EXHIBIT 99.3

  

American Realty Capital Properties, Inc.

Pro Forma Consolidated Balance Sheet

 

The following unaudited pro forma Consolidated Balance Sheet is presented as American Realty Capital Properties, Inc. (“the Company” or “ARCP”) had acquired CapLease, Inc. (“CapLease”) in a cash transaction as of March 31, 2013. In conjunction with the merger, the Company will redeem all the outstanding preferred stock of CapLease for $25.00 per share, as well as exchange all of the outstanding shares of CapLease’s common stock including common stock equivalents (partnership units and restricted shares) for $8.50 per share in exchange for all of the assets and liabilities of CapLease (“Merger”).

 

The Merger is expected to close in the third quarter of 2013. However, as of June 14, 2013, the consummation of the Merger has not occurred and, although the closing of the Merger is subject to a “go-shop period” whereby CapLease is able to solicit other bids for the purchase of CapLease from other parties, a vote by the CapLease common stockholders and other customary conditions, and therefore there can be no assurance that the Merger will be consummated, the Company believes that the completion of the Merger is probable.  Accordingly, the Company cannot assure that the Merger as presented in the pro forma consolidated balance sheet and statements of operations will be completed based on the terms in the Merger agreement or at all.

 

This financial statement should be read in conjunction with the unaudited pro forma Consolidated Statement of Operations and the Company’s historical financial statements and notes thereto. The pro forma Consolidated Balance Sheet is unaudited and is not necessarily indicative of what the actual financial position would have been had the Company acquired CapLease as of March 31, 2013, nor does it purport to present the future financial position of the Company.

 

American Realty Capital Properties, Inc.

Unaudited Pro Forma Consolidated Balance Sheet

March 31, 2013

(In thousands)

 

			ARCP Historical (1)				Pro Forma Subsequent Adjustments (2)				ARCP as Adjusted				CapLease Historical (3)				Pro Forma Adjustments (4)				ARCP Pro Forma
Assets
Real estate investments, at cost:
Land		$	298,280			$	12,820			$	311,100			$	223,544			$	1,503	(5)		$	536,147
Buildings, fixtures and improvements			1,521,505				73,057				1,594,562				1,452,218				9,761	(5)			3,056,541
Construction in progress - land			-								-				1,521				-				1,521
Construction in progress - building and improvements			-								-				17,788				-				17,788
Acquired intangible lease assets			241,501				10,144				251,645				171,393				1,152	(5)			424,190
Total real estate investments, at cost			2,061,286				96,021				2,157,307				1,866,464				12,416				4,036,187
Less: accumulated depreciation and amortization			(81,207	)			-				(81,207	)			(324,495	)			324,495	(6)			(81,207
Total real estate investments, net			1,980,079				96,021				2,076,100				1,541,969				336,911				3,954,980
Cash and cash equivalents			52,412				888,979				941,391				71,869				(896,652	)(7)			116,608
Investment securities, at fair value			4				-				4				59,929				-				59,933
Restricted cash			1,287				-				1,287				449				-				1,736
Prepaid expenses and other assets			15,397				-				15,397				74,684				(32,023	)(11)			58,058
Loans held for investment, net			-				-				-				25,334				4,053	(8)			29,387
Goodwill and other intangible assets			-				-				-				-				105,569	(9)			105,569
Deferred costs, net			38,244				-				38,244				10,022				(10,022	)(10)			38,244
Assets held for sale			679				-				679				-				-				679
Total assets		$	2,088,102			$	985,000			$	3,073,102			$	1,784,256			$	(492,164	)		$	4,365,194
Liabilities and Equity
Mortgage notes payable		$	265,118			$	-			$	265,118			$	1,020,207			$	65,428	(10)			1,350,753
Derivatives, at fair value			5,012				-				5,012				-				-				5,012
Secured term loan			-				-				-				66,485				(3,363	)(10)			63,122
Unsecured credit facility			640,000				85,000				725,000				-				-				725,000
Secured credit agreements			-				-				-				57,009				-				57,009
Convertible senior notes			-								-				19,210				(5	)(10)			19,205
Accounts payable, accrued expenses and other liabilites			6,589				-				6,589				57,780				(99	)(11)			64,270
Deferred rent			5,270				-				5,270				-				-				5,270
Other long-term debt			-								-				30,930				(4,173	)(10)			26,757
Distributions payable			92				-				92				9,683				-				9,775
Total liabilities			922,081				85,000				1,007,081				1,261,304				57,788				2,326,173
Series A convertible preferred stock			5				-				5				-				-				5
Series B convertible preferred stock			3				-				3				-				-				3
Series C convertible preferred stock			-				284				284				-				-				284
Redeemable preferred			-				-				-				171,110				(171,110	)(12)			-
Common stock			1,543				294				1,837				795				(795	)(12)			1,837
Additional paid-in capital			1,335,863				899,422				2,235,285				350,425				(350,425	)(12)			2,235,285
Accumulated other comprehensive loss			(5,018	)			-				(5,018	)			(399	)			399	(13)			(5,018
Accumulated deficit			(290,484	)			-				(290,484	)			-				(27,000	)(14)			(317,484
Total stockholders' equity			1,041,912				900,000				1,941,912				521,931				(548,931	)			1,914,912
Non-controlling interests			124,109				-				124,109				1,021				(1,021	)(15)			124,109
Total equity			1,166,021				900,000				2,066,021				522,952				(549,952	)			2,039,021
Total liabilities and equity		$	2,088,102			$	985,000			$	3,073,102			$	1,784,256			$	(492,164	)		$	4,365,194

 

 

American Realty Capital Properties, Inc.

Notes to Unaudited Pro Forma Consolidated Balance Sheet

 

Pro Forma Consolidated Balance Sheet as of March 31, 2013:

 

(1)

Reflects the historical Balance Sheet of American Realty Capital Properties, Inc. for the period indicated.

 

(2)

Reflects adjustments (1) to record ARCP property acquisitions from April 1, 2013 to May 31, 2013, and borrowings on the Company’s unsecured credit facility used to finance the property acquisitions, to best reflect the current portfolio and (2) for the issuance on June 7, 2013, pursuant to private placement transactions for which definitive agreements were entered into on June 4, 2013, of (i) 29.4 million shares of common stock for aggregate gross proceeds of $455.0 million and (ii) 28.4 million shares of Series C Convertible Preferred Stock for aggregate gross proceeds of $445.0 million. The Series C Convertible Preferred Stock will pay a 5.81% dividend and, at the Company's option, is redeemable for cash or convertible to common stock (subject to restrictions on the number of shares that can be issued, with the balance redeemed for cash) upon certain events. In connection with the private placement transactions described above, on June 7, 2013, the Company issued to the common stock investors 29.4 million contingent value rights and to the Series C Convertible Preferred Stock investors 28.4 million contingent value rights, which may entitle each holder of the contingent value rights to a cash payment in the future depending on certain value metrics based on the future performance of the Company's common stock, subject to certain limits. This Pro Forma Balance Sheet excludes any potential cash payments in respect of the contingent value rights because such potential cash payment, if any, cannot be determined with any degree of certainty.

 

(3)

Reflects the historical Balance Sheet of CapLease for the period indicated. Balances exclude the subsequent issuance of 9.4 million shares of CapLease’s common stock for proceeds of $53.8 million. Proceeds of $17.9 million were used to pay mortgage debt. These shares will be exchanged for $79.9 million in conjunction with the Merger.

 

(4)

Reflects pro forma adjustments to record the assets and liabilities of CapLease at their fair values and record cash consideration of $869.7 million paid to CapLease’s shareholders and estimated Merger related costs of $27.0 million.

  

The preliminary purchase price allocation to assets acquired and liabilities assumed is provided throughout these notes.

 

(5)

The Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets acquired based on their respective fair values. Tangible assets include land, land improvements, buildings, fixtures and tenant improvements on an as-if vacant basis. The Company utilizes various estimates, processes and information to determine the as-if vacant property value. Estimates of value are made using customary methods, including data from appraisals, comparable sales, discounted cash flow analysis and other methods. Amounts allocated to land, land improvements, buildings, fixtures, and tenant improvements are based on cost segregation studies performed by independent third-parties or the Company's analysis of comparable properties in its portfolio. Identifiable intangible assets include amounts allocated to acquire leases for above- and below-market lease rates and the value of in-place leases. Depreciation is computed using the straight-line method over the estimated lives of forty years for buildings, fifteen years for land improvements, five years for fixtures and the shorter of the useful life or the remaining lease term for tenant improvements.

 

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 in the 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 is estimated to be nine months. Estimates of costs to execute similar leases including leasing commissions, legal and other related expenses are also utilized. The value of in-place leases is amortized to expense over the initial term of the respective lease, which ranges from six to 13 years. If a tenant terminates its lease, the unamortized portion of the in-place lease value and intangible is charged to expense.

 

Above-market and below-market in-place lease values, if any, 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. The capitalized above-market lease intangibles are amortized as a decrease to rental income over the remaining term of the lease.  The capitalized below-market lease values will be amortized as an increase to rental income over the remaining term and any fixed rate renewal periods provided within the respective leases. In determining the amortization period for below-market lease intangibles, the Company initially will consider, and periodically evaluate on a quarterly basis, the likelihood that a lessee will execute the renewal option.  The likelihood that a lessee will execute the renewal option is determined 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 making estimates of 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 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 allocations presented in the accompanying Pro Forma Consolidated Balance Sheet are substantially complete; however, there are certain items that will be finalized once additional information is received. Accordingly, these allocations are subject to revision when final information is available, although the Company does not expect future revisions to have a significant impact on its financial position or results of operations.

 

(6)

Reflects the elimination of CapLease’s historical accumulated depreciation and amortization upon acquisition.

 

(7)

Reflects cash used for Merger related activities including $27.0 million for estimated closing costs.

 

(8)

Reflects an adjustment to the fair value for loans held for investment based upon discounted cash flows and estimates of current interest rates for loans with similar terms.

 

(9)

Amount represents preliminary adjustment to record goodwill and other intangible assets including intangibles for customer relationships. Amount is preliminary and will be finalized once the purchase price allocation to the assets and liabilities acquired is finalized.

 

(10)

Reflects an adjustment to the fair value of assumed debt based on discounted cash flows and estimates of current interest rates for similar debt instruments, and the write off of the related deferred costs.

 

(11)

Represents the elimination of CapLease’s existing straight-line rent adjustments.

  

(12)

Represents the elimination of CapLease’s capital balances.

 

(13)

Represents an adjustment for the elimination of CapLease’s accumulated other comprehensive income balance.

 

(14)

Represents estimated Merger related costs.

 

(15)

Represents an adjustment for the elimination of CapLease’s non-controlling interests related to partnership units, which will be canceled and converted to the right to receive $8.50 per share.

 

 

 

 

 

American Realty Capital Properties, Inc.

Unaudited Pro Forma Consolidated Statement of Operations

For the Three Months Ended March 31, 2013 and for the Year Ended December 31, 2012

 

The following unaudited pro forma Consolidated Statements of Operations are presented as if the Company had acquired CapLease at the beginning of each period presented. These financial statements should be read in conjunction with the unaudited pro forma Consolidated Balance Sheet and the Company’s historical financial statements and notes thereto. The pro forma Consolidated Statements of Operations are unaudited and are not necessarily indicative of what the actual operations would have been had the Company consummated this transaction at the beginning of the periods nor does it purport to present the future operations of the Company.

 

American Realty Capital Properties, Inc.

Unaudited Pro Forma Consolidated Statement Of Operations

For the three months ended March 31, 2013

(In thousands except per share data)

 

 

			ARCP Historical (1)				Pro Forma Subsequent Adjustments (2)				ARCP as Adjusted				CapLease Historical (3)				Pro Forma Merger Adjustments (4)				ARCP Pro Forma
Revenues:
Rental income		$	38,378			$	5,101			$	43,479			$	35,299			$	814	(5)		$	79,592
Operating expense reimbursements			1,822				-				1,822				5,990				-				7,812
Other revenues			-				-				-				2,063				-				2,063
Total revenues			40,200				5,101				45,301				43,352				814				89,467
Operating expenses:
Acquisition related			5,582				-				5,582				-				-				5,582
Merger and other transaction related			137,769				-				137,769				-				-				137,769
Property operating			2,404				-				2,404				9,073				-				11,477
General and administrative			1,307				-				1,307				3,144				-				4,451
Equity-based compensation			876				-				876				775				(775	)(6)			876
Depreciation and amortization			25,109				3,559				28,668				12,026				9,435	(7)			50,129
Operating fees to affiliates			-				-				-				-				4,786	(8)			4,786
Total operating expenses			173,047				3,559				176,606				25,018				13,446				215,070
Operating income (loss)			(132,847	)			1,542				(131,305	)			18,334				(12,632	)			(125,603	)
Other income (expenses):
Interest expense			(6,202	)			(985	)			(7,187	)			(16,297	)			2,887	(9)			(20,597	)
Income from investment securities			218				-				218				-				-				218
Gain on sale of investment securities			451				-				451				-				-				451
Loss on derivative instruments			(5	)			-				(5	)			-				-				(5	)
Other income			35				-				35				-				-				35
Total other expenses			(5,503	)			(985	)			(6,488	)			(16,297	)			2,887				(19,898	)
Income (loss) from continuing operations			(138,350	)			557				(137,793	)			2,037				(9,745	)			(145,501	)
Net income (loss) from continuing operations attributable to non-controlling interests			432				(33	)			399				3				8,059	(10)			8,461
Net income (loss) from continuing operations attributable to stockholders			(137,918	)			524				(137,394	)			2,040				(1,686	)			(137,040	)
Discontinued operations:
Income (loss) from operations of held for sale properties			(16	)			-				(16	)			-				-				(16	)
Loss on held for sale properties			14				-				14				-				-				14
Net loss from discontinued operations			(2	)			-				(2	)			-				-				(2	)
Net from discontinued operations attributable to non-controlling interests			-				-				-				-				-				-
Net from discontinued operations attributable to stockholders			(2	)			-				(2	)			-				-				(2	)
Net income (loss)			(138,352	)			557				(137,795	)			2,037				(9,745	)			(145,503	)
Dividends allocable to preferred shares			-								-				(3,538	)			3,538	(11)			-
Net income (loss) attributable to non-controlling interests			432				(33	)			399				3				8,059	(10)			8,461
Net income (loss) attributable to stockholders		$	(137,920	)		$	524			$	(137,396	)		$	(1,498	)		$	1,852			$	(137,042	)
Earnings per share:
Basic		$	(0.90	)										$	(0.02	)						$	(0.75	)
Fully diluted		$	(0.90	)										$	(0.02	)						$	(0.75	)
Weighted average common shares: (12)
Basic and diluted			153,339				29,412								76,182								182,751

 

 

 

 

 

American Realty Capital Properties, Inc.

Unaudited Pro Forma Consolidated Statement Of Operations

For the year ended December 31, 2012

(In thousands except per share data)

 

 

			ARCP Historical (1)				Pro Forma Subsequent Adjustments (2)				ARCP as Adjusted				CapLease Historical (3)				Pro Forma Merger Adjustments (4)				ARCP Pro Forma
Revenues:
Rental income		$	64,791			$	109,123			$	173,914			$	137,126			$	7,582	(5)		$	318,622
Operating expense reimbursements			2,002				-				2,002				16,287				-				18,289
Other revenues			-				-				-				8,629				-				8,629
Total revenues			66,793				109,123				175,916				162,042				7,582				345,540
Operating expenses:
Acquisition related			42,761				-				42,761				-				-				42,761
Merger and other transaction related			2,603				-				2,603				-				-				2,603
Property operating			3,484				-				3,484				27,798				-				31,282
General and administrative			3,912				-				3,912				11,642				-				15,554
Equity-based compensation			1,180				-				1,180				3,200				(3,200	)(6)			1,180
Depreciation and amortization			40,700				73,972				114,672				48,189				73,972	(7)			236,833
Operating fees to affiliates			212				-				212				-				19,145	(8)			19,357
Other expenses			-				-				-				1,001				-				1,001
Total operating expenses			94,852				73,972				168,824				91,830				89,917				350,571
Operating income (loss)			(28,059	)			35,151				7,092				70,212				(82,335	)			(5,031	)
Other income (expenses):
Interest expense			(11,856	)			(16,891	)			(28,747	)			(67,137	)			12,985	(9)			(82,899	)
Income from investment securities, net			534				-				534				1,009				-				1,543
Gain on extinguishment of debt, net			-				-				-				10,790				-				10,790
Other income, net			426				-				426				-				-				426
Total other expenses			(10,896	)			(16,891	)			(27,787	)			(55,338	)			12,985				(70,140	)
Income (loss) from continuing operations			(38,955	)			18,260				(20,695	)			14,874				(69,350	)			(75,171	)
Net income (loss) from continuing operations attributable to non-controlling interests			255				(881	)			(626	)			27				2,627	(10)			2,028
Net income (loss) from continuing operations attributable to stockholders			(38,700	)			17,379				(21,321	)			14,901				(66,723	)			(73,143	)
Discontinued operations:
Loss from operations of held for sale properties			(145	)			-				(145	)			(1,372	)			-				(1,517	)
Loss on held for sale properties			(600	)			-				(600	)			-				-				(600	)
Loss on investments, net			-				-				-				(15,229	)			-				(15,229	)
Net loss from discontinued operations			(745	)			-				(745	)			(16,601	)			-				(17,346	)
Net from discontinued operations attributable to non-controlling interests			46				-				46				-				801				847
Net from discontinued operations attributable to stockholders			(699	)			-				(699	)			(16,601	)			801				(16,499	)
Net income (loss)			(39,700	)			18,260				(21,440	)			(1,727	)			(69,350	)			(92,517	)
Dividends allocable to preferred shares			-				-				-				(10,003	)			10,003	(11)			-
Net income (loss) attributable to non-controlling interests			301				(881	)			(580	)			27				3,428	(10)			2,875
Net income (loss) attributable to stockholders		$	(39,399	)		$	17,379			$	(22,020	)		$	(11,703	)		$	(55,919	)		$	(89,642	)
Earnings per share:
Basic		$	(0.39	)										$	(0.17	)						$	(0.68	)
Fully diluted		$	(0.39	)										$	(0.17	)						$	(0.68	)
Weighted average common shares:
Basic and diluted			102,514				29,412								67,121								131,926

 

 

 

American Realty Capital Properties, Inc.

Notes to Unaudited Pro Forma Consolidated Statements of Operations

 

(1)

Reflects the historical Statement of Operations of the Company for the period indicated. The balances for the year ended December 31, 2012 reflect the effect of the February 2013 merger of the Company and American Realty Capital Trust III, Inc. (“ARCT III”) as presented in the Current Report on Form 8-K/A filed with the Securities and Exchange Commission on May 8, 2013.

 

(2)

Adjustments reflect the annualization of certain ARCP lease rental income, lease asset depreciation and amortization and interest expense on additional financing used for ARCP property acquisitions closed in 2012 and up to May 31, 2013 as if they were made at the beginning of each period.

 

(3)

Reflects the historical Statement of Operations of CapLease for the periods indicated. Certain balances reported in CapLease’s December 31, 2012 audited financial statements have been reclassified to conform to ARCP’s presentation.

 

(4)

Adjustments and pro forma balances reflect adjustments related to the acquisition of CapLease by the Company.

 

(5)

Adjustment reflects an adjustment to straight-line rent for the CapLease properties as if the properties had been acquired at the beginning of each period.

  

(6)

Adjustment represents expenses of CapLeases equity compensation plan for outstanding restricted shares. As part of the Merger agreement, all unamortized restricted shares will become fully vested and therefore this expense will no longer be recognized.

 

(7)

Adjustment reflects the depreciation and amortization expense that would have been recorded if the CapLease properties acquired in conjunction with the Merger had been acquired as of the beginning of each period based on the estimated fair values assigned to each asset class.

 

(8)

Adjustment reflects recognition of full contractual asset management fees due to the Company’s external manager, if the external manager had charged these fees in each period. Fees are 0.50% annually for average unadjusted book value of real estate assets up to $3.0 billion and 0.40% annually for average unadjusted book value of real estate assets in excess of $3.0 billion.

 

(9)

Adjustment to interest expense represents the amortization of debt fair value adjustments and the effect of the elimination of CapLease’s deferred financing costs.

      

(10)

Adjustment represents the allocation to non-controlling interests for the net effect of the Merger adjustments.

 

(11)

Adjustment reflects the redemption of CapLease’s preferred stock.

 

(12)

Weighted average shares include the pro forma effect of certain transactions which occurred in conjunction with the Compnay’s merger with ARCT III, including the repurchase of 27.7 million shares of common stock, based on the conversion ratio of 0.95 share of ARCP common stock to 1 share of ARCT III common stock in conjunction with the merger of ARCP and ARCT III in February 2013. Excludes the effect of restricted shares and partnership equity units convertible to common stock as the effect would be anti-dilutive.

 

 

American Realty Capital Properties, Inc.

Unaudited Supplementary Information

(In thousands except per share data)

 

The following unaudited supplementary information presents certain information related to management's intentions to repay certain obligations of CapLease upon the consumation of the merger and their effect on net income and funds from operations and adjusted funds from operations, as well as managments estimates of the expected cost savings for general and administrative expense resulting from the elimination of duplicative costs and processes. These adjustments are not required by the merger agreement between the Company and CapLease (the “Merger Agreement”) but were contemplated by management when entering into the Merger Agreement. There can be no assurances that management will satisfy these obligations or that the Company will realize the expected costs savings detailed below once the Merger is comsumated, nor can their be any assurance of the timing of the Company's satisfaction of these obligations or implementation of costs saving strategies.

 

		Three Months Ended March 31, 2013								Year Ended December 31, 2012
		ARCP Historical				ARCP Pro Forma Including Caplease				ARCP Historical				ARCP Pro Forma Including Caplease
Unaudited pro forma net loss attributable to stockholders		$	-			$	(137,042	)		$	-			$	(89,669	)
General and administrative expense savings			-				3,019				-				11,142
Expense savings from the early termination of $609.2 million of CapLease debt			-				8,399				-				33,595
Adjustment for reduced amortization of CapLease fair value adjustments			-				(1,223	)			-				(4,893	)
Expected interest expense on $257.3 million additional borrowing on the Company's unsecured credit facility used to fund debt and preferred stock repayments			-				(1,544	)			-				(6,175	)
Amount attributed to minority interests			-				(510	)			-				(1,624	)
Adjusted net loss attributable to stockholders							(128,901	)							(57,624	)
Unaudited Pro Forma Funds From Operations and Adjusted Funds From Operations
Adjusted net loss attributable to stockholders		$	(137,920	)		$	(128,901	)		$	(39,399	)		$	(57,624	)
Merger and other transaction costs			137,769				137,769				2,603				2,603
Loss on held for sale properties			(14	)			(14	)			600				600
Realized gain/losses on sale of securities and early extinguishment of debt			(451	)			(2,463	)			-				(10,790	)
Depreciation and amortization			25,109				50,129				40,700				236,833
Total Funds from Operations (FFO)			24,493				56,520				4,504				171,622
Acquisition related			5,582				5,582				42,761				42,761
Core FFO			30,075				62,102				47,265				214,383
AFFO adjustments:
Amortization of above and below-market lease asset			63				(406	)			117				(722	)
Amortization of deferred financing costs			1,108				1,332				841				1,507
Straight-line rent			(1,370	)			937				(2,008	)			(3,350	)
Non-cash equity compensation expense			876				876				1,180				1,180
AFFO		$	30,752			$	64,841			$	47,395			$	212,998
Weighted average common shares (1):
Basic			153,339				210,588				151,238				208,487
Fully Diluted			154,322				239,969				152,289				237,936
FFO per share:
Basic		$	0.16			$	0.27			$	0.03			$	0.82
Diluted		$	0.16			$	0.24			$	0.03			$	0.72
AFFO per share:
Basic		$	0.20			$	0.31			$	0.31			$	1.02
Diluted		$	0.20			$	0.27			$	0.31			$	0.90

 

(1)	Weighted average shares include the pro forma effect of the repurchase of 27.7 million shares of common stock, based on the conversion ratio of 0.95 share of ARCP common stock to 1 share of ARCT III common stock in conjunction with the merger of ARCP and ARCT III in February 2013, as well as the hypotentical issuance of an additional 27.8 million shares of common stock at $16.40 per share to fund the anticipated early termination of debt and repayment of preferred stock detailed in the adjustments detailed above.
	The actual issuance of common stock will be based on a number of factors including the availability of capital under the Company's existing line of credit, availability of capital with new borrowing instruments, as applicable, and the opportunity to further issue preferred securities.