family Dollar Lovelock NV NV NV Family Dollar Silver Spring NV — — — — 657 — 1,152 — — — 766 — — — — — — — 876 — — 341 126 105 83 37 196 141 125 456 378 161 350 250 158 184 119 221 140 80 54 84 140 106 183 175 116 99 217 191 689 185 202 621 715 942 749 703 1,334 1,159 499 1,294 1,511 675 — — 632 1,344 854 1,366 1,434 — 722 752 953 — — — 1,431 895 869 764 612 742 808 F-118 — — 24 — — — 3 — (2) (174) — 969 1,113 (15) — — — — 1,147 — — — 1,199 1,122 1,294 — — — — — — — 962 841 (128) 6/17/2014 2014 (240) 1/31/2012 2010 1,071 (318) 1/31/2012 2011 832 740 1,530 1,303 624 1,748 1,715 836 1,319 1,363 775 1,528 973 1,587 1,574 1,227 776 836 1,093 1,305 1,305 1,469 1,547 994 1,086 955 1,301 927 1,010 (252) 1/31/2012 2010 (238) 12/30/2011 2011 (292) 12/19/2014 1995 (241) 12/18/2014 1995 (150) 4/26/2013 2007 (231) 12/12/2014 1989 (226) 12/31/2014 2014 (175) 2/7/2014 2001 (168) 5/29/2015 2014 (174) 3/6/2015 2014 (192) 1/30/2013 2009 (269) 12/18/2014 1995 (231) 2/7/2014 2004 (386) 2/7/2014 2007 (404) 2/7/2014 2008 (171) 5/29/2015 2015 (137) 6/30/2014 2014 (242) 7/16/2012 2011 (263) 2/7/2014 2004 (212) 2/11/2015 2014 (172) 2/25/2015 2015 (137) 2/5/2015 2014 (387) 2/7/2014 2009 (259) 9/13/2013 2012 (251) 9/13/2013 2013 (248) 6/1/2012 2012 (193) 2/7/2014 2005 (242) 5/4/2012 2012 (256) 9/21/2012 2012 Property City State Family Dollar Wells Family Dollar Altona Family Dollar Chateaugay Family Dollar Cincinnatus Family Dollar Penn Yan Family Dollar Sodus Family Dollar Wolcott Family Dollar Bethel Family Dollar Canal Winchester Family Dollar Canton Family Dollar Cincinnati Family Dollar Cleveland Family Dollar Cleveland Family Dollar Cortland Family Dollar Dayton Family Dollar Dayton Family Dollar Hamilton NV NY NY NY NY NY NY OH OH OH OH OH OH OH OH OH OH Family Dollar Jackson Center OH Family Dollar Loveland Family Dollar Middleton Family Dollar Toledo Family Dollar Toledo Family Dollar Warren Family Dollar Durant Family Dollar El Reno Family Dollar Geary Family Dollar Keota Family Dollar Kingston OH OH OH OH OH OK OK OK OK OK Family Dollar Oklahoma City OK Family Dollar Oklahoma City OK Family Dollar Porum Family Dollar Poteau OK OK Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — 525 — — 852 — 460 — 1,079 1,370 — — — — — 798 660 — — — — — — — — — — — — 84 94 133 287 23 54 197 139 218 93 221 39 216 188 107 129 131 97 179 137 306 226 170 164 225 167 279 28 403 390 18 310 755 923 910 862 760 1,441 1,193 1,099 1,116 766 1,055 1,614 1,818 963 899 618 1,215 764 986 869 917 905 681 1,223 — 882 872 660 — 990 — — F-119 — — — — — — — — — — — — — — — — — — — — — — (2) — 968 — — — 988 — 995 924 839 1,017 1,043 1,149 783 1,495 1,390 1,238 1,334 859 1,276 1,653 2,034 1,151 1,006 747 1,346 861 1,165 1,006 1,223 1,131 849 1,387 1,193 1,049 1,151 688 1,391 1,380 1,013 1,234 (246) 5/11/2012 2011 (265) 2/21/2014 2014 (261) 2/20/2014 2014 (243) 12/30/2013 2013 (203) 2/7/2014 2003 (378) 5/7/2014 2013 (211) 3/25/2015 2014 (306) 2/7/2014 2005 (207) 8/28/2014 2012 (198) 2/7/2014 2002 (211) 8/28/2014 2001 (425) 2/7/2014 2003 (493) 2/7/2014 1994 (184) 8/28/2014 2013 (212) 8/28/2014 1940 (136) 8/28/2014 2002 (222) 8/28/2014 2013 (146) 4/28/2014 1989 (273) 2/7/2014 2002 (235) 2/7/2014 2001 (280) 2/25/2013 2012 (266) 7/11/2013 1942 (216) 9/11/2012 2012 (239) 8/28/2014 2000 (197) 3/2/2015 1995 (128) 10/14/2015 2015 (168) 10/16/2014 2014 (165) 2/7/2014 2000 (146) 5/15/2015 2015 (187) 8/28/2014 2013 (153) 11/5/2015 2015 (146) 8/7/2015 2015 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Family Dollar Stilwell Family Dollar Texhoma Family Dollar Tulsa Family Dollar Broad Top Family Dollar Abbeville Family Dollar Columbia Family Dollar Columbia Family Dollar Estill Family Dollar Lancaster Family Dollar Manning Family Dollar Mccormick Family Dollar Newberry Family Dollar North Family Dollar St. Matthews Family Dollar Woodruff Family Dollar Blackhawk Family Dollar Custer Family Dollar Lemmon Family Dollar Martin Family Dollar Mclaughlin Family Dollar Parker Family Dollar Tyndall Family Dollar Harrison Family Dollar Lexington Family Dollar Memphis Family Dollar Memphis Family Dollar Memphis Family Dollar Memphis Family Dollar Nashville Family Dollar Piney Flats Family Dollar Alton Family Dollar Arlington OK OK OK PA SC SC SC SC SC SC SC SC SC SC SC SD SD SD SD SD SD SD TN TN TN TN TN TN TN TN TX TX — — — — — — — — — — — — — — — — — — — — — — — — — 638 1,251 973 — — — — 40 150 220 196 146 429 489 244 249 313 167 231 193 175 229 115 32 140 85 35 117 72 74 323 248 215 376 336 334 200 134 300 768 — 878 954 734 719 943 757 725 960 791 935 979 828 1,125 585 617 — 764 — 828 — 420 838 1,039 811 1,508 1,156 1,275 953 908 — F-120 — 912 — — — (35) — — — — — — — — — — — 1,021 — 1,092 1 1,072 — — — — — — — — — 1,058 808 1,062 1,098 1,150 880 1,113 1,432 1,001 974 1,273 958 1,166 1,172 1,003 1,354 700 649 1,161 849 1,127 946 1,144 494 1,161 1,287 1,026 1,884 1,492 1,609 1,153 1,042 1,358 (258) 1/6/2012 2011 (120) 4/15/2015 2015 (283) 7/30/2012 2012 (181) 5/30/2014 2013 (148) 5/23/2014 2014 (195) 3/12/2014 2014 (154) 2/3/2015 2013 (150) 6/4/2014 2014 (140) 8/28/2014 2013 (178) 9/30/2014 2014 (211) 4/30/2014 2014 (252) 3/27/2014 2013 (161) 2/23/2015 2013 (155) 9/3/2014 2014 (207) 8/28/2014 2010 (117) 8/6/2014 2006 (183) 6/14/2013 1995 (144) 5/1/2015 2014 (257) 1/31/2012 2010 (141) 5/12/2015 2015 (182) 10/10/2014 2014 (170) 3/31/2015 2015 (123) 7/23/2013 2006 (159) 8/28/2014 2013 (277) 2/7/2014 2004 (216) 2/7/2014 2003 (411) 2/7/2014 2005 (312) 2/7/2014 2003 (259) 8/28/2014 1976 (180) 8/28/2014 2014 (170) 8/28/2014 2013 (145) 12/4/2015 1995 Property City State Family Dollar Arlington Family Dollar Avinger TX TX Family Dollar Balch Springs TX Family Dollar Beaumont Family Dollar Beaumont Family Dollar Beaumont Family Dollar Blooming Grove Family Dollar Brazoria Family Dollar Broaddus Family Dollar Centerville Family Dollar Chireno Family Dollar Clarendon TX TX TX TX TX TX TX TX TX Family Dollar Cockrell Hill TX Family Dollar Converse Family Dollar Dallas Family Dollar Dickinson Family Dollar Donna Family Dollar Eagle Lake Family Dollar Etoile Family Dollar Floydada Family Dollar Fort Worth Family Dollar Fort Worth Family Dollar Houston Family Dollar Houston Family Dollar Houston Family Dollar Houston Family Dollar Houston Family Dollar Houston Family Dollar Houston Family Dollar Industry Family Dollar Jacksonville Family Dollar Kerens TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — 654 — — — — — — 970 409 627 681 — — — — — — — 886 — — — 911 425 40 318 215 235 225 70 216 75 226 50 83 369 148 292 182 194 100 45 36 276 350 174 297 565 138 128 277 920 1,355 — — — 190 195 73 — 761 — 1,511 810 806 753 966 — 679 943 749 1,156 469 676 876 855 566 850 681 935 — 696 1,081 1,223 1,052 769 1,144 95 — 1,003 658 F-121 1,112 — 1,209 — — — — — 922 — — — — — — — — 100 — — — 1,015 — — — — — — — 902 — — 1,537 801 1,527 1,726 1,045 1,031 823 1,182 997 905 993 832 (63) 2/13/2015 2014 (240) 10/22/2012 2012 (160) 4/10/2015 2015 (365) 2/7/2014 2003 (214) 2/7/2014 2003 (211) 2/7/2014 2003 (144) 8/28/2014 2014 (252) 2/7/2014 2002 (177) 2/6/2015 1995 (196) 9/10/2013 2013 (293) 12/10/2012 2012 (216) 9/17/2013 2013 1,525 (308) 2/7/2014 2002 617 968 1,058 1,049 766 895 717 1,211 1,365 870 1,378 1,788 1,190 897 1,421 1,450 1,092 1,198 731 (127) 2/7/2014 2003 (188) 2/7/2014 2004 (232) 2/7/2014 2010 (164) 8/28/2014 2013 (193) 7/6/2012 2012 (248) 8/6/2013 2013 (231) 12/30/2011 2010 (136) 8/21/2015 1995 (122) 11/3/2014 2015 (209) 4/26/2013 1995 (284) 2/7/2014 2002 (327) 2/7/2014 2009 (274) 2/7/2014 2002 (187) 2/7/2014 2002 (299) 2/7/2014 2002 (44) 2/7/2014 1981 (155) 1/5/2015 2014 (279) 3/21/2014 2014 (220) 2/29/2012 2011 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Family Dollar La Pryor Family Dollar Leander Family Dollar Lovelady Family Dollar Lufkin Family Dollar Marshall Family Dollar Mcallen Family Dollar Mcallen Family Dollar Mesquite Family Dollar Mesquite Family Dollar Mesquite Family Dollar Mexia Family Dollar Noonday Family Dollar Oakhurst Family Dollar Oakwood Family Dollar Ore City Family Dollar Palestine Family Dollar Pharr Family Dollar Plano Family Dollar Port Arthur TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX Family Dollar Raymondville TX Family Dollar Refugio Family Dollar Rio Grande Family Dollar Robstown Family Dollar Royse City Family Dollar Sabinal Family Dollar San Angelo Family Dollar San Antonio Family Dollar San Antonio Family Dollar San Antonio Family Dollar San Antonio TX TX TX TX TX TX TX TX TX TX — 557 — 1,153 — — 857 — — — — 625 — — — 671 969 — 1,044 542 — — 550 972 — 891 800 864 598 506 74 355 82 198 85 445 219 426 1,414 1,460 112 103 36 133 27 120 219 468 178 117 110 133 44 411 35 232 198 299 260 211 — — — — — — — 1,146 (8) (184) — — — — — — — — — — — — — — — — — — — — 817 489 740 1,600 662 896 1,093 — — — 495 895 683 752 744 914 1,253 869 1,452 707 982 1,284 852 1,078 952 1,118 1,018 1,039 653 567 F-122 891 844 822 1,798 747 1,341 1,312 1,572 1,406 1,276 607 998 719 885 771 1,034 1,472 1,337 1,630 824 1,092 1,417 896 1,489 987 1,350 1,216 1,338 913 778 (154) 8/28/2014 2013 (136) 2/7/2014 2004 (224) 3/27/2013 1995 (416) 2/7/2014 2004 (182) 2/7/2014 2001 (168) 8/28/2014 2013 (289) 2/7/2014 2004 (178) 5/29/2015 1995 (165) 9/1/2015 2015 (167) 7/9/2015 2015 (137) 2/7/2014 2000 (236) 2/7/2014 2004 (212) 12/12/2012 2012 (214) 11/20/2013 2013 (142) 8/28/2014 2013 (245) 2/7/2014 2000 (332) 2/7/2014 2002 (253) 8/1/2013 2013 (376) 2/7/2014 2005 (188) 2/7/2014 2002 (183) 8/28/2014 2013 (338) 2/7/2014 2003 (216) 2/7/2014 2003 (288) 2/7/2014 2002 (176) 8/28/2014 2013 (300) 2/7/2014 2011 (270) 2/7/2014 2002 (274) 2/7/2014 2004 (176) 2/7/2014 2004 (153) 2/7/2014 2004 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State 214 117 132 55 51 131 49 132 441 125 218 107 104 131 430 142 204 148 304 92 128 161 90 43 166 45 44 72 Family Dollar San Antonio Family Dollar San Antonio Family Dollar San Benito Family Dollar San Diego Family Dollar Seadrift Family Dollar Somerville Family Dollar Sonora Family Dollar Tyler Family Dollar Victoria Family Dollar Waco Family Dollar Weatherford Family Dollar Beaver Family Dollar Bristol Family Dollar Gretna Family Dollar Hopewell Family Dollar Petersburg Family Dollar Stuart Family Dollar Wirtz Family Dollar Green Bay Family Dollar Markesan Family Dollar Mayville Family Dollar Milwaukee Family Dollar Thorp Family Dollar Webster Family Dollar Alderson Family Dollar Kemmerer Family Dollar Mountain View Family Dollar Torrington TX TX TX TX TX TX TX TX TX TX TX UT VA VA VA VA VA VA WI WI WI WI WI WI WV WY WY WY Family Fare Supermarket Battle Creek MI Farmers Insurance Mercer Island WA Fazoli's Carmel FedEx Homewood IN AL 728 1,143 598 602 — — — 416 — 440 — 646 608 — — 948 — — — — — 970 — — — — — — — — — — 911 1,619 772 855 832 743 548 554 144 544 — — — — — — — — — — 1,057 (5) 913 837 744 987 1,209 750 919 1,072 831 1,023 1,397 810 808 663 853 838 645 — — — — — — — — — — — — — — — — — — — — — 1,125 1,736 904 910 883 874 597 686 585 669 1,270 1,020 941 875 1,417 1,351 954 1,067 1,376 923 1,151 1,558 900 851 829 898 882 717 (240) 2/7/2014 2004 (425) 2/7/2014 2004 (206) 2/7/2014 2004 (226) 2/7/2014 2004 (156) 8/28/2014 2013 (230) 12/31/2012 1995 (124) 8/28/2014 2001 (146) 2/7/2014 2003 (48) 2/7/2014 2003 (146) 2/7/2014 2001 (220) 10/10/2014 2014 (244) 2/7/2014 2007 (234) 2/7/2014 1978 (219) 7/2/2013 2012 (279) 2/26/2014 2014 (338) 2/7/2014 2003 (104) 4/18/2014 2013 (174) 8/28/2014 2013 (290) 2/7/2014 2011 (234) 12/12/2013 2013 (287) 2/26/2014 2014 (362) 2/7/2014 2003 (236) 8/30/2013 2013 (237) 7/11/2013 2013 (195) 7/11/2013 2012 (261) 2/22/2013 2013 (242) 9/13/2013 2013 (192) 5/9/2013 1995 9,343 (2,159) 2/7/2014 2010 52,495 (7,038) 11/5/2013 1982 949 1,301 (146) 7/31/2013 1986 (231) 6/27/2013 2000 1,393 7,950 24,285 28,210 427 522 522 779 F-123 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx Tempe Yuma Chico Commerce City Melbourne Des Moines Ottumwa Waterloo Effingham Kankakee Quincy Evansville Kokomo Lafayette AZ AZ CA CO FL IA IA IA IL IL IL IN IN IN Independence KS Hazard London KY KY Bossier City LA Grand Rapids MI Port Huron MI Roseville Mccomb Butte Greenville Belmont Wendover Blauvelt Marcy Plattsburg Lebanon Northwood Tulsa MN MS MT NC NH NV NY NY NY OH OH OK 15,373 (2,826) 6/25/2014 2004 2,076 3,214 (736) 10/17/2012 2011 (967) 11/9/2012 2006 33,173 (9,770) 3/20/2012 2007 1,592 2,277 5,506 3,034 (461) 7/26/2013 2001 (468) 4/18/2013 1986 (1,182) 10/30/2012 2012 (963) 3/22/2013 2006 16,736 (3,449) 2/7/2014 2008 1,474 5,483 3,326 7,169 4,896 2,280 4,300 3,501 6,518 8,986 1,246 9,744 6,028 (430) 5/31/2012 2003 (1,150) 9/28/2012 2012 (972) 5/31/2012 1998 (1,631) 3/16/2012 2012 (923) 2/7/2014 2008 (757) 10/30/2012 2012 (1,441) 9/28/2012 2012 (985) 10/11/2013 2013 (1,507) 2/7/2014 2009 (2,603) 6/14/2012 2012 (368) 5/31/2013 2003 (2,871) 11/30/2012 2012 (966) 2/7/2014 2008 2,914 12,300 — 308 2,076 2,776 6,556 26,224 6,712 1,875 14,827 — — — — — — — — 159 733 205 152 — — — — 2,126 — — — — — — — — — — — — 195 371 665 186 768 114 215 350 295 1,797 125 1,462 548 403 363 265 262 159 — 130 393 — 183 — 34 176 2,552 2,749 1,433 1,361 2,882 1,103 2,101 3,011 2,661 — 3,541 3,442 4,128 2,166 4,085 3,151 6,223 7,189 1,121 8,282 — — — — — — — — 3,268 2,212 6,903 2,386 1,483 7,653 4,049 12,105 (3,251) 9/27/2011 2001 — — — — — — — 486 — 7,266 2,651 1,745 (2,584) 2/22/2012 2006 (908) 12/29/2011 1991 (500) 2/25/2013 2012 41,199 (9,861) 4/5/2012 2012 6,134 4,783 9,944 6,657 9,153 (1,946) 9/5/2014 2006 (1,044) 2/7/2014 2008 (2,849) 8/26/2013 2013 (1,282) 2/7/2014 1998 (3,255) 2/22/2012 2008 26,100 14,420 26,779 — 2,614 339 801 — 1,492 2,410 — 674 458 5,795 3,982 8,452 5,497 8,695 F-124 Initial Costs (1) Encumbrances at December 31, 2018 State Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 1,476 18,054 555 549 20,085 (5,684) 3/31/2014 1999 32,729 (10,380) 8/15/2013 2013 2,741 4,584 OK PA SD TN TN TX WA WA WI FL FL Property FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx City Tulsa Tinicum Rapid City Blountville Humboldt Bryan Omak Wenatchee Menomonee Falls Parkersburg WV Filibertos Payson AZ Fire Mountain Buffet Fire Mountain Buffet Summerville SC Charleston WV First Bank Lake Mary First Bank Fleming's Steakhouse Pinellas Park Englewood CO Floor & Decor Overland Park KS Floor & Decor Mcdonough GA Floor & Decor Oklahoma City OK Floor & Decor Riverdale Folsom Gateway II Folsom Food Lion Moyock Forum Energy Technology Forum Energy Technology Guthrie Gainesville Fresenius Medical Care Fairhope Fresenius Medical Care Foley Fresenius Medical Care Mobile Fresenius Medical Care Defuniak Springs Fresenius Medical Care Aurora Fresenius Medical Care Fresenius Medical Care Chicago Waukegan Fresenius Medical Care Peru UT CA NC OK TX AL AL AL FL IL IL IL IN 4,215 14,555 829 (719) 1,308 (1,241) 1,305 (1,228) — — — — — — — — — — — — — — — — — — — — — 305 562 239 1,422 252 266 193 679 245 243 1,230 630 1,152 2,943 1,859 3,069 2,920 32,180 5,056 4,543 4,763 1,425 2,393 3,671 1,504 1,470 3,055 5,832 7,711 6,666 5,734 21,600 10,314 27,983 — — — — — — — 2,294 — — — 1,269 393 123 — 287 278 115 287 588 94 69 2,950 1,305 6,019 2,035 2,580 2,505 2,180 2,584 1,764 1,792 1,305 F-125 — — 34 — — — — 4 4 — — — — — 372 265 — — — (9) — 10 15 — 61 — 7,630 5,618 4,782 6,219 1,677 2,659 (1,428) 5/8/2015 2007 (1,893) 2/3/2012 2009 (1,631) 7/11/2012 2008 (1,363) 6/15/2012 1995 (503) 9/27/2012 2012 (844) 9/27/2012 1995 18,770 (2,016) 2/18/2016 2015 3,864 (1,295) 9/20/2012 2012 789 312 320 2,738 2,104 4,207 8,775 9,570 9,735 8,654 (26) 7/31/2013 1986 (73) 1/8/2014 1997 (90) 1/8/2014 2000 (412) 10/1/2013 1990 (403) 10/1/2013 1980 (904) 2/7/2014 2004 (22) 11/26/2018 1963 (487) 12/13/2016 2015 (39) 10/25/2018 2018 (160) 6/28/2018 1992 38,669 (6,857) 2/7/2014 2006 4,484 1,698 6,142 2,035 2,858 2,783 2,305 2,886 2,352 1,947 1,374 (871) 2/7/2014 1999 (278) 6/25/2014 1979 (1,248) 6/25/2014 2008 (505) 7/8/2013 2006 (641) 7/8/2013 2009 (622) 7/8/2013 2009 (541) 7/8/2013 2008 (719) 7/13/2012 1996 (489) 7/31/2012 1960 (509) 7/31/2012 1980 (365) 6/27/2012 1982 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — 6 — — — — — — — — — 6 81 — — — — — 802 1,836 2,740 1,392 1,355 3,226 2,794 2,026 2,799 2,685 3,557 2,333 1,628 2,014 1,478 1,462 1,374 1,003 1,590 (179) 1/30/2013 2008 (488) 6/5/2012 1995 (728) 6/5/2012 1995 (320) 4/30/2013 2008 (294) 4/30/2013 2012 (742) 4/30/2013 2012 (664) 6/28/2013 1995 (455) 6/28/2013 2002 (596) 6/28/2013 1995 (640) 6/28/2013 2004 (847) 6/28/2013 1999 (556) 6/28/2013 1986 (388) 6/28/2013 2009 (480) 6/28/2013 2000 (352) 6/28/2013 2010 (348) 6/28/2013 2008 (281) 4/30/2013 2011 (171) 6/5/2012 1995 (282) 2/28/2013 1958 4,758 (1,061) 2/7/2014 2007 8,337 (350) 5/18/2017 2017 631 70 (85) 6/25/2014 — 6/25/2014 5,244 (1,128) 6/27/2013 2008 2009 2008 Property City State Fresenius Medical Care Bossier City LA Fresenius Medical Care Caro Fresenius Medical Care Fresenius Medical Care Fresenius Medical Care Fresenius Medical Care Jackson Albemarle Angiers Asheboro Fresenius Medical Care Clinton Fresenius Medical Care Fresenius Medical Care Fresenius Medical Care Fresenius Medical Care Fresenius Medical Care Fresenius Medical Care Fresenius Medical Care Fresenius Medical Care Fresenius Medical Care Fresenius Medical Care Fresenius Medical Care Fairmont Fayetteville Fayetteville Fayetteville Lumberton Pembroke Red Springs Roseboro St. Pauls Taylorsville Kings Mills Fresenius Medical Care Dallas The Fresh Market Winston- Salem Fresh Thyme Farmers Market Canton Fun Town RV Cleburne Fun Town RV Cleburne Furr's Garland Gastro Pub Tulsa GE Aviation Auburn GE Engine Winfield General Electric Longmont General Mills Geneva General Mills Fort Wayne General Service Administration General Service Administration Mobile Craig MI MI NC NC NC NC NC NC NC NC NC NC NC NC NC NC OH TX NC MI TX TX TX OK AL KS CO IL IN AL CO — — 1,948 — — 2,373 — — — — — — — — — — — — — — — — — — — 120 92 137 139 203 323 139 201 420 134 178 117 81 101 74 73 275 399 377 196 682 1,744 2,603 1,253 1,152 2,903 2,655 1,819 2,379 2,551 3,379 2,216 1,547 1,913 1,404 1,389 1,099 598 1,132 4,562 1,361 6,976 369 — 3,715 5,087 262 70 1,529 1,253 — — — — — — 1,078 1,402 7,457 2,533 268 129 70,274 1,869 73,396 (17,333) 11/5/2013 1995 24,133 1,627 30,920 — — 32,547 (9,087) 11/21/2012 1995 6,165 (4,092) 5/6/2014 1951 15,640 1,258 18,300 (5,022) 1/8/2014 1993 22,371 48,130 5,095 1,159 F-126 — — 49 16 29,828 (8,169) 5/23/2012 1998 50,663 (16,832) 10/18/2012 2012 5,412 1,304 (1,681) 6/19/2012 1995 (404) 12/30/2011 1995 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State General Service Administration General Service Administration General Service Administration General Service Administration General Service Administration General Service Administration General Service Administration General Service Administration Cocoa Grangeville Freeport Plattsburgh Warren Ponce Fort Worth Gloucester Giant Levittown Giant Eagle Gahanna Giant Eagle Lancaster Glen's Market Manistee GM Financial Arlington Golden Corral Cullman Golden Corral Gilbert Golden Corral Goodyear Golden Corral Surprise Golden Corral Bakersfield Golden Corral Palatka Golden Corral Albany Golden Corral Brunswick FL ID NY NY PA PR TX VA PA OH OH MI TX AL AZ AZ AZ CA FL GA GA Golden Corral Council Bluffs IA Golden Corral Clarksville Golden Corral Evansville Golden Corral Kokomo Golden Corral Richmond Golden Corral Wichita Golden Corral Henderson Golden Corral Louisville Golden Corral Owensboro IN IN IN IN KS KY KY KY Golden Corral Coon Rapids MN Golden Corral Independence MO 500 2,100 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 253 317 843 508 341 1,435 6,023 3,372 4,572 3,114 15 27 — — — 1,780 9,313 (4,565) 477 287 4,716 3,549 2,210 294 4,294 1,628 9,955 16,736 15,649 6,694 7,901 35,553 (4) 8 — — — — — 1,703 6,367 4,215 5,080 3,455 6,528 4,767 1,923 (501) 12/13/2011 1995 (2,036) 3/5/2012 2007 (1,158) 1/10/2012 1995 (1,504) 6/19/2012 2008 (1,030) 6/19/2012 2008 (698) 11/5/2013 1995 (1,424) 5/9/2012 2010 (536) 6/20/2012 1995 14,671 (2,524) 11/5/2013 1995 20,285 (3,848) 2/7/2014 2002 17,859 (3,498) 2/7/2014 2008 6,988 (1,709) 2/7/2014 2009 43,454 (9,485) 11/5/2013 1998 847 871 686 1,258 2,664 853 460 390 1,140 1,061 670 780 728 560 600 1,020 1,244 1,611 1,425 2,390 (2,143) 2,910 1,939 4,068 2,078 1,048 1,863 2,093 1,460 1,344 2,707 2,107 723 1,306 1,586 1,173 — — — — (471) — — — — — — — — — — 1,656 (1,941) 2,188 (2,893) 1,094 3,781 2,625 5,326 4,742 1,430 2,323 2,483 2,600 2,405 3,377 2,887 1,451 1,866 2,186 2,193 959 906 (150) 2/7/2014 1996 (884) 6/27/2013 2006 (589) 6/27/2013 2006 (1,235) 6/27/2013 2007 (671) 2/7/2014 2011 (157) 6/27/2013 1997 (561) 6/27/2013 1995 (630) 6/27/2013 1995 (440) 6/27/2013 1995 (502) 2/7/2014 2002 (815) 6/27/2013 1995 (634) 6/27/2013 1995 (233) 2/7/2014 2002 (366) 7/31/2013 2000 (477) 6/27/2013 1995 (347) 2/7/2014 2001 (112) 2/7/2014 1997 (94) 2/7/2014 2003 2,437 — 3,862 (722) 2/7/2014 2010 F-127 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — 680 925 690 520 300 270 640 713 647 694 1,109 770 579 774 2,730 — 2,463 (2,319) 1,566 1,433 2,930 — — — 3,174 (2,023) 2,133 1,858 2,135 2,066 2,315 2,476 1,429 2,766 — — — — — — — — 3,410 1,069 2,256 1,953 3,230 1,421 2,773 2,571 2,782 2,760 3,424 3,246 2,008 3,540 (822) 6/27/2013 1995 (147) 2/7/2014 1995 (471) 6/27/2013 1995 (431) 6/27/2013 1995 (882) 6/27/2013 1995 (166) 6/27/2013 1995 (550) 2/7/2014 2003 (462) 2/7/2014 2000 (584) 2/7/2014 2002 (558) 2/7/2014 1999 (581) 2/7/2014 2004 (745) 6/27/2013 1995 (388) 2/7/2014 2000 (734) 2/7/2014 2002 Property City State Golden Corral Flowood Golden Corral Horn Lake Golden Corral Aberdeen Golden Corral Bellevue Golden Corral Lincoln MS MS NC NE NE Golden Corral Farmington NM Golden Corral Akron OH Golden Corral Beavercreek OH Golden Corral Canton Golden Corral Cincinnati Golden Corral Cleveland Golden Corral Columbus Golden Corral Dayton Golden Corral Dayton OH OH OH OH OH OH F-128 Property City State Encumbrances at December 31, 2018 Initial Costs (1) Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction Land 1,167 859 926 947 616 619 838 487 1,175 345 280 1,647 320 800 596 1,265 1,147 644 3,342 758 750 1,248 534 1,085 — — — — — — — — — — — — — — — — — — — — — — — — Golden Corral Elyria Golden Corral Fairfield Golden Corral Grove City Golden Corral Northfield Golden Corral Ontario Golden Corral Springfield Golden Corral Toledo Golden Corral Zanesville OH OH OH OH OH OH OH OH Golden Corral Midwest City OK Golden Corral Norman Golden Corral Tulsa Golden Corral Monroeville Golden Corral Rock Hill Golden Corral Cookeville Golden Corral Baytown Golden Corral College Station Golden Corral Houston Golden Corral San Angelo Golden Corral Spring Golden Corral Texarkana Golden Corral Bristol Golden Corral Beckley Goodyear Cumming Goodyear Cumming Goodyear Mcdonough Goodyear Stockbridge Goodyear Dekalb OK OK PA SC TN TX TX TX TX TX TX VA WV GA GA GA GA IL 10,674 1,797 21,264 12,994 1,222 32,119 19,491 4,476 44,516 Goodyear Lockbourne OH 12,716 3,107 28,868 Goodyear York Goodyear Columbia PA SC Goodyear Corpus Christi TX 22,090 1,980 53,396 — — 656 753 2,077 1,737 Goodyear Terrell TX 14,851 2,516 34,804 F-129 1,599 1,135 1,859 1,061 2,412 1,142 3,333 2,030 1,708 2,107 3,890 849 2,130 1,937 1,788 1,718 2,447 1,702 1,207 3,031 2,276 — — — — — — — — (983) — — — — — — — (64) — — — — 2,258 (2,507) 2,516 1,915 — (11) — — — — — — — — 2,766 1,994 2,785 2,008 3,028 1,761 4,171 2,517 1,900 2,452 4,170 2,496 2,450 2,737 2,384 2,983 3,530 2,346 4,549 3,789 3,026 999 3,050 2,989 (409) 2/7/2014 2004 (302) 2/7/2014 1999 (478) 2/7/2014 2007 (264) 2/7/2014 2004 (652) 2/7/2014 2004 (285) 2/7/2014 2000 (836) 2/7/2014 2004 (616) 6/27/2013 2002 (225) 6/27/2013 1991 (640) 6/27/2013 1994 (1,171) 6/27/2013 1995 (164) 2/7/2014 1982 (641) 6/27/2013 1995 (583) 6/27/2013 1995 (502) 7/31/2013 1998 (522) 6/27/2013 1990 (743) 6/27/2013 1995 (476) 2/7/2014 2012 (416) 2/7/2014 2011 (850) 7/31/2013 2001 (685) 6/27/2013 1995 (129) 2/7/2014 1995 (617) 2/7/2014 2010 (499) 2/7/2014 2010 23,061 (6,512) 1/8/2014 1995 33,341 (10,169) 1/8/2014 1995 48,992 (14,086) 1/8/2014 1999 31,975 (8,750) 1/8/2014 1998 55,376 (15,992) 1/8/2014 2001 2,733 2,490 (519) 2/7/2014 2010 (425) 2/7/2014 2008 37,320 (10,998) 1/8/2014 1998 Property City State The Gorilla Glue Company Cincinnati Grandy's Ardmore Grandy's Moore OH OK OK Grandy's Oklahoma City OK Grandy's Oklahoma City OK Grandy's Arlington Grandy's Carrollton Grandy's Grandy's Dallas Dallas Grandy's Fort Worth Grandy's Fort Worth Grandy's Garland Grandy's Garland Grandy's Greenville Grandy's Irving Grandy's Lancaster Grandy's Mesquite Grandy's Graphic Packaging Gravity Oilfield Services Gravity Oilfield Services Gravity Oilfield Services Gravity Oilfield Services Gravity Oilfield Services Gravity Oilfield Services Gravity Oilfield Services Gravity Oilfield Services Gravity Oilfield Services Gravity Oilfield Services Gravity Oilfield Services Plano Monroe Big Springs Levelland Midland Midland Monahans Odessa Odessa San Angelo Snyder Snyder TX TX TX TX TX TX TX TX TX TX TX TX TX LA TX TX TX TX TX TX TX TX TX TX LA Greene's Energy Group Broussard Hanesbrands Rural Hall NC Hobbs NM Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 5,563 34,887 454 320 260 320 734 847 725 357 777 811 623 859 847 871 780 871 871 637 358 426 42 1,063 1,013 50 104 500 821 466 174 455 — 428 380 289 — — — — — — — — — — — — — 91,313 1,129 599 1,887 528 968 538 1,259 3,891 1,658 588 1,189 6,022 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 40,450 (1,491) 7/28/2017 1978 454 748 640 609 734 847 725 357 777 811 623 859 847 871 780 871 871 — 6/27/2013 1995 — 6/27/2013 1995 — 6/27/2013 1995 — 6/27/2013 1995 — 6/27/2013 1995 — 6/27/2013 1986 — 7/31/2013 1981 — 7/31/2013 1984 — 6/27/2013 1995 — 6/27/2013 1985 — 6/27/2013 1980 — 6/27/2013 1985 — 7/31/2013 1979 — 6/27/2013 1983 — 6/27/2013 1984 — 6/27/2013 1983 — 6/27/2013 1980 91,950 (111) 12/28/2018 2018 1,487 1,025 1,929 1,591 1,981 588 1,363 4,391 2,479 1,054 1,363 6,477 (274) 6/12/2014 2013 (150) 6/25/2014 2012 (453) 6/25/2014 1997 (131) 6/12/2014 2009 (214) 6/12/2014 2010 (131) 6/12/2014 2011 (248) 6/25/2014 1963 (951) 6/12/2014 1963 (364) 6/12/2014 2012 (153) 6/12/2014 2005 (243) 6/12/2014 1975 (1,068) 6/12/2014 1980 1,798 41,214 (50) 42,962 (9,406) 2/7/2014 1992 F-130 Property City State Hanesbrands Rural Hall Hardee's Morrilton Hardee's Jacksonville Hardee's Pace Hardee's Williston Hardee's Bremen Hardee's Canton NC AR FL FL FL GA GA Hardee's Mount Vernon IA Hardee's Old Fort Hardee's Hardee's Sparta Akron Hardee's Jefferson Hardee's Minerva Hardee's Hardee's Seville Aiken Hardee's Chapin Hardee's Chester NC NC OH OH OH OH SC SC SC Hardee's Bloomingdale TN Hardee's Clinton Hardee's Crossville Hardee's Erwin Hardee's Morristown Hardee's Springfield Hardee's / Red Burrito Attalla Harley Davidson Round Rock Harps Grocery Cabot Harps Grocery Haskell Harps Grocery Hot Springs Harps Grocery Hot Springs Harps Grocery Searcy Harps Grocery West Fork TN TN TN TN TN AL TX AR AR AR AR AR AR Harps Grocery Poplar Bluff MO Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 17,990 1,082 22,565 (203) 23,444 (7,997) 12/21/2012 1989 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 175 875 419 395 129 488 320 300 372 207 242 214 151 220 380 586 270 390 300 346 353 343 220 1,688 270 499 592 839 705 635 572 937 583 435 553 518 539 480 904 346 483 363 321 454 450 741 563 844 893 689 406 431 515 896 9,563 4,664 3,281 4,353 4,486 4,159 4,708 2,991 F-131 — — — — — — (6) — — — — — — — — — — — — — — — — — — — — (6) — — 4 1,112 1,458 854 948 647 1,027 794 1,204 718 690 605 535 605 670 1,121 1,149 1,114 1,283 989 752 784 858 (249) 3/28/2014 1986 (164) 7/31/2013 1993 (129) 6/27/2013 1991 (164) 6/27/2013 1992 (145) 7/31/2013 1980 (160) 6/27/2013 1983 (142) 6/27/2013 1987 (265) 6/27/2013 1995 (103) 6/27/2013 1983 (135) 7/31/2013 1990 (102) 7/31/2013 1989 (90) 7/31/2013 1990 (127) 7/31/2013 1989 (132) 6/27/2013 1995 (217) 6/27/2013 1995 (133) 7/31/2013 1994 (247) 6/27/2013 1995 (262) 6/27/2013 1995 (202) 6/27/2013 1995 (120) 6/27/2013 1982 (121) 7/31/2013 1991 (145) 7/31/2013 1990 1,116 (263) 6/27/2013 1995 11,251 (2,983) 7/31/2013 2008 4,934 3,780 4,945 5,319 4,864 5,343 3,567 (1,244) 2/7/2014 2014 (862) 2/7/2014 2012 (1,137) 2/7/2014 2013 (1,116) 2/7/2014 2013 (1,051) 2/7/2014 2008 (1,196) 2/7/2014 2013 (365) 2/21/2014 2014 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Harps Grocery Inola Harris Teeter Durham HD Supply Santee Healthnow Buffalo Helmer Scientific Noblesville Hobby Lobby Algonquin Hobby Lobby Avon Hobby Lobby Auburn Hobby Lobby Kannapolis Hobby Lobby Columbia Hobby Lobby Logan Hobby Lobby & Big Lots Foley Home Depot Tucson Home Depot San Diego Home Depot Evans Home Depot Kennesaw Home Depot Slidell Home Depot Las Vegas Home Depot Columbia Home Depot Odessa Home Depot Winchester Home Town Buffet Home Town Buffet Home Town Buffet Home Town Buffet Rialto Santa Maria Newark OK NC CA NY IN IL IN ME NC TN UT AL AZ CA GA GA LA NV SC TX VA CA CA DE Union Gap WA Hooters Grand Prairie TX Houghton Town Center Tucson Huntington National Bank Huntington National Bank Conneaut Jefferson Hy-Vee Vermillion IFM Efectors Malvern Igloo Katy AZ OH OH SD PA TX — 130 3,387 1,910 3,239 — — 2,400 7,312 40,953 2,569 89,399 1,431 10,699 — — 430 — — — — — — 38 — — — — — 1 — — — — 3,517 3,239 (859) 3/5/2014 2014 — 2/7/2014 2009 10,142 (2,262) 2/21/2014 1995 91,968 (17,452) 2/7/2014 2007 12,130 (428) 7/27/2017 2012 5,578 7,294 6,172 6,156 3,456 5,762 8,612 6,251 12,518 4,583 (217) 6/23/2017 2012 (1,421) 2/7/2014 2007 (83) 3/7/2018 2014 (1,068) 2/7/2014 2004 (710) 2/26/2014 1986 (845) 2/7/2014 2008 (123) 5/24/2018 2014 — 2/7/2014 2005 — 2/7/2014 1998 — 2/7/2014 2009 14,141 (2,771) 2/7/2014 2012 5,131 7,907 — 2/7/2014 1998 — 2/7/2014 1998 18,374 (5,315) 11/9/2009 2009 1,599 — 2/7/2014 1998 4,580 5,855 3,566 4,227 2,467 3,079 6,842 — — — 12,331 — — 15,463 — 18,405 1,136 23,496 (6,424) 2/7/2014 2008 1,261 (1,046) 1,006 1,129 (763) (739) 1,320 (1,223) 2,327 8,565 477 765 3,684 250 — 6 7 — 480 434 567 350 3,574 9,741 688 1,027 4,093 (170) 1/8/2014 1998 (86) 1/8/2014 2002 (150) 1/8/2014 1983 (117) 1/8/2014 2002 (731) 7/31/2013 2001 (318) 12/28/2017 2017 (131) 10/1/2013 1971 (210) 10/1/2013 1963 (1,357) 4/8/2013 1986 — 9,747 11,563 (1,181) 8/27/2014 2014 38,470 — 44,087 (8,666) 2/7/2014 2004 F-132 — — — — — — — — — 998 1,439 2,606 1,929 951 2,683 1,770 6,251 6,650 12,518 — — 4,583 1,809 1,996 5,131 — — — — — — — — — — — — 2,922 — — 7,907 2,911 1,599 3,955 265 191 177 253 997 1,176 205 255 409 1,816 5,617 Property City State Encumbrances at December 31, 2018 IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP Auburn Homewood AL AL Montgomery AL Castle Rock Greeley Loveland Pueblo CO CO CO CO Bossier City LA Natchitoches LA Roseville MI Kansas City MO Southaven Greenville Clarksville MS SC TN Murfreesboro TN Baytown TX Corpus Christi TX Fort Worth Houston Killeen TX TX TX Lake Jackson TX Leon Valley TX Auburn WA Inform Diagnostics Irving Ingersoll Rand Annandale Ingram Micro Amherst Insurance Auto Auctions Hudson Iron Mountain Columbus Iron Mountain Mohnton IRS Gateway Center Covington Irving Oil Belfast Irving Oil Bethel TX NJ NY FL OH PA KY ME ME — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Initial Costs (1) Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction 933 1,762 — — — (772) 2,334 1,538 1,534 1,589 1,342 89 1,071 1,002 2,108 1,551 1,346 1,687 1,297 — 1,879 2,462 1,028 2,018 2,055 1,878 37,297 14,223 20,347 11,203 — — — — — — 125 — — — — — — — — — — — — — 341 (90) — — 2,044 2,372 169 2,654 1,658 1,715 1,919 1,883 839 1,536 1,632 2,458 2,161 1,876 2,287 1,995 1,176 2,439 3,222 1,408 2,388 2,705 2,658 (283) 6/27/2013 1998 (530) 6/27/2013 1995 — 6/27/2013 1998 (703) 6/27/2013 1995 (463) 6/27/2013 1995 (113) 6/27/2013 1995 (478) 6/27/2013 1995 (407) 6/27/2013 1998 (27) 6/27/2013 1995 (330) 6/27/2013 1995 (302) 6/27/2013 1995 (635) 6/27/2013 1995 (467) 6/27/2013 1995 (405) 6/27/2013 1995 (508) 6/27/2013 1995 (364) 7/31/2013 1998 — 7/31/2013 1995 (566) 6/27/2013 1995 (741) 6/27/2013 1995 (309) 6/27/2013 1995 (608) 6/27/2013 1995 (789) 6/27/2013 1995 (565) 6/27/2013 1995 40,875 (9,055) 4/28/2014 1997 15,500 (6,672) 4/30/2014 1999 24,454 (5,216) 6/25/2014 1986 12,265 (141) 10/9/2018 2018 3,642 1,263 6,152 — 5,310 6,349 (1,384) 9/28/2012 1954 (1,330) 7/2/2014 1979 Land 1,111 610 941 320 120 181 330 541 750 340 630 350 610 530 600 698 1,176 560 760 380 370 650 780 3,237 1,367 4,107 1,062 405 197 3,120 80,689 1,582 85,391 (15,546) 6/5/2014 1994 339 182 698 331 F-133 — — 1,037 513 (213) 2/7/2014 1997 (105) 2/7/2014 1990 Initial Costs (1) Encumbrances at December 31, 2018 State Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property Irving Oil City Boothbay Harbor Irving Oil Caribou Irving Oil Fort Kent Irving Oil Kennebunk Irving Oil Lincoln Irving Oil Orono Irving Oil Saco Irving Oil Skowhegan Irving Oil Conway Irving Oil Dover Irving Oil Rochester ME ME ME ME ME ME ME ME NH NH NH Irving Oil Dummerston VT Irving Oil Rutland Irving Oil Westminster Jack in the Box Avondale Jack in the Box Chandler Jack in the Box Folsom Jack in the Box Sacramento Jack in the Box West Sacramento Jack in the Box Burley Jack in the Box Belleville Jack in the Box Florissant Jack in the Box St. Louis Jack in the Box Salem Jack in the Box Tigard Jack in the Box Arlington Jack in the Box Arlington Jack in the Box Cleburne Jack in the Box Corinth Jack in the Box Farmers Branch Jack in the Box Fort Worth Jack in the Box Georgetown VT VT AZ AZ CA CA CA ID IL MO MO OR OR TX TX TX TX TX TX TX — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 413 187 358 469 360 228 619 541 173 380 290 185 249 108 110 450 280 476 590 240 200 502 420 580 620 420 420 291 400 460 490 600 550 404 352 541 360 272 222 492 525 717 747 353 220 437 2,237 1,447 2,423 1,110 1,710 1,430 966 1,515 1,494 1,301 1,361 1,325 1,365 1,647 1,416 1,640 1,702 1,508 F-134 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 963 591 710 (180) 2/7/2014 1993 (121) 2/7/2014 1990 (126) 2/7/2014 1973 1,010 (184) 2/7/2014 1980 720 500 841 1,033 698 1,097 1,037 538 469 545 2,347 1,897 2,703 1,586 2,300 1,670 1,166 2,017 1,914 1,881 1,981 1,745 1,785 1,938 1,816 2,100 2,192 2,108 (114) 2/7/2014 1994 (84) 2/7/2014 1984 (98) 2/7/2014 1995 (170) 2/7/2014 1988 (150) 2/7/2014 2004 (213) 2/7/2014 1988 (215) 2/7/2014 1970 (120) 2/7/2014 1993 (68) 2/7/2014 1984 (131) 2/7/2014 1990 (656) 6/27/2013 1995 (425) 6/27/2013 1995 (711) 6/27/2013 1995 (312) 7/31/2013 1991 (502) 6/27/2013 1995 (420) 6/27/2013 1995 (283) 6/27/2013 1995 (444) 6/27/2013 1995 (438) 6/27/2013 1995 (382) 6/27/2013 1995 (399) 6/27/2013 1995 (389) 6/27/2013 1995 (400) 6/27/2013 1995 (462) 7/31/2013 2000 (415) 6/27/2013 1995 (481) 6/27/2013 1995 (499) 6/27/2013 1995 (442) 6/27/2013 1995 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — 380 600 470 460 390 330 410 450 1,449 1,856 1,344 1,437 1,172 1,845 1,621 1,396 — — — — — — — — 1,829 2,456 1,814 1,897 1,562 2,175 2,031 1,846 (425) 6/27/2013 1995 (544) 6/27/2013 1995 (394) 6/27/2013 1995 (422) 6/27/2013 1995 (344) 6/27/2013 1995 (541) 6/27/2013 1995 (475) 6/27/2013 1995 (409) 6/27/2013 1995 Property City State Jack in the Box Granbury TX Jack in the Box Grand Prairie TX Jack in the Box Grapevine Jack in the Box Houston Jack in the Box Houston Jack in the Box Houston Jack in the Box Houston Jack in the Box Houston TX TX TX TX TX TX F-135 Property City State Jack in the Box Hutchins Jack in the Box Lufkin Jack in the Box Lufkin Jack in the Box Mesquite TX TX TX TX Jack in the Box Missouri City TX Jack in the Box Nacogdoches TX Jack in the Box Orange Jack in the Box Port Arthur Jack in the Box San Antonio Jack in the Box San Antonio Jack in the Box San Antonio Jack in the Box Spring Jack in the Box Spring Jack in the Box Texas City Jack in the Box Tyler Jack in the Box Weatherford TX TX TX TX TX TX TX TX TX TX Jack in the Box Enumclaw WA Jeremiah's Italian Ice Winter Springs FL Jiffy Lube Houston Jo-Ann's Shakopee Johnny Carinos Rogers Johnny Carinos Columbus Johnny Carinos Muncie Johnny Carinos Houston Johnny Carinos Midland Katun Corp. Davenport Keane Frac Pleasanton Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Bloomington Charleston Decatur Dolton Elmhurst TX MN AR IN IN TX TX IA TX IL IL IL IL IL Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 330 440 450 560 451 340 270 460 400 470 350 570 450 454 450 480 380 734 423 994 997 809 540 1,328 998 454 328 576 282 276 167 242 1,363 1,544 1,563 1,652 837 1,320 1,661 1,405 1,244 1,256 1,249 1,340 1,487 844 1,025 1,329 1,238 — 1,037 1,807 2,540 1,888 2,160 2,656 2,329 7,485 — — — — — — — — — — — — — — — — — — — — — — — — — — 4,804 (2,858) — — — — — 1,466 1,514 1,619 946 969 F-136 1,693 1,984 2,013 2,212 1,288 1,660 1,931 1,865 1,644 1,726 1,599 1,910 1,937 1,298 1,475 1,809 1,618 734 1,460 2,801 3,537 2,697 2,700 3,984 3,327 7,939 2,274 2,042 1,796 1,895 1,113 1,211 (400) 6/27/2013 1995 (453) 6/27/2013 1995 (458) 6/27/2013 1995 (485) 6/27/2013 1995 (235) 7/31/2013 1991 (387) 6/27/2013 1995 (487) 6/27/2013 1995 (412) 6/27/2013 1995 (365) 6/27/2013 1995 (368) 6/27/2013 1995 (366) 6/27/2013 1995 (393) 6/27/2013 1995 (436) 6/27/2013 1995 (250) 6/27/2013 1991 (301) 6/27/2013 1995 (390) 6/27/2013 1995 (363) 6/27/2013 1995 — 7/31/2013 1995 (231) 6/9/2014 2008 (441) 2/7/2014 2012 (771) 6/27/2013 2001 (584) 8/30/2013 2004 (668) 8/30/2013 2003 (806) 6/27/2013 2002 (726) 7/31/2013 2000 (1,477) 5/6/2014 1993 (250) 9/25/2014 2014 (434) 6/27/2013 2004 (448) 6/27/2013 2003 (480) 6/27/2013 2001 (266) 7/31/2013 1975 (272) 7/31/2013 1990 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken / A&W Kentucky Fried Chicken / A&W Kentucky Fried Chicken / A&W Kentucky Fried Chicken / A&W Kentucky Fried Chicken / A&W Kentucky Fried Chicken / A&W Kentucky Fried Chicken / A&W Kentucky Fried Chicken / A&W Kentucky Fried Chicken / A&W Kentucky Fried Chicken / A&W Kentucky Fried Chicken / A&W Kentucky Fried Chicken / A&W Hazel Crest Homewood Matteson Mattoon Oak Forest Rockford Springfield Springfield Westchester IL IL IL IL IL IL IL IL IL Crawfordsville IN Frankfort Franklin Greenwood Lebanon Deming Las Cruces Warren Green Bay Milwaukee Milwaukee Milwaukee Milwaukee Milwaukee South Milwaukee Wauwatosa West Bend IN IN IN IN NM NM OH PA WI WI WI WI WI WI WI WI WI WI FL Kentucky Fried Chicken New Kensington Appleton Granite City IL Allison Park PA Germantown WI Ker's WingHouse Bar and Grill Brandon — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 153 660 399 113 185 201 267 212 238 159 99 205 339 337 220 270 426 324 350 102 246 368 208 396 281 89 197 138 197 135 185 340 1,376 1,541 2,259 1,019 1,047 1,142 1,068 1,203 952 1,068 893 1,375 1,405 1,348 691 498 640 487 874 1,083 683 913 1,022 773 795 750 975 924 695 615 705 654 F-137 — — — — — — — — — — — — — — — — (421) (260) — — — — — — — — — — — — — — 1,529 2,201 2,658 1,132 1,232 1,343 1,335 1,415 1,190 1,227 992 1,580 1,744 1,685 911 768 645 551 1,224 1,185 929 1,281 1,230 1,169 1,076 839 1,172 1,062 892 750 890 994 (386) 7/31/2013 1982 (432) 7/31/2013 1992 (634) 7/31/2013 1973 (286) 7/31/2013 1973 (294) 7/31/2013 1955 (320) 7/31/2013 1995 (300) 7/31/2013 1987 (338) 7/31/2013 1987 (267) 7/31/2013 1973 (316) 6/27/2013 1979 (251) 7/31/2013 1985 (408) 6/27/2013 1976 (416) 6/27/2013 1976 (378) 7/31/2013 1983 (203) 6/27/2013 1995 (146) 6/27/2013 1995 (49) 7/31/2013 1987 (41) 7/31/2013 1967 (256) 6/27/2013 1995 (321) 6/27/2013 1987 (202) 6/27/2013 1978 (270) 6/27/2013 1989 (303) 6/27/2013 1986 (229) 6/27/2013 1991 (236) 6/27/2013 1992 (222) 6/27/2013 1989 (289) 6/27/2013 1991 (274) 6/27/2013 1992 (206) 6/27/2013 1993 (182) 6/27/2013 1992 (209) 6/27/2013 1972 (197) 6/27/2013 1995 Property City State Ker's WingHouse Bar and Grill Clearwater FL Key Bank Spencerport NY Kirklands Wilmington Initial Costs (1) Encumbrances at December 31, 2018 — — — Land 550 59 1,127 8,700 8,052 4,670 4,173 — — 7,705 — — — — 1,431 964 547 1,110 1,532 2,984 2,756 3,429 1,286 — — — — — — — — — — — — — — — — — — — 1,268 — — — — — — — — — — 195 348 352 305 259 560 303 502 Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — 60 — — — — — — — — — — — — — — — — — 182 — 125 125 — 175 125 — 627 1,112 1,061 7,891 — 3,109 5,009 10,399 6,932 14,561 5,842 3,423 7,321 7,788 6,279 6,250 7,574 7,691 5,794 5,715 6,165 6,073 7,782 7,642 1,147 811 654 712 1,036 829 562 613 F-138 1,177 1,171 2,188 (189) 6/27/2013 1995 (315) 6/5/2013 1960 (279) 2/7/2014 2004 15,943 (1,941) 2/7/2014 1982 4,173 4,540 6,033 — 2/7/2014 2008 (766) 2/7/2014 2011 (1,105) 2/7/2014 2009 10,946 (3,852) 3/28/2013 2003 8,042 (1,525) 2/7/2014 2011 16,093 (3,036) 2/7/2014 2007 8,826 6,179 8,607 9,056 6,279 6,250 7,574 7,691 5,794 5,715 6,165 6,073 7,782 7,642 1,524 1,159 1,131 1,142 1,295 1,564 990 1,115 (1,369) 2/7/2014 2006 (38) 2/7/2014 2007 (1,660) 2/7/2014 2005 (1,717) 2/7/2014 2011 (1,592) 11/5/2013 1996 (1,585) 11/5/2013 1995 (1,921) 11/5/2013 1995 (1,950) 11/5/2013 1993 (1,469) 11/5/2013 1995 (1,449) 11/5/2013 1996 (1,563) 11/5/2013 1995 (1,540) 11/5/2013 1996 (1,973) 11/5/2013 1996 (1,938) 11/5/2013 1996 (385) 6/27/2013 1995 (303) 4/23/2013 1960 (256) 4/23/2013 1971 (274) 6/10/2013 1985 (405) 9/21/2012 1964 (290) 6/27/2013 1995 (222) 4/23/2013 1962 (229) 4/23/2013 1962 NC CA FL IA KS MI MI SC SC TX TX WI GA GA GA GA KY Monrovia Tavares Fort Dodge Salina Howell Saginaw Columbia Spartanburg Brownsville Mcallen Rice Lake Calhoun Lithonia Suwanee Suwanee Frankfort Madisonville KY Murray Owensboro Franklin Knoxville Greenville Huntsville Huntsville Huntsville KY KY TN TN AL AL AL AL Montgomery AL Montgomery AL Montgomery AL Montgomery AL Kohl's Kohl's Kohl's Kohl's Kohl's Kohl's Kohl's Kohl's Kohl's Kohl's Kohl's Kroger Kroger Kroger Kroger Kroger Kroger Kroger Kroger Kroger Kroger Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Scottsboro Tuscaloosa Valley AL AL AL Vestavia Hills AL Jacksonville Orlando Orlando Plant City FL FL FL FL St. Augustine FL Albany Atlanta Augusta Columbus Decatur East Point Macon GA GA GA GA GA GA GA Milledgeville GA Snellville Corinth Gulfport Pearl Chattanooga Chattanooga Chattanooga Knoxville GA MS MS MS TN TN TN TN Lawrenceburg TN Memphis Memphis TN TN Murfreesboro TN Kum & Go Bentonville Kum & Go Lowell Kum & Go Paragould AR AR AR — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 20 206 297 342 574 372 669 355 411 309 166 365 622 94 221 325 261 466 279 215 426 336 186 440 369 304 257 181 465 587 774 708 1,157 1,165 694 513 574 372 446 533 411 721 664 851 934 533 664 759 609 466 652 861 638 784 328 659 246 709 1,029 723 698 1,370 1,437 2,123 F-139 172 454 125 — — 125 — — 125 — — — — — — — — — 125 — — — — — — — — — — (52) (27) — 1,349 1,825 1,116 855 1,148 869 1,115 888 947 1,030 830 1,216 1,556 627 885 (385) 6/27/2013 1995 (254) 9/21/2012 1976 (270) 4/23/2013 1979 (192) 4/23/2013 1995 (225) 9/21/2012 1990 (154) 9/21/2012 1994 (175) 9/21/2012 1995 (209) 9/21/2012 2012 (170) 9/21/2012 2012 (282) 9/21/2012 1962 (260) 9/21/2012 1973 (333) 9/21/2012 1979 (365) 9/21/2012 1977 (208) 9/21/2012 1965 (258) 10/26/2012 1984 1,084 (297) 9/21/2012 1962 870 932 1,056 1,076 1,064 1,120 514 1,099 615 1,013 1,286 904 1,163 1,905 2,184 2,831 (238) 9/21/2012 2011 (182) 9/21/2012 1981 (254) 4/23/2013 2007 (337) 9/21/2012 2011 (250) 9/21/2012 1976 (307) 9/21/2012 2010 (73) 6/27/2013 1995 (246) 4/23/2013 1983 (96) 9/21/2012 1970 (265) 4/23/2013 1980 (384) 4/23/2013 1975 (270) 4/23/2013 1972 (261) 4/23/2013 2008 (428) 11/20/2012 2009 (449) 11/20/2012 2009 (674) 9/28/2012 2012 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Kum & Go Rogers Kum & Go Sherwood Kum & Go Fountain Kum & Go Monument Kum & Go Muscatine Kum & Go Ottumwa Kum & Go Sloan Kum & Go Story City Kum & Go Tipton Kum & Go Waukee Kum & Go West Branch Kum & Go Joplin Kum & Go Joplin Kum & Go Neosho Kum & Go Tioga Kum & Go Muskogee Kum & Go Muskogee Kum & Go Cheyenne Kum & Go Gillette LA Fitness Avondale LA Fitness Glendale LA Fitness Marana LA Fitness LA Fitness Highland Boynton Beach LA Fitness Miami LA Fitness Tampa LA Fitness Broadview LA Fitness Oswego LA Fitness Tinley Park LA Fitness Carmel LA Fitness Indianapolis LA Fitness St. Clair Shores AR AR CO CO IA IA IA IA IA IA IA MO MO MO ND OK OK WY WY AZ AZ AZ CA FL FL FL IL IL IL IN IN MI — — — — — — — — — — — — — — — — — — — — 668 866 1,131 1,192 794 586 447 223 507 1,280 219 218 205 504 318 423 97 411 878 2,253 3,049 2,177 — 1,284 4,481 2,274 — — — — — — — — — 1,485 2,730 1,084 3,345 3,163 1,722 1,457 1,279 2,163 1,559 1,609 1,696 1,457 1,853 1,368 2,162 2,089 1,945 1,280 1,089 782 594 1,144 2,863 1,691 973 2,327 2,048 9,040 7,568 8,322 8,673 9,945 8,671 6,500 8,763 8,749 8,976 9,562 8,970 6,787 F-140 — — — — — — — — — — — — — — — — — — — — 20 — — — — — 2,227 2,475 2,827 2,649 2,647 1,954 2,609 2,312 2,452 2,560 1,308 1,000 799 1,648 3,181 2,114 1,070 2,738 2,926 (487) 11/20/2012 2008 (510) 9/28/2012 2012 (526) 12/24/2012 2012 (452) 12/24/2012 2012 (575) 12/27/2012 2012 (428) 11/20/2012 1998 (668) 2/7/2014 2008 (574) 2/7/2014 2006 (629) 2/7/2014 2008 (388) 3/28/2013 2012 (296) 2/7/2014 1997 (281) 2/11/2014 1987 (216) 2/11/2014 1986 (319) 2/11/2014 1997 (895) 11/8/2012 2012 (497) 7/22/2013 2013 (210) 9/30/2014 1999 (722) 12/27/2012 2012 (606) 6/28/2013 2013 11,293 (2,382) 2/7/2014 2006 9,765 9,606 (2,166) 2/7/2014 2005 (2,282) 2/7/2014 2011 10,947 (2,528) 2/7/2014 2009 11,430 (631) 11/22/2016 2005 11,401 (566) 11/22/2016 2015 7,584 (254) 11/13/2017 2016 276 12,384 (2,349) 2/7/2014 2010 — — — — — 11,912 (2,433) 2/7/2014 2008 10,698 (260) 12/22/2017 2006 11,019 (2,526) 2/7/2014 2008 10,249 (2,370) 2/7/2014 2009 8,950 (480) 11/22/2016 1982 Property City State LA Fitness Oakdale LA Fitness Webster LA Fitness Edmond LA Fitness Easton LA Fitness Memphis LA Fitness Dallas LA Fitness Denton LA Fitness Duncanville LA Fitness Mckinney LA Fitness Rowlett LA Fitness Spring MN NY OK PA TN TX TX TX TX TX TX Lamrite West Strongsville OH Leeann Chin Blaine MN Leeann Chin Chanhassen MN Leeann Chin Golden Valley MN Lee's Famous Recipe Chicken Lee's Famous Recipe Chicken Lee's Famous Recipe Chicken Florissant St. Ann St. Louis Lifetime Dentistry Chickasha Chickasha Logan's Roadhouse Logan's Roadhouse Logan's Roadhouse Logan's Roadhouse Logan's Roadhouse Logan's Roadhouse Logan's Roadhouse Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Huntsville Fayetteville Hattiesburg Owasso Clarksville Cleveland El Paso Merced Collinsville Fairview Heights Jacksonville Litchfield MO MO MO OK AL AR MS OK TN TN TX CA IL IL IL IL Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 4,749 2,315 2,922 962 938 — — — — 1,466 7,348 4,712 2,629 10,413 3,775 1,888 9,568 8,315 5,102 6,916 — — — 10,630 (2,291) 2/7/2014 2009 8,024 7,878 (227) 8/1/2017 2014 (1,668) 3/31/2014 2014 10,600 139 11,677 (2,818) 2/7/2014 1979 — — (6) — — 8,814 (109) 7/26/2018 2014 13,042 (2,615) 2/7/2014 2008 11,450 (2,473) 2/7/2014 2009 11,561 (2,548) 2/7/2014 2007 9,826 (516) 11/22/2016 2005 406 10,613 (403) 4/11/2017 2006 — — — — — — — — — — — — — — — — — — — — — — — — 1,538 2,039 2,539 1,970 3,078 480 450 270 306 187 107 100 520 1,570 890 1,449 1,010 890 320 174 220 258 171 194 10,023 7,787 7,668 9,290 34,076 528 763 776 560 571 874 186 — — — — — — — — — 4,797 (1,363) 2,182 4,012 2,173 (953) (803) (568) 4,424 (1,264) 3,902 (1,225) 4,731 (1,558) — — — — — 695 940 525 431 996 F-141 11,260 (2,394) 2/7/2014 2006 37,154 (1,238) 8/21/2017 1999 1,008 1,213 1,046 866 758 981 286 3,954 2,799 4,099 3,054 4,170 3,567 3,493 869 1,160 783 602 (155) 6/27/2013 1995 (224) 6/27/2013 1995 (228) 6/27/2013 1995 (166) 6/27/2013 1984 (169) 6/27/2013 1984 (259) 6/27/2013 1984 (58) 6/27/2013 1995 (750) 6/27/2013 1995 (329) 6/27/2013 1995 (698) 6/27/2013 1995 (385) 7/31/2013 2006 (706) 6/27/2013 1995 (604) 6/27/2013 1995 (691) 6/27/2013 1995 (195) 7/31/2013 1982 (278) 6/27/2013 2006 (155) 6/27/2013 1976 (128) 6/27/2013 1978 1,190 (295) 6/27/2013 1986 Property City State Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Marion IL Mount Carmel IL Vandalia IL West Frankfort IL Wood River IL Garden City Hays Clovis Fairborn Penn Hills Austin Green Bay Ashtabula Tampa Paducah Jonesboro Burlington Florence KS KS NM OH PA TX WI OH FL KY OH AR IA KY Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / KFC Long John Silver's / Taco Bell Longhorn Steakhouse Longhorn Steakhouse Lowe's Lowe's Lowe's Lowe's Lowe's Lowe's Lowe's Lowe's Lowe's Lowe's Lowe's Lowe's Lowe's Lumber Liquidators Los Tios Mexican Restaurant Dalton New Orleans LA 12,332 10,315 20,728 Sanford Windham ME ME Benton Harbor MI Kansas City MO Las Vegas NV 4,672 4,045 7,930 12,640 — — — 1,011 3,729 11,499 Ticonderoga NY 4,345 1,812 West Carrollton Columbia Texas City Saginaw OH SC TX MI Mad Max Fond Du Lac WI Mad Max Fond Du Lac WI — — — — — — 2,864 5,485 2,313 287 303 1,484 — — — — — — — — — — — — — — — — — — — 305 105 101 244 251 120 160 210 103 438 459 748 440 370 1,059 (925) 484 484 996 314 530 624 705 300 656 477 563 1,640 1,852 — (375) (836) — — — (377) — — — — — — 1,121 1,443 (2,072) 18 2,101 2,775 4,814 30 8,405 8,191 10,189 — 185 819 250 — — — — — 7,851 245 — — — — — — — — — — — — 9,883 — 9,253 502 1,212 2,511 F-142 439 589 210 404 565 650 784 538 403 1,094 936 1,311 2,080 2,222 492 48 — 6/27/2013 1983 (143) 6/27/2013 1977 — 6/27/2013 1976 — 6/27/2013 1977 (93) 6/27/2013 1975 (157) 6/27/2013 1978 (185) 6/27/2013 1994 (63) 6/27/2013 1995 (89) 6/27/2013 1976 (184) 7/31/2013 1993 (141) 6/27/2013 1993 (167) 6/27/2013 1978 (481) 6/27/2013 1995 (557) 6/27/2013 1995 (6) 2/7/2014 1995 (9) 6/27/2013 1990 10,691 (2,011) 5/19/2014 1994 11,785 (1,932) 2/7/2014 1996 15,253 (2,368) 2/7/2014 1997 31,043 (5,256) 11/5/2013 2005 4,045 12,640 9,107 3,729 11,499 1,812 — 2/7/2014 2009 — 6/3/2013 2006 (1,934) 3/17/2014 1994 — 2/7/2014 2009 — 2/7/2014 2002 — 2/7/2014 2009 12,747 (2,157) 2/7/2014 1994 5,485 — 2/7/2014 1994 11,566 (2,984) 5/19/2014 1995 789 1,515 3,995 (128) 5/28/2014 2000 (20) 7/17/2018 2007 (27) 7/17/2018 1974 Property City State Mad Max Fond Du Lac WI Mad Max Mad Max Port Washington Port Washington Mad Max Sheboygan Mad Max West Bend Mad Max West Bend Mad Max West Bend Mad Max West Bend Mars Petcare Columbia Marshall's Convenience Stores Marshall's Convenience Stores Marshall's Convenience Stores Marshall's Convenience Stores Marshall's Convenience Stores Marshall's Convenience Stores Cascade Elkhart Lake WI Glenbeulah WI Kewaskum WI Plymouth WI Plymouth Mastec Houston Mattress Firm Daphne Mattress Firm Dothan Mattress Firm Rogers Mattress Firm Destin Mattress Firm Tallahassee Mattress Firm Fairview Heights Mattress Firm Columbus Mattress Firm Evansville Mattress Firm Goshen Mattress Firm South Bend Mattress Firm Lafayette Mattress Firm Flint Mattress Firm Flint Mattress Firm Goldsboro Mattress Firm Painesville Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — 1,194 — — — — 133 191 533 354 463 483 278 333 272 568 733 318 710 965 315 570 — — — — — — — — 405 759 1,266 672 1,173 1,448 593 903 (6) 7/17/2018 1952 (11) 7/17/2018 1991 (14) 7/17/2018 1996 (7) 7/17/2018 1996 (13) 7/17/2018 2012 (16) 7/17/2018 2016 (7) 7/17/2018 1986 (10) 7/17/2018 1999 1,875 19,591 (985) 20,481 (3,634) 11/5/2013 2014 32 283 45 253 82 199 369 528 406 321 693 924 231 157 117 211 289 — 467 409 349 437 436 955 605 468 318 539 2,669 1,233 1,217 1,284 1,287 1,386 958 891 2,227 1,555 2,445 1,251 1,323 1,164 1,385 1,318 F-143 — — — — — — — — — — — — — — — — — — — — — — 468 (6) 8/30/2018 1991 1,238 (14) 8/30/2018 1985 650 721 400 738 3,038 1,761 1,623 1,605 1,980 2,310 1,189 1,048 2,344 1,766 2,734 1,251 1,790 1,573 1,734 1,755 (9) 8/30/2018 2008 (7) 8/30/2018 1999 (5) 8/30/2018 1984 (9) 8/30/2018 2005 (550) 6/12/2014 2012 (353) 10/1/2013 2013 (363) 5/14/2013 2013 (392) 2/6/2013 2012 (381) 6/5/2013 2013 (414) 5/14/2013 2013 (276) 2/7/2014 1977 (278) 11/6/2012 1964 (680) 2/11/2013 1995 (381) 3/20/2014 2013 (611) 2/24/2014 2013 (373) 5/2/2013 1995 (272) 8/19/2014 2014 (208) 10/3/2014 2014 (274) 5/29/2014 2014 (286) 7/10/2014 2014 WI WI WI WI WI WI WI SC WI WI TX AL AL AR FL FL IL IN IN IN IN LA MI MI NC OH Property City State Mattress Firm Johnstown Mattress Firm Florence Mattress Firm Rock Hill Mattress Firm Knoxville Mattress Firm Nederland Mattress Firm Bountiful Mattress Firm Spokane Mattress Firm Spokane PA SC SC TN TX UT WA WA McAlisters Murfreesboro TN McAlisters Sherman McAlisters Waco TX TX McDonald's Scotland Neck NC MDC Holdings Inc. Denver MedAssets Plano The Medicines Co. Melrose Park Center Parsippany CO TX NJ Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — 389 398 385 586 311 736 409 511 310 563 429 320 906 929 898 1,088 1,245 1,367 1,685 1,582 720 1,223 791 — 12,648 66,398 10,432 45,650 27,700 5,150 50,051 745 (8) — — — — — — — — — — 397 — 748 597 2,040 1,319 1,283 1,674 1,556 2,103 2,094 2,093 1,030 1,786 1,220 320 (281) 7/31/2013 1995 (287) 12/7/2012 2012 (262) 8/21/2013 2008 (330) 3/19/2013 2012 (395) 9/26/2012 1997 (424) 12/31/2012 2012 (517) 4/4/2013 2013 (490) 3/28/2013 2013 (217) 6/27/2013 1995 (324) 5/16/2014 2013 (238) 3/27/2014 2000 — 6/27/2013 2005 79,443 (17,105) 11/5/2013 2001 56,082 (9,902) 2/7/2014 2013 55,949 (11,324) 2/7/2014 2009 17,255 (2,664) 2/7/2014 2006 Melrose Park IL — 6,143 10,515 Merrill Lynch Hopewell Metro by T- Mobile Richardson Mezcal Mexican Restaurant Grafton Michaels Lancaster Michaels Lafayette Michaels Phoenix Michelin Louisville NJ TX OH CA LA AZ KY Millenium Chem Glen Burnie MD Mills Fleet Farm Cedar Falls Mister Car Wash Florence Mister Car Wash Florence IA AL AL Mister Car Wash Muscle Shoals AL Mister Car Wash Grand Rapids MI Mister Car Wash Grand Rapids MI Mister Car Wash Grand Rapids MI Mister Car Wash Grand Rapids MI 74,250 17,619 108,349 (12,141) 113,827 (15,642) 2/7/2014 2001 7,489 1,292 19,606 769 21,667 (5,161) 11/5/2013 1986 — — — — — — — — — — — — — — 64 7,744 1,831 2,325 1,120 2,127 — 198 404 378 662 779 721 458 191 33,872 3,631 5,948 7,763 — — — — — 255 (60) 7/31/2013 1990 41,616 (1,113) 11/20/2017 1998 5,462 8,273 8,883 (1,049) 2/7/2014 2011 (126) 5/31/2018 1997 (2,403) 11/5/2013 2011 23,198 (3,894) 21,431 (2,794) 2/21/2014 1984 — 3 3 3 — — — — 3,501 1,577 2,012 1,826 1,439 2,379 1,717 1,396 — 12/21/2018 N/A (49) 10/17/2017 2008 (70) 10/17/2017 2016 (55) 10/17/2017 2008 (36) 5/16/2017 2002 (77) 4/18/2017 2001 (45) 5/16/2017 1984 (44) 5/16/2017 1961 3,501 1,376 1,605 1,445 777 1,600 996 938 F-144 Property City State Mister Car Wash Grand Rapids MI Mister Car Wash Jenison Mister Car Wash Kentwood Monro Muffler Lewiston Monro Muffler Waukesha Monterey's Tex Mex Tulsa Moonshine Austin MI MI ME WI OK TX MotoMart MS Energy Service St. Charles MO Midland N/A - Billboard Memphis N/A - Billboard Memphis N/A - Billboard Memphis N/A - Billboard Memphis N/A - Parking Lot Kingston National Tire & Battery National Tire & Battery National Tire & Battery Morrow St. Louis Nashville Natural Grocers Gilbert Natural Grocers Gilbert Natural Grocers Tucson Natural Grocers Salem Nestle Holdings Breinigsville Northern Tool & Equipment Ocala Northrop Grumman El Segundo NTT Data Lincoln O'Charley's Dalton O'Charley's Tucker Old Country Buffet Burbank Olive Garden Flagstaff Olive Garden Altamonte Springs Olive Garden Leesburg TX TN TN TN TN PA GA MO TN AZ AZ AZ OR PA FL CA NE GA GA CA AZ FL FL Olive Garden Port Charlotte FL Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — (326) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 799 — — — — — 554 393 238 279 228 135 837 1,085 1,165 33 63 73 90 29 397 756 603 2,113 2,100 1,571 1,339 7,381 902 915 877 1,115 684 406 1,797 1,980 948 — — — — — 1,586 924 1,373 3,211 3,231 3,637 3,886 66,948 1,574 1,693 2,727 15,935 67,908 2,812 25,566 — — — — — — — — — 406 1,037 246 875 699 692 1,454 1,817 866 1,309 (1,094) — — — — 455 4,023 1,837 4,156 F-145 1,456 1,308 1,115 1,394 912 215 2,634 3,065 2,113 33 63 73 90 29 1,983 1,680 1,976 5,324 5,331 5,208 5,225 (11) 8/15/2018 1976 (10) 8/15/2018 1977 (42) 5/16/2017 1979 (348) 5/10/2013 1976 (210) 7/23/2013 2002 (20) 7/31/2013 2001 (546) 6/27/2013 1998 (595) 2/7/2014 2009 (214) 6/12/2014 2012 — 7/31/2013 1995 — 7/31/2013 1995 — 7/31/2013 1995 — 7/31/2013 1995 — 6/27/2013 1995 (548) 6/5/2012 1992 (308) 10/31/2012 1998 (337) 2/7/2014 1978 (177) 3/1/2017 2016 (178) 3/1/2017 2016 (228) 3/1/2017 2016 (1,017) 2/7/2014 2013 74,329 (20,730) 11/5/2013 1994 4,420 (713) 2/7/2014 2008 83,843 (14,927) 6/27/2014 1972 28,378 (5,837) 2/7/2014 2009 2,223 1,903 461 1,330 4,722 2,529 5,610 (552) 6/27/2013 1993 (263) 6/27/2013 1993 (112) 1/8/2014 2001 (80) 7/28/2014 1996 (556) 7/28/2014 2006 (238) 7/28/2014 1990 (496) 7/28/2014 1990 Property City Olive Garden Salisbury Olive Garden Cary State MD NC Olive Garden Oklahoma City OK Olive Garden Langhorne Olive Garden Pittsburgh Olive Garden Houston Olive Garden Chesapeake Olive Garden Manassas PA PA TX VA VA Olive Garden Silverdale WA Olive Garden Morgantown WV Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — 1,171 1,545 819 970 1,560 973 1,382 1,965 1,752 1,765 3,144 6,603 4,053 3,717 1,422 2,902 2,252 2,585 2,015 2,199 — — — — — — — — — — 4,315 8,148 4,872 4,687 2,982 3,875 3,634 4,550 3,767 3,964 (388) 7/28/2014 1995 (771) 7/28/2014 1992 (487) 7/28/2014 1991 (446) 7/28/2014 1996 (233) 7/28/2014 2003 (359) 7/28/2014 1994 (289) 7/28/2014 1991 (324) 7/28/2014 1993 (263) 7/28/2014 1993 (363) 7/28/2014 2006 Omnipoint Communication Indianapolis IN 49,838 5,770 64,073 3,162 73,005 (17,688) 5/9/2013 2000 On the Border Rogers On the Border Mesa On the Border Peoria On the Border Alpharetta On the Border Buford On the Border Naperville On the Border West Springfield On the Border Auburn Hills On the Border Novi AR AZ AZ GA GA IL MA MI MI 950 655 1,804 2,090 1,562 2,129 — — — 1,771 1,786 2,549 2,000 413 — — 1,355 444 On the Border Kansas City MO 1,454 1,743 On the Border Lees Summit MO 1,200 1,647 On the Border Concord Mills NC — 1,903 On the Border Mount Laurel NJ 713 1,446 On the Border W. Windsor NJ 2,433 1,489 On the Border Columbus OH 1,925 1,594 On the Border Oklahoma City OK On the Border Tulsa On the Border Burleson On the Border College Station On the Border Denton On the Border Desoto OK TX TX TX TX — — — — — — 859 740 891 2,218 1,419 751 — — — — — — — — — — — — — — — — — — — — — 1,500 1,534 1,352 1,842 1,506 1,414 4,173 2,745 3,176 1,039 1,008 1,456 1,938 1,703 1,558 2,310 2,956 2,844 1,471 2,012 3,207 F-146 2,155 3,624 3,481 3,613 3,292 3,963 4,586 4,100 3,620 2,782 2,655 3,359 3,384 3,192 3,152 3,169 3,696 3,735 3,689 3,431 3,958 (463) 2/7/2014 2002 (476) 2/7/2014 1998 (383) 2/7/2014 1998 (566) 2/7/2014 1997 (470) 2/7/2014 2001 (514) 2/7/2014 1997 (1,217) 2/7/2014 1995 (784) 2/7/2014 1999 (881) 2/7/2014 1997 (393) 2/7/2014 1997 (373) 2/7/2014 2002 (501) 2/7/2014 2000 (596) 2/7/2014 2004 (691) 2/7/2014 1998 (556) 2/7/2014 1997 (720) 2/7/2014 1996 (899) 2/7/2014 1995 (855) 2/7/2014 2000 (450) 2/7/2014 1997 (616) 2/7/2014 2002 (923) 2/7/2014 1998 Property City State Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction On the Border Ft. Worth On the Border Garland On the Border Lubbock On the Border Rockwall On the Border Woodbridge TX TX TX TX VA AL KY Oneonta Louisville Breaux Bridge LA Central La Place New Roads Ravenna Willard Highlands Houston San Antonio LA LA LA OH OH TX TX TX Christiansburg VA Laramie WY Alhambra Fort Smith Centennial Jacksonville Sebring Fort Wayne CA AR CO FL FL IN Lexington KY Baton Rouge LA Southgate MI Lees Summit MO Garner NC Las Cruces NM Boardman Township OH O'Reilly Auto Parts O'Reilly Auto Parts O'Reilly Auto Parts O'Reilly Auto Parts O'Reilly Auto Parts O'Reilly Auto Parts O'Reilly Auto Parts O'Reilly Auto Parts O'Reilly Auto Parts O'Reilly Auto Parts O'Reilly Auto Parts O'Reilly Auto Parts O'Reilly Auto Parts Orora Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse — — — — — 52 — — — — — — — — — — — — — — — — — — — — — — — — — 4,213 2,757 4,054 3,937 2,698 593 1,367 877 1,019 1,161 912 1,281 1,014 1,094 1,235 1,469 1,355 1,441 (872) 2/7/2014 1999 (507) 2/7/2014 2007 (1,030) 2/7/2014 1994 (881) 2/7/2014 1999 (555) 2/7/2014 1998 (148) 8/2/2012 2000 (210) 2/7/2014 2011 (198) 2/7/2014 2009 (236) 2/7/2014 2010 (218) 2/7/2014 2008 (199) 2/7/2014 2008 (289) 2/7/2014 2010 (218) 2/7/2014 2011 (193) 2/7/2014 2010 (212) 2/7/2014 2010 (252) 2/7/2014 2010 (195) 2/7/2014 2010 (409) 10/12/2012 1999 15,873 (2,972) 1/24/2013 1966 2,837 2,775 3,031 2,676 1,717 3,216 2,014 3,529 1,521 2,905 2,085 3,317 (620) 2/7/2014 1999 (442) 2/7/2014 1996 (625) 2/7/2014 2001 (530) 2/7/2014 2001 (510) 2/7/2014 2000 (643) 2/7/2014 2002 (378) 2/7/2014 2001 (780) 2/7/2014 1994 (212) 2/7/2014 1999 (553) 2/7/2014 2004 (449) 2/7/2014 2000 (796) 2/7/2014 1995 — — — — — — — — — — — — — 485 560 703 646 — — — — — — — — — — — — — — 1,222 1,065 375 693 1,799 81 573 139 104 342 175 144 137 281 340 439 562 144 7,143 841 1,378 770 981 733 1,077 742 787 901 1,088 536 575 2,991 1,692 3,679 3,244 899 460 794 738 915 819 737 1,137 877 813 895 1,030 793 1,297 8,730 1,996 1,397 2,261 1,695 984 2,139 1,272 2,742 620 1,817 1,549 2,742 F-147 Owens & Minor Cleveland Owens Corning Newark Owens Corning Wichita Falls TX Property Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Pantry Gas & Convenience Pantry Gas & Convenience Pantry Gas & Convenience Pantry Gas & Convenience Pantry Gas & Convenience Pantry Gas & Convenience Pantry Gas & Convenience Pantry Gas & Convenience Pantry Gas & Convenience Pantry Gas & Convenience Pantry Gas & Convenience Pearson Education City State Independence OH Pittsburgh Conroe Houston Mcallen Colonial Heights PA TX TX TX VA Newport News VA Winchester VA OH OH Montgomery AL Charlotte Charlotte Charlotte Charlotte Conover Cornelius Lincolnton Matthews NC NC NC NC NC NC NC NC Thomasville NC Fort Mill Lawrence SC KS OH VA MO AZ CA CA CA FL Penske Bedford Peraton Herndon Petco Petco Lake Charles LA Dardenne Prairie PetSmart Phoenix PetSmart Merced PetSmart PetSmart Redding Westlake Village PetSmart Boca Raton Initial Costs (1) Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction 2,268 — 932 (932) 2,063 2,321 443 746 1,356 1,310 6,077 13,013 847 1,228 1,332 417 1,787 1,308 936 2,258 2,159 1,819 1,436 1,967 — — — — — — (4) — — — — — — — — — — — — — 3,169 1,370 3,022 3,285 1,278 2,043 1,956 2,014 6,828 (546) 2/7/2014 2006 — 2/7/2014 1995 (553) 2/7/2014 2001 (625) 2/7/2014 1998 (136) 2/7/2014 1999 (553) 2/7/2014 2000 (670) 2/7/2014 1993 (711) 2/7/2014 2006 (1,287) 9/30/2014 2014 13,738 (2,884) 2/7/2014 2007 1,078 1,754 2,664 2,084 2,978 2,378 2,080 4,105 3,925 2,799 2,611 3,278 (185) 6/12/2014 1972 (381) 12/31/2012 1998 (413) 12/31/2012 2004 (129) 12/31/2012 1982 (554) 12/31/2012 1987 (406) 12/31/2012 1997 (290) 12/31/2012 1998 (700) 12/31/2012 1999 (670) 12/31/2012 2000 (564) 12/31/2012 1987 (445) 12/31/2012 2000 (610) 12/31/2012 1988 18,057 (3,435) 17,170 (1,910) 11/5/2013 1997 — — 183 — 6/27/2013 1995 Land 901 1,370 959 964 835 1,297 600 704 755 725 231 526 1,332 1,667 1,191 1,070 1,144 1,847 1,766 980 1,175 1,311 2,548 183 1,384 53,584 (17,140) 37,828 (1,079) 11/5/2013 1999 Encumbrances at December 31, 2018 — — — — — — — — — — — — — — — — — — — — — — — — — 2,145 — 690 806 4,072 3,024 51,250 7,308 97,510 — — — — 1,729 1,312 3,406 3,514 4,194 4,133 5,017 4,912 F-148 54 — 42 — 228 — — 4,816 3,830 (969) 2/7/2014 2008 (699) 2/7/2014 2009 104,860 (19,625) 2/7/2014 1997 5,923 5,673 8,423 8,426 (987) 2/7/2014 1993 (1,068) 2/7/2014 1989 (1,137) 2/7/2014 1998 (1,198) 2/7/2014 2001 Property City State PetSmart Lake Mary PetSmart Plantation PetSmart Tallahassee PetSmart Evanston PetSmart Braintree PetSmart Oxon Hill PetSmart Flint FL FL FL IL MA MD MI PetSmart Lee'S Summit MO PetSmart Sedalia PetSmart PetSmart Parma Dallas PetSmart Southlake Oak Creek Lawrenceville NJ MO OH TX TX WI IL IL IL IL IN TX AZ FL FL GA GA GA KY Aurora Glendale Heights New Lenox Plainfield Mishawaka Page Cooper City Marathon Eatonton Greensboro Jackson Louisville Salisbury MD Dearborn Bozeman Glasgow Livingston MI MT MT MT PetSmart Physicians Dialysis Physicians Immediate Care Physicians Immediate Care Physicians Immediate Care Physicians Immediate Care Physicians Immediate Care Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pier 1 Imports Victoria Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,430 965 1,468 1,120 2,805 1,722 606 781 273 1,288 470 1,063 906 633 1,043 487 535 590 252 457 66 320 530 353 569 673 539 245 284 150 120 130 2,556 5,302 1,387 6,007 8,398 4,389 3,839 3,381 3,645 3,527 6,089 7,093 3,578 2,757 1,346 2,256 1,884 1,747 1,351 1,767 263 466 187 353 465 735 499 734 528 343 217 245 F-149 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 4,986 6,267 2,855 7,127 (632) 2/7/2014 1997 (1,232) 2/7/2014 2001 (355) 2/7/2014 1998 (1,359) 2/7/2014 2001 11,203 (1,850) 2/7/2014 1996 6,111 4,445 4,162 3,918 4,815 6,559 8,156 4,484 3,390 2,389 2,743 2,419 2,337 1,603 2,224 329 786 717 706 1,034 1,408 1,038 979 812 493 337 375 (1,025) 2/7/2014 1998 (893) 2/7/2014 1996 (95) 1/5/2018 2017 (122) 11/1/2017 2017 (817) 2/7/2014 1996 (1,325) 2/7/2014 1998 (1,576) 2/7/2014 1998 (160) 8/25/2017 2016 (588) 2/7/2014 2009 (377) 2/7/2014 2003 (597) 2/7/2014 1997 (509) 2/7/2014 2011 (468) 2/7/2014 2011 (395) 2/7/2014 2013 (471) 2/7/2014 2011 (74) 7/31/2013 1977 (140) 6/27/2013 1995 (56) 6/27/2013 1995 (99) 7/31/2013 1988 (131) 7/31/2013 1989 (218) 6/27/2013 1987 (148) 6/27/2013 1975 (206) 7/31/2013 1983 (148) 7/31/2013 1977 (103) 6/27/2013 1995 (65) 6/27/2013 1995 (74) 6/27/2013 1995 Property Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet City State East Syracuse NY Bowling Green OH Defiance Delaware Middleburg Hts OH OH OH North Olmsted OH Norwalk Sandusky Strongsville Toledo Batesburg Bishopville Cheraw Columbia Edgefield Laurens Pageland Saluda Santee St. George West Columbia Box Elder Knoxville Amarillo Amarillo Crystal City OH OH OH OH SC SC SC SC SC SC SC SC SC SC SC SD TN TX TX TX Fort Stockton TX Midland Midland Monahans Odessa Odessa TX TX TX TX TX Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 137 141 114 270 128 122 77 140 74 58 261 365 415 881 221 454 344 346 371 367 507 68 300 339 254 148 252 414 506 361 456 588 185 262 197 721 156 153 115 171 108 173 484 365 507 588 410 371 420 346 248 245 415 217 546 1,016 1,015 453 1,007 506 619 671 847 882 F-150 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 322 403 311 991 284 275 192 311 182 231 745 730 922 (55) 6/27/2013 1978 (73) 7/31/2013 1979 (58) 6/27/2013 1977 (213) 6/27/2013 1975 (44) 7/31/2013 1985 (45) 6/27/2013 1977 (32) 7/31/2013 1977 (48) 7/31/2013 1982 (32) 6/27/2013 1977 (51) 6/27/2013 1978 (136) 7/31/2013 1987 (103) 7/31/2013 1987 (142) 7/31/2013 1984 1,469 (165) 7/31/2013 1977 631 825 764 692 619 612 922 285 846 1,355 1,269 601 1,259 920 1,125 1,032 1,303 1,470 (115) 7/31/2013 1986 (104) 7/31/2013 1989 (118) 7/31/2013 1999 (97) 7/31/2013 1995 (69) 7/31/2013 1972 (69) 7/31/2013 1980 (116) 7/31/2013 1980 (64) 6/27/2013 1985 (164) 6/27/2013 1995 (285) 7/31/2013 1976 (285) 7/31/2013 1980 (134) 6/27/2013 1981 (282) 7/31/2013 2008 (142) 7/31/2013 1975 (174) 7/31/2013 1978 (188) 7/31/2013 1979 (238) 7/31/2013 1976 (247) 7/31/2013 1972 Initial Costs (1) City State Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Odessa Odessa Odessa Pecos Stamford Cedar City Kanab Ashland Bedford Chester TX TX TX TX TX UT UT VA VA VA Christiansburg VA Clifton Forge VA Colonial Heights Hampton Hopewell VA VA VA Newport News VA Newport News VA Petersburg Richmond Richmond Abbotsford Antigo Clintonville Eagle River Hayward Merrill Neilsville Plover VA VA VA WI WI WI WI WI WI WI WI Stevens Point WI Tomahawk Waupaca WI WI Beckley WV — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 572 627 457 387 38 52 52 589 548 473 494 287 311 641 707 394 394 378 666 311 159 45 208 28 51 83 35 85 130 35 61 160 572 766 685 719 115 361 210 1,093 670 1,104 918 861 311 345 864 591 591 701 814 311 195 252 69 159 205 531 106 199 390 81 91 131 F-151 — — — — — — — — — — — — — — — — — — — — — 100 — — — (100) — 100 100 — 35 — 1,144 1,393 1,142 1,106 153 413 262 1,682 1,218 1,577 1,412 1,148 622 986 (161) 7/31/2013 1976 (215) 7/31/2013 1979 (192) 7/31/2013 1976 (202) 7/31/2013 1974 (32) 7/31/2013 1995 (107) 6/27/2013 1978 (59) 7/31/2013 1989 (307) 7/31/2013 1989 (188) 7/31/2013 1977 (310) 7/31/2013 1983 (258) 7/31/2013 1982 (241) 7/31/2013 1978 (87) 7/31/2013 1991 (97) 7/31/2013 1977 1,571 (242) 7/31/2013 1985 985 985 1,079 1,480 622 354 397 277 187 256 514 141 384 620 116 187 291 (166) 7/31/2013 1969 (166) 7/31/2013 1970 (197) 7/31/2013 1979 (228) 7/31/2013 1978 (87) 7/31/2013 1991 (55) 7/31/2013 1980 (87) 7/31/2013 1997 (19) 7/31/2013 1978 (45) 7/31/2013 1991 (58) 7/31/2013 1993 (113) 7/31/2013 1980 (30) 7/31/2013 1995 (72) 7/31/2013 1995 (129) 7/31/2013 1995 (23) 7/31/2013 1986 (37) 7/31/2013 1991 (37) 7/31/2013 1977 Property Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Property Pizza Hut/ WingStreet PLS Check Cashers PLS Check Cashers PLS Check Cashers PLS Check Cashers PLS Check Cashers PLS Check Cashers PLS Check Cashers PLS Check Cashers PLS Check Cashers PLS Check Cashers PLS Check Cashers PLS Check Cashers PLS Check Cashers City State Huntington WV Mesa Phoenix Tucson Compton Calumet Park Chicago Dallas Dallas Fort Worth AZ AZ AZ CA IL IL TX TX TX Grand Prairie TX Houston Mesquite Kenosha TX TX WI NJ PNC Bank Woodbury PNC Bank Cincinnati OH Pollo Tropical Davie Pollo Tropical Fort Lauderdale Pollo Tropical Lake Worth Ponderosa Scottsburg Popeyes Brandon Popeyes Carol City Popeyes Jacksonville Popeyes Lakeland Popeyes Miami Popeyes Orlando Popeyes Pensacola Popeyes Popeyes Popeyes Starke Tampa Tampa FL FL FL IN FL FL FL FL FL FL FL FL FL FL Popeyes Winter Haven FL Popeyes Thomasville GA Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 190 187 288 264 475 306 451 197 169 187 385 158 261 190 465 195 280 190 280 430 776 423 781 830 220 782 301 380 216 673 484 110 4 759 677 800 107 1,003 127 1,356 1,180 1,473 1,056 1,293 1,388 693 2,633 — — — — — — — — — — — — — — — 538 (304) — — — — — — — — — — — 614 — — — — 1,490 1,242 1,182 141 961 1,090 955 830 330 955 673 — 508 1,065 1,001 705 F-152 194 946 965 1,064 582 1,309 578 1,553 1,349 1,660 1,441 1,451 1,649 883 3,098 429 1,770 1,432 1,462 571 1,737 1,513 1,736 1,660 550 1,737 974 994 724 1,738 1,485 815 (1) 7/31/2013 1995 (262) 2/7/2014 2006 (220) 2/7/2014 2006 (285) 2/7/2014 2005 (88) 2/7/2014 2005 (338) 2/7/2014 2005 (107) 2/7/2014 2001 (367) 2/7/2014 1983 (322) 2/7/2014 2003 (385) 2/7/2014 2003 (286) 2/7/2014 1971 (320) 2/7/2014 2005 (404) 2/7/2014 2006 (207) 2/7/2014 2005 (744) 1/8/2014 1971 (5) 1/8/2014 1979 (437) 6/27/2013 1995 (364) 6/27/2013 1995 (347) 6/27/2013 1995 (43) 6/27/2013 1985 (285) 6/27/2013 1978 (301) 1/8/2014 1979 (268) 7/31/2013 1955 (233) 7/31/2013 1999 (93) 7/31/2013 1962 (268) 7/31/2013 2004 (186) 1/8/2014 2001 (46) 6/27/2013 1995 (141) 1/8/2014 1981 (316) 6/27/2013 1976 (297) 6/27/2013 1976 (207) 6/27/2013 1995 Property City State Popeyes Valdosta GA Popeyes Baton Rouge LA Popeyes Bayou Vista Popeyes Eunice Popeyes Franklin Popeyes Lafayette Popeyes Lafayette Popeyes Marksville Popeyes Ferguson Popeyes St. Louis Popeyes St. Louis Popeyes Greenville Popeyes Grenada Popeyes Popeyes Omaha Omaha Popeyes Eatontown Popeyes Austin LA LA LA LA LA LA MO MO MO MS MS NE NE NJ TX Popeyes Channelview TX Popeyes Houston Popeyes Houston Popeyes Houston Popeyes Houston Popeyes Nederland Popeyes Orange Popeyes Port Arthur TX TX TX TX TX TX TX Popeyes Newport News VA Popeyes Portsmouth Price Rite Rochester VA NY Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — (579) — — — — — — — — — — — — — — — — — — 839 717 1,084 1,273 821 1,333 1,374 1,616 511 129 719 (176) 6/27/2013 1995 (111) 7/31/2013 1999 (210) 6/27/2013 1985 (250) 7/31/2013 1986 (159) 6/27/2013 1985 (266) 6/27/2013 1993 (267) 6/27/2013 1996 (334) 6/27/2013 1987 (108) 7/31/2013 1984 — 6/27/2013 1959 (121) 7/31/2013 1978 1,490 (289) 6/27/2013 1984 535 858 879 1,447 1,749 621 642 536 277 505 1,113 1,303 997 598 599 (127) 1/8/2014 2007 (144) 7/31/2013 1996 (173) 7/31/2013 1985 (223) 7/31/2013 1987 (158) 6/27/2013 1996 (118) 6/27/2013 1995 (133) 6/27/2013 1995 (68) 7/31/2013 1976 (47) 7/31/2013 1976 (64) 7/31/2013 1978 (187) 7/31/2013 1988 (238) 7/31/2013 1984 (174) 6/27/2013 1984 (64) 6/27/2013 2002 (68) 6/27/2013 2002 4,163 (1,277) 9/27/2012 1965 — — — — — — — — — — — — — — — — — — — — — — — — — — — 3,080 240 323 375 382 283 434 473 487 128 248 288 513 77 343 264 651 1,216 220 190 295 111 278 445 456 408 381 369 569 599 394 709 891 538 899 901 1,129 383 460 431 977 458 515 615 796 533 401 452 241 166 227 668 847 589 217 230 3,594 F-153 Property City State Publix Birmingham AL Pulte Mortgage Englewood CO Qdoba Mexican Grill Qdoba Mexican Grill Quincy's Family Steakhouse Flint Grand Blanc Monroe RaceTrac Bessemer RaceTrac Mobile RaceTrac Bellview RaceTrac Jacksonville RaceTrac Leesburg RaceTrac Atlanta RaceTrac Denton RaceTrac Houston RaceTrac Houston Rally's Rally's Rally's Rally's Rally's Rally's Rally's Rally's Indianapolis Indianapolis Indianapolis Kokomo Muncie New Orleans New Orleans Hamtramck Red Lobster Birmingham Red Lobster Dothan Red Lobster Huntsville Red Lobster Montgomery MI MI NC AL AL FL FL FL GA TX TX TX IN IN IN IN IN LA LA MI AL AL AL AL Red Lobster Vestavia Hills AL Red Lobster Fort Smith Red Lobster Red Lobster Hot Springs North Little Rock Red Lobster Pine Bluff Red Lobster Chandler Red Lobster Flagstaff AR AR AR AR AZ AZ Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 934 6,377 165 7,476 (1,695) 2/7/2014 2004 2,563 22,026 110 165 560 761 580 684 1,065 1,188 1,025 1,030 1,209 1,203 210 1,168 1,168 290 310 450 220 230 — 726 1,098 1,034 1,257 1,643 928 999 226 — 891 990 935 458 2,624 1,317 3,831 2,863 2,711 1,511 2,645 1,204 1,509 1,514 — — 548 1,196 1,691 1,018 1,020 741 1,244 2,330 1,413 1,417 1,228 1,593 1,906 1,194 252 514 F-154 — — — (245) — — — — — — — — — — — — — — — — — — — — — — — — — — — — 24,589 (5,628) 11/5/2013 2009 1,100 1,100 773 3,385 1,897 4,515 3,928 3,899 2,536 3,675 2,413 2,712 1,724 1,168 1,168 838 1,506 2,141 1,238 1,250 741 1,970 3,428 2,447 2,674 2,871 2,521 2,905 1,420 252 1,405 (372) 3/29/2013 2006 (352) 3/29/2013 2006 (72) 7/31/2013 1978 (700) 2/7/2014 (350) 2/7/2014 (1,061) 2/7/2014 (856) 2/7/2014 (821) 2/7/2014 (427) 2/7/2014 (672) 2/7/2014 (314) 2/7/2014 (395) 2/7/2014 2003 1998 2007 2011 2007 2004 2003 1995 1997 (444) 6/27/2013 1995 — 7/31/2013 2005 — 7/31/2013 2005 (161) 6/27/2013 1995 (351) 6/27/2013 1995 (496) 6/27/2013 1995 (298) 6/27/2013 1995 (299) 6/27/2013 1995 (176) 7/28/2014 1972 (217) 7/28/2014 1979 (322) 7/28/2014 1975 (241) 7/28/2014 1983 (204) 7/28/2014 1972 (227) 7/28/2014 1980 (303) 7/28/2014 1994 (295) 7/28/2014 1981 (254) 7/28/2014 1995 (165) 7/28/2014 2000 (182) 7/28/2014 1996 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Red Lobster Gilbert Red Lobster Surprise Red Lobster Tucson Red Lobster Bakersfield Red Lobster Chula Vista Red Lobster Fremont Red Lobster Inglewood Red Lobster Oceanside Red Lobster Palm Desert Red Lobster Riverside Red Lobster San Bruno Red Lobster San Diego Red Lobster Red Lobster Valencia Colorado Springs Red Lobster Bridgeport Red Lobster Danbury Red Lobster Newark Red Lobster Red Lobster Altamonte Springs Boynton Beach Red Lobster Fort Pierce Red Lobster Hollywood Red Lobster Kissimmee Red Lobster Leesburg Red Lobster Miami Red Lobster Orlando Red Lobster Panama City Red Lobster Pembroke Pines Red Lobster Plantation AZ AZ AZ CA CA CA CA CA CA CA CA CA CA CO CT CT DE FL FL FL FL FL FL FL FL FL FL FL Red Lobster Port Charlotte FL Red Lobster Sebring FL Red Lobster Winter Haven FL Red Lobster Athens Red Lobster Austell GA GA — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,638 — — 1,132 914 — — — — — — — 1,212 — 618 — — 721 — — — 479 1,975 1,476 1,003 1,055 669 — 460 565 676 731 1,671 564 2,211 1,529 1,321 2,459 1,611 1,113 841 1,512 323 159 1,515 1,674 1,631 1,491 2,282 1,364 1,262 1,062 1,188 1,515 3,126 1,733 1,516 1,487 2,217 2,027 1,092 F-155 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 460 565 676 731 1,671 2,202 2,211 1,529 2,453 3,373 1,611 1,113 841 1,512 323 159 1,515 2,886 1,631 2,109 2,282 1,364 1,983 1,062 1,188 1,515 3,605 3,708 2,992 2,490 3,272 2,696 1,092 (212) 7/28/2014 2007 (238) 7/28/2014 2003 (238) 7/28/2014 2009 (272) 7/28/2014 2003 (361) 7/28/2014 1988 (131) 7/28/2014 1984 (538) 7/28/2014 2007 (345) 7/28/2014 2010 (277) 7/28/2014 2012 (338) 7/28/2014 1988 (479) 7/28/2014 1992 (499) 7/28/2014 1988 (389) 7/28/2014 1988 (344) 7/28/2014 2004 (172) 7/28/2014 1996 (123) 7/28/2014 1996 (429) 7/28/2014 2006 (273) 7/28/2014 1986 (412) 7/28/2014 2008 (284) 7/28/2014 1995 (596) 7/28/2014 2003 (440) 7/28/2014 2002 (245) 7/28/2014 1990 (400) 7/28/2014 2003 (427) 7/28/2014 1989 (382) 7/28/2014 1976 (446) 7/28/2014 1987 (295) 7/28/2014 1989 (269) 7/28/2014 1990 (254) 7/28/2014 1992 (284) 7/28/2014 1972 (266) 7/28/2014 1971 (301) 7/28/2014 2001 Initial Costs (1) Property City State Red Lobster Buford Red Lobster Cartersville Red Lobster Columbus Red Lobster Dalton Red Lobster Decatur GA GA GA GA GA Red Lobster Douglasville GA Red Lobster Jonesboro Red Lobster Kennesaw Red Lobster Rome Red Lobster Roswell Red Lobster Savannah Red Lobster Tucker Red Lobster Cedar Rapids Red Lobster Davenport Red Lobster Boise Red Lobster Pocatello Red Lobster Alton Red Lobster Aurora Red Lobster Chicago Red Lobster Red Lobster Danville Fairview Heights Red Lobster Forsyth Red Lobster Gurnee Red Lobster Marion Red Lobster Matteson Red Lobster Norridge Red Lobster Oak Lawn Red Lobster Orland Park Red Lobster Peru Red Lobster Schaumburg Red Lobster Springfield Red Lobster West Dundee GA GA GA GA GA GA IA IA ID ID IL IL IL IL IL IL IL IL IL IL IL IL IL IL IL IL Red Lobster Anderson IN Encumbrances at December 31, 2018 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Land 1,315 594 956 775 1,102 1,356 1,049 1,382 961 2,358 475 — — 619 — — 1,251 1,598 1,064 253 — — 1,735 399 962 — 1,825 1,046 339 — 1,205 197 813 Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,638 1,386 1,957 2,045 1,873 1,161 1,678 1,802 911 354 2,236 1,718 495 2,896 714 773 1,854 782 2,422 1,580 1,806 1,083 2,286 2,399 2,212 929 2,316 2,489 1,169 665 1,253 2,195 1,272 F-156 3,953 1,980 2,913 2,820 2,975 2,517 2,727 3,184 1,872 2,712 2,711 1,718 495 3,515 714 773 3,105 2,380 3,486 1,833 1,806 1,083 4,021 2,798 3,174 929 4,141 3,535 1,508 665 2,458 2,392 2,085 (408) 7/28/2014 2000 (257) 7/28/2014 1996 (330) 7/28/2014 2005 (314) 7/28/2014 1995 (258) 7/28/2014 1973 (225) 7/28/2014 1991 (233) 7/28/2014 1972 (283) 7/28/2014 1987 (174) 7/28/2014 1979 (108) 7/28/2014 1981 (299) 7/28/2014 1971 (435) 7/28/2014 1973 (245) 7/28/2014 1981 (388) 7/28/2014 1975 (262) 7/28/2014 1988 (401) 7/28/2014 1994 (282) 7/28/2014 1983 (149) 7/28/2014 1979 (335) 7/28/2014 1980 (294) 7/28/2014 1991 (811) 7/28/2014 1972 (324) 7/28/2014 1975 (319) 7/28/2014 1980 (378) 7/28/2014 1992 (298) 7/28/2014 1976 (449) 7/28/2014 1979 (311) 7/28/2014 1975 (348) 7/28/2014 1980 (235) 7/28/2014 1995 (226) 7/28/2014 1976 (218) 7/28/2014 1977 (313) 7/28/2014 1982 (216) 7/28/2014 1982 Property City State Red Lobster Avon Red Lobster Elkhart Red Lobster Evansville Red Lobster Kokomo Red Lobster Mishawaka Red Lobster Muncie Red Lobster Richmond Red Lobster Terre Haute IN IN IN IN IN IN IN IN Red Lobster Elizabethtown KY Red Lobster Lexington Red Lobster Owensboro KY KY Red Lobster St. Matthews KY Red Lobster Baton Rouge Red Lobster Monroe Red Lobster Annapolis Red Lobster Frederick Red Lobster Lanham LA LA MD MD MD Red Lobster Owings Mills MD Red Lobster Salisbury Red Lobster Suitland Red Lobster Battle Creek Red Lobster Dearborn Heights Red Lobster Flint Red Lobster Jackson Red Lobster Kentwood Red Lobster Lansing Red Lobster Livonia Red Lobster Mt. Pleasant Red Lobster Novi Red Lobster Portage Red Lobster Saginaw Red Lobster Southgate Red Lobster Traverse City MD MD MI MI MI MI MI MI MI MI MI MI MI MI MI Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 616 587 394 593 627 371 1,066 866 — 815 1,640 — 455 — — — — 1,070 1,090 202 822 505 235 819 — 635 508 2,061 396 335 611 1,036 864 1,657 3,357 1,835 2,205 1,427 1,416 2,640 401 1,094 1,485 1,841 1,535 2,022 644 319 455 229 1,868 3,112 1,827 2,156 2,266 2,174 1,606 1,534 1,824 1,346 1,847 2,496 1,961 2,531 1,121 F-157 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 864 2,273 3,944 2,229 2,798 2,054 1,787 3,706 1,267 1,094 2,300 3,481 1,535 2,477 644 319 455 229 2,938 4,202 2,029 2,978 2,771 2,409 2,425 1,534 2,459 1,854 3,908 2,892 2,296 3,142 2,157 (324) 7/28/2014 2001 (391) 9/19/2014 1993 (441) 7/28/2014 1972 (274) 7/28/2014 1980 (307) 7/28/2014 1974 (189) 7/28/2014 1975 (273) 7/28/2014 1996 (355) 7/28/2014 1972 (179) 7/28/2014 2003 (318) 7/28/2014 2011 (250) 7/28/2014 1982 (258) 7/28/2014 1972 (390) 7/28/2014 2011 (327) 7/28/2014 1991 (189) 7/28/2014 1985 (185) 7/28/2014 1997 (200) 7/28/2014 1980 (128) 7/28/2014 1989 (321) 7/28/2014 1992 (399) 7/28/2014 1975 (280) 7/28/2014 1979 (305) 7/28/2014 1975 (325) 7/28/2014 1976 (310) 7/28/2014 1976 (243) 7/28/2014 1975 (390) 7/28/2014 1976 (299) 7/28/2014 1987 (261) 7/28/2014 1993 (295) 7/28/2014 1983 (341) 7/28/2014 1975 (287) 7/28/2014 1975 (389) 7/28/2014 1990 (244) 7/28/2014 1996 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — 349 867 — 1,291 1,496 1,128 — 518 593 — 1,023 2,656 1,642 1,674 1,298 1,074 2,003 1,762 1,466 1,092 1,510 1,002 — — — — — — — — — — — 3,005 2,509 1,674 2,589 2,570 3,131 1,762 1,984 1,685 1,510 2,025 (360) 7/28/2014 1975 (298) 7/28/2014 1993 (366) 7/28/2014 1987 (185) 7/28/2014 1975 (168) 7/30/2014 2000 (287) 7/28/2014 1973 (488) 7/28/2014 1973 (221) 7/28/2014 1975 (197) 7/28/2014 1995 (588) 7/28/2014 1972 (179) 7/28/2014 1979 Property City State Red Lobster Warren Red Lobster Mankato Red Lobster Rochester Red Lobster Roseville Red Lobster Branson Red Lobster Bridgeton MI MN MN MN MO MO Red Lobster Chesterfield MO Red Lobster Crestwood MO Red Lobster Jefferson City MO Red Lobster Springfield Red Lobster St. Joseph MO MO F-158 Property City Red Lobster St. Peters Red Lobster St.Louis Red Lobster Jackson Red Lobster Meridian Red Lobster Asheville Red Lobster Cary Red Lobster Concord Red Lobster Fayetteville Red Lobster Greensboro Red Lobster Raleigh Red Lobster Bismarck Red Lobster Fargo Red Lobster Kearney Red Lobster Lincoln Red Lobster Cherry Hill Red Lobster Deptford Red Lobster Vineland State MO MO MS MS NC NC NC NC NC NC ND ND NE NE NJ NJ NJ Red Lobster Clovis NM Red Lobster Farmington NM Red Lobster Amherst Red Lobster Brooklyn Red Lobster Hicksville Red Lobster Liverpool Red Lobster Rochester NY NY NY NY NY Red Lobster Ronkonkoma NY Red Lobster Valley Stream NY Red Lobster Vestal Red Lobster Watertown Red Lobster Yonkers Red Lobster Akron NY NY NY OH Red Lobster Beavercreek OH Red Lobster Canton OH Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,387 1,128 — 544 1,933 — 675 1,372 946 831 888 678 — — — — — 855 1,344 — — 900 756 — — 1,027 807 — — 551 398 1,543 2,662 2,851 872 2,865 1,118 1,506 2,908 1,785 2,183 3,321 2,933 1,109 254 2,274 1,608 1,779 318 2,287 1,271 5,897 870 2,088 2,122 1,109 1,417 2,255 1,586 894 1,398 2,334 2,596 F-159 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,543 4,049 3,979 872 3,409 3,051 1,506 3,583 3,157 3,129 4,152 3,821 1,787 254 2,274 1,608 1,779 318 3,142 2,615 5,897 870 2,988 2,878 1,109 1,417 3,282 2,393 894 1,398 2,885 2,994 (614) 7/28/2014 1976 (350) 7/28/2014 1972 (392) 7/28/2014 1977 (267) 7/28/2014 1996 (390) 7/28/2014 1980 (235) 7/28/2014 1992 (462) 7/28/2014 2002 (356) 7/28/2014 1978 (258) 7/28/2014 1972 (288) 7/28/2014 1983 (437) 7/28/2014 1990 (403) 7/28/2014 1981 (240) 7/28/2014 1996 (116) 7/28/2014 1977 (670) 7/28/2014 1984 (503) 7/28/2014 1991 (411) 7/28/2014 1995 (162) 7/28/2014 1995 (363) 7/28/2014 1992 (237) 7/28/2014 1980 (1,535) 7/28/2014 2003 (276) 7/28/2014 1982 (305) 7/28/2014 1975 (345) 7/28/2014 1985 (346) 7/28/2014 2005 (457) 7/28/2014 1983 (322) 7/28/2014 1976 (297) 7/28/2014 1993 (288) 7/28/2014 2012 (418) 7/28/2014 1981 (368) 7/28/2014 1994 (337) 7/28/2014 1974 Property City State Encumbrances at December 31, 2018 Red Lobster Cincinnati Red Lobster Cincinnati Red Lobster Columbus Red Lobster Red Lobster Columbus Cuyahoga Falls Red Lobster Dublin Red Lobster Lancaster Red Lobster Lima Red Lobster Mansfield Red Lobster Mentor Red Lobster Miamisburg Red Lobster New Philadelphia Red Lobster Niles OH OH OH OH OH OH OH OH OH OH OH OH OH Red Lobster North Olmsted OH Red Lobster Parma Red Lobster Sandusky OH OH Red Lobster St. Clairsville OH Red Lobster Wooster OH Red Lobster Youngstown OH Red Lobster Muskogee OK Red Lobster Oklahoma City OK Red Lobster Oklahoma City OK Red Lobster Shawnee OK Red Lobster Bartonsville PA Red Lobster Chambersburg PA Red Lobster Du Bois Red Lobster Greensburg Red Lobster Hanover Red Lobster Lancaster Red Lobster Langhorne Red Lobster Mechanicsbur g Red Lobster Philadelphia PA PA PA PA PA PA PA — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Initial Costs (1) Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,687 2,344 1,100 2,123 2,511 873 1,570 658 1,697 2,129 2,615 1,349 1,799 2,291 2,156 1,126 853 1,205 2,477 1,707 2,681 1,960 1,744 2,389 1,212 981 2,432 1,870 2,968 2,735 2,656 1,902 F-160 3,171 2,709 1,100 2,910 2,817 873 2,307 1,501 2,032 2,780 3,227 1,581 1,799 2,291 2,622 2,416 853 1,405 2,691 2,106 3,291 2,760 2,181 2,389 1,906 1,298 3,180 2,316 2,968 3,714 3,332 1,902 (232) 7/28/2014 1977 (313) 7/28/2014 1980 (366) 7/28/2014 2002 (286) 7/28/2014 1973 (328) 7/28/2014 1974 (255) 7/28/2014 1990 (263) 7/28/2014 1991 (181) 7/28/2014 1991 (247) 7/28/2014 1977 (299) 7/30/2014 1977 (323) 7/28/2014 1974 (251) 7/28/2014 1991 (465) 7/28/2014 1982 (519) 7/28/2014 1974 (293) 7/28/2014 1975 (210) 7/30/2014 1986 (386) 7/28/2014 1997 (243) 7/28/2014 1995 (346) 7/28/2014 1982 (301) 7/28/2014 1995 (355) 7/28/2014 1980 (303) 7/28/2014 1991 (281) 7/28/2014 1995 (540) 7/28/2014 2010 (246) 7/28/2014 1991 (216) 7/28/2014 1995 (342) 7/28/2014 1989 (317) 7/28/2014 1995 (580) 7/28/2014 1977 (423) 7/28/2014 1996 (360) 7/28/2014 1976 (388) 7/28/2014 1977 Land 1,484 365 — 787 306 — 737 843 335 651 612 232 — — 466 1,290 — 200 214 399 610 800 437 — 694 317 748 446 — 979 676 — Initial Costs (1) Property City State Red Lobster Pittsburgh Red Lobster Pittsburgh Red Lobster Pottstown Red Lobster Scranton Red Lobster Springfield PA PA PA PA PA Red Lobster State College PA Red Lobster Washington Red Lobster Whitehall Red Lobster Aiken Red Lobster Columbia Red Lobster Florence PA PA SC SC SC Red Lobster Myrtle Beach SC Red Lobster Spartanburg Red Lobster Sumter Red Lobster Chattanooga Red Lobster Clarksville Red Lobster Jackson Red Lobster Memphis Red Lobster Sevierville Red Lobster Abilene Red Lobster Amarillo Red Lobster Burleson Red Lobster College Station Red Lobster Conroe Red Lobster Denton Red Lobster Duncanville Red Lobster El Paso Red Lobster El Paso Red Lobster Fort Worth Red Lobster Houston Red Lobster Houston Red Lobster Humble SC SC TN TN TN TN TN TX TX TX TX TX TX TX TX TX TX TX TX TX Encumbrances at December 31, 2018 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Land — 1,641 — — 1,571 — — — 780 — 779 — — 988 1,548 543 822 1,602 — 209 590 — — — 832 361 — — — — 960 — Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,379 1,096 1,115 1,563 2,344 1,026 694 2,155 1,247 918 1,506 462 1,136 1,117 2,575 2,223 1,427 2,290 1,062 1,976 2,342 356 643 557 2,044 2,658 414 883 239 399 1,833 1,087 F-161 1,379 2,737 1,115 1,563 3,915 1,026 694 2,155 2,027 918 2,285 462 1,136 2,105 4,123 2,766 2,249 3,892 1,062 2,185 2,932 356 643 557 2,876 3,019 414 883 239 399 2,793 1,087 (423) 7/28/2014 1976 (188) 7/28/2014 1987 (540) 7/28/2014 1995 (522) 7/28/2014 2001 (364) 7/28/2014 1983 (438) 7/28/2014 1999 (200) 7/28/2014 1976 (683) 7/28/2014 1977 (236) 7/28/2014 1991 (271) 7/28/2014 1980 (269) 7/28/2014 1990 (221) 7/28/2014 2006 (265) 7/28/2014 1973 (241) 7/28/2014 1995 (318) 7/28/2014 1972 (326) 7/28/2014 1990 (276) 7/28/2014 1995 (306) 7/28/2014 1972 (371) 7/28/2014 2002 (289) 7/30/2014 1980 (319) 7/28/2014 1976 (190) 7/28/2014 2003 (201) 7/28/2014 1983 (228) 7/28/2014 2011 (339) 7/28/2014 1991 (351) 7/28/2014 1974 (208) 7/28/2014 1976 (271) 7/28/2014 2008 (120) 7/28/2014 1982 (201) 7/28/2014 1974 (269) 7/28/2014 1981 (291) 7/28/2014 1980 Property City State Red Lobster Killeen Red Lobster Laredo Red Lobster Lewisville Red Lobster Longview Red Lobster Mcallen Red Lobster Mcallen Red Lobster San Antonio Red Lobster Sugar Land Red Lobster Layton Red Lobster Bristol TX TX TX TX TX TX TX TX UT VA Red Lobster Charlottesville VA Red Lobster Chesapeake VA Red Lobster Harrisonburg VA Red Lobster Manassas Red Lobster Midlothian Red Lobster Sterling Red Lobster Winchester Red Lobster Olympia Red Lobster Silverdale Red Lobster Spokane VA VA VA VA WA WA WA Red Lobster Ashwaubenon WI Red Lobster Mt. Pleasant Red Lobster Wauwatosa WI WI Red Lobster Charleston WV Red Lobster Huntington WV Red Lobster Morgantown WV Red Lobster Parkersburg WV Red Lobster Casper Red Lobster Cheyenne Red Oak Village San Marcos Reef Services, LLC Gainesville WY WY TX TX Regal Cinemas Christiansburg VA Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 732 — 1,087 324 1,175 960 — — 1,577 816 — 1,262 465 1,800 — — — — 1,661 — 1,270 856 1,524 — 344 1,252 654 1,014 1,514 1,935 819 1,626 2,625 2,280 1,647 963 708 1,333 1,175 1,021 1,374 1,369 941 655 646 357 596 501 1,427 1,116 1,773 997 1,100 2,552 1,477 1,447 1,337 640 12,480 5,287 20,357 — — 86 1,610 285 9,897 F-162 — — (106) — — — — — — — — — — — — — — — — — — — — — — — — — — 171 — — 2,667 819 2,607 2,949 3,455 2,607 963 708 2,910 1,991 1,021 2,636 1,834 2,741 655 646 357 596 2,162 1,427 2,386 2,629 2,521 1,100 2,896 2,729 2,101 2,351 2,154 (312) 7/28/2014 1991 (302) 7/28/2014 2003 (232) 7/28/2014 1973 (366) 7/28/2014 1981 (332) 7/28/2014 1981 (320) 7/28/2014 2010 (220) 7/28/2014 1974 (203) 7/28/2014 1981 (269) 7/28/2014 1993 (231) 7/28/2014 2005 (261) 7/28/2014 1986 (227) 7/28/2014 1992 (273) 7/28/2014 1993 (200) 7/28/2014 1993 (272) 7/28/2014 2003 (265) 7/28/2014 2001 (187) 7/28/2014 2006 (306) 7/28/2014 1995 (164) 7/28/2014 1993 (372) 7/28/2014 2009 (195) 7/28/2014 1975 (348) 7/28/2014 2012 (177) 7/28/2014 1975 (372) 7/28/2014 2003 (383) 7/28/2014 1985 (290) 7/28/2014 2009 (285) 7/28/2014 1994 (301) 7/28/2014 2011 (102) 7/28/2014 1992 25,815 (4,968) 2/7/2014 2006 371 (59) 6/25/2014 2009 11,507 (96) 8/24/2018 2007 Initial Costs (1) Property City State Encumbrances at December 31, 2018 Ridley Pointe Smyrna Rite Aid Bear TN DE — — Land 2,009 851 Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction 9,467 2,702 109 — 11,585 (381) 8/25/2017 2016 3,553 (829) 1/8/2014 1999 F-163 Property City State Rite Aid Bay City Rite Aid Burton Rite Aid West Branch Rite Aid Bristol Rite Aid Winchester MI MI MI NH NH Rite Aid Cheektowaga NY Rite Aid Rite Aid Genoa Lima Rite Aid Louisville Rite Aid Marion Rite Aid St. Marys Rite Aid Warren OH OH OH OH OH OH Rite Aid Wheelersburg OH Rite Aid Meadville Rite Aid Philadelphia Rite Aid Memphis Rite Aid Hayes PA PA TN VA Road Ranger Winnebago IL Rockwell Collins Sterling Ross Austin Rubbermaid Winfield Rubbermaid Winfield VA TX KS KS Rubbermaid Bowling Green OH Rubbermaid Brimfield Ruby Tuesday Dillon Ruby Tuesday Bartow Ruby Tuesday Somerset Ryan's Buffet Commerce Ryan's Buffet Rome Ryan's Buffet Asheville OH CO FL KY GA GA NC Ryan's Buffet Clarksburg WV Salty's Jasper AL Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 463 128 418 395 343 436 405 576 576 508 581 668 361 193 633 266 812 707 1,629 2,541 1,280 1,461 1,868 3,466 1,845 2,304 3,266 2,877 2,322 2,670 1,444 2,521 2,531 1,062 3,247 3,202 62 (50) 70 52 — — — — — — — 62 65 — — 54 — — 2,154 2,619 1,768 1,908 2,211 3,902 2,250 2,880 3,842 3,385 2,903 3,400 1,870 2,714 3,164 1,382 4,059 3,909 (407) 6/24/2014 1996 (791) 7/26/2013 1999 (346) 6/23/2014 1996 (452) 1/8/2014 1997 (574) 1/8/2014 1998 (964) 2/7/2014 2000 (554) 1/8/2014 1998 (769) 11/13/2012 2006 (1,098) 10/31/2012 2008 (960) 11/13/2012 2006 (640) 5/19/2014 2005 (756) 5/19/2014 1999 (419) 5/19/2014 1998 (754) 1/8/2014 1999 (724) 5/19/2014 1999 (313) 5/19/2014 2000 (895) 5/19/2014 2005 (901) 2/7/2014 1998 4,285 29,802 6,304 40,391 (6,382) 6/30/2014 2011 2,631 700 3,989 (920) 5/19/2014 2002 658 819 15,555 1,056 20,060 714 13,564 1,552 29,495 400 270 480 962 831 1,628 1,916 1,120 1,470 1,848 — — — — — — — (647) (919) 1,261 2,204 (1,179) — 140 1,639 (1,305) 219 — F-164 16,374 (5,392) 11/28/2012 2012 21,116 (7,386) 4/25/2012 2008 14,278 (4,367) 7/29/2013 2013 31,047 (10,043) 1/31/2013 2012 2,028 2,186 1,600 1,785 1,760 2,286 334 359 (490) 6/27/2013 1995 (577) 6/27/2013 1995 (337) 6/27/2013 1995 (284) 2/7/2014 1996 (289) 2/7/2014 1983 (362) 2/7/2014 1996 (75) 1/8/2014 2001 (66) 6/27/2013 1995 Property City State Sam's Club Sam's Club Hoover Colorado Springs AL CO Sam's Club Douglasville GA Sam's Southern Eatery Santa Rosa Commons Savers Schlotzsky's Schmitz & Schmitz Kennesaw Pace Austin Colorado Springs Gainesville GA FL TX CO TX Schneider Electric Foxboro MA Scotts Company Orrville Scotts Company Orrville Scotts Company Orrville SCP Distributors North Little Rock SCP Distributors Knoxville Sedgwick Claims Mgmt Services Dublin Select Energy Services Select Energy Services Select Energy Services Select Energy Services Select Energy Services Select Energy Services Select Energy Services Select Energy Services Damascus Frierson Alderson Big Wells Chireno Cleburne Dilley Odessa Shale Tank Truck Cleburne Shale Tank Truck Midland Sherwin-Williams Angola Sherwin-Williams Muskegon Sherwin-Williams Ashtabula Sherwin-Williams Boardman Shoney's Gadsden Shoney's Oxford Shoney's Grayson OH OH OH AR TN OH AR LA OK TX TX TX TX TX TX TX IN MI OH OH AL AL KY Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,253 3,347 1,701 210 9,606 12,652 11,052 46 — — — — 11,859 (2,296) 2/7/2014 1989 15,999 (2,975) 2/7/2014 1998 12,753 (2,423) 2/7/2014 1999 256 (14) 6/27/2013 1995 4,447 21,884 464 26,795 (5,178) 2/7/2014 2008 740 530 29 2,958 530 1,950 — — — 3,698 1,060 1,979 (755) 5/19/2014 2002 (157) 6/27/2013 1997 (336) 6/25/2014 1930 11,784 — 27,888 39,672 (4,882) 6/27/2014 1965 278 611 609 258 251 945 530 260 260 353 388 154 308 460 476 757 249 187 176 206 220 670 420 2,502 1,134 11,576 1,665 900 8,520 800 4,954 1,150 1,820 5,470 2,333 1,416 1,998 547 939 996 1,524 704 825 707 25 406 F-165 — — — (9) 189 — — — — — — — — — — — — — — — — — — 2,780 1,745 (883) 9/28/2012 1950 (407) 7/30/2012 1950 12,185 (4,155) 7/30/2012 2006 1,914 1,340 9,465 1,330 5,214 1,410 2,173 5,858 2,487 1,724 2,458 1,023 1,696 1,245 1,711 880 1,031 927 695 826 (302) 11/20/2014 2006 (191) 11/20/2014 2012 (1,861) 6/26/2014 1997 (306) 6/12/2014 2009 (1,009) 6/12/2014 2010 (294) 6/12/2014 2008 (374) 6/12/2014 2011 (1,104) 6/25/2014 2011 (480) 6/25/2014 2008 (304) 6/25/2014 2012 (452) 6/25/2014 1982 (122) 6/25/2014 2007 (221) 6/25/2014 2012 (257) 5/19/2014 2001 (396) 2/7/2014 2008 (148) 5/19/2014 2003 (173) 5/19/2014 2003 (213) 6/27/2013 1995 (8) 6/27/2013 1995 (122) 6/27/2013 1995 Property City State Shoney's Grenada Shoney's Hattiesburg Shoney's Jackson MS MS MS Shoney's Summerville SC Shoney's Cookeville TN Shoney's Lawrenceburg TN Shoney's Charleston Shoney's Lewisburg Shoney's Princeton Shoney's Shopko Hometown Sierra Pines Ripley L'Anse The Woodlands SiteOne Homer Glen SiteOne Park City SiteOne Pingree Grove Smokey Bones Morrow Smokey Bones Pittsburgh Sonic Drive-In Wadesboro Sonny's Real Pit BBQ Sonny's Real Pit BBQ Sonny's Real Pit BBQ Sonny's Real Pit BBQ Venice Athens Conyers Marietta Southern Kitchen Prattville Sovereign Bank Linden Sovereign Bank Spaghetti Warehouse Spaghetti Warehouse Spaghetti Warehouse Kennett Square Arlington Dallas San Antonio WV WV WV WV MI TX IL IL IL GA PA NC FL GA GA GA AL NJ PA TX TX TX Sprouts Centennial CO St. Luke's Urgent Care Creve Coeur MO Staples Staples Pensacola Helena FL MT Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — 270 730 360 350 510 330 190 110 90 200 382 809 618 572 800 760 873 543 642 593 599 1,736 — — — — — — — — — — — 1,079 1,348 932 1,150 1,270 1,203 733 752 683 799 (227) 7/31/2013 1995 (186) 6/27/2013 1995 (172) 6/27/2013 1995 (241) 6/27/2013 1995 (229) 6/27/2013 1995 (263) 6/27/2013 1995 (164) 6/27/2013 1995 (193) 6/27/2013 1995 (179) 6/27/2013 1995 (180) 6/27/2013 1995 2,118 (473) 5/13/2014 2009 14,036 5,219 19,196 7,233 31,648 (3,095) 11/5/2013 2014 — — — — — — — — — — — — — — — — — — — — 929 932 1,281 390 1,490 137 338 460 450 290 893 744 1,161 2,184 390 266 507 1,280 663 — — — — — — — — — 1,772 400 1,038 1,802 (1,871) 601 837 630 810 1,140 1,581 1,644 1,539 1,159 2,329 2,412 1,400 1,656 — — — — 1,434 (1,063) — — — — 6,394 4,497 3,354 2,452 F-166 1,822 1,676 2,442 2,574 1,880 403 845 1,740 1,113 2,462 969 2,930 3,249 2,030 2,466 1,511 7,975 6,141 4,893 3,611 (32) 5/29/2018 1960 (24) 5/29/2018 1988 (35) 5/29/2018 2018 (658) 6/27/2013 1995 (146) 7/28/2014 2000 (79) 6/27/2013 2007 (158) 7/31/2013 1978 (385) 6/27/2013 1995 (200) 6/27/2013 1995 (546) 6/27/2013 1995 (125) 2/7/2014 1997 (646) 1/8/2014 1945 (672) 1/8/2014 1963 (421) 6/27/2013 1995 (499) 6/27/2013 1995 (96) 6/27/2013 1995 (1,771) 2/7/2014 2009 (1,286) 2/7/2014 2010 (752) 2/7/2014 2010 (585) 2/7/2014 2012 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 3,192 1,533 — 150 4,361 2,363 (719) 2/7/2014 2008 (456) 6/27/2013 1995 9,067 4,341 14,558 (3,594) 1/8/2014 1988 Property City State Staples Houston Starbucks Las Vegas State of Colorado Longmont Steak 'n Shake Tampa Stearns Crossing Bartlett Stop & Shop Cranston TX NV CO FL IL RI Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Portales NM Andrews Brady Brownsville Carrizo Springs TX TX TX TX Corpus Christi TX Corpus Christi TX Corpus Christi TX Eagle Pass Edinburg Edinburg Edinburg TX TX TX TX Fort Stockton TX Haskell Houston Laredo Laredo Midland Mission Mission Odessa Odessa Ranchito San Angelo San Angelo TX TX TX TX TX TX TX TX TX TX TX TX TN Subway Knoxville 1,815 1,169 — — — 680 1,150 951 — 7,060 4,437 5,970 — — — — — — — — — — — — — — — — — — — — — — — — — — — 4,309 306 406 203 613 496 681 1,011 803 762 1,286 488 450 1,237 143 1,204 581 626 1,098 742 1,007 301 803 498 772 1,006 160 — 2,595 2,302 3,205 3,195 2,526 2,047 3,125 3,109 2,453 1,546 2,499 2,818 3,812 2,554 2,069 2,367 2,338 4,857 550 3,178 2,895 3,596 2,671 4,025 3,277 349 F-167 785 681 — — — — — — — — — — — — — — — — — — — — (33) — — — — — — 1,736 (73) 7/31/2013 1999 11,088 (1,889) 2/7/2014 1999 4,309 2,901 2,708 3,408 3,808 3,022 2,728 4,136 3,912 3,215 2,832 2,987 3,268 5,049 2,697 3,273 2,948 2,964 5,955 1,292 4,152 3,196 4,399 3,169 4,797 4,283 509 — 2/7/2014 2011 (767) 2/7/2014 2010 (703) 2/15/2013 2008 (870) 2/7/2014 2007 (889) 2/7/2014 2007 (767) 2/7/2014 2010 (580) 2/7/2014 2007 (875) 2/7/2014 2007 (872) 2/7/2014 2007 (698) 2/7/2014 2009 (443) 2/7/2014 1999 (752) 2/7/2014 2007 (710) 2/7/2014 2007 (1,248) 2/7/2014 2010 (750) 2/7/2014 2010 (566) 2/7/2014 2007 (708) 2/7/2014 2010 (713) 2/7/2014 2010 (1,346) 2/7/2014 2006 (147) 2/7/2014 1986 (830) 2/7/2014 2003 (814) 2/7/2014 2011 (1,453) 2/7/2014 1998 (739) 2/7/2014 2010 (1,119) 2/7/2014 1997 (916) 2/7/2014 2007 (102) 6/27/2013 1995 Property City State Sun Trust Bank Coral Springs FL Sun Trust Bank Destin Sun Trust Bank Dunedin Sun Trust Bank Dunnellon Sun Trust Bank Lakeland Sun Trust Bank North Port Sun Trust Bank Palm Harbor Sun Trust Bank Plant City Sun Trust Bank Port Orange Sun Trust Bank Port Orange Sun Trust Bank Sun Trust Bank S. Daytona Beach West Palm Beach Sun Trust Bank Atlanta Sun Trust Bank Atlanta Sun Trust Bank Dunwoody Sun Trust Bank Jesup Sun Trust Bank St. Simons Island FL FL FL FL FL FL FL FL FL FL FL GA GA GA GA GA Sun Trust Bank Annapolis MD Sun Trust Bank Ellicott City MD Sun Trust Bank Frederick Sun Trust Bank Waldorf Sun Trust Bank Belmont Sun Trust Bank Carrboro Sun Trust Bank Concord Sun Trust Bank Durham Sun Trust Bank Greensboro Sun Trust Bank Lexington Sun Trust Bank Matthews Sun Trust Bank Mocksville Sun Trust Bank Raleigh Sun Trust Bank Chattanooga Sun Trust Bank Madison MD MD NC NC NC NC NC NC NC NC NC TN TN Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 654 572 479 82 598 460 535 751 590 563 592 1,026 1,018 1,435 1,784 184 1,363 2,653 1,728 991 523 616 512 707 747 403 447 382 978 658 223 286 1,525 1,717 1,917 463 1,110 1,381 1,249 1,753 1,095 1,314 1,099 1,026 1,527 478 1,460 1,657 734 2,170 931 991 2,962 924 512 707 1,388 748 831 382 2,933 658 1,263 1,143 F-168 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,179 2,289 2,396 545 1,708 1,841 1,784 2,504 1,685 1,877 1,691 2,052 2,545 1,913 3,244 1,841 2,097 4,823 2,659 1,982 3,485 1,540 1,024 1,414 2,135 1,151 1,278 764 3,911 1,316 1,486 1,429 (438) 4/12/2013 1996 (494) 4/12/2013 1998 (555) 3/22/2013 1995 (134) 3/22/2013 1980 (319) 4/12/2013 1988 (400) 3/22/2013 1982 (359) 4/12/2013 1994 (508) 3/22/2013 2000 (317) 3/22/2013 1989 (381) 3/22/2013 1982 (316) 4/12/2013 1985 (297) 3/22/2013 1981 (439) 4/12/2013 1965 (138) 4/12/2013 1970 (423) 3/22/2013 1972 (480) 3/22/2013 1964 (213) 3/22/2013 1975 (609) 7/23/2013 1976 (270) 3/22/2013 1975 (285) 4/26/2013 1880 (858) 3/22/2013 1964 (268) 3/22/2013 1970 (147) 4/12/2013 1980 (203) 4/12/2013 1988 (399) 4/12/2013 1973 (215) 4/12/2013 1962 (239) 4/12/2013 2001 (111) 3/22/2013 1971 (850) 3/22/2013 2000 (191) 3/22/2013 1977 (366) 3/22/2013 1953 (331) 3/22/2013 1953 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — 567 1,598 613 90 305 1,308 613 510 — — — — 872 2,906 1,226 600 (86) 7/23/2013 1954 (376) 4/12/2013 1992 (176) 4/12/2013 1970 (148) 3/22/2013 1975 Property City State Sun Trust Bank Nashville Sun Trust Bank Nashville Sun Trust Bank Nashville Sun Trust Bank Cheriton TN TN TN VA F-169 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Sun Trust Bank Lynchburg Sun Trust Bank Petersburg Sun Trust Bank Richmond Sun Trust Bank Richmond VA VA VA VA Sun Trust Bank Rocky Mount VA Sunbelt Rentals Mabelvale Sunbelt Rentals Memphis AR TN Sunoco Merritt Island FL — — — — — — — — 251 102 277 224 265 240 365 540 466 306 416 2,012 1,504 894 929 2,162 Sunset Valley Homestead Sunset Valley TX 16,650 14,283 28,351 SuperAmerica Foley MN SuperAmerica Pequot Lakes MN SuperAmerica Pierz SuperAmerica Sartell MN MN SuperAmerica Sauk Rapids MN SuperAmerica St. Cloud SuperAmerica St. Cloud SuperAmerica St. Cloud SuperAmerica St. Cloud SuperAmerica St. Cloud SuperAmerica Waite Park SuperAmerica Waite Park MN MN MN MN MN MN MN Superior Energy Services Gainesville TX Sweet Tomato Coral Springs FL Synovus Bank Tampa Sysmex Lincolnshire Taco Bell Albertville Taco Bell Cullman Taco Bell Daphne Taco Bell Taco Bell Dora Foley Taco Bell Hartselle Taco Bell Jasper FL IL AL AL AL AL AL AL AL — — — — — — — — — — — — — — — 72 158 67 718 419 582 104 126 330 361 316 770 284 790 985 276 1,489 411 486 753 657 136 151 365 433 333 503 10,475 1,625 2,298 22,500 4,143 36,987 — — — — — — — 419 375 180 348 360 378 445 778 1,053 1,278 813 1,460 781 814 F-170 — — — — — — 128 — 297 — — — — — — — — — — — — 3 — — 5 — — — — — — — 717 408 693 2,236 1,769 1,134 1,422 2,702 (135) 3/22/2013 1973 (88) 4/12/2013 1975 (120) 3/22/2013 1959 (578) 4/12/2013 1909 (429) 5/22/2013 1961 (205) 6/4/2014 2006 (226) 9/26/2014 1995 (454) 5/19/2014 2009 42,931 (6,941) 2/7/2014 2007 348 1,647 478 1,204 1,172 1,239 240 277 695 794 649 (18) 3/27/2017 1984 (96) 3/27/2017 1983 (25) 3/27/2017 1996 (28) 3/27/2017 2000 (46) 3/27/2017 1997 (42) 3/27/2017 1987 (8) 3/27/2017 1922 (10) 3/27/2017 1968 (23) 3/27/2017 1984 (28) 3/27/2017 1987 (20) 3/27/2017 1999 1,273 (31) 3/27/2017 1999 10,762 (6,935) 7/24/2014 1982 2,415 3,283 (489) 6/27/2013 1995 (682) 12/31/2012 1959 41,135 (8,787) 2/7/2014 2010 1,197 1,428 1,458 1,161 1,820 1,159 1,259 (218) 7/31/2013 1995 (312) 6/27/2013 1995 (375) 6/27/2013 1995 (228) 7/31/2013 1995 (428) 6/27/2013 1995 (231) 6/27/2013 1995 (241) 6/27/2013 1995 Property City State Taco Bell Mobile Taco Bell Saraland Taco Bell Warrior Taco Bell Winfield Taco Bell Corona Taco Bell Fairfield Taco Bell Fontana Taco Bell Montclair AL AL AL AL CA CA CA CA Taco Bell Moreno Valley CA Taco Bell Rancho Cucamonga Taco Bell Rubidoux Taco Bell Suisun City Taco Bell Vacaville Taco Bell Vacaville Taco Bell Jacksonville Taco Bell Jacksonville Taco Bell Pensacola Taco Bell Augusta Taco Bell Hephzibah Taco Bell Jesup Taco Bell Kennesaw Taco Bell Waycross CA CA CA CA CA FL FL FL GA GA GA GA GA Taco Bell Crawfordsville IN Taco Bell Hartford City Taco Bell Kokomo Taco Bell Lafayette Taco Bell Marion Taco Bell Noblesville Taco Bell Tipton IN IN IN IN IN IN Taco Bell North Corbin KY Taco Bell Detroit Taco Bell St. Louis MI MO Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 160 150 364 278 306 500 524 322 367 415 415 355 522 1,184 440 340 140 220 330 230 162 170 234 99 199 304 496 363 104 139 124 190 1,973 1,063 675 834 1,138 1,327 1,016 900 998 1,210 1,223 1,419 1,513 1,375 1,167 1,383 1,897 1,292 930 715 601 1,115 934 889 798 912 921 545 936 1,082 704 1,951 F-171 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,133 1,213 1,039 1,112 1,444 1,827 1,540 1,222 1,365 1,625 1,638 1,774 2,035 2,559 1,607 1,723 2,037 1,512 1,260 945 763 1,285 1,168 988 997 1,216 1,417 908 1,040 1,221 828 2,141 (579) 6/27/2013 1995 (312) 6/27/2013 1995 (189) 7/31/2013 1995 (234) 7/31/2013 1995 (337) 6/27/2013 1990 (393) 6/27/2013 1985 (301) 6/27/2013 1992 (267) 6/27/2013 1996 (296) 6/27/2013 1992 (359) 6/27/2013 1992 (362) 6/27/2013 1992 (398) 7/31/2013 1986 (448) 6/27/2013 1985 (407) 6/27/2013 1994 (342) 6/27/2013 1995 (406) 6/27/2013 1995 (556) 6/27/2013 1995 (379) 6/27/2013 1995 (273) 6/27/2013 1995 (210) 6/27/2013 1995 (178) 6/27/2013 1984 (327) 6/27/2013 1995 (262) 7/31/2013 1991 (249) 7/31/2013 1978 (224) 7/31/2013 1993 (256) 7/31/2013 1990 (258) 7/31/2013 1994 (153) 7/31/2013 2005 (263) 7/31/2013 1998 (320) 6/27/2013 1995 (198) 7/31/2013 1989 (517) 6/27/2013 1995 Property City State Taco Bell Wentzville MO Taco Bell Taco Bell Brunswick North Olmstead Taco Bell Kingston Taco Bell Livingston Taco Bell Dallas Taco Bell / KFC Texarkana Taco Bell / KFC Minden Taco Bell / KFC Shreveport Taco Bell / KFC Shreveport Taco Bell / KFC Shreveport Taco Bell / KFC Shreveport Taco Bell / KFC Dunkirk Taco Bell / KFC Geneva Taco Bell / KFC Canonsburg Taco Bell / KFC Pittsburgh Taco Bell / KFC Mount Pleasant Taco Bell / KFC New Boston Taco Bell / KFC Green Bay Taco Bell / KFC Milwaukee OH OH TN TN TX AR LA LA LA LA LA NY NY PA PA TX TX WI WI Taco Bell / KFC Benwood WV Taco Bell / Pizza Hut Dallas Taco Bueno Hutchinson TX KS Taco Bueno Springfield MO Taco Bueno Arlington Taco Bueno Frisco Taco Bueno Lubbock Taco Bueno N. Richland Hills Taco Bueno Waco Taco Cabana Austin Taco Cabana Pasadena Taco Cabana San Antonio TX TX TX TX TX TX TX TX Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 410 400 390 280 300 400 111 274 343 616 427 352 800 569 176 180 106 125 470 533 123 420 561 753 597 601 228 423 595 700 420 600 1,168 1,267 904 714 775 1,225 630 639 514 753 522 528 978 695 1,586 269 952 1,127 574 1,055 287 1,582 841 753 895 577 561 567 893 2,105 1,420 1,955 F-172 — — — 300 — — — — — — — — — — — 3 — — — — 4 — — (974) — — — — — — — — 1,578 1,667 1,294 1,294 1,075 1,625 741 913 857 (343) 6/27/2013 1995 (372) 6/27/2013 1995 (265) 6/27/2013 1995 (230) 6/27/2013 1995 (13) 6/27/2013 1995 (359) 6/27/2013 1995 (177) 7/31/2013 1980 (179) 7/31/2013 1995 (144) 7/31/2013 1995 1,369 (211) 7/31/2013 1995 949 880 1,778 1,264 1,762 452 1,058 1,252 1,044 1,588 414 2,002 1,402 532 1,492 1,178 789 990 1,488 2,805 1,840 2,555 (146) 7/31/2013 1997 (148) 7/31/2013 1998 (274) 7/31/2013 2000 (195) 7/31/2013 1999 (445) 7/31/2013 1996 (74) 10/1/2013 1995 (267) 7/31/2013 1992 (316) 7/31/2013 1995 (161) 7/31/2013 1986 (313) 6/27/2013 1978 (78) 10/1/2013 1995 (464) 6/27/2013 1995 (236) 7/31/2013 2000 — 7/31/2013 2006 (251) 7/31/2013 2000 (171) 6/27/2013 2000 (166) 6/27/2013 2000 (168) 6/27/2013 2000 (250) 7/31/2013 2000 (617) 6/27/2013 1995 (416) 6/27/2013 1995 (574) 6/27/2013 1995 Property City State Taco Cabana San Antonio Taco Cabana San Antonio Taco Cabana San Antonio Taco Cabana Schertz TX TX TX TX Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Talbots Talbots Lawrenceburg IN Alexandria Erlanger Florence Fort Wright Akron Akron Akron Bedford Heights Cleveland KY KY KY KY OH OH OH OH OH Fairview Park OH Lakewood Mayfield Heights Medina Miamisburg Moraine OH OH OH OH OH N. Barberton OH Painesville Parma Parma Seven Hills Solon OH OH OH OH OH South Euclid OH Stow Westlake Willoughby Hingham Lakeville OH OH OH MA MA Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 500 280 500 520 516 294 337 279 179 79 135 205 156 127 205 205 201 135 246 415 140 276 124 306 182 233 109 230 85 168 1,740 1,695 1,766 1,408 721 677 1,072 896 816 287 761 1,043 529 559 179 765 430 414 486 692 502 208 390 502 201 487 561 132 525 425 23,362 3,009 27,080 22,509 6,302 25,209 F-173 — — — — — — — — — — — — — — — — — (5) — — — — — — — — — — — — — — 2,240 1,975 2,266 1,928 1,237 971 1,409 1,175 995 366 896 (511) 6/27/2013 1995 (497) 6/27/2013 1995 (518) 6/27/2013 1995 (413) 6/27/2013 1995 (36) 6/8/2017 2017 (30) 6/8/2017 1996 (46) 6/8/2017 2003 (40) 6/8/2017 1998 (38) 6/8/2017 1995 (57) 9/2/2014 1988 (156) 9/2/2014 1995 1,248 (209) 9/2/2014 1992 685 686 384 970 631 544 732 (115) 9/2/2014 1986 (112) 9/2/2014 1988 (53) 9/2/2014 1988 (157) 9/2/2014 1993 (93) 9/2/2014 1988 (91) 9/2/2014 1995 (23) 6/8/2017 1992 1,107 (31) 6/8/2017 1995 642 484 514 808 383 720 670 362 610 593 (99) 9/2/2014 1998 (55) 9/2/2014 1988 (75) 9/2/2014 1986 (111) 9/2/2014 1986 (50) 9/2/2014 1987 (101) 9/2/2014 1992 (104) 9/2/2014 1986 (37) 9/2/2014 1988 (97) 9/2/2014 1999 (86) 9/2/2014 1986 30,089 (7,045) 5/24/2013 1980 31,511 (8,273) 5/17/2013 1987 Property City State Taqueria El Rodeo de Jalisco San Antonio TX TCF Bank Crystal TD Bank Falmouth Teva Pharmaceuticals Malvern Texas Roadhouse Cedar Rapids Texas Roadhouse Ammon Texas Roadhouse Shively Texas Roadhouse Concord Texas Roadhouse Gastonia Texas Roadhouse Hickory Texas Roadhouse College Station MN ME PA IA ID KY NC NC NC TX Texas Roadhouse Grand Prairie TX Texas Roadhouse Kenosha TGI Fridays Royal Palm Beach TGI Fridays Ann Arbor TGI Fridays Kentwood TGI Fridays Novi TGI Fridays Blasdell TGI Fridays Warwick Thorntons Oil Bloomington Thorntons Oil Franklin Park Thorntons Oil Joliet Thorntons Oil Oaklawn Thorntons Oil Ottawa Thorntons Oil Plainfield Thorntons Oil Roselle Thorntons Oil South Elgin Thorntons Oil Springfield Thorntons Oil Summit Thorntons Oil Waukegan Thorntons Oil Westmont WI FL MI MI MI NY RI IL IL IL IL IL IL IL IL IL IL IL IL Thorntons Oil Clarksville IN Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — 168 640 206 642 19,607 4,057 23,689 — — 307 374 1,282 (58) 7/31/2013 1965 (180) 6/27/2013 1995 28,053 (6,236) 3/18/2013 2002 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,666 40,981 (6,111) 37,536 (3,854) 11/5/2013 1999 430 490 540 650 570 580 670 780 1,061 1,530 547 281 1,042 1,215 1,228 1,184 1,403 953 1,203 565 862 661 1,239 926 2,233 875 760 1,319 2,194 1,206 2,055 2,130 1,544 1,831 2,299 1,867 1,835 1,530 1,640 2,533 1,042 1,913 — — — — — — — — (14) — — — — — 2,775 (1,252) 733 1,882 2,539 — — — 898 278 — — — — — — — — — 2,003 1,338 2,194 1,688 2,514 109 1,421 3,069 687 F-174 2,624 1,696 2,595 2,780 2,114 2,411 2,969 2,647 2,882 3,060 2,187 2,814 2,084 3,128 2,751 1,917 3,285 3,492 2,379 2,568 2,200 2,855 2,927 3,440 2,342 2,296 3,829 2,006 (661) 6/27/2013 1995 (363) 6/27/2013 1995 (618) 6/27/2013 1995 (641) 6/27/2013 1995 (465) 6/27/2013 1995 (551) 6/27/2013 1995 (692) 6/27/2013 1995 (562) 6/27/2013 1995 (557) 6/27/2013 2001 (477) 7/31/2013 2001 (512) 7/31/2013 1998 (790) 7/31/2013 1983 (325) 7/31/2013 1994 (581) 6/27/2013 2000 (387) 6/27/2013 1983 (240) 2/7/2014 1992 (548) 2/7/2014 1989 (734) 2/7/2014 2000 (283) 2/7/2014 1994 (597) 2/7/2014 2006 (410) 2/7/2014 1995 (614) 2/7/2014 1996 (537) 2/7/2014 1995 (819) 2/7/2014 1994 (38) 2/7/2014 2000 (416) 2/7/2014 1999 (852) 2/7/2014 1997 (238) 2/7/2014 2005 Property City State Thorntons Oil Edinburgh Thorntons Oil Evansville Thorntons Oil Evansville Thorntons Oil Jeffersonville Thorntons Oil Terre Haute Thorntons Oil Henderson Thorntons Oil Henderson Thorntons Oil Louisville Thorntons Oil Shelbyville Thorntons Oil Galloway Tiffany & Co. Parsippany IN IN IN IN IN KY KY KY KY OH NJ Tilted Kilt Hendersonville TN Time Warner Cable Milwaukee Tire Kingdom Auburndale Tire Kingdom Dublin Tire Kingdom Greenville WI FL OH SC Tire Warehouse Fitchburg MA Tire Warehouse Bangor Tires Plus Duluth TitleMax Gainesville ME GA GA TJ Maxx Philadelphia PA T-Mobile Topgolf Nashville Brooklyn Center Tractor Supply Oneonta Tractor Supply Summerdale Tractor Supply Tuscaloosa Tractor Supply Little Rock Tractor Supply Auburn Tractor Supply Dixon Tractor Supply Jackson Tractor Supply Los Banos Tractor Supply Buena Vista TN MN AL AL AL AR CA CA CA CA CO Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — 1,204 — — — — — — — — — — 1,154 — 1,500 609 373 499 203 289 777 221 9,889 1,190 8,173 359 276 746 930 — 1,175 2,962 1,619 — 1,209 3,468 1,213 — 646 685 467 602 1,233 732 659 483 637 299 547 1,505 1,479 1,398 1,533 1,829 3,271 1,778 1,680 2,036 1,550 2,248 81,081 310 763 — — — — — — — — — — — — 2,190 1,946 2,000 2,766 2,561 3,930 2,261 2,317 2,335 2,097 (443) 2/7/2014 1996 (443) 2/7/2014 1987 (415) 2/7/2014 1990 (486) 2/7/2014 1995 (555) 2/7/2014 1995 (949) 2/7/2014 1971 (472) 2/7/2014 2007 (442) 2/7/2014 1994 (569) 2/7/2014 1991 (439) 2/7/2014 1998 83,329 (25,106) 11/5/2013 1997 1,073 (230) 6/27/2013 1995 3,081 22,512 1,095 26,688 (6,037) 11/5/2013 2001 1,571 1,119 1,367 704 1,400 1,259 270 84,953 — — — — — — — — 2,180 1,492 1,866 907 1,689 2,036 491 (420) 2/7/2014 2010 (393) 4/30/2012 2003 (380) 3/28/2014 1997 (209) 6/27/2013 1982 (414) 6/27/2013 1977 (361) 2/21/2014 2001 (84) 7/31/2013 2007 94,842 (26,305) 11/5/2013 2001 15,847 691 17,728 (4,031) 11/5/2013 2002 — — — — — — — — — — 32,801 (129) 11/2/2018 2018 1,797 2,746 2,725 2,965 4,076 5,663 4,849 4,851 3,620 (377) 4/18/2013 1983 (538) 2/7/2014 2010 (429) 2/7/2014 2012 (441) 2/7/2014 2009 (649) 2/7/2014 2012 (912) 2/7/2014 2007 (778) 2/7/2014 2012 (974) 2/28/2013 2009 (138) 6/16/2017 2014 24,628 1,438 2,470 1,979 2,035 2,901 4,044 3,640 3,638 2,974 F-175 Initial Costs (1) Property City State Encumbrances at December 31, 2018 Tractor Supply Middletown Tractor Supply Mims Tractor Supply Bainbridge Tractor Supply Rincon Tractor Supply Alton Tractor Supply Mishawaka Tractor Supply Sellersburg Tractor Supply St. John Tractor Supply Lawrence Tractor Supply Topeka Tractor Supply Glasgow Tractor Supply Grayson Tractor Supply Paducah Tractor Supply Gray DE FL GA GA IL IN IN IN KS KS KY KY KY LA Land 1,487 310 687 978 565 620 762 — — — — 1,404 — 1,433 2,247 1,715 1,377 — — — — 2,048 361 446 453 540 393 550 Tractor Supply Belchertown MA 1,823 1,148 Tractor Supply Millbury Tractor Supply Southwick Tractor Supply Augusta Tractor Supply Jonesville Tractor Supply Negaunee MA MA ME MI MI Tractor Supply Jefferson City MO Tractor Supply Nixa Tractor Supply Sedalia Tractor Supply Troy Tractor Supply Union Tractor Supply Franklin Tractor Supply Murphy Tractor Supply York Tractor Supply Plaistow MO MO MO MO NC NC NE NH — 806 2,428 1,601 1,423 — — 1,125 1,346 1,090 1,286 1,404 1,479 1,402 — — 530 267 488 490 476 480 730 589 434 990 326 638 Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — 59 — — — — — — — — — — — — — — — 73 — — — 13 — — — — 4,780 3,097 3,132 2,994 3,686 3,303 2,908 5,112 2,998 2,231 2,265 3,249 1,967 2,752 4,327 3,900 5,184 3,286 2,631 2,441 2,440 2,516 2,262 3,317 3,614 3,063 3,080 2,778 3,190 (690) 2/7/2014 2007 (684) 10/10/2013 2012 (508) 2/7/2014 2008 (421) 2/7/2014 2007 (653) 2/7/2014 2008 (575) 2/7/2014 2011 (475) 2/7/2014 2010 (772) 2/7/2014 2007 (577) 2/7/2014 2010 (495) 5/19/2014 2006 (494) 5/19/2014 2005 (588) 2/7/2014 2011 (441) 5/19/2014 1995 (627) 8/7/2012 2011 (717) 2/7/2014 2009 (642) 6/26/2014 2013 (804) 2/7/2014 2008 (616) 2/7/2014 2009 (565) 3/28/2014 2005 (567) 6/12/2012 2010 (404) 2/7/2014 2009 (452) 2/7/2014 2009 (404) 2/7/2014 2010 (551) 2/7/2014 2009 (628) 2/7/2014 2008 (572) 2/7/2014 2009 (476) 2/7/2014 2010 (88) 11/3/2017 2017 (626) 10/10/2013 2012 3,293 2,787 2,445 2,016 3,062 2,683 2,146 3,397 2,637 1,785 1,812 2,709 1,574 2,202 3,179 3,094 3,583 2,756 2,364 1,953 1,877 2,040 1,782 2,587 3,012 2,629 2,090 2,452 2,552 F-176 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Tractor Supply Plymouth NH 2,074 Tractor Supply Allentown Tractor Supply Sicklerville NJ NJ Tractor Supply Farmington NM Tractor Supply Roswell Tractor Supply Silver City Tractor Supply Macedon Tractor Supply Hamilton Tractor Supply Wauseon Tractor Supply Chickasha Tractor Supply Glenpool Tractor Supply Stillwater Tractor Supply Gibsonia Tractor Supply Columbia Tractor Supply Irmo Tractor Supply Ballinger Tractor Supply Del Rio Tractor Supply Edinburg Tractor Supply Kenedy Tractor Supply Pearsall Tractor Supply Rio Grande NM NM NY OH OH OK OK OK PA SC SC TX TX TX TX TX TX Tractor Supply Woodstock VA Tractor Supply Romney Trader Joe's Sarasota Trader Joe's Lexington WV FL KY Tumbleweed Terre Haute IN Tumbleweed Louisville Tumbleweed Mayesville Tumbleweed Owensboro KY KY KY Tumbleweed Bellefontaine OH Tumbleweed Springfield Tumbleweed Wooster OH OH 424 697 1,931 1,091 947 716 168 675 931 599 359 205 — — — — — — 932 1,374 — 1,180 1,205 1,648 1,044 — — 1,248 — — 1,163 1,144 — — — — — — — — — — — — 952 725 476 927 768 309 318 469 524 418 1,646 2,287 434 468 353 355 234 549 342 16 — — — — — — — — 538 — — — — 62 — — — — — — — — — — — — — — — — — 2,430 3,949 4,302 2,194 2,181 2,380 1,591 1,472 2,128 2,056 2,447 2,715 2,778 2,222 2,171 2,477 2,044 3,163 2,372 2,551 1,095 2,098 3,097 5,416 3,795 1,303 1,404 823 1,420 938 1,280 799 F-177 2,870 4,646 6,233 3,285 3,128 3,096 1,759 2,147 3,059 3,193 2,806 2,920 3,822 3,174 2,958 2,953 2,971 3,931 2,681 2,869 1,564 2,622 3,515 7,062 6,082 1,737 1,872 1,176 1,775 1,172 1,829 1,141 (668) 11/29/2012 2011 (1,201) 1/27/2012 2008 (906) 2/7/2014 2009 (525) 3/28/2014 2012 (480) 2/7/2014 2009 (569) 3/28/2014 2012 (374) 4/29/2014 1992 (462) 2/7/2014 (491) 2/7/2014 1975 2007 (560) 3/28/2014 2014 (522) 2/7/2014 (576) 2/7/2014 (613) 2/7/2014 (465) 2/7/2014 (483) 2/7/2014 (512) 2/7/2014 (435) 2/7/2014 (650) 2/7/2014 (488) 2/7/2014 (531) 2/7/2014 2009 2009 2009 2011 2009 2010 2009 2009 2010 2009 (318) 6/19/2012 1993 (558) 5/19/2014 2004 (103) 11/29/2017 2017 (1,394) 2/7/2014 (1,020) 2/7/2014 2012 2012 (407) 7/31/2013 1997 (438) 7/31/2013 2001 (257) 7/31/2013 2000 (443) 7/31/2013 1997 (293) 7/31/2013 1999 (399) 7/31/2013 1998 (249) 7/31/2013 1997 Property City State Tumbleweed Zanesville OH Tutor Time Downingtown PA Tutor Time Austin Ulta Beauty Jonesboro Ulta Beauty Fort Gratiot Ulta Beauty Jackson TX AR MI TN United Buffet and Grille United Technologies Hagerstown MD Bradenton University Plaza Flagstaff The UPS Store Elizabethtown KY US Bank Alsip US Bank Chicago US Bank US Bank Chicago Chicago Heights IL IL IL IL US Bank Elmwood Park IL US Bank Evergreen Park US Bank Lyons US Bank Orland Hills US Bank Westchester US Bank Wilmington US Bank Fayetteville US Bank Garfield Height VA Clinic Oceanside Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Hueytown Jasper Mobile Arkadelphia Pine Bluff Fountain Hills AZ Peoria San Luis Obispo Santee AZ CA CA FL AZ IL IL IL IL IL NC OH CA AL AL AL AR AR Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction (465) 7/31/2013 1998 — — — — — 1,454 — — — — — — — — — — — 639 205 417 742 164 547 244 2,692 4,727 1,460 226 267 191 182 431 167 214 2,646 1,253 — — — — 366 330 608 165 1,491 2,788 1,861 2,289 2,083 2,123 — — — — — — 1,306 (1,505) 2,130 2,993 2,278 3,031 2,247 2,670 45 (707) 2/7/2014 (498) 2/7/2014 (531) 2/7/2014 (498) 2/7/2014 (503) 2/7/2014 (20) 1/8/2014 1998 2000 2013 2012 2010 2001 2004 1982 17,973 18,087 10,336 1,280 1,511 1,082 1,637 2,441 944 1,212 2,327 853 1,872 1,741 1,016 — 501 778 — — — — — — — — — — — — 20,665 (3,735) 2/7/2014 23,315 (5,588) 2/7/2014 12,574 (3,251) 9/24/2013 2001 1,506 1,778 1,273 1,819 2,872 1,111 1,426 3,580 1,219 2,202 2,349 1,181 (472) 8/1/2010 (558) 8/1/2010 (399) 8/1/2010 1981 1923 1979 (482) 1/24/2013 1996 (867) 8/1/2010 (349) 8/1/2010 (447) 8/1/2010 1984 1984 1959 (690) 12/14/2012 1995 (249) 2/22/2013 1986 (654) 8/1/2010 (405) 2/7/2014 (304) 1/8/2014 1966 2012 1958 2010 27,749 9,489 33,812 105 43,406 (7,571) 2/7/2014 — — — — — — — — — 60 577 127 225 105 241 837 195 265 639 (312) 2,545 (2,786) 276 633 433 597 (254) (720) (473) (228) 387 336 149 138 65 610 (7) 6/27/2013 1995 (54) 2/7/2014 2000 (1) 6/27/2013 1974 (1) 6/27/2013 1990 (1) 6/27/2013 1978 (37) 6/27/2013 1994 1,953 (1,552) 1,238 (67) 2/27/2013 1996 1,013 (844) 1,261 (1,390) 364 136 (96) 1/8/2014 (42) 1/8/2014 2000 1995 F-178 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State 1,014 (1,070) 534 (498) 3,071 (2,203) 567 (242) 140 130 1,728 574 (36) 1/8/2014 — 8/1/2010 1995 1995 (180) 6/27/2013 2003 (4) 6/27/2013 1979 5,289 — 9,553 (1,297) 2/7/2014 2010 Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Lone Tree CO New London CT Brandon Cocoa FL FL Coral Springs FL Kissimmee Melbourne Melbourne Orlando Tallahassee Augusta Augusta Bowdon Columbus Mason City Boise Garden City Lombard Merrillville Mishawaka FL FL FL FL FL GA GA GA GA IA ID ID IL IN IN Bowling Green KY Nicholasville KY Bossier City LA Van Buren Detroit ME MI Harper Woods MI Highland Park MI Southfield Spring Lake Belton Joplin Joplin MI MI MO MO MO — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 196 94 860 249 4,264 1,167 464 405 778 (1,083) 1,392 1,237 — — 1,286 — (297) 828 178 178 416 1,933 (1,274) 533 414 (591) (525) 1,247 (1,563) 1,307 2,529 (2,876) 290 335 492 84 511 375 648 435 1,255 1,339 1,305 100 4,768 1,500 973 (737) — — — — — — 2,040 (1,602) 1,168 2,594 (2,882) 115 204 207 150 283 341 476 314 127 1,720 (1,339) 1,159 (1,263) 1,171 (1,137) 848 (787) 1,605 (1,601) 512 701 (391) — 1,610 (1,231) 300 — F-179 862 1,856 1,642 989 1,487 120 67 100 960 808 1,674 1,797 184 5,279 1,875 1,621 873 880 496 100 241 211 287 462 (2) 4/12/2013 1981 (400) 4/12/2013 1987 (326) 2/7/2014 2011 (11) 7/31/2013 1998 (16) 4/12/2013 1991 (5) 7/31/2013 1981 (2) 7/31/2013 1978 — 3/22/2013 1900 (118) 2/7/2014 2002 (12) 6/27/2013 1995 (409) 2/22/2013 2013 (324) 2/26/2014 2003 (30) 6/27/2013 1973 (1,311) 2/7/2014 2011 (441) 7/30/2013 2013 (293) 4/25/2013 2012 (21) 6/11/2014 2001 (117) 2/7/2014 (27) 1/8/2014 — 8/1/2010 — 8/1/2010 — 8/1/2010 — 8/1/2010 2004 1998 1956 1982 1967 1975 (6) 7/31/2013 1994 1,177 (208) 6/27/2013 2006 693 427 (29) 2/11/2014 1984 (110) 2/11/2014 1973 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Albemarle Greenville Raleigh Warsaw Wilmington Wilson Flanders East Greenbush Greene Nedrow Rochester NC NC NC NC NC NC NJ NY NY NY NY Schenectady NY Cincinnati Dayton Englewood Massillon Mentor Moraine OH OH OH OH OH OH Youngstown OH The Dalles Grants Pass OR OR Lake Oswego OR Beaver Falls Drexel Hill Ford City Highspire Indiana Matamoras Monesson PA PA PA PA PA PA PA North Fayette PA Philadelphia Pitcairn PA PA 457 (493) 1,085 (1,323) 1,091 1,428 1,257 692 883 269 — (880) — — (1,154) (373) 1,227 (1,193) 80 384 — (262) 1,655 (1,172) 824 732 — (807) (713) (422) 1,202 (1,189) 1,011 (599) 148 232 802 2,979 1,693 (50) (123) (486) — — 1,304 (1,489) 1,064 802 649 1,255 946 (901) (601) (644) (920) (655) 1,123 (1,222) — — — — — — 483 1,085 1,091 75 412 373 915 1,468 404 216 55 128 292 353 129 547 212 178 87 139 201 393 590 243 266 89 216 676 509 198 — — — — — — — — — — — — — — — — — — — — — — — — — 1,990 2,700 127 46 722 867 F-180 3 (650) (773) 447 847 2,182 623 1,669 1,065 1,197 300 250 135 250 775 370 148 125 225 590 185 248 517 3,372 2,283 58 429 290 221 (43) 6/27/2013 1995 — 12/12/2012 2012 (346) 9/28/2012 1997 (10) 11/13/2012 2003 (384) 3/29/2013 2013 (220) 9/28/2012 2012 (18) 2/7/2014 2003 (1) 6/27/2013 1980 — 8/1/2010 1981 (24) 6/27/2013 1979 (10) 7/31/2013 1985 — 8/1/2010 1974 (2) 7/31/2013 1969 (5) 7/31/2013 1995 — 6/27/2013 1974 — 8/1/2010 (7) 8/1/2010 1958 1976 (1) 6/27/2013 1995 (1) 6/27/2013 1976 (219) 7/31/2013 1994 (845) 1/8/2014 1963 (510) 6/27/2013 1995 (56) 1/8/2014 2004 — 12/14/2012 1950 — 12/14/2012 1975 — 12/14/2012 1974 1,011 (139) 7/31/2013 2000 800 99 — 12/14/2012 1920 (5) 8/1/2010 4,693 (656) 2/7/2014 1930 1999 199 140 — 12/14/2012 1920 — 12/14/2012 1985 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Pittsburgh Pittsburgh Shamokin Greenville North Charleston Memphis Sevierville Bay City Gun Barrel City Houston Houston Killeen Waco Midlothian Norfolk White River Junction Schofield PA PA PA SC SC TN TN TX TX TX TX TX TX VA VA VT WI Vanguard Car Rental College Park GA Velox Insurance Woodstock Verizon Wireless Statesville The Vitamin Shoppe The Vitamin Shoppe Evergreen Park Ashland GA NC IL VA — — — — — — — — — — — — — — — — — — — — — — 185 255 54 280 2,193 100 1,443 229 300 900 1,051 1,019 217 342 4,636 283 430 124 961 1,749 2,640 10,559 534 595 230 656 183 106 1,561 155 207 476 992 892 1,300 437 196 6,244 127 459 1,427 2,399 19,663 — — (108) (482) — 167 (751) (220) (866) — — (803) (842) (861) — — — 40 27 — — 1,039 (836) 1,236 1,274 163 140 (312) 12/14/2012 1960 (302) 12/14/2012 1970 (3) 7/31/2013 1995 (4) 7/31/2013 1970 6,829 (1,290) 2/7/2014 2008 550 1,122 133 395 — 6/27/2013 1995 (92) 2/7/2014 2003 (7) 7/31/2013 1985 (26) 6/27/2013 1995 2,649 (527) 6/27/2013 1995 13,199 (2,763) 5/19/2014 2004 723 645 669 (99) 7/31/2013 1993 — 7/31/2013 1995 (60) 6/27/2013 1995 1,093 (126) 4/12/2013 1990 386 302 (12) 8/1/2010 1975 (55) 7/31/2013 1987 7,805 (2,114) 5/19/2014 2002 322 693 (40) 7/31/2013 1988 (138) 6/27/2013 1993 1,903 (429) 4/19/2013 2012 22,062 (6,088) 11/5/2013 2013 Volusia Square Daytona Beach FL 16,557 4,598 28,511 (18,165) 14,944 (202) 2/7/2014 1986 Waffle House Cocoa Walgreens Birmingham Walgreens Talladega Walgreens Wetumpka Walgreens Kingman Walgreens Phoenix Walgreens Tucson Walgreens Tucson Walgreens Coalinga FL AL AL AL AZ AZ AZ AZ CA — 1,487 — — 2,861 — — 150 996 377 547 669 1,037 1,234 2,910 1,406 2,800 396 279 3,005 1,311 3,102 5,726 1,927 5,143 3,571 3,568 F-181 — — — — — — — — — 429 4,001 1,688 3,649 6,395 2,964 6,377 4,977 3,964 (78) 7/31/2013 1986 (880) 2/7/2014 (395) 1/8/2014 1999 1997 (1,105) 2/22/2012 2007 (1,547) 2/7/2014 2009 (624) 3/26/2013 1999 (1,386) 2/7/2014 (984) 2/7/2014 2003 2004 (1,307) 10/11/2011 2008 Property City State Walgreens Lancaster Walgreens Castle Rock Walgreens Denver Walgreens Pueblo Walgreens Orlando Walgreens Acworth Walgreens Decatur Walgreens Grayson Walgreens Tucker Walgreens Twin Falls Walgreens Cahokia Walgreens Chicago Walgreens Chicago Walgreens Chicago Walgreens Chicago Walgreens Matteson Walgreens South Elgin Walgreens St. Charles Walgreens Anderson Walgreens Jeffersonville Walgreens Lafayette Walgreens South Bend CA CO CO CO FL GA GA GA GA ID IL IL IL IL IL IL IL IL IN IN IN IN Walgreens Lawrenceburg KY Walgreens Lexington Walgreens Paris Walgreens Scottsville Walgreens Stanford KY KY KY KY Walgreens Shereveport LA Walgreens Adams MA Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 2,719 859 3,953 1,581 3,350 — — — — 2,720 — — 519 1,007 1,583 1,746 947 793 2,322 1,156 — — — — — 2,450 394 1,212 1,617 952 911 416 2,158 1,710 1,935 1,472 — — — 807 824 626 2,978 1,240 — — — — — — — 567 — 743 153 152 619 300 — — — — — — — — — — 167 — — — — — — — — — — — — — — — — — — — — — 4,246 3,689 4,050 2,971 1,869 2,940 3,337 3,747 1,419 3,896 1,577 2,829 3,003 3,235 4,830 4,070 3,208 3,262 3,227 2,472 4,183 5,014 2,267 1,943 2,228 2,904 2,886 3,509 1,200 4,770 2,764 4,160 F-182 5,105 5,270 4,050 3,490 2,876 4,523 5,083 4,694 2,212 5,052 2,138 4,041 4,620 4,187 5,741 4,486 4,918 4,734 4,034 3,296 4,809 6,254 2,834 1,943 2,971 3,057 3,038 4,128 1,500 6,873 3,949 5,576 (1,254) 2/7/2014 2009 (1,157) 7/11/2013 2002 (1,271) 7/2/2013 (812) 2/7/2014 2008 2003 (577) 9/30/2013 1996 (966) 1/25/2013 2012 (911) 2/7/2014 (1,007) 2/7/2014 (427) 1/8/2014 (1,096) 2/7/2014 2001 2004 1996 2009 (537) 5/19/2014 1994 (930) 1/30/2013 1999 (987) 1/30/2013 1995 (864) 2/7/2014 (1,258) 2/7/2014 (1,043) 2/7/2014 (892) 2/7/2014 (869) 2/7/2014 2003 2000 2008 2002 2002 (1,109) 7/31/2012 2001 (825) 11/30/2012 2008 (1,008) 2/7/2014 (1,399) 2/7/2014 2008 2006 (757) 11/30/2012 2008 (648) 11/30/2012 2007 (744) 11/30/2012 2008 (969) 11/30/2012 2007 (963) 11/30/2012 2009 (1,250) 2/22/2012 2003 (376) 7/30/2013 1958 (1,265) 2/7/2014 (860) 8/6/2013 (1,099) 2/7/2014 2007 2000 2008 Walgreens Framingham MA 2,908 2,103 Walgreens Baltimore MD Walgreens Brooklyn Park MD — — 1,185 1,416 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 3,013 1,648 5,146 — Property City State Walgreens Augusta Walgreens Walgreens Buxton Dover- Foxcroft ME ME ME Walgreens Fort Fairfield ME Walgreens Fort Kent ME Walgreens Clarkston Walgreens Walgreens Clinton Dearborn Heights Walgreens Eastpointe Walgreens Lincoln Park Walgreens Livonia Walgreens Stevensville Walgreens Troy Walgreens Warren MI MI MI MI MI MI MI MI MI — — — — — — — — — 256 117 387 2,768 1,463 190 668 5,494 1,041 — 3,099 — — 261 855 — 748 Walgreens North Mankato MN 2,415 1,748 Walgreens Country Club Hills Walgreens Columbia Walgreens Greenwood Walgreens Burlington MO MS MS NC Walgreens Cape Carteret NC Walgreens Durham Walgreens Durham Walgreens Laurinburg Walgreens Leland NC NC NC NC — — — — — 997 452 561 973 919 2,871 1,441 2,720 2,201 — 355 2,472 1,226 Walgreens Rocky Mount NC 2,857 1,105 Walgreens Wilson Walgreens Winterville Walgreens North Platte Walgreens Omaha Walgreens Papillion Walgreens Maplewood NC NC NE NE NE NJ — 2,889 — 573 578 935 2,460 1,316 — 1,239 4,700 1,071 — 2,131 22 76 20 — 50 3 — — 96 — 3 3 — — — — — — — — — — — — — — — — — 2,659 1,821 2,064 3,197 3,413 3,605 2,672 5,896 2,350 3,420 1,896 2,990 3,604 4,204 4,072 3,181 2,726 3,087 3,581 2,923 3,577 3,681 4,046 1,337 5,322 4,291 4,122 3,212 6,071 F-183 6,794 2,131 2,937 2,014 2,471 5,965 4,926 3,798 3,340 6,937 2,707 4,275 1,899 3,741 5,352 5,201 4,524 3,742 3,699 4,006 5,022 5,124 3,932 4,907 5,151 1,910 5,900 5,226 5,438 4,451 7,142 (1,456) 2/7/2014 2007 (477) 5/19/2014 1997 (818) 1/8/2014 (562) 1/8/2014 (621) 1/8/2014 (879) 2/7/2014 1999 1998 1999 2000 (1,140) 11/13/2012 2002 (1,158) 4/1/2013 1998 (959) 1/19/2012 1998 (2,027) 7/31/2012 2007 (756) 4/1/2013 1998 (1,244) 11/28/2011 2007 (628) 12/12/2012 2000 (998) 11/21/2012 1999 (1,000) 2/7/2014 (1,058) 2/7/2014 2008 2009 (1,349) 12/21/2012 2011 (1,133) 2/22/2012 2007 (838) 1/8/2014 (839) 2/7/2014 (1,085) 2/7/2014 (963) 2/7/2014 2000 2008 2010 2008 (1,031) 2/26/2014 2013 (1,029) 2/7/2014 (1,250) 2/7/2014 2008 2009 (419) 7/30/2013 2002 (1,528) 2/7/2014 (1,205) 2/7/2014 (1,145) 2/7/2014 (875) 2/7/2014 2009 2009 2009 2009 (2,208) 11/18/2011 2011 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Walgreens Albuquerque NM — 1,173 Walgreens Las Vegas Walgreens Las Vegas Walgreens Lockport NV NV NY 6,566 1,528 — — 700 2,358 Walgreens Staten Island NY 3,081 — Walgreens Watertown Walgreens Akron Walgreens Bryan Walgreens Cleveland Walgreens Cleveland Walgreens Eaton Walgreens Medina NY OH OH OH OH OH OH Walgreens New Albany OH Walgreens Edmond Walgreens Stillwater Walgreens Tahlequah Walgreens Walgreens Tulsa Aibonito Pueblo Walgreens Las Piedras Walgreens Anderson Walgreens Easley Walgreens Fort Mill Walgreens Greenville Walgreens Lancaster OK OK OK OK PR PR SC SC SC SC SC — 2,937 1,684 — — 2,570 3,067 — — 2,240 — — — 664 219 472 743 398 820 919 697 368 647 1,147 5,695 1,855 5,293 1,726 — 835 3,686 1,206 2,180 1,300 3,991 1,313 2,841 1,941 Walgreens Myrtle Beach SC — — Walgreens N. Charleston SC 3,379 1,320 Walgreens Spartanburg SC Walgreens Travelers Rest SC Walgreens Spearfish Walgreens Bartlett Walgreens Cordova Walgreens Memphis SD TN TN TN — — — — — — 894 882 1,116 2,358 1,005 896 — — — — — — 71 — 68 — — — — — 87 — — — — — — (232) — — — — — — — — — — 2,287 6,114 2,801 2,301 3,984 2,664 1,548 4,154 1,890 4,757 3,586 4,585 3,424 4,287 4,368 3,664 2,904 5,566 5,179 3,342 3,617 2,760 3,940 3,526 2,077 3,081 3,575 3,527 4,158 2,194 2,345 2,687 F-184 3,460 7,642 3,501 4,659 3,984 5,601 2,283 4,373 2,430 5,500 3,984 5,405 4,343 4,984 4,823 4,311 4,051 7,421 6,905 4,177 4,823 3,828 5,253 5,467 2,077 4,401 4,469 4,409 5,274 4,552 3,350 3,583 (636) 2/7/2014 1996 (2,132) 5/30/2012 2009 (900) 4/30/2013 2001 (652) 4/21/2014 1998 (1,459) 10/5/2011 2007 (747) 2/7/2014 2006 (496) 5/31/2013 1994 (1,480) 2/22/2012 2007 (534) 5/19/2014 1994 (1,330) 2/7/2014 2008 (1,242) 6/27/2012 2008 (1,209) 2/7/2014 2001 (900) 2/7/2014 2006 (1,169) 2/7/2014 2000 (1,189) 2/7/2014 2000 (1,205) 1/2/2013 2008 (791) 2/7/2014 2001 (1,802) 3/5/2013 2012 (1,664) 4/3/2013 1995 (1,190) 2/8/2012 2006 (1,253) 6/27/2012 2007 (844) 2/7/2014 2010 (1,364) 6/27/2012 2006 (1,091) 2/7/2014 2009 (750) 12/29/2011 2001 (1,067) 6/27/2012 2007 (986) 5/19/2014 2004 (972) 5/19/2014 2005 (1,144) 2/7/2014 2008 (593) 2/7/2014 2001 (783) 11/9/2012 2002 (903) 10/2/2012 2003 Wal-Mart Pueblo CO 8,249 2,586 12,512 Property City State Walgreens Murfreesboro TN Walgreens Anthony Walgreens Baytown Walgreens Houston Walgreens Portsmouth Walgreens Appleton Walgreens Appleton Walgreens Beloit Walgreens Janesville Walgreens Janesville TX TX TX VA WI WI WI WI WI Walgreens Huntington WV Wal-Mart Douglasville GA Wal-Mart Valdosta Wal-Mart Cary GA NC Wal-Mart Albuquerque NM Wal-Mart Las Vegas Wal-Mart Lancaster NV SC Waste Connections Weatherford TX WaWa WaWa Gap Portsmouth Weir Oil and Gas Williston Wells Fargo Bristol Wells Fargo Lebanon Welspun Global Trade Houston Wendy's Anniston Wendy's Auburn Wendy's Birmingham Wendy's Homewood Wendy's Phenix City Wendy's Batesville Wendy's Benton PA VA ND PA PA TX AL AL AL AL AL AR AR Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — 2,364 — — 1,792 454 644 953 491 730 975 2,612 1,198 2,184 721 — 1,039 2,134 — 593 964 1,817 4,369 4,298 1,965 3,311 3,047 4,344 3,653 5,315 4,009 2,250 3,559 3,909 2,314 10,991 17,038 17,588 9,447 5,549 — — 2,714 11,677 — — — — — — — — 102 561 1,241 1,573 — — — 273 114 80 3,386 (2,911) 5,054 — 6,232 81 435 — — — 118 89 2,271 5,013 5,251 2,456 4,041 4,022 5,542 4,374 6,354 4,602 3,214 (501) 5/19/2014 1999 (1,124) 2/7/2014 2008 (1,152) 2/7/2014 2009 (632) 5/19/2014 1993 (1,006) 11/5/2013 1998 (838) 2/7/2014 2008 (1,202) 2/7/2014 2008 (1,017) 2/7/2014 2008 (1,453) 2/7/2014 2008 (1,090) 2/7/2014 2010 (751) 11/30/2012 2008 15,098 (3,488) 2/7/2014 1998 21,147 (4,559) 2/7/2014 1999 13,356 (2,525) 2/7/2014 1998 7,863 (1,462) 2/7/2014 2005 10,991 17,038 — 2/7/2014 2008 — 2/7/2014 2001 14,391 (3,121) 2/7/2014 1999 577 5,615 1,573 6,505 313 604 (175) 6/12/2014 2011 (1,313) 2/7/2014 2004 — 2/7/2014 2008 (1,242) 6/25/2014 2012 (31) 1/8/2014 1818 (128) 1/8/2014 1995 19,524 2,356 36,347 (19,687) 19,016 — 11/5/2013 2009 — — — — — — — 454 718 562 995 529 155 478 591 1,333 990 — 1,178 878 1,018 F-185 — — — — — — — 1,045 2,051 1,552 995 1,707 1,033 1,496 (175) 6/27/2013 1976 (374) 7/31/2013 2000 (293) 6/27/2013 2005 — 6/27/2013 1995 (349) 6/27/2013 1999 (246) 7/31/2013 1995 (302) 6/27/2013 1993 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Wendy's Bentonville Wendy's Wendy's Bryant Cabot Wendy's Conway Wendy's Conway Wendy's Fayetteville Wendy's Fayetteville Wendy's Fort Smith Wendy's Fort Smith Wendy's Little Rock Wendy's Little Rock Wendy's Little Rock Wendy's Little Rock Wendy's Little Rock Wendy's Little Rock Wendy's Pine Bluff Wendy's Rogers Wendy's Russellville Wendy's Springdale Wendy's Springdale Wendy's Stuttgart Wendy's Van Buren Wendy's Camarillo Wendy's Groton Wendy's Norwich Wendy's Orange Wendy's Indialantic Wendy's Lake Wales Wendy's Lynn Haven Wendy's Melbourne AR AR AR AR AR AR AR AR AR AR AR AR AR AR AR AR AR AR AR AR AR AR CA CT CT CT FL FL FL FL Wendy's Merritt Island FL Wendy's New Smyrna Beach FL — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 648 529 524 478 482 408 463 195 63 278 990 605 501 773 532 221 579 356 323 410 67 197 320 1,099 703 1,343 592 975 446 550 720 476 708 575 707 594 833 830 463 1,186 1,016 878 623 463 500 773 650 1,022 912 638 896 821 1,038 748 2,253 900 937 1,641 614 1,462 852 680 589 394 F-186 — — — — — — — (11) — — — — — — — — — — — — — — — — — — — — — — — — 1,356 1,104 1,231 1,072 1,315 1,238 926 1,370 1,079 1,156 1,613 1,068 1,001 1,546 1,182 1,243 1,491 994 1,219 1,231 1,105 945 2,573 1,999 1,640 2,984 1,206 2,437 1,298 1,230 1,309 870 (210) 6/27/2013 1993 (170) 6/27/2013 1995 (209) 6/27/2013 1991 (176) 6/27/2013 1985 (247) 6/27/2013 1994 (246) 6/27/2013 1994 (130) 7/31/2013 1989 (352) 6/27/2013 1995 (301) 6/27/2013 1995 (260) 6/27/2013 1976 (464) 6/27/2013 1982 (137) 6/27/2013 1987 (141) 7/31/2013 1983 (217) 7/31/2013 1994 (182) 7/31/2013 1978 (303) 6/27/2013 1989 (270) 6/27/2013 1995 (189) 6/27/2013 1985 (265) 6/27/2013 1994 (243) 6/27/2013 1995 (308) 6/27/2013 2001 (221) 6/27/2013 1994 (661) 6/27/2013 1995 (252) 7/31/2013 1978 (278) 6/27/2013 1980 (461) 7/31/2013 1995 (182) 6/27/2013 1985 (410) 7/31/2013 1999 (252) 6/27/2013 1995 (202) 6/27/2013 1993 (165) 7/31/2013 1990 (117) 6/27/2013 1982 Property City State Wendy's Ormond Beach FL Wendy's Ormond Beach FL Wendy's Panama City Wendy's Panama City Wendy's Port Orange FL FL FL Wendy's South Daytona FL Wendy's Tallahassee Wendy's Tallahassee Wendy's Titusville Wendy's Titusville Wendy's Albany Wendy's Albany Wendy's Marietta Wendy's Brunswick Wendy's Columbus Wendy's Columbus Wendy's Columbus Wendy's Columbus FL FL FL FL GA GA GA GA GA GA GA GA Wendy's Douglasville GA Wendy's Eastman Wendy's Fairburn Wendy's Hogansville GA GA GA Wendy's Lithia Springs GA Wendy's Morrow Wendy's Savannah Wendy's Sharpsburg Wendy's Bourbonnais Wendy's Joliet Wendy's Kankakee Wendy's Mokena Wendy's Normal Wendy's Anderson GA GA GA IL IL IL IL IL IN Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 626 503 461 445 695 531 952 855 415 414 414 383 383 306 701 743 478 223 605 258 561 503 529 837 569 432 514 505 761 770 1,656 748 506 435 1,787 1,184 2,209 1,380 776 473 1,076 1,316 — — — — — — — — — — — — — — — — — — — — — 240 668 755 720 649 346 642 250 665 443 872 1,359 (1,081) — — — — — — — — — — 774 922 720 1,299 1,039 963 1,419 997 991 736 F-187 1,187 1,006 990 1,282 1,264 963 1,466 1,360 1,176 1,184 2,070 1,131 889 741 2,488 1,927 2,687 1,603 1,381 731 2,392 518 1,442 1,677 1,440 1,948 1,385 1,605 1,669 1,662 1,434 1,608 (166) 6/27/2013 1994 (141) 7/31/2013 1984 (157) 6/27/2013 1984 (248) 6/27/2013 1987 (160) 7/31/2013 1996 (128) 6/27/2013 1980 (152) 6/27/2013 1986 (149) 6/27/2013 1986 (225) 6/27/2013 1984 (216) 7/31/2013 1996 (465) 7/31/2013 1995 (199) 3/26/2014 1999 (150) 6/27/2013 1994 (129) 6/27/2013 1985 (530) 6/27/2013 1999 (351) 6/27/2013 1988 (655) 6/27/2013 2003 (367) 3/26/2014 1982 (230) 6/27/2013 1993 (140) 6/27/2013 1996 (369) 7/31/2013 2002 (4) 7/31/2013 1985 (229) 6/27/2013 1988 (259) 7/31/2013 1990 (202) 7/31/2013 2001 (385) 6/27/2013 2002 (292) 7/31/2013 1993 (270) 7/31/2013 1977 (398) 7/31/2013 2005 (280) 7/31/2013 1992 (263) 3/26/2014 1985 (218) 6/27/2013 1978 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Wendy's Anderson Wendy's Anderson Wendy's Anderson Wendy's Wendy's Avon Avon Wendy's Carmel Wendy's Carmel Wendy's Connersville Wendy's Wendy's Fishers Fishers Wendy's Greenfield Wendy's Indianapolis Wendy's Lebanon Wendy's Noblesville Wendy's Pendleton Wendy's Richmond Wendy's Richmond Wendy's Benton Wendy's Louisville Wendy's Louisville Wendy's Louisville Wendy's Mayfield Wendy's Minden Wendy's Worcester Wendy's Baltimore Wendy's Wendy's Baltimore District Heights Wendy's Landover Wendy's Pasadena Wendy's Wendy's Salisbury Madison Heights Wendy's Picayune IN IN IN IN IN IN IN IN IN IN IN IN IN IN IN IN IN KY KY KY KY KY LA MA MD MD MD MD MD MD MI MS — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 859 505 584 538 638 736 915 324 855 761 429 751 1,265 590 448 735 661 252 834 532 857 242 182 370 760 904 332 340 1,049 370 198 437 707 757 713 407 330 211 178 1,298 147 229 214 212 108 42 894 1,716 992 926 1,379 1,221 1,420 779 936 1,288 802 1,035 275 267 1,902 1,299 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 725 (477) 1,032 — F-188 1,566 1,262 1,297 945 968 947 1,093 1,622 1,002 990 643 963 1,373 632 1,342 2,451 1,653 1,178 2,213 1,753 2,277 1,021 1,118 1,658 1,562 1,939 607 607 2,951 1,669 446 1,469 (210) 6/27/2013 1978 (212) 7/31/2013 1995 (200) 7/31/2013 1976 (160) 2/7/2014 1990 (175) 2/7/2014 1999 (90) 2/7/2014 1980 (112) 2/7/2014 2001 (364) 7/31/2013 1989 (94) 2/7/2014 1999 (119) 2/7/2014 2012 (93) 2/7/2014 1980 (114) 2/7/2014 1993 (84) 2/7/2014 1979 (24) 2/7/2014 1988 (265) 6/27/2013 2005 (481) 7/31/2013 1989 (278) 7/31/2013 1989 (246) 3/26/2014 2001 (409) 6/27/2013 2001 (362) 6/27/2013 1998 (421) 6/27/2013 2000 (207) 3/26/2014 1986 (277) 6/27/2013 2001 (378) 6/27/2013 1995 (238) 6/27/2013 1995 (307) 6/27/2013 2002 (81) 6/27/2013 1979 (79) 6/27/2013 1978 (564) 6/27/2013 1997 (381) 6/27/2013 1995 (35) 6/27/2013 1998 (274) 3/26/2014 1983 Property City State Wendy's Kinston Wendy's Bellevue Wendy's Millville Wendy's Henderson Wendy's Henderson Wendy's Henderson Wendy's Las Vegas Wendy's Las Vegas Wendy's Las Vegas Wendy's Las Vegas Wendy's Las Vegas Wendy's Las Vegas Wendy's Auburn NC NE NJ NV NV NV NV NV NV NV NV NV NY Wendy's Binghamton NY Wendy's Corning Wendy's Cortland Wendy's Endicott Wendy's Fulton Wendy's Horseheads Wendy's Liverpool Wendy's Oswego Wendy's Owego Wendy's Wendy's Vestal Belpre NY NY NY NY NY NY NY NY NY OH Wendy's Bowling Green OH Wendy's Brookville OH Wendy's Buckeye Lake OH Wendy's Centerville OH Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 1,650 822 1,542 1,775 1,339 1,292 987 1,481 1,372 1,183 1,639 1,025 1,550 1,172 1,908 1,587 1,566 1,573 1,441 1,394 835 2,016 1,366 1,491 508 1,520 1,741 2,049 (302) 5/1/2014 2004 (143) 6/27/2013 1981 (346) 6/27/2013 1994 (266) 2/7/2014 1997 (144) 2/7/2014 1999 (173) 2/7/2014 2000 (162) 2/7/2014 1976 (185) 2/7/2014 1976 (164) 2/7/2014 1984 (149) 2/7/2014 1986 (222) 2/7/2014 1991 (113) 2/7/2014 1994 (304) 7/31/2013 1977 (247) 7/31/2013 1978 (482) 7/31/2013 1996 (267) 7/31/2013 1984 (352) 7/31/2013 1987 (314) 3/26/2014 1980 (384) 7/31/2013 1982 (104) 3/26/2014 1980 (171) 3/26/2014 1986 (537) 7/31/2013 1989 (105) 3/26/2014 1995 (317) 3/26/2014 2000 (54) 7/31/2013 1994 (285) 3/26/2014 1984 (260) 6/27/2013 2000 (402) 7/31/2013 1997 — — — — — — — — — — — — — — — — — — — — — — — — — — — — 491 338 373 933 882 785 398 919 789 725 915 633 465 293 191 635 313 392 72 530 190 101 488 297 502 448 864 615 1,159 484 1,169 842 457 507 589 562 583 458 724 392 1,085 879 1,717 952 1,253 1,181 1,369 864 645 1,915 878 1,194 — — — — — — — — — — — — — — — — — — — — — — — — 932 (926) 1,072 877 1,434 — — — F-189 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Wendy's Cincinnati Wendy's Dayton Wendy's Dayton Wendy's Dayton Wendy's Dayton Wendy's Dayton Wendy's Dayton Wendy's Dayton Wendy's Eaton Wendy's Englewood Wendy's Fairborn Wendy's Fairborn Wendy's Fairborn Wendy's Fairfield Wendy's Hamilton Wendy's Hamilton Wendy's Hamilton Wendy's Hillsboro Wendy's Lancaster Wendy's Miamisburg Wendy's Middletown Wendy's Middletown Wendy's Middletown OH OH OH OH OH OH OH OH OH OH OH OH OH OH OH OH OH OH OH OH OH OH OH Wendy's Saint Bernard OH Wendy's Springboro Wendy's Swanton Wendy's Wendy's Sylvania West Carrollton OH OH OH OH Wendy's West Chester OH Wendy's West Chester OH Wendy's Whitehall OH Wendy's Wintersville OH — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 939 723 304 288 342 274 286 259 207 261 629 604 271 794 655 697 908 291 552 888 755 752 494 432 891 430 300 708 944 616 716 621 1,408 1,343 1,264 813 848 1,029 869 838 1,084 924 1,468 1,408 828 970 1,848 1,295 1,362 1,408 1,025 1,086 1,133 920 1,481 1,009 1,336 1,233 799 865 772 924 863 1,449 F-190 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,347 2,066 1,568 1,101 1,190 1,303 1,155 1,097 1,291 1,185 2,097 2,012 1,099 1,764 2,503 1,992 2,270 1,699 1,577 1,974 1,888 1,672 1,975 1,441 2,227 1,663 1,099 1,573 1,716 1,540 1,579 2,070 (395) 7/31/2013 1980 (377) 7/31/2013 1977 (335) 3/26/2014 1974 (216) 3/26/2014 1985 (225) 3/26/2014 1973 (283) 3/26/2014 2004 (231) 3/26/2014 1977 (223) 3/26/2014 1985 (130) 3/26/2014 1993 (245) 3/26/2014 1976 (412) 7/31/2013 1999 (395) 7/31/2013 1992 (220) 3/26/2014 1975 (272) 7/31/2013 1981 (547) 6/27/2013 2001 (363) 7/31/2013 1974 (382) 7/31/2013 2002 (417) 6/27/2013 1985 (288) 7/31/2013 1984 (305) 7/31/2013 1995 (318) 7/31/2013 1995 (258) 7/31/2013 1995 (416) 7/31/2013 1977 (283) 7/31/2013 1985 (375) 7/31/2013 1982 (362) 6/27/2013 1995 (234) 6/27/2013 1995 (243) 7/31/2013 1979 (217) 7/31/2013 1982 (259) 7/31/2013 2005 (256) 6/27/2013 1983 (407) 7/31/2013 1977 Property City State Wendy's Edmond Wendy's Enid Wendy's Ponca City Wendy's Sayre Wendy's Anderson Wendy's Columbia Wendy's Wendy's Greenville N. Myrtle Beach Wendy's Spartanburg Wendy's Brentwood Wendy's Crossville Wendy's Knoxville Wendy's Knoxville Wendy's Manchester OK OK OK PA SC SC SC SC SC TN TN TN TN TN Wendy's Mcminnville TN Wendy's Millington TN Wendy's Murfreesboro TN Wendy's Nashville Wendy's Nashville Wendy's Arlington TN TN TX Wendy's Corpus Christi TX Wendy's El Paso Wendy's Kingwood Wendy's San Antonio Wendy's San Antonio Wendy's San Antonio Wendy's San Antonio Wendy's San Antonio Wendy's San Antonio Wendy's San Antonio Wendy's San Marcos Wendy's Schertz TX TX TX TX TX TX TX TX TX TX TX Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 791 158 529 372 734 1,368 516 464 699 339 190 330 330 245 255 380 586 592 328 1,322 646 630 304 268 410 707 633 1,007 703 788 714 793 697 893 983 1,115 897 — 631 861 572 1,356 760 1,161 1,132 1,390 1,443 1,208 1,088 1,100 1,313 1,546 1,198 1,889 1,724 630 451 603 1,388 546 45 45 1,024 109 F-191 — — — — (1,168) — — — (818) — — — — — — — — — — — — — (944) — — — — — — — — — 1,488 1,051 1,512 1,487 463 1,368 1,147 1,325 453 1,695 950 1,491 1,462 1,635 1,698 1,588 1,674 1,692 1,641 2,868 1,844 2,519 1,084 898 861 1,310 2,021 1,553 748 833 1,738 902 (185) 3/27/2014 1979 (251) 7/31/2013 2003 (276) 7/31/2013 1979 (313) 7/31/2013 1994 (11) 7/31/2013 1995 (37) 6/27/2013 1995 (177) 7/31/2013 1975 (242) 7/31/2013 1983 (4) 7/31/2013 1977 (380) 7/31/2013 1982 (213) 7/31/2013 1978 (341) 6/27/2013 1995 (332) 6/27/2013 1995 (390) 7/31/2013 1984 (405) 7/31/2013 2010 (354) 6/27/2013 1995 (305) 7/31/2013 1983 (309) 7/31/2013 1983 (368) 7/31/2013 1983 (458) 6/27/2013 1994 (336) 7/31/2013 1987 (530) 7/31/2013 1996 (120) 7/31/2013 2001 (187) 6/27/2013 1985 (134) 6/27/2013 1987 (159) 2/7/2014 1990 (337) 2/7/2014 1992 (148) 2/7/2014 1995 (24) 2/7/2014 2000 (24) 2/7/2014 2003 (262) 2/7/2014 2002 (34) 2/7/2014 1994 Property City State Wendy's Selma Wendy's Bluefield TX VA Wendy's Christiansburg VA Wendy's Dublin Wendy's Emporia Wendy's Hayes Wendy's Hillsville Wendy's Lebanon VA VA VA VA VA Wendy's Mechanicsville VA Wendy's Pounding Mill VA Wendy's Woodbridge Wendy's Woodbridge Wendy's Wytheville VA VA VA Wendy's Bellingham WA Wendy's Bothell Wendy's Burlington WA WA Wendy's Port Angeles WA Wendy's Redmond Wendy's Silverdale Wendy's Beloit Wendy's Fitchburg WA WA WI WI Wendy's Germantown WI Wendy's Greenfield Wendy's Janesville Wendy's Kenosha Wendy's Kenosha Wendy's Madison Wendy's Milwaukee Wendy's Milwaukee Wendy's Milwaukee Wendy's New Berlin Wendy's Oak Creek WI WI WI WI WI WI WI WI WI WI Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 841 450 416 384 631 304 324 431 521 296 1,193 521 598 502 687 425 422 969 808 1,138 662 419 487 647 322 965 454 810 338 436 903 577 117 1,927 624 1,401 1,424 859 973 1,006 704 1,404 1,598 615 897 477 292 806 502 123 201 931 1,230 1,257 1,137 971 1,290 1,447 1,362 810 1,351 1,015 739 1,347 F-192 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 958 2,377 1,040 1,785 2,055 1,163 1,297 1,437 1,225 1,700 2,791 1,136 1,495 979 979 1,231 924 1,092 1,009 2,069 1,892 1,676 1,624 1,618 1,612 2,412 1,816 1,620 1,689 1,451 1,642 1,924 (31) 2/7/2014 2003 (565) 6/27/2013 1995 (175) 7/31/2013 1980 (416) 6/27/2013 1993 (422) 6/27/2013 1994 (255) 6/27/2013 1992 (273) 7/31/2013 2001 (282) 7/31/2013 1983 (209) 6/27/2013 1989 (416) 6/27/2013 2004 (473) 6/27/2013 1996 (182) 6/27/2013 1978 (252) 7/31/2013 2003 (132) 2/7/2014 1994 (63) 2/7/2014 2004 (239) 6/27/2013 1994 (236) 2/7/2014 1980 (22) 2/7/2014 1977 (154) 2/7/2014 1995 (261) 7/31/2013 2002 (345) 7/31/2013 2003 (353) 7/31/2013 1989 (319) 7/31/2013 2001 (272) 7/31/2013 1991 (362) 7/31/2013 1984 (406) 7/31/2013 1986 (382) 7/31/2013 1998 (227) 7/31/2013 1979 (379) 7/31/2013 1985 (285) 7/31/2013 1983 (207) 7/31/2013 1983 (378) 7/31/2013 1999 Initial Costs (1) Encumbrances at December 31, 2018 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2018 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Wendy's Sheboygan Wendy's West Allis Wendy's Beaver Wendy's Bridgeport WI WI WV WV Wendy's Buckhannon WV Wendy's Clarksburg Wendy's Fairmont WV WV Wendy's Parkersburg WV Wendy's Parkersburg WV Wendy's Parkersburg WV Wendy's Ripley WV Wendy's Saint Marys WV Wendy's Vienna WV West Marine Anchorage AK West Marine West Marine Fort Lauderdale Harrison Township West Marine Deltaville Whataburger Edna Whataburger El Campo Whataburger Ingleside Whataburger Lubbock Whole Foods Hinsdale Wild Bill's Sports Salon Rochester Willbros Group, Inc. Tulsa FL MI VA TX TX TX TX IL MN OK Williams Sonoma Olive Branch MS — — — — — — — — — — — — — — — — — — — — — 676 583 290 273 157 277 224 295 311 241 273 70 301 1,220 4,337 452 425 290 693 1,106 432 5,709 5,499 — — — 1,347 2,239 2,330 1,014 1,083 1,156 818 890 1,181 1,119 885 1,243 964 871 1,322 702 2,531 9,052 2,092 2,409 869 1,013 474 647 7,388 1,102 6,375 44,266 Winn-Dixie Jacksonville FL 63,240 4,360 82,834 Worrior Energy Services Midland Other N/A TX N/A — — 508 — 815 13,345 — — — — — — — — — — — — — — — — — — — — — — — — — — — 25 1,690 1,666 1,446 1,091 1,047 1,458 1,343 1,180 1,554 1,205 1,144 1,392 1,003 3,751 (284) 7/31/2013 1995 (304) 7/31/2013 1984 (339) 6/27/2013 1995 (230) 7/31/2013 1984 (250) 7/31/2013 1987 (314) 3/26/2014 1980 (332) 6/27/2013 1983 (248) 7/31/2013 1979 (349) 7/31/2013 1977 (271) 7/31/2013 1996 (258) 6/27/2013 1984 (371) 7/31/2013 2001 (197) 7/31/2013 1976 (644) 3/31/2014 1995 13,389 (2,099) 2/7/2014 2011 2,544 2,834 1,159 1,706 1,580 1,079 (676) 2/7/2014 2009 (776) 7/31/2012 2012 (244) 7/31/2013 1986 (300) 6/27/2013 1986 (133) 7/31/2013 1986 (182) 7/31/2013 1992 12,887 (2,086) 2/7/2014 1999 2,449 8,614 (344) 7/31/2013 1993 (1,200) 6/25/2014 1982 46,596 (15,753) 8/10/2012 2001 87,194 (21,852) 4/24/2013 2000 1,323 (187) 6/25/2014 2012 13,370 (3,642) N/A N/A $ 1,917,132 $ 2,884,968 $ 10,791,126 $ (83,654) $ 13,592,440 $ (2,622,879) _______________________________________________ F-193 (1) Initial costs exclude subsequent impairment charges. (2) Consists of capital expenditures and real estate development costs, net of condemnations, easements and impairment charges. (3) Gross intangible lease assets of $2.01 billion and the associated accumulated amortization of $813.9 million are not reflected in the table above. (4) The aggregate cost for Federal income tax purposes of land, buildings, fixtures and improvements as of December 31, 2018 was $15.4 billion. (5) Depreciation is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, five to 15 years for building fixtures and improvements. The following is a reconciliation of the gross real estate activity for the years ended December 31, 2018, 2017 and 2016 (amounts in thousands): Balance, beginning of year Additions: Acquisitions Improvements Deductions/Other: Dispositions Impairments Reclassified to assets held for sale Other Balance, end of year Years Ended December 31, 2018 13,577,700 $ 2017 13,539,921 $ 2016 14,566,343 437,227 31,898 634,080 28,503 (368,808) (84,278) (2,997) 1,698 13,592,440 $ (505,403) (82,292) (52,376) 15,267 13,577,700 $ 91,052 25,781 (878,552) (228,750) (36,722) 769 13,539,921 $ $ The following is a reconciliation of the accumulated depreciation for the years ended December 31, 2018, 2017 and 2016 (amounts in thousands): Balance, beginning of year Additions: Depreciation expense Deductions/Other: Dispositions Impairments Reclassified to assets held for sale Other Balance, end of year Years Ended December 31, 2018 2017 2016 $ 2,217,108 $ 1,766,006 $ 1,331,751 497,511 548,901 586,321 (57,346) (32,147) (400) (1,847) 2,622,879 $ (34,086) (50,828) (12,885) — 2,217,108 $ (77,987) (69,040) (5,039) — 1,766,006 $ F-194 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. SCHEDULE IV – MORTGAGE LOANS ON REAL ESTATE December 31, 2018 (in thousands) Schedule IV – Mortgage Loans on Real Estate Description Location Long-Term Mortgage Loans Interest Rate Final Maturity Date Periodic Payment Terms Prior Liens Face Amount of Mortgages Carrying Amount of Mortgages (1) Principal Amount of Loans Subject to Delinquent Principal or Interest CVS Caremark Corporation CVS Caremark Corporation CVS Caremark Corporation Evansville, IN 6.22% 1/15/2033 P&I N/A $ 2,465 $ 2,505 Greensboro, GA 6.52% 1/15/2030 P&I N/A Shelby Twp., MI 5.98% 1/15/2031 Walgreen Co. Dallas, TX 6.46% 12/15/2029 Walgreen Co. Nacogdoches, TX 6.80% 9/15/2030 P&I P&I P&I N/A N/A N/A 899 1,828 2,254 2,501 920 1,841 2,297 2,601 $ 9,947 $ 10,164 $ — — — — — — ___________________________________ (1) During the year ended December 31, 2018, the Company decided to sell its mortgage notes receivable and classified them as held for sale. The valuation allowance related to the remaining five mortgage notes as of December 31, 2018 was $0.7 million. Beginning Balance Deductions during the year: Early payoff of loan investment Sale of loan investments Principal payments received on loan investments Amortization of unearned discounts and premiums Valuation allowance Ending Balance Years Ended December 31, 2018 2017 2016 $ 20,294 $ 22,764 $ 24,238 — (8,256) (897) 15 (992) (1,502) — (904) (64) — — — (1,339) (135) — $ 10,164 $ 20,294 $ 22,764 F-195 [THIS PAGE INTENTIONALLY LEFT BLANK] The following tables show reconciliations to amounts presented in accordance with GAAP on the balance sheet and income statement for the periods presented (dollar amounts in thousands): EXECUTIVE TEAM Glenn J. Rufrano (cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:605)(cid:70)(cid:72)(cid:85) Michael J. Bartolotta (cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:9)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:50)(cid:605)(cid:70)(cid:72)(cid:85) Three Months Ended Dec. 31, 2018 2014 $ 27,842 $ (360,427) Lauren Goldberg (cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:42)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3)(cid:38)(cid:82)(cid:88)(cid:81)(cid:86)(cid:72)(cid:79)(cid:3) (cid:9)(cid:3)(cid:54)(cid:72)(cid:70)(cid:85)(cid:72)(cid:87)(cid:68)(cid:85)(cid:92) (cid:3) 70,832 (cid:20)(cid:24)(cid:22)(cid:15)(cid:19)(cid:24)(cid:19)(cid:3) (cid:20)(cid:15)(cid:25)(cid:20)(cid:23)(cid:3) (cid:21)(cid:24)(cid:23)(cid:3) 126,157 (cid:3)(cid:21)(cid:21)(cid:25)(cid:15)(cid:21)(cid:26)(cid:21) (cid:3)(cid:11)(cid:21)(cid:25)(cid:15)(cid:24)(cid:26)(cid:20)(cid:12) (cid:22)(cid:15)(cid:23)(cid:19)(cid:21) Paul H. McDowell (cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:9)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:50)(cid:605)(cid:70)(cid:72)(cid:85) Thomas W. Roberts (cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:9)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:918)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:50)(cid:605)(cid:70)(cid:72)(cid:85) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) (cid:3) Net income (loss) (cid:3) (cid:36)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:29)(cid:3) Interest expense (cid:3) (cid:39)(cid:72)(cid:83)(cid:85)(cid:72)(cid:70)(cid:76)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:80)(cid:82)(cid:85)(cid:87)(cid:76)(cid:93)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:85)(cid:72)(cid:68)(cid:79)(cid:3)(cid:72)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3) (cid:3) (cid:3) (cid:51)(cid:85)(cid:82)(cid:89)(cid:76)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:11)(cid:69)(cid:72)(cid:81)(cid:72)(cid:564)(cid:87)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:12)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)(cid:87)(cid:68)(cid:91)(cid:72)(cid:86)(cid:3) (cid:51)(cid:85)(cid:82)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:87)(cid:72)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:88)(cid:81)(cid:70)(cid:82)(cid:81)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:72)(cid:81)(cid:87)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3) EBITDA (cid:11)(cid:42)(cid:68)(cid:76)(cid:81)(cid:12)(cid:3)(cid:79)(cid:82)(cid:86)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:71)(cid:76)(cid:86)(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:85)(cid:72)(cid:68)(cid:79)(cid:3)(cid:72)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:15)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:77)(cid:82)(cid:76)(cid:81)(cid:87)(cid:3)(cid:89)(cid:72)(cid:81)(cid:87)(cid:88)(cid:85)(cid:72)(cid:86)(cid:15)(cid:3)(cid:81)(cid:72)(cid:87) (cid:3) (cid:918)(cid:80)(cid:83)(cid:68)(cid:76)(cid:85)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:85)(cid:72)(cid:68)(cid:79)(cid:3)(cid:72)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:3) EBITDAre Non-real estate impairment (cid:47)(cid:82)(cid:86)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:71)(cid:76)(cid:86)(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:71)(cid:76)(cid:86)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:51)(cid:68)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:85)(cid:72)(cid:70)(cid:72)(cid:76)(cid:89)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:73)(cid:88)(cid:79)(cid:79)(cid:92)(cid:3)(cid:85)(cid:72)(cid:86)(cid:72)(cid:85)(cid:89)(cid:72)(cid:71)(cid:3)(cid:79)(cid:82)(cid:68)(cid:81)(cid:86)(cid:3) (cid:36)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:16)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:86)(cid:3) $ 253,592 $ (31,167) (25,591) (cid:20)(cid:27)(cid:15)(cid:24)(cid:25)(cid:24)(cid:3) 1,263 (cid:28)(cid:25)(cid:15)(cid:25)(cid:28)(cid:21) $ 246,206 $ 66,788 — (cid:22)(cid:19)(cid:3) (cid:11)(cid:23)(cid:15)(cid:26)(cid:28)(cid:21)(cid:12)(cid:3) (cid:20)(cid:15)(cid:20)(cid:22)(cid:25)(cid:3) (cid:515)(cid:3) (cid:515)(cid:3) (cid:11)(cid:26)(cid:27)(cid:12)(cid:3) (cid:25)(cid:19)(cid:3) 309,444 (cid:515) (cid:515) (cid:23)(cid:15)(cid:22)(cid:21)(cid:23) (cid:21)(cid:23)(cid:15)(cid:22)(cid:22)(cid:22) — (cid:20)(cid:26)(cid:21) 1,475 (cid:25)(cid:19)(cid:24) (cid:23)(cid:23)(cid:27) (cid:11)(cid:21)(cid:24)(cid:15)(cid:22)(cid:25)(cid:26)(cid:12) (cid:11)(cid:25)(cid:19)(cid:15)(cid:19)(cid:19)(cid:19)(cid:12) (cid:20)(cid:22)(cid:15)(cid:20)(cid:19)(cid:28) (cid:22)(cid:22)(cid:24) (cid:20)(cid:15)(cid:19)(cid:27)(cid:25) (cid:47)(cid:76)(cid:87)(cid:76)(cid:74)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:80)(cid:72)(cid:85)(cid:74)(cid:72)(cid:85)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:81)(cid:82)(cid:81)(cid:16)(cid:85)(cid:82)(cid:88)(cid:87)(cid:76)(cid:81)(cid:72)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:86)(cid:15)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:76)(cid:81)(cid:86)(cid:88)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:89)(cid:72)(cid:85)(cid:76)(cid:72)(cid:86)(cid:3)(cid:3) (cid:21)(cid:22)(cid:15)(cid:24)(cid:23)(cid:20)(cid:3) Gain on investments (cid:3) (cid:3) (cid:3) (cid:3) (cid:47)(cid:82)(cid:86)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:71)(cid:72)(cid:85)(cid:76)(cid:89)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:76)(cid:81)(cid:86)(cid:87)(cid:85)(cid:88)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:15)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3) (cid:36)(cid:80)(cid:82)(cid:85)(cid:87)(cid:76)(cid:93)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:69)(cid:82)(cid:89)(cid:72)(cid:16)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:79)(cid:72)(cid:68)(cid:86)(cid:72)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:71)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:72)(cid:71)(cid:3)(cid:79)(cid:72)(cid:68)(cid:86)(cid:72)(cid:3)(cid:76)(cid:81)(cid:70)(cid:72)(cid:81)(cid:87)(cid:76)(cid:89)(cid:72)(cid:86)(cid:15)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3)(cid:82)(cid:73) (cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:68)(cid:80)(cid:82)(cid:85)(cid:87)(cid:76)(cid:93)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:69)(cid:72)(cid:79)(cid:82)(cid:90)(cid:16)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:79)(cid:72)(cid:68)(cid:86)(cid:72)(cid:3)(cid:79)(cid:76)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3) (cid:11)(cid:42)(cid:68)(cid:76)(cid:81)(cid:12)(cid:3)(cid:79)(cid:82)(cid:86)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:72)(cid:91)(cid:87)(cid:76)(cid:81)(cid:74)(cid:88)(cid:76)(cid:86)(cid:75)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:73)(cid:82)(cid:85)(cid:74)(cid:76)(cid:89)(cid:72)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:71)(cid:72)(cid:69)(cid:87)(cid:15)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3) (cid:3) (cid:49)(cid:72)(cid:87)(cid:3)(cid:71)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:3)(cid:564)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:81)(cid:74)(cid:3)(cid:79)(cid:72)(cid:68)(cid:86)(cid:72)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3) (1,790) (cid:28)(cid:21)(cid:3) 945 (cid:11)(cid:21)(cid:20)(cid:12)(cid:3) (cid:23)(cid:28)(cid:27)(cid:3) (cid:54)(cid:87)(cid:85)(cid:68)(cid:76)(cid:74)(cid:75)(cid:87)(cid:16)(cid:79)(cid:76)(cid:81)(cid:72)(cid:3)(cid:85)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:69)(cid:68)(cid:71)(cid:3)(cid:71)(cid:72)(cid:69)(cid:87)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:3)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:86)(cid:87)(cid:85)(cid:68)(cid:76)(cid:74)(cid:75)(cid:87)(cid:16)(cid:79)(cid:76)(cid:81)(cid:72)(cid:3)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3) (cid:11)(cid:27)(cid:15)(cid:22)(cid:23)(cid:20)(cid:12)(cid:3) (cid:47)(cid:72)(cid:74)(cid:68)(cid:79)(cid:3)(cid:86)(cid:72)(cid:87)(cid:87)(cid:79)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3) (cid:51)(cid:85)(cid:82)(cid:74)(cid:85)(cid:68)(cid:80)(cid:3)(cid:71)(cid:72)(cid:89)(cid:72)(cid:79)(cid:82)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:86)(cid:3)(cid:90)(cid:85)(cid:76)(cid:87)(cid:72)(cid:16)(cid:82)(cid:909)(cid:3) (cid:3) (cid:50)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:15)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3) (cid:3) (cid:51)(cid:85)(cid:82)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:87)(cid:72)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:88)(cid:81)(cid:70)(cid:82)(cid:81)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:72)(cid:81)(cid:87)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:3) NORMALIZED EBITDA $ 257,486 $ 336,752 (cid:48)(cid:82)(cid:85)(cid:87)(cid:74)(cid:68)(cid:74)(cid:72)(cid:3)(cid:81)(cid:82)(cid:87)(cid:72)(cid:86)(cid:3)(cid:83)(cid:68)(cid:92)(cid:68)(cid:69)(cid:79)(cid:72)(cid:15)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3) Corporate bonds, net Convertible debt, net (cid:38)(cid:85)(cid:72)(cid:71)(cid:76)(cid:87)(cid:3)(cid:73)(cid:68)(cid:70)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:15)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3) Total debt - as reported (cid:36)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:29) (cid:39)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:72)(cid:71)(cid:3)(cid:564)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:81)(cid:74)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:86)(cid:15)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3) (cid:49)(cid:72)(cid:87)(cid:3)(cid:83)(cid:85)(cid:72)(cid:80)(cid:76)(cid:88)(cid:80)(cid:86)(cid:3) (cid:3) (cid:36)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:51)(cid:85)(cid:76)(cid:81)(cid:70)(cid:76)(cid:83)(cid:68)(cid:79)(cid:3)(cid:50)(cid:88)(cid:87)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3) (cid:36)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:51)(cid:85)(cid:76)(cid:81)(cid:70)(cid:76)(cid:83)(cid:68)(cid:79)(cid:3)(cid:50)(cid:88)(cid:87)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3) (cid:47)(cid:72)(cid:86)(cid:86)(cid:29)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:72)(cid:84)(cid:88)(cid:76)(cid:89)(cid:68)(cid:79)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3) Net Debt (cid:49)(cid:82)(cid:85)(cid:80)(cid:68)(cid:79)(cid:76)(cid:93)(cid:72)(cid:71)(cid:3)(cid:40)(cid:37)(cid:918)(cid:55)(cid:39)(cid:36)(cid:3)(cid:68)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:76)(cid:93)(cid:72)(cid:71)(cid:3) NET DEBT TO NORMALIZED EBITDA annualized ratio Dec. 31, 2018 Dec. 31, 2014 (cid:7)(cid:3) (cid:20)(cid:15)(cid:28)(cid:21)(cid:21)(cid:15)(cid:25)(cid:24)(cid:26)(cid:3) (cid:7)(cid:3) (cid:22)(cid:15)(cid:26)(cid:26)(cid:22)(cid:15)(cid:28)(cid:21)(cid:21) 3,368,609 2,531,081 394,883 (cid:23)(cid:19)(cid:20)(cid:15)(cid:26)(cid:26)(cid:22)(cid:3) 952,856 (cid:22)(cid:15)(cid:20)(cid:25)(cid:26)(cid:15)(cid:28)(cid:20)(cid:28) 6,087,922 10,425,778 (cid:23)(cid:21)(cid:15)(cid:26)(cid:25)(cid:22)(cid:3) (cid:11)(cid:27)(cid:15)(cid:19)(cid:24)(cid:22)(cid:12)(cid:3) (cid:27)(cid:27)(cid:15)(cid:19)(cid:19)(cid:22) (cid:11)(cid:23)(cid:23)(cid:15)(cid:25)(cid:25)(cid:19)(cid:12) (cid:7)(cid:3) $ $ $ (cid:25)(cid:15)(cid:20)(cid:21)(cid:21)(cid:15)(cid:25)(cid:22)(cid:21)(cid:3) (cid:7)(cid:3) (cid:20)(cid:19)(cid:15)(cid:23)(cid:25)(cid:28)(cid:15)(cid:20)(cid:21)(cid:20) 6,122,632 $ 10,469,121 (cid:22)(cid:19)(cid:15)(cid:26)(cid:24)(cid:27)(cid:3) (cid:23)(cid:20)(cid:25)(cid:15)(cid:26)(cid:20)(cid:20) 6,091,874 $ 10,052,410 1,029,944 $ 1,347,008 5.91x 7.46x BOARD OF DIRECTORS Hugh R. Frater (cid:49)(cid:82)(cid:81)(cid:16)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:38)(cid:75)(cid:68)(cid:76)(cid:85)(cid:80)(cid:68)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:57)(cid:40)(cid:53)(cid:40)(cid:918)(cid:55)(cid:15)(cid:3)(cid:918)(cid:81)(cid:70)(cid:17)(cid:15)(cid:3)(cid:918)(cid:81)(cid:87)(cid:72)(cid:85)(cid:76)(cid:80)(cid:3) (cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:605)(cid:70)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:41)(cid:72)(cid:71)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3)(cid:49)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3) (cid:48)(cid:82)(cid:85)(cid:87)(cid:74)(cid:68)(cid:74)(cid:72)(cid:3)(cid:36)(cid:86)(cid:86)(cid:82)(cid:70)(cid:76)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:11)(cid:41)(cid:68)(cid:81)(cid:81)(cid:76)(cid:72)(cid:3)(cid:48)(cid:68)(cid:72)(cid:12) David B. Henry (cid:41)(cid:82)(cid:85)(cid:80)(cid:72)(cid:85)(cid:3)(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:38)(cid:75)(cid:68)(cid:76)(cid:85)(cid:80)(cid:68)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:40)(cid:50)(cid:15)(cid:3)(cid:46)(cid:76)(cid:80)(cid:70)(cid:82)(cid:3)(cid:53)(cid:72)(cid:68)(cid:79)(cid:87)(cid:92)(cid:3) (cid:38)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81) Mary Hogan Preusse (cid:41)(cid:82)(cid:85)(cid:80)(cid:72)(cid:85)(cid:3)(cid:48)(cid:68)(cid:81)(cid:68)(cid:74)(cid:76)(cid:81)(cid:74)(cid:3)(cid:39)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:82)(cid:16)(cid:43)(cid:72)(cid:68)(cid:71)(cid:3) (cid:82)(cid:73)(cid:3)(cid:36)(cid:80)(cid:72)(cid:85)(cid:76)(cid:70)(cid:68)(cid:86)(cid:3)(cid:53)(cid:72)(cid:68)(cid:79)(cid:3)(cid:40)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:15)(cid:3)(cid:36)(cid:51)(cid:42)(cid:3)(cid:36)(cid:86)(cid:86)(cid:72)(cid:87)(cid:3) (cid:48)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:56)(cid:54)(cid:3) Richard J. Lieb (cid:54)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3)(cid:36)(cid:71)(cid:89)(cid:76)(cid:86)(cid:82)(cid:85)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:73)(cid:82)(cid:85)(cid:80)(cid:72)(cid:85)(cid:3)(cid:48)(cid:68)(cid:81)(cid:68)(cid:74)(cid:76)(cid:81)(cid:74)(cid:3)(cid:39)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3) (cid:38)(cid:75)(cid:68)(cid:76)(cid:85)(cid:80)(cid:68)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:53)(cid:72)(cid:68)(cid:79)(cid:3)(cid:40)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:15)(cid:3)(cid:42)(cid:85)(cid:72)(cid:72)(cid:81)(cid:75)(cid:76)(cid:79)(cid:79)(cid:3)(cid:9)(cid:3)(cid:38)(cid:82)(cid:17)(cid:15)(cid:3)(cid:47)(cid:47)(cid:38)(cid:3) Mark S. Ordan (cid:41)(cid:82)(cid:85)(cid:80)(cid:72)(cid:85)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:605)(cid:70)(cid:72)(cid:85)(cid:15)(cid:3)(cid:52)(cid:88)(cid:68)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:38)(cid:68)(cid:85)(cid:72)(cid:3) (cid:51)(cid:85)(cid:82)(cid:83)(cid:72)(cid:85)(cid:87)(cid:76)(cid:72)(cid:86)(cid:15)(cid:3)(cid:918)(cid:81)(cid:70)(cid:17) Eugene A. Pinover (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:82)(cid:16)(cid:38)(cid:75)(cid:68)(cid:76)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:49)(cid:72)(cid:90)(cid:3)(cid:60)(cid:82)(cid:85)(cid:78)(cid:3)(cid:53)(cid:72)(cid:68)(cid:79)(cid:3)(cid:40)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:3) (cid:51)(cid:85)(cid:68)(cid:70)(cid:87)(cid:76)(cid:70)(cid:72)(cid:15)(cid:3)(cid:39)(cid:47)(cid:36)(cid:3)(cid:51)(cid:76)(cid:83)(cid:72)(cid:85) Julie G. Richardson (cid:41)(cid:82)(cid:85)(cid:80)(cid:72)(cid:85)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:48)(cid:68)(cid:81)(cid:68)(cid:74)(cid:76)(cid:81)(cid:74)(cid:3)(cid:39)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:15)(cid:3) (cid:51)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:40)(cid:84)(cid:88)(cid:76)(cid:87)(cid:92)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86) Glenn J. Rufrano (cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:605)(cid:70)(cid:72)(cid:85)(cid:15)(cid:3)(cid:57)(cid:40)(cid:53)(cid:40)(cid:918)(cid:55)(cid:15)(cid:3)(cid:918)(cid:81)(cid:70)(cid:17) INVESTOR RELATIONS InvestorRelations@VEREIT.com 877.405.2653 HEADQUARTERS 2325 East Camelback Road 9th Floor, Phoenix, Arizona 85016 (cid:57)(cid:40)(cid:53)(cid:40)(cid:918)(cid:55)(cid:3)(cid:76)(cid:86)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:68)(cid:605)(cid:79)(cid:76)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:15)(cid:3)(cid:76)(cid:86)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:72)(cid:81)(cid:71)(cid:82)(cid:85)(cid:86)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:15)(cid:3)(cid:71)(cid:82)(cid:72)(cid:86)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3) (cid:72)(cid:81)(cid:71)(cid:82)(cid:85)(cid:86)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:76)(cid:86)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:82)(cid:85)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:82)(cid:85)(cid:3)(cid:68)(cid:3)(cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:82)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3) (cid:82)(cid:85)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:86)(cid:3)(cid:83)(cid:76)(cid:70)(cid:87)(cid:88)(cid:85)(cid:72)(cid:71)(cid:3)(cid:82)(cid:85)(cid:3)(cid:80)(cid:72)(cid:81)(cid:87)(cid:76)(cid:82)(cid:81)(cid:72)(cid:71)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:81)(cid:68)(cid:80)(cid:72)(cid:86)(cid:15)(cid:3)(cid:79)(cid:82)(cid:74)(cid:82)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:79)(cid:79)(cid:3) (cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:3)(cid:81)(cid:68)(cid:80)(cid:72)(cid:86)(cid:15)(cid:3)(cid:71)(cid:72)(cid:86)(cid:76)(cid:74)(cid:81)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:79)(cid:82)(cid:74)(cid:68)(cid:81)(cid:86)(cid:3) (cid:68)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:87)(cid:85)(cid:68)(cid:71)(cid:72)(cid:80)(cid:68)(cid:85)(cid:78)(cid:86)(cid:3)(cid:82)(cid:85)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:76)(cid:85)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) companies. w w w . V E R E I T . c o m

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