2019 ANNUAL REPORT 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 LETTER FROM THE CEO Dear Stockholder, As a result, Fitch, a major credit rating agency, upgraded the Company from ‘BBB-‘ to ‘BBB’ with a stable outlook. We realized Over the last five years, VEREIT has worked hard to revitalize the the benefits of our credit rating upgrade in savings in our credit Company following accounting issues that occurred under the facility of 25 basis points on the term loan, 20 basis points on organization’s prior management team. 2019 represented a the revolver, and 5 basis points on the facility fee. In addition, transformative year for the Company as we realized the our investment grade ratings from our other major rating completion of the goals set forth in our 2015 business plan and agencies remain intact at ‘BBB-‘ or equivalent. With litigation we resolved our last legacy issue, litigation. VEREIT has behind us, the balance sheet remains very liquid with a well-lad- improved portfolio quality, enhanced the strength of its balance dered maturity schedule. sheet and maintained a consistent management team. The market has recognized these achievements as evidenced by VEREIT’s 2019 total stockholder return of 37.3%. Additionally, Maintained Tenured Leadership the Company announced the formation of two institutional The experience of VEREIT’s team will continue to be an asset as partnerships increasing the Company’s sourcing opportunities the Company moves forward. The average tenure for Senior while utilizing VEREIT’s in-house infrastructure to maximize the Director colleagues and above is more than eight years at value of the enterprises. The partnerships also provide a more VEREIT. The knowledge, professional relationships and experi- optimal business model that allows for capital sources other ence that comes with this tenure is invaluable. Over the last five than the public equity markets. These accomplishments, along years VEREIT’s team has worked diligently to strengthen the with a well-diversified portfolio, put the Company in a good organization through a number of avenues, including employee position for the future. engagement and corporate responsibility. The Company has established a more robust program focusing on environmental, Further Diversified Portfolio and Asset Management social and governance accountability. Our leadership team has spearheaded these initiatives and will continue to report the Diversification is an important component in protecting income Company’s efforts to our Board of Directors. Because of the and generating consistent earnings regardless of macroeco- tested experience of the Company’s leadership team, VEREIT nomic conditions. In 2019, VEREIT continued to take advantage will continue to perform in a disciplined, transparent and of capital markets by selling $1.06 billion of assets and acquiring consistent manner. $425.6 million of assets in order to improve portfolio metrics. Concentrations were improved with additional tenant diversifi- cation and office exposure continuing to decrease. Red Lobster, Conclusion our top tenant, was reduced from 5.5% to 4.7% of annualized Since the end of 2019, there has been increased uncertainty in rental income. The Company also decreased Walgreens from the market and global economies as a result of the coronavirus being the second largest tenant exposure to the fourth and (COVID-19). We are pleased that we further stabilized the decreased Citizens Bank from 1.3% to 0.8% of annualized rental Company over the last five years to help VEREIT weather more income. Through consistent portfolio management, VEREIT’s volatile conditions. Our tenured leadership team has experi- top 10 tenant concentration was reduced from 27.2% at the end enced years of changing economic cycles and will maintain a of 2018 to 26.7% at the end of 2019. VEREIT’s portfolio remains measured approach in 2020. VEREIT will continue to prioritize extremely diversified geographically and by industry type. At the diversification of our portfolio, the health of the investment year-end, 38.6% of annual rental income was generated from grade balance sheet, maintaining liquidity and the strength of investment-grade rated companies and over 60.0% from public our knowledgeable leadership team. companies, providing greater tenant transparency. Occupancy remained healthy at 99.1% and 3.7 million square feet were We are proud of the positive transformation that has occurred leased by VEREIT in 2019, as the teams actively manage the at the Company and we thank you for your ongoing trust in portfolio. VEREIT’s portfolio of quality single-tenant assets has VEREIT. been strengthened over the years. Capital Activity and Balance Sheet VEREIT has been persistent in prudent capital allocation and the management of its investment-grade balance sheet. Since 2015, Glenn J. Rufrano | Chief Executive Officer | VEREIT, Inc. total debt has been reduced from $10.4 billion to $5.7 billion and Net Debt to Normalized EBITDA has decreased from 7.5x to 5.7x. Additionally, preferred stock has been reduced by $300 million. In 2019, the Company announced the global litigation settlement at a net cost to the Company of $765.5 million which was financed with an equity offering of $887 million. VEREIT also issued $129 million under the Company’s ATM program and $600 million aggregate principal amount of 3.1% senior notes due in 2029. This kept debt ratios low and extended the duration of and further laddered the maturity schedule. 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, 2019 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to __________ Commission file numbers: 001-35263 and 333-197780 VEREIT, Inc. VEREIT Operating Partnership, L.P. (Exact name of registrant as specified in its charter) Maryland (VEREIT, Inc.) 45-2482685 Delaware (VEREIT Operating Partnership, L.P.) 45-1255683 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 2325 E. Camelback Road, 9th Floor Phoenix AZ 85016 (Address of principal executive offices) (Zip Code) (800) 606-3610 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934: Title of each class: Trading symbol(s): Name of each exchange on which registered: Common Stock $0.01 par value per share (VEREIT, Inc.) VER New York Stock Exchange 6.70% Series F Cumulative VER PRF New York Stock Exchange Redeemable Preferred Stock $0.01 par value per share (VEREIT, Inc.) Securities registered pursuant to Section 12(g) of the Securities 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 No VEREIT Operating Partnership, L.P. Yes 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 No VEREIT Operating Partnership, L.P. Yes 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 No VEREIT Operating Partnership, L.P. Yes 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 No VEREIT Operating Partnership, L.P. Yes No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. VEREIT, Inc. Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company VEREIT Operating Partnership, L.P. Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. VEREIT, Inc. VEREIT Operating Partnership, L.P. Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). VEREIT, Inc. Yes No VEREIT Operating Partnership, L.P. Yes No The aggregate market value of voting and non-voting common stock held by non-affiliates of VEREIT, Inc. as of June 28, 2019 was approximately $8.8 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 1,077,331,084 shares of common stock of VEREIT, Inc. outstanding as of February 21, 2020. 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.