Document
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 10-Q/A
 
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2015
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to             
Commission file number 001-36004
_______________________________________________
SPIRIT REALTY CAPITAL, INC.
(Exact name of registrant as specified in its charter)
_______________________________________________
Maryland
 
20-1676382
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification Number)
 
 
 
2727 North Harwood Street, Suite 300, Dallas, Texas 75201
 
(972) 476-1900
(Address of principal executive offices; zip code)
 
(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)
______________________________________________________________________________
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.     Yes x    No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes x   No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
x
 
Accelerated filer
o
Non-accelerated filer
o
(Do not check if smaller reporting company)
Smaller reporting company
o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes o    No x
As of November 2, 2015, there were 441,394,341 shares of common stock, par value $0.01, of Spirit Realty Capital, Inc. outstanding.
 




SPIRIT REALTY CAPITAL, INC.
INDEX
Explanatory Note
Glossary
 
 
Consolidated Balance Sheets as of September 30, 2015 (Unaudited) and December 31, 2014
Consolidated Statements of Operations for the three and nine months ended September 30, 2015 and 2014 (Unaudited)
Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2015 and 2014 (Unaudited)
Consolidated Statement of Stockholders' Equity for the nine months ended September 30, 2015 (Unaudited)
Consolidated Statements of Cash Flows for the nine months ended September 30, 2015 and 2014 (Unaudited)
 

 

2



Explanatory Note
The Company is restating its interim unaudited consolidated financial statements for the quarter ended September 30, 2015. See the Company's Current Report on Form 8-K filed with the SEC on October 19, 2016 for additional details.
When the Company disposes of real estate assets, if the real estate assets constitute a business, a portion of the Company’s goodwill should be allocated to the carrying value of the business disposed of to determine the gain/loss on disposal. Further, when the Company classifies real estate assets that constitute a business as held for sale, the carrying amount used to determine an impairment loss, if any, should include an allocation of goodwill, in accordance with ASC 350 “Intangibles - Goodwill and Other." Historically, the Company did not allocate goodwill resulting from the Cole II Merger to real estate assets disposed of or consider the amount of goodwill attributable to real estate assets held for sale in assessing impairment in the Company’s consolidated financial statements as of and for the three and nine months ended September 30, 2015.
As explained in Note 2 to the consolidated financial statements included within this Form 10-Q/A (as defined below), the restatement is a correction of an error in the application of the accounting treatment under ASC 350. For each real estate asset that constitutes a business that was disposed of or classified as held for sale, the restatement reflects an allocation of goodwill that has been derived based upon the proportionate fair value of the real estate asset to the fair value of the Company’s reporting unit (i.e. the Company's equity).
The allocation of goodwill to real estate assets disposed of resulted in a decrease in gain on disposition of assets of $2.0 million and $15.7 million for the three and nine months ended September 30, 2015, respectively, and a decrease of $22.2 million to goodwill as of September 30, 2015. The allocation of goodwill to real estate assets held for sale resulted in an increase of $0.2 million and $0.8 million to impairments for the three and nine months ended September 30, 2015, respectively, and a decrease of $0.7 million to real estate assets held for sale, net as of September 30, 2015. Additionally, the correction of these errors resulted in an increase of $22.9 million to accumulated deficit as of September 30, 2015.
This Amendment No. 1 on Form 10-Q/A (“Form 10-Q/A”) to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, initially filed with the SEC on November 6, 2015 (the “Original Filing”), is being filed to reflect the restatement of (i) the Company’s consolidated balance sheet at September 30, 2015, (ii) the Company’s consolidated statements of operations and comprehensive income for the three and nine months ended September 30, 2015 and (iii) the Company's consolidated statements of stockholders’ equity and cash flows for the nine months ended September 30, 2015, and the notes related thereto. Additionally, although the effects were determined to be immaterial, the Company’s consolidated balance sheet as of December 31, 2014, the Company’s consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2014 and the Company's consolidated statement of cash flows for the nine months ended September 30, 2014 included in this Form 10-Q/A are being restated to reflect the correction of these errors. For the convenience of the reader, this Form 10-Q/A sets forth the Original Filing in its entirety and only amends and restates Items 1, 2, and 4 of Part I of the Original Filing to reflect the adjustments described above and in Note 2, and the related impact on disclosures. No other information in the Original Filing is amended. For a more detailed description of these matters, see Note 2 to the accompanying consolidated financial statements in this Form 10-Q/A.
Notably, these adjustments did not negatively impact the following metrics of the Company:
Revenues;
Cash position or its total cash flows from operating, investing or financing activities;
Liquidity;
Funds from operations (“FFO”);
Adjusted funds from operations (“AFFO”);
Reported capitalization rates on the sale of assets; and
Any metric utilized in the determination of executive compensation.
Additionally, the Company remains in compliance with all of its debt agreements and financial covenants.
Pursuant to the rules of the SEC, Item 6 of Part II of the Original Filing has been amended to contain the currently-dated certifications from our Chief Executive Officer and Chief Financial Officer, as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. The certifications of our Chief Executive Officer and Chief Financial Officer are attached to this Form 10-Q/A as Exhibits 31.1, 31.2 and 32.1, respectively.

3


GLOSSARY
Definitions:
 
1031 Exchange
Tax-deferred like-kind exchange of properties held for business or investment purposes, pursuant to Section 1031 of the Code
2013 Credit Facility
$400.0 million secured credit facility pursuant to the credit agreement between the Operating Partnership and certain lenders dated July 17, 2013
2015 Credit Facility
$600.0 million unsecured credit facility pursuant to the Credit Agreement
2019 Notes
$402.5 million convertible notes of the Corporation due in 2019
2021 Notes
$345.0 million convertible notes of the Corporation due in 2021
Additional Collateral Deposit
A cash reserve deposit or letter of credit in the amount of $8.0 million required pursuant to an amendment of a certain CMBS loan agreement
AFFO
Adjusted Funds From Operations
AOCL
Accumulated Other Comprehensive Loss
ASC
Accounting Standards Codification
ASU
Accounting Standards Update
ATM Program
At the Market equity distribution program, pursuant to which the Corporation may offer and sell registered shares of common stock from time to time
CAM
Tenant Common Area Maintenance costs
CMBS
Commercial Mortgage Backed Securities
Code
Internal Revenue Code of 1986, as amended
Cole II
Cole Credit Property Trust II, Inc.
Cole II Merger
Acquisition on July 17, 2013 of Cole II by the Company, in which the Company merged with and into the Cole II legal entity
Collateral Pools
Pools of collateral assets that are pledged to the indenture trustee for the benefit of the noteholders and secure obligations of issuers under the Spirit Master Funding Program
Company
The Corporation and its consolidated subsidiaries
Convertible Notes
The 2019 Notes and 2021 Notes, together
Corporation
Spirit Realty Capital, Inc., a Maryland corporation
CPI
Consumer Price Index
Credit Agreement
2015 credit facility agreement between the Operating Partnership and certain lenders dated March 31, 2015, as amended on November 3, 2015
EBITDA
Earnings Before Interest, Taxes, Depreciation and Amortization
Excess Cash
Rent received in excess of debt service obligations
Exchange Act
Securities Exchange Act of 1934, as amended
Exchange Offer
Offer to exchange the outstanding principal balance of three series of existing net-lease mortgage notes for three series of newly issued Master Trust 2014 notes in May 2014
FASB
Financial Accounting Standards Board
FFO
Funds From Operations
GAAP
Generally Accepted Accounting Principles
Incentive Award Plan
Spirit Realty Capital, Inc. and Spirit Realty, L.P. 2012 Incentive Award Plan
IPO
Initial Public Offering
LIBOR
London Interbank Offered Rate
Line of Credit
$40.0 million secured revolving credit facility pursuant to the loan agreement between an indirect wholly-owned subsidiary of the Corporation and a certain lender dated March 27, 2013, as amended
Master Trust 2013
The net-lease mortgage securitization trust established in December 2013 under the Spirit Master Funding Program
Master Trust 2014
The net-lease mortgage securitization trust established in 2005 and amended and restated in 2014 under the Spirit Master Funding Program

4


Definitions:
 
Master Trust Exchange Costs
Legal, accounting and financial advisory services costs incurred in connection with the Exchange Offer
Master Trust Notes
The Master Trust 2013 and Master Trust 2014 notes, together
Master Trust Release
Proceeds from the sale of assets securing the Master Trust Notes held in restricted accounts until a qualifying substitution is made
Moody's
Moody's Investor Services
NAREIT
National Association of Real Estate Investment Trusts
Normalized Rental Revenue
Total rental revenue normalized to exclude rental revenues contributed by properties sold during a given period
Normalized Revenue
Total revenue normalized to exclude revenues contributed by properties sold during a given period
OP Holdings
Spirit General OP Holdings, LLC
Operating Partnership
Spirit Realty, L.P., a Delaware limited partnership
REIT
Real Estate Investment Trust
Revolving Credit Facilities
The 2013 Credit Facility, the 2015 Credit Facility and Line of Credit, together
S&P
Standard & Poor's Rating Services
SEC
Securities and Exchange Commission
Securities Act
Securities Act of 1933, as amended
Shopko
Specialty Retail Shops Holding Corp. and certain of its affiliates
Spirit Master Funding Program
The Company's asset-backed securitization program that comprises Master Trust 2013 and Master Trust 2014
Term Loan
$325.0 million senior unsecured term facility pursuant to the Term Loan Agreement
Term Loan Agreement
Term loan agreement between the Operating Partnership and certain lenders dated November 3, 2015
Total Debt
Principal debt outstanding before discounts or premiums
TSR
Total Shareholder Return
Walgreens
Walgreen Company

Unless otherwise indicated or unless the context requires otherwise, all references to "we," "us" or "our" refer to the Corporation and its consolidated subsidiaries including the Operating Partnership.

5


PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
SPIRIT REALTY CAPITAL, INC.
Consolidated Balance Sheets (As Restated, see Note 2)
(In Thousands, Except Share and Per Share Data)
(Unaudited)

 
September 30,
2015
 
December 31,
2014
 
(Restated)
 
(Restated)
Assets



Investments:



Real estate investments:



Land and improvements
$
2,702,922


$
2,614,630

Buildings and improvements
4,779,228


4,579,166

Total real estate investments
7,482,150


7,193,796

Less: accumulated depreciation
(826,280
)

(752,210
)

6,655,870


6,441,586

Loans receivable, net
106,944


109,425

Intangible lease assets, net
543,620


590,073

Real estate assets under direct financing leases, net
44,353


56,564

Real estate assets held for sale, net
77,306


119,046

Net investments
7,428,093


7,316,694

Cash and cash equivalents
28,210


176,181

Deferred costs and other assets, net
143,808


185,507

Goodwill
269,212


285,848

Total assets
$
7,869,323


$
7,964,230

Liabilities and stockholders’ equity



Liabilities:



Revolving Credit Facilities
$
75,000


$
15,114

Mortgages and notes payable, net
3,242,922


3,629,998

Convertible Notes, net
687,062


678,190

Total debt, net
4,004,984


4,323,302

Intangible lease liabilities, net
200,601


205,968

Accounts payable, accrued expenses and other liabilities
131,426


123,298

Total liabilities
4,337,011


4,652,568

Commitments and contingencies (see Note 8)





Stockholders’ equity:



Common stock, $0.01 par value, 750,000,000 shares authorized: 441,411,091 shares and 411,350,440 shares issued and outstanding at September 30, 2015 December 31, 2014, respectively
4,414


4,113

Capital in excess of par value
4,718,765


4,361,320

Accumulated deficit
(1,189,150
)

(1,052,688
)
Accumulated other comprehensive loss
(1,717
)

(1,083
)
Total stockholders’ equity
3,532,312


3,311,662

Total liabilities and stockholders’ equity
$
7,869,323


$
7,964,230

See accompanying notes.


6


SPIRIT REALTY CAPITAL, INC.
Consolidated Statements of Operations (As Restated, see Note 2)
(In Thousands, Except Share and Per Share Data)
(Unaudited)


 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2015
 
2014
 
2015
 
2014
 
(Restated)
 
(Restated)
 
(Restated)
 
(Restated)
Revenues:
 
 
 
 
 
 
 
Rentals
$
159,183

 
$
145,591

 
$
473,308

 
$
426,212

Interest income on loans receivable
1,764

 
1,805

 
5,216

 
5,463

Earned income from direct financing leases
725

 
837

 
2,299

 
2,521

Tenant reimbursement income
3,780

 
3,308

 
11,903

 
9,548

Other income and interest from real estate transactions
2,973

 
754

 
5,920

 
4,312

Total revenues
168,425

 
152,295

 
498,646

 
448,056

Expenses:
 
 
 
 
 
 
 
General and administrative
12,265

 
10,380

 
36,837

 
31,881

Finance restructuring costs

 
(11
)
 

 
13,022

Property costs
6,496

 
5,357

 
20,317

 
17,215

Real estate acquisition costs
576

 
865

 
2,122

 
2,372

Interest
54,673

 
53,535

 
168,754

 
163,926

Depreciation and amortization
64,493

 
62,069

 
195,460

 
184,586

Impairments
21,027

 
13,214

 
56,998

 
43,277

Total expenses
159,530

 
145,409

 
480,488

 
456,279

Income (loss) from continuing operations before other income (expense) and income tax expense
8,895

 
6,886

 
18,158

 
(8,223
)
Other income (expense):
 
 
 
 
 
 
 
Gain (loss) on debt extinguishment
342

 
212

 
2,489

 
(64,496
)
Total other income (expense)
342

 
212

 
2,489

 
(64,496
)
Income (loss) from continuing operations before income tax expense
9,237

 
7,098

 
20,647

 
(72,719
)
Income tax expense
(184
)
 
(242
)
 
(707
)
 
(586
)
Income (loss) from continuing operations
9,053

 
6,856

 
19,940

 
(73,305
)
Discontinued operations:
 
 
 
 

 

(Loss) income from discontinued operations
(41
)
 
288

 
90

 
3,621

Gain on disposition of assets

 
240

 
590

 
325

(Loss) income from discontinued operations
(41
)
 
528

 
680

 
3,946

Income (loss) before gain on disposition of assets
9,012

 
7,384

 
20,620

 
(69,359
)
Gain on disposition of assets
5,991

 
841

 
66,291

 
1,086

Net income (loss) attributable to common stockholders
$
15,003

 
$
8,225

 
$
86,911

 
$
(68,273
)
Net income (loss) per share of common stock—basic:
 
 
 
 
 
 
 
Continuing operations
$
0.03

 
$
0.02

 
$
0.20

 
$
(0.19
)
Discontinued operations

 

 

 
0.01

Net income (loss) per share attributable to common stockholders—basic
$
0.03

 
$
0.02

 
$
0.20

 
$
(0.18
)
Net income (loss) per share of common stock—diluted:
 
 
 
 
 
 
 
Continuing operations
$
0.03

 
$
0.02

 
$
0.20

 
$
(0.19
)
Discontinued operations

 

 

 
0.01

Net income (loss) per share attributable to common stockholders—diluted
$
0.03

 
$
0.02

 
$
0.20

 
$
(0.18
)
Weighted average shares of common stock outstanding:
 
 
 
 
 
 
 
Basic
440,205,348

 
396,807,656

 
429,387,707

 
382,525,614

Diluted
440,353,965

 
397,613,583

 
429,738,776

 
382,525,614

Dividends declared per common share issued
$
0.17000

 
$
0.16625

 
$
0.51000

 
$
0.49875

See accompanying notes.

7


SPIRIT REALTY CAPITAL, INC.
Consolidated Statements of Comprehensive Income (Loss) (As Restated, see Note 2)
(In Thousands)
(Unaudited)

 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2015
 
2014
 
2015
 
2014
 
(Restated)
 
(Restated)
 
(Restated)
 
(Restated)
Net income (loss) attributable to common stockholders
$
15,003

 
$
8,225

 
$
86,911

 
$
(68,273
)
Other comprehensive income (loss):
 
 
 
 
 
 
 
Change in net unrealized (losses) gains on cash flow hedges
(797
)
 
237

 
(1,608
)
 
(1,040
)
Net cash flow hedge losses reclassified to operations
277

 
333

 
974

 
987

Total comprehensive income (loss)
$
14,483

 
$
8,795

 
$
86,277

 
$
(68,326
)
See accompanying notes.


8


SPIRIT REALTY CAPITAL, INC.
Consolidated Statement of Stockholders’ Equity (As Restated, see Note 2)
(In Thousands, Except Share Data)
(Unaudited)

 
Common Stock
 
 
 
 
 
Total
Stockholders’
Equity
 
Shares
 
Par 
Value
 
Capital in
Excess of
Par Value
 
Accumulated
Deficit
 
AOCL
 
Balances, December 31, 2014 (Restated)
411,350,440

 
$
4,113

 
$
4,361,320

 
$
(1,052,688
)
 
$
(1,083
)
 
$
3,311,662

Net income (Restated)

 

 

 
86,911

 

 
86,911

Other comprehensive loss

 

 

 

 
(634
)
 
(634
)
Dividends declared on common stock

 

 

 
(221,216
)
 

 
(221,216
)
Repurchase of shares of common stock
(169,515
)
 
(2
)
 

 
(1,698
)
 

 
(1,700
)
Issuance of shares of common stock, net
29,610,100

 
296

 
346,915

 

 

 
347,211

Exercise of stock options
5,000

 

 
46

 

 

 
46

Stock-based compensation, net
615,066

 
7

 
10,484

 
(459
)
 

 
10,032

Balances, September 30, 2015 (Restated)
441,411,091

 
$
4,414

 
$
4,718,765

 
$
(1,189,150
)
 
$
(1,717
)
 
$
3,532,312

See accompanying notes.

9


SPIRIT REALTY CAPITAL, INC.
Consolidated Statements of Cash Flows (As Restated, see Note 2)
(In Thousands)
(Unaudited)
 
Nine Months Ended 
 September 30,
 
2015
 
2014
 
(Restated)
 
(Restated)
Operating activities
 
 
 
Net income (loss) attributable to common stockholders
$
86,911

 
$
(68,273
)
Adjustments to reconcile net income (loss) attributable to common stockholders to net cash provided by operating activities:
 
 
 
Depreciation and amortization
195,460

 
184,586

Impairments
57,032

 
43,277

Amortization of deferred financing costs
5,893

 
4,084

Derivative net settlements, amortization and other interest rate hedge losses
(95
)
 
(83
)
Amortization of debt discounts (premiums)
1,670

 
(821
)
Stock-based compensation expense
10,757

 
8,503

(Gain) loss on debt extinguishment
(2,489
)
 
64,496

Debt extinguishment costs
(3,760
)
 
(59,069
)
Gains on dispositions of real estate and other assets, net
(66,881
)
 
(1,411
)
Non-cash revenue
(15,947
)
 
(12,877
)
Other
165

 
(1,341
)
Changes in operating assets and liabilities:
 
 
 
Deferred costs and other assets, net
(4,935
)
 
(3,111
)
Accounts payable, accrued expenses and other liabilities
7,433

 
(3,248
)
Net cash provided by operating activities
271,214

 
154,712

Investing activities
 
 
 
Acquisitions of real estate
(703,106
)
 
(569,806
)
Capitalized real estate expenditures
(7,449
)
 
(3,244
)
Investments in loans receivable
(4,020
)
 

Collections of principal on loans receivable and real estate assets under direct financing leases
4,450

 
4,641

Proceeds from dispositions of real estate and other assets
397,325

 
37,886

Transfers of net sales proceeds (to) from restricted accounts pursuant to 1031 Exchanges
(2,489
)
 
20,784

Transfers of net sales proceeds from (to) Master Trust Release
40,126

 
(20,240
)
Net cash used in investing activities
(275,163
)
 
(529,979
)
Financing activities
 
 
 
Borrowings under Revolving Credit Facilities
535,000

 
515,535

Repayments under Revolving Credit Facilities
(475,181
)
 
(425,219
)
Borrowings under Convertible Notes

 
757,500

Repayments under mortgages and notes payable
(347,242
)
 
(562,104
)
Deferred financing costs
(3,782
)
 
(20,011
)
Proceeds from issuance of common stock, net of offering costs
347,211

 
287,454

Proceeds from exercise of stock options
46

 
183

Offering costs paid on equity component of Convertible Notes

 
(1,609
)
Purchase of shares of common stock
(1,700
)
 
(2,920
)
Dividends paid/distributions to equity owners
(216,231
)
 
(189,510
)
Transfers from (to) reserve/escrow deposits with lenders
17,857

 
(490
)
Net cash (used in) provided by financing activities
(144,022
)
 
358,809

Net decrease in cash and cash equivalents
(147,971
)
 
(16,458
)
Cash and cash equivalents, beginning of period
176,181

 
66,588

Cash and cash equivalents, end of period
$
28,210

 
$
50,130

See accompanying notes.

10


SPIRIT REALTY CAPITAL, INC.
Notes to Consolidated Financial Statements
September 30, 2015
(Unaudited)



Note 1. Organization
Company Organization and Operations
The Company operates as a self-administered and self-managed REIT that seeks to generate and deliver sustainable and attractive returns for stockholders by investing primarily in and managing a portfolio of single-tenant, operationally essential real estate throughout the United States that is generally leased on a long-term, triple-net basis to tenants operating within predominantly retail, but also office and industrial property types. Single tenant, operationally essential real estate generally refers to free-standing, commercial real estate facilities where tenants conduct activities that are essential to the generation of their sales and profits.
The Company’s operations are generally carried out through the Operating Partnership. OP Holdings, one of the Corporation's wholly-owned subsidiaries, is the sole general partner and owns 1.0% of the Operating Partnership. The Corporation and a wholly-owned subsidiary are the only limited partners and together own the remaining 99.0% of the Operating Partnership.

As of September 30, 2015, our undepreciated investment in real estate and loans totaled approximately $8.26 billion, representing investments in 2,634 properties, including properties securing mortgage loans made by the Company. Of this amount, 98.7% consisted of our $8.15 billion investment in real estate, representing ownership of 2,489 properties, and the remaining 1.3% consisted of $106.9 million in commercial mortgage and other loans receivable, primarily secured by the remaining 145 properties or other related assets.

Note 2. Restatement
The restatement of the Company's consolidated financial statements results from the Company's subsequent accounting for goodwill resulting from the Cole II Merger. Previously, the Company did not allocate goodwill to the disposal of real estate assets or held for sale real estate assets that met the definition of a business under GAAP, as required by ASC 350 “Intangibles - Goodwill and Other” in order to determine gain on disposition of assets or impairments, if any, respectively.
For the disposal of real estate assets that constituted a business, goodwill and gain on disposition of assets both should have been reduced by the proportionate amount of goodwill allocated to each disposed of real estate asset. The amount of goodwill allocated is derived as the proportionate fair value of the real estate considered to be a business under GAAP at the time of sale to the fair value of the Company’s reporting unit. As a result, the restated consolidated balance sheet includes a reduction to goodwill of $22.2 million at September 30, 2015 and the restated consolidated statement of operations includes a reduction to gain on disposition of assets of $2.0 million and $15.7 million for the three and nine months ended September 30, 2015, respectively. The restated consolidated balance sheet includes a reduction to goodwill of $5.6 million at December 31, 2014 and the restated consolidated statement of operations includes a reduction to gain on disposition of assets of $0.6 million and $0.8 million for the three and nine months ended September 30, 2014, respectively.
Further, in evaluating the impairment on held for sale real estate assets considered to be a business under GAAP, the proportionate amount of goodwill attributable to the real estate asset held for sale should be considered in determining the amount of impairment, if any. The amount of goodwill attributed is derived as the proportionate fair value of the real estate asset considered to be a business under GAAP held for sale at measurement date to the fair value of the Company’s reporting unit. As a result, the restated consolidated balance sheet includes a reduction to real estate assets held for sale, net of $0.7 million at September 30, 2015 and the restated consolidated statement of operations includes an increase to impairments of $0.2 million and $0.8 million for the three and nine months ended September 30, 2015, respectively. The restated consolidated balance sheet includes a reduction to real estate assets held for sale, net of $0.9 million at December 31, 2014 and the restated consolidated statement of operations includes an increase to impairments of $0.5 million and $1.2 million for the three and nine months ended September 30, 2014, respectively.



11

SPIRIT REALTY CAPITAL, INC.
Notes to Consolidated Financial Statements - (continued)
September 30, 2015
(Unaudited)



As part of its restatement, the Company also identified one other immaterial error affecting the consolidated financial statements as of and for the three and nine months ended September 30, 2014. The Company recorded an increase to goodwill of $1.6 million in the restated consolidated balance sheet as of September 30, 2014 and recorded a decrease of $1.6 million to general and administrative expense in the restated consolidated statements of operations for the three and nine months ended September 30, 2014 to correct the presentation of account receivable balances acquired in the Cole II Merger as an increase to goodwill from the merger instead of a bad debt expense included in general and administrative expense based on facts that existed at the acquisition date.

The Company has historically presented share repurchases as treasury stock (thereby reducing stockholders’ equity) in the consolidated balance sheets and consolidated statements of stockholders’ equity. However, the Company is incorporated in Maryland and under Maryland law, there is no concept of treasury stock. Therefore, shares repurchased should be considered retired and constitute authorized but unissued shares rather than treasury stock as previously presented. As a result, during the nine months ended September 30, 2015, the Company has corrected the classification error and the amount previously reported as treasury stock of $4.9 million at December 31, 2014 is presented as a reduction to common stock and common stock par value and an increase in accumulated deficit in the restated consolidated balance sheet and consolidated statement of stockholders' equity. In addition, the number of shares previously disclosed as issued have been reduced by the number of shares repurchased of 473,599 at December 31, 2014. This change does not affect previously disclosed shares outstanding, total stockholders’ equity or earnings per share computations.
The consolidated financial statements included in this Form 10-Q/A have been restated as of September 30, 2015 and for the three and nine months then ended to reflect the adjustments described above. The consolidated financial statements included in this Form 10-Q/A have been restated as of December 31, 2014 and for the three and nine ended September 30, 2014 to reflect the adjustments described above. The following statements present the effect of the restatement on (i) the Company's consolidated balance sheets at September 30, 2015 and December 31, 2014, (ii) the Company's consolidated statements of operations for the three and nine months ended September 30, 2015 and 2014 and (iii) the Company's consolidated statements of cash flows for the nine months ended September 30, 2015 and 2014. The Company did not present a summary of the effect of the restatement on the consolidated statement of stockholders' equity for any of the above referenced periods because the impact to stockholders' equity is reflected below in the restated consolidated balance sheets. The Company did not present a summary of the effect of the restatement on the consolidated statements of comprehensive income (loss) for any of the above referenced periods because the impact to net income (loss) is reflected below in the restated consolidated statements of operations and the restatement adjustments did not affect any other component of comprehensive income (loss).



12

SPIRIT REALTY CAPITAL, INC.
Notes to Consolidated Financial Statements - (continued)
September 30, 2015
(Unaudited)


The following table presents the consolidated balance sheet as previously reported, restatement adjustments and the consolidated balance sheet as restated at September 30, 2015 (in thousands, except per share data):
 
As Previously Reported
 
Restatement Adjustments
 
As Restated
Assets
 
 
 
 
 
Investments:
 
 
 
 
 
Real estate investments:
 
 
 
 
 
Land and improvements
$
2,702,922

 
$

 
$
2,702,922

Buildings and improvements
4,779,228

 

 
4,779,228

Total real estate investments
7,482,150

 

 
7,482,150

Less: accumulated depreciation
(826,280
)
 

 
(826,280
)
 
6,655,870

 

 
6,655,870

Loans receivable, net
106,944

 

 
106,944

Intangible lease assets, net
543,620

 

 
543,620

Real estate assets under direct financing leases, net
44,353

 

 
44,353

Real estate assets held for sale, net
78,007

 
(701
)
 
77,306

Net investments
7,428,794

 
(701
)
 
7,428,093

Cash and cash equivalents
28,210

 

 
28,210

Deferred costs and other assets, net
143,808

 

 
143,808

Goodwill
291,421

 
(22,209
)
 
269,212

Total assets
$
7,892,233

 
$
(22,910
)
 
$
7,869,323

Liabilities and stockholders’ equity
 
 
 
 
 
Liabilities:
 
 
 
 
 
Revolving credit facilities
$
75,000

 
$

 
$
75,000

Mortgages and notes payable, net
3,242,922

 

 
3,242,922

Convertible Notes, net
687,062

 

 
687,062

Total debt, net
4,004,984

 

 
4,004,984

Intangible lease liabilities, net
200,601

 

 
200,601

Accounts payable, accrued expenses and other liabilities
131,426

 

 
131,426

Total liabilities
4,337,011

 

 
4,337,011

Commitments and contingencies (see Note 8)
 
 
 
 
 
Stockholders’ equity:
 
 
 
 
 
Common stock, $0.01 par value
4,421

 
(7
)
 
4,414

Capital in excess of par value
4,718,765

 

 
4,718,765

Accumulated deficit
(1,159,685
)
 
(29,465
)
 
(1,189,150
)
Accumulated other comprehensive loss
(1,717
)
 

 
(1,717
)
Treasury stock, at cost
(6,562
)
 
6,562

 

Total stockholders’ equity
3,555,222

 
(22,910
)
 
3,532,312

Total liabilities and stockholders’ equity
$
7,892,233

 
$
(22,910
)
 
$
7,869,323


13

SPIRIT REALTY CAPITAL, INC.
Notes to Consolidated Financial Statements - (continued)
September 30, 2015
(Unaudited)


The following table presents the consolidated balance sheet as previously reported, restatement adjustments and the consolidated balance sheet as restated at December 31, 2014 (in thousands, except per share data):
 
As Previously Reported
 
Restatement Adjustments
 
As Restated
Assets
 
 
 
 
 
Investments:
 
 
 
 
 
Real estate investments:
 
 
 
 
 
Land and improvements
$
2,614,630

 
 
 
$
2,614,630

Buildings and improvements
4,579,166

 
 
 
4,579,166

Total real estate investments
7,193,796

 

 
7,193,796

Less: accumulated depreciation
(752,210
)
 
 
 
(752,210
)
 
6,441,586

 

 
6,441,586

Loans receivable, net
109,425

 
 
 
109,425

Intangible lease assets, net
590,073

 
 
 
590,073

Real estate assets under direct financing leases, net
56,564

 
 
 
56,564

Real estate assets held for sale, net
119,912

 
(866
)
 
119,046

Net investments
7,317,560

 
(866
)
 
7,316,694

Cash and cash equivalents
176,181

 
 
 
176,181

Deferred costs and other assets, net
185,507

 
 
 
185,507

Goodwill
291,421

 
(5,573
)
 
285,848

Total assets
$
7,970,669

 
$
(6,439
)
 
$
7,964,230

Liabilities and stockholders’ equity
 
 
 
 
 
Liabilities:
 
 
 
 
 
Revolving credit facilities
$
15,114

 
 
 
$
15,114

Mortgages and notes payable, net
3,629,998

 
 
 
3,629,998

Convertible Notes, net
678,190

 
 
 
678,190

Total debt, net
4,323,302

 

 
4,323,302

Intangible lease liabilities, net
205,968

 
 
 
205,968

Accounts payable, accrued expenses and other liabilities
123,298

 
 
 
123,298

Total liabilities
4,652,568

 

 
4,652,568

Commitments and contingencies (see Note 8)
 
 
 
 
 
Stockholders’ equity:
 
 
 
 
 
Common stock, $0.01 par value
4,118

 
(5
)
 
4,113

Capital in excess of par value
4,361,320

 
 
 
4,361,320

Accumulated deficit
(1,041,392
)
 
(11,296
)
 
(1,052,688
)
Accumulated other comprehensive loss
(1,083
)
 
 
 
(1,083
)
Treasury stock, at cost
(4,862
)
 
4,862

 

Total stockholders’ equity
3,318,101

 
(6,439
)
 
3,311,662

Total liabilities and stockholders’ equity
$
7,970,669

 
$
(6,439
)
 
$
7,964,230



14

SPIRIT REALTY CAPITAL, INC.
Notes to Consolidated Financial Statements - (continued)
September 30, 2015
(Unaudited)


The following table presents the consolidated statement of operations as previously reported, restatement adjustments and the consolidated statement of operations as restated for the three months ended September 30, 2015 (in thousands, except share and per share data):
 
As Previously Reported
 
Restatement Adjustments
 
As Restated
Revenues:
 
 
 
 
 
Rentals
$
159,183

 
$

 
$
159,183

Interest income on loans receivable
1,764

 

 
1,764

Earned income from direct financing leases
725

 

 
725

Tenant reimbursement income
3,780

 

 
3,780

Other income and interest from real estate transactions
2,973

 

 
2,973

Total revenues
168,425

 

 
168,425

Expenses:
 
 
 
 
 
General and administrative
12,265

 

 
12,265

Property costs
6,496

 

 
6,496

Real estate acquisition costs
576

 

 
576

Interest
54,673

 

 
54,673

Depreciation and amortization
64,493

 

 
64,493

Impairments
20,832

 
195

 
21,027

Total expenses
159,335

 
195

 
159,530

Income from continuing operations before other income and income tax expense
9,090

 
(195
)
 
8,895

Other income:
 
 
 
 
 
Gain on debt extinguishment
342

 

 
342

Total other income
342

 

 
342

Income from continuing operations before income tax expense
9,432

 
(195
)
 
9,237

Income tax expense
(184
)
 

 
(184
)
Income from continuing operations
9,248

 
(195
)
 
9,053

Discontinued operations:
 
 
 
 
 
Loss from discontinued operations
(41
)
 

 
(41
)
Income before gain on disposition of assets
9,207

 
(195
)
 
9,012

Gain on disposition of assets
7,960

 
(1,969
)
 
5,991

Net income attributable to common stockholders
$
17,167

 
$
(2,164
)
 
$
15,003

Net income per share of common stock—basic:
 
 
 
 
 
Continuing operations
$
0.04

 
$
(0.01
)
 
$
0.03

Net income per share attributable to common stockholders—basic
$
0.04

 
$
(0.01
)
 
$
0.03

Net income per share of common stock—diluted:
 
 
 
 
 
Continuing operations
$
0.04

 
$
(0.01
)
 
$
0.03

Net income per share attributable to common stockholders—diluted
$
0.04

 
$
(0.01
)
 
$
0.03

Weighted average shares of common stock outstanding:
 
 
 
 
 
Basic
440,205,348

 

 
440,205,348

Diluted
440,353,965

 

 
440,353,965


15

SPIRIT REALTY CAPITAL, INC.
Notes to Consolidated Financial Statements - (continued)
September 30, 2015
(Unaudited)


The following table presents the consolidated statement of operations as previously reported, restatement adjustments and the consolidated statement of operations as restated for the three months ended September 30, 2014 (in thousands, except share and per share data):
 
As Previously Reported
 
Restatement Adjustments
 
As Restated
Revenues:
 
 
 
 
 
Rentals
$
145,591

 
$

 
$
145,591

Interest income on loans receivable
1,805

 

 
1,805

Earned income from direct financing leases
837

 

 
837

Tenant reimbursement income
3,308

 

 
3,308

Other income and interest from real estate transactions
754

 

 
754

Total revenues
152,295

 

 
152,295

Expenses:
 
 
 
 
 
General and administrative
11,995

 
(1,615
)
 
10,380

Finance restructuring costs
(11
)
 

 
(11
)
Property costs
5,357

 

 
5,357

Real estate acquisition costs
865

 

 
865

Interest
53,535

 

 
53,535

Depreciation and amortization
62,069

 

 
62,069

Impairments
12,727

 
487

 
13,214

Total expenses
146,537

 
(1,128
)
 
145,409

Income from continuing operations before other income and income tax expense
5,758

 
1,128

 
6,886

Other income:
 
 
 
 
 
Gain on debt extinguishment
212

 

 
212

Total other income
212

 

 
212

Income from continuing operations before income tax expense
5,970

 
1,128

 
7,098

Income tax expense
(242
)
 

 
(242
)
Income from continuing operations
5,728

 
1,128

 
6,856

Discontinued operations:
 
 
 
 
 
Income from discontinued operations
288

 

 
288

Gain on disposition of assets
403

 
(163
)
 
240

Income from discontinued operations
691

 
(163
)
 
528

Income before gain on disposition of assets
6,419

 
965

 
7,384

Gain on disposition of assets
1,251

 
(410
)
 
841

Net income attributable to common stockholders
$
7,670

 
$
555

 
$
8,225

Net income per share of common stock—basic:
 
 
 
 
 
Continuing operations
$
0.02

 
$

 
$
0.02

Net income per share attributable to common stockholders—basic
$
0.02

 
$

 
$
0.02

Net income per share of common stock—diluted:
 
 
 
 
 
Continuing operations
$
0.02

 
$

 
$
0.02

Net income per share attributable to common stockholders—diluted
$
0.02

 
$

 
$
0.02

Weighted average shares of common stock outstanding:
 
 
 
 
 
Basic
396,807,656

 

 
396,807,656

Diluted
397,613,583

 

 
397,613,583


16

SPIRIT REALTY CAPITAL, INC.
Notes to Consolidated Financial Statements - (continued)
September 30, 2015
(Unaudited)


The following table presents the consolidated statement of operations as previously reported, restatement adjustments and the consolidated statement of operations as restated for the nine months ended September 30, 2015 (in thousands, except share and per share data):
 
As Previously Reported
 
Restatement Adjustments
 
As Restated
Revenues:
 
 
 
 
 
Rentals
$
473,308

 
$

 
$
473,308

Interest income on loans receivable
5,216

 

 
5,216

Earned income from direct financing leases
2,299

 

 
2,299

Tenant reimbursement income
11,903

 

 
11,903

Other income and interest from real estate transactions
5,920

 

 
5,920

Total revenues
498,646

 

 
498,646

Expenses:
 
 
 
 
 
General and administrative
36,837

 

 
36,837

Property costs
20,317

 

 
20,317

Real estate acquisition costs
2,122

 

 
2,122

Interest
168,754

 

 
168,754

Depreciation and amortization
195,460

 

 
195,460

Impairments
56,222

 
776

 
56,998

Total expenses
479,712

 
776

 
480,488

Income from continuing operations before other income and income tax expense
18,934

 
(776
)
 
18,158

Other income:
 
 
 
 
 
Gain on debt extinguishment
2,489

 

 
2,489

Total other income
2,489

 

 
2,489

Income from continuing operations before income tax expense
21,423

 
(776
)
 
20,647

Income tax expense
(707
)
 

 
(707
)
Income from continuing operations
20,716

 
(776
)
 
19,940

Discontinued operations:
 
 
 
 
 
Income from discontinued operations
90

 

 
90

Gain on disposition of assets
590

 

 
590

Income from discontinued operations
680

 

 
680

Income before gain on disposition of assets
21,396

 
(776
)
 
20,620

Gain on disposition of assets
81,986

 
(15,695
)
 
66,291

Net income attributable to common stockholders
$
103,382

 
$
(16,471
)
 
$
86,911

Net income per share of common stock—basic:
 
 
 
 
 
Continuing operations
$
0.24

 
$
(0.04
)
 
$
0.20

Discontinued operations

 

 

Net income per share attributable to common stockholders—basic
$
0.24

 
$
(0.04
)
 
$
0.20

Net income per share of common stock—diluted:
 
 
 
 
 
Continuing operations
$
0.24

 
$
(0.04
)
 
$
0.20

Discontinued operations

 

 

Net income per share attributable to common stockholders—diluted
$
0.24

 
$
(0.04
)
 
$
0.20

Weighted average shares of common stock outstanding:
 
 
 
 
 
Basic
429,387,707

 

 
429,387,707

Diluted
429,738,776

 

 
429,738,776


17

SPIRIT REALTY CAPITAL, INC.
Notes to Consolidated Financial Statements - (continued)
September 30, 2015
(Unaudited)


The following table presents the consolidated statement of operations as previously reported, restatement adjustments and the consolidated statement of operations as restated for the nine months ended September 30, 2014 (in thousands, except share and per share data):
 
As Previously Reported
 
Restatement Adjustments
 
As Restated
Revenues:
 
 
 
 
 
Rentals
$
426,212

 
$

 
$
426,212

Interest income on loans receivable
5,463

 

 
5,463

Earned income from direct financing leases
2,521

 

 
2,521

Tenant reimbursement income
9,548

 

 
9,548

Other income and interest from real estate transactions
4,312

 

 
4,312

Total revenues
448,056

 

 
448,056

Expenses:
 
 
 
 
 
General and administrative
33,496

 
(1,615
)
 
31,881

Finance restructuring costs
13,022

 

 
13,022

Property costs
17,215

 

 
17,215

Real estate acquisition costs
2,372

 

 
2,372

Interest
163,926

 

 
163,926

Depreciation and amortization
184,586

 

 
184,586

Impairments
42,061

 
1,216

 
43,277

Total expenses
456,678

 
(399
)
 
456,279

Loss from continuing operations before other expense and income tax expense
(8,622
)
 
399

 
(8,223
)
Other expense:
 
 
 
 
 
Loss on debt extinguishment
(64,496
)
 

 
(64,496
)
Total other expense
(64,496
)
 

 
(64,496
)
Loss from continuing operations before income tax expense
(73,118
)
 
399

 
(72,719
)
Income tax expense
(586
)
 

 
(586
)
Loss from continuing operations
(73,704
)
 
399

 
(73,305
)
Discontinued operations:
 
 
 
 
 
Income from discontinued operations
3,621

 

 
3,621

Gain on disposition of assets
488

 
(163
)
 
325

Income from discontinued operations
4,109

 
(163
)
 
3,946

Loss before gain on disposition of assets
(69,595
)
 
236

 
(69,359
)
Gain on disposition of assets
1,683

 
(597
)
 
1,086

Net loss attributable to common stockholders
$
(67,912
)
 
$
(361
)
 
$
(68,273
)
Net (loss) income per share of common stock—basic:
 
 
 
 
 
Continuing operations
$
(0.19
)
 
$

 
$
(0.19
)
Discontinued operations
0.01

 

 
0.01

Net loss per share attributable to common stockholders—basic
$
(0.18
)
 
$

 
$
(0.18
)
Net (loss) income per share of common stock—diluted:
 
 
 
 
 
Continuing operations
$
(0.19
)
 
$

 
$
(0.19
)
Discontinued operations
0.01

 

 
0.01

Net loss per share attributable to common stockholders—diluted
$
(0.18
)
 
$

 
$
(0.18
)
Weighted average shares of common stock outstanding:
 
 
 
 
 
Basic
382,525,614

 

 
382,525,614

Diluted
382,525,614

 

 
382,525,614


18

SPIRIT REALTY CAPITAL, INC.
Notes to Consolidated Financial Statements - (continued)
September 30, 2015
(Unaudited)


The following table presents the consolidated statement of cash flows as previously reported, restatement adjustments and the consolidated statement of cash flows as restated for the nine months ended September 30, 2015 (in thousands):
 
As Previously Reported
 
Restatement Adjustments
 
As Restated
Operating activities
 
 
 
 
 
Net income attributable to common stockholders
$
103,382

 
$
(16,471
)
 
$
86,911

Adjustments to reconcile net income attributable to common stockholders to net cash provided by operating activities:
 
 
 
 
 
Depreciation and amortization
195,460

 

 
195,460

Impairments
56,256

 
776

 
57,032

Amortization of deferred financing costs
5,893

 

 
5,893

Derivative net settlements, amortization and other interest rate hedge losses
(95
)
 

 
(95
)
Amortization of debt discounts
1,670

 

 
1,670

Stock-based compensation expense
10,757

 

 
10,757

Gain on debt extinguishment
(2,489
)
 

 
(2,489
)
Debt extinguishment costs
(3,760
)
 

 
(3,760
)
Gains on dispositions of real estate and other assets, net
(82,576
)
 
15,695

 
(66,881
)
Non-cash revenue
(15,947
)
 

 
(15,947
)
Other
165

 

 
165

Changes in operating assets and liabilities:
 
 
 
 
 
Deferred costs and other assets, net
(4,935
)
 

 
(4,935
)
Accounts payable, accrued expenses and other liabilities
7,433

 

 
7,433

Net cash provided by operating activities
271,214

 

 
271,214

Investing activities
 
 
 
 
 
Acquisitions of real estate
(703,106
)
 

 
(703,106
)
Capitalized real estate expenditures
(7,449
)
 

 
(7,449
)
Investments in loans receivable
(4,020
)
 

 
(4,020
)
Collections of principal on loans receivable and real estate assets under direct financing leases
4,450

 

 
4,450

Proceeds from dispositions of real estate and other assets
397,325

 

 
397,325

Transfers of net sales proceeds to restricted accounts pursuant to 1031 Exchanges
(2,489
)
 

 
(2,489
)
Transfers of net sales proceeds from Master Trust Release
40,126

 

 
40,126

Net cash used in investing activities
(275,163
)
 

 
(275,163
)
Financing activities
 
 
 
 
 
Borrowings under Revolving Credit Facilities
535,000

 

 
535,000

Repayments under Revolving Credit Facilities
(475,181
)
 

 
(475,181
)
Repayments under mortgages and notes payable
(347,242
)
 

 
(347,242
)
Deferred financing costs
(3,782
)
 

 
(3,782
)
Proceeds from issuance of common stock, net of offering costs
347,211

 

 
347,211

Proceeds from exercise of stock options
46

 

 
46

Purchase of shares of common stock
(1,700
)
 

 
(1,700
)
Dividends paid/distributions to equity owners
(216,231
)
 

 
(216,231
)
Transfers from reserve/escrow deposits with lenders
17,857

 

 
17,857

Net cash used in financing activities
(144,022
)
 

 
(144,022
)
Net decrease in cash and cash equivalents
(147,971
)
 

 
(147,971
)
Cash and cash equivalents, beginning of period
176,181

 

 
176,181

Cash and cash equivalents, end of period
$
28,210

 
$

 
$
28,210


19

SPIRIT REALTY CAPITAL, INC.
Notes to Consolidated Financial Statements - (continued)
September 30, 2015
(Unaudited)


The following table presents the consolidated statement of cash flows as previously reported, restatement adjustments and the consolidated statement of cash flows as restated for the nine months ended September 30, 2014 (in thousands):
 
As Previously Reported
 
Restatement Adjustments
 
As Restated
Operating activities
 
 
 
 
 
Net loss attributable to common stockholders
$
(67,912
)
 
$
(361
)
 
$
(68,273
)
Adjustments to reconcile net loss attributable to common stockholders to net cash provided by operating activities:
 
 
 
 
 
Depreciation and amortization
184,586

 

 
184,586

Impairments
42,061

 
1,216

 
43,277

Amortization of deferred financing costs
4,084

 

 
4,084

Derivative net settlements, amortization and other interest rate hedge losses
(83
)
 

 
(83
)
Amortization of debt premiums
(821
)
 

 
(821
)
Stock-based compensation expense
8,503

 

 
8,503

Loss on debt extinguishment
64,496

 

 
64,496

Debt extinguishment costs
(59,069
)
 

 
(59,069
)
Gains on dispositions of real estate and other assets, net
(2,171
)
 
760

 
(1,411
)
Non-cash revenue
(12,877
)
 

 
(12,877
)
Other
274

 
(1,615
)
 
(1,341
)
Changes in operating assets and liabilities:
 
 
 
 
 
Deferred costs and other assets, net
(3,111
)
 

 
(3,111
)
Accounts payable, accrued expenses and other liabilities
(3,248
)
 

 
(3,248
)
Net cash provided by operating activities
154,712

 

 
154,712

Investing activities
 
 
 
 
 
Acquisitions of real estate
(569,806
)
 

 
(569,806
)
Capitalized real estate expenditures
(3,244
)
 

 
(3,244
)
Collections of principal on loans receivable and real estate assets under direct financing leases
4,641

 

 
4,641

Proceeds from dispositions of real estate and other assets
37,886

 

 
37,886

Transfers of net sales proceeds from restricted accounts pursuant to 1031 Exchanges
20,784

 

 
20,784

Transfers of net sales proceeds to Master Trust Release
(20,240
)
 

 
(20,240
)
Net cash used in investing activities
(529,979
)
 

 
(529,979
)
Financing activities
 
 
 
 
 
Borrowings under Revolving Credit Facilities
515,535

 

 
515,535

Repayments under Revolving Credit Facilities
(425,219
)
 

 
(425,219
)
Borrowings under Convertible Notes
757,500

 

 
757,500

Repayments under mortgages and notes payable
(562,104
)
 

 
(562,104
)
Deferred financing costs
(20,011
)
 

 
(20,011
)
Proceeds from issuance of common stock, net of offering costs
287,454

 

 
287,454

Proceeds from exercise of stock options
183

 

 
183

Offering costs paid on equity component of Convertible Notes
(1,609
)
 

 
(1,609
)
Purchase of shares of common stock
(2,920
)
 

 
(2,920
)
Consent fees paid to lenders

 

 

Dividends paid/distributions to equity owners
(189,510
)
 

 
(189,510
)
Transfers to reserve/escrow deposits with lenders
(490
)
 

 
(490
)
Net cash provided by financing activities
358,809

 

 
358,809

Net decrease in cash and cash equivalents
(16,458
)
 

 
(16,458
)
Cash and cash equivalents, beginning of period
66,588

 

 
66,588

Cash and cash equivalents, end of period
$
50,130