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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2009
 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 000-51962
 COLE CREDIT PROPERTY TRUST, INC.
 (Exact name of registrant as specified in its charter)
 Maryland
    
    20-0939158(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification Number)2555 East Camelback Road, Suite 400Phoenix, Arizona, 85016
    
    (602) 778-8700(Address of principal executive offices; zip code)
    
    (Registrants telephone number, including area code)
 Not Applicable  (Former name, former address and former fiscal year, if changed since last report)
 þ o
 Yes o No o
 Rule 12b-2
 Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if smaller reporting company)
 o þ




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##### 



COLE CREDIT PROPERTY TRUST, INC.
INDEX
 PART I  FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Unaudited Balance Sheets as of
September 30, 2009 and December 31, 2008
    
    
    4Condensed Consolidated Unaudited Statements of Operations for
the three months and nine months ended September 30, 2009 and 2008
    
    
    5Condensed Consolidated Unaudited Statement of Stockholders
Equity for the nine months ended September 30, 2009
    
    
    6Condensed Consolidated Unaudited Statements of Cash Flows for
the nine months ended September 30, 2009 and 2008
    
    
    7Notes to Condensed Consolidated Unaudited Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    14Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    21Item 4T. Controls and Procedures
    
    
    21PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    22Item 1A. Risk Factors
    
    
    22Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    22Item 3. Defaults Upon Senior Securities
    
    
    22Item 4. Submission of Matters to a Vote of Security Holders
    
    
    22Item 5. Other Information
    
    
    22Item 6. Exhibits
    
    
    22Signatures
    
    
    23Exhibit 31.1Exhibit 31.2Exhibit 32.1
   2




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PART I
FINANCIAL INFORMATION
    3




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COLE CREDIT PROPERTY TRUST, INC.
 
 CONDENSED CONSOLIDATED UNAUDITED BALANCE SHEETS
  September 30,
    
    
    December 31,2009
    
    
    2008ASSETSInvestment in real estate assets:Land
    
    $
    55,317
    
    
    $
    55,321Buildings and improvements, less accumulated
depreciation of $16,352 and $13,588,
respectively
    
    
    107,199
    
    
    
    109,963Acquired intangible lease assets, less
accumulated amortization of $8,689 and $7,246,
respectively
    
    
    19,649
    
    
    
    21,092Total investment in real estate assets, net
    
    
    182,165
    
    
    
    186,376Cash and cash equivalents
    
    
    1,194
    
    
    
    923Rents and tenant receivables, less allowance
for doubtful accounts of $178 and $167,
respectively
    
    
    2,556
    
    
    
    2,084Prepaid expenses and other assets
    
    
    108
    
    
    
    104Deferred financing costs, less accumulated
amortization of $1,713 and $1,415,
respectively
    
    
    857
    
    
    
    1,155Total assets
    
    $
    186,880
    
    
    $
    190,642LIABILITIES AND STOCKHOLDERS EQUITYMortgage notes payable and line of credit
    
    $
    118,727
    
    
    $
    117,977Accounts payable and accrued expenses
    
    
    682
    
    
    
    757Due to affiliates
    
    
    40
    
    
    
    167Acquired below market lease intangibles, less
accumulated amortization of $967 and $814,
respectively
    
    
    1,272
    
    
    
    1,425Distributions payable
    
    
    589
    
    
    
    589Deferred rent and other liabilities
    
    
    192
    
    
    
    590Total liabilities
    
    
    121,502
    
    
    
    121,505STOCKHOLDERS EQUITY:Preferred stock, $0.01 par value; 10,000,000
shares authorized, none issued and outstanding
    
    
    
    
    
    
    Common stock, $0.01 par value; 90,000,000
shares authorized, 10,090,951 shares issued
and outstanding
    
    
    101
    
    
    
    101Capital in excess of par value
    
    
    90,424
    
    
    
    90,424Accumulated distributions in excess of earnings
    
    
    (25,147
    )
    
    
    (21,388
    )Total stockholders equity
    
    
    65,378
    
    
    
    69,137Total liabilities and stockholders equity
    
    $
    186,880
    
    
    $
    190,642
   4




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COLE CREDIT PROPERTY TRUST, INC.
 
 CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Revenues:Rental income
    
    $
    3,944
    
    
    $
    3,984
    
    
    $
    12,001
    
    
    $
    11,954Tenant reimbursement income
    
    
    99
    
    
    
    84
    
    
    
    305
    
    
    
    251Total revenue
    
    
    4,043
    
    
    
    4,068
    
    
    
    12,306
    
    
    
    12,205Expenses:General and administrative
    
    
    94
    
    
    
    183
    
    
    
    454
    
    
    
    484Property operating expenses
    
    
    138
    
    
    
    274
    
    
    
    398
    
    
    
    515Property and asset management expenses
    
    
    118
    
    
    
    238
    
    
    
    354
    
    
    
    724Depreciation
    
    
    922
    
    
    
    921
    
    
    
    2,764
    
    
    
    2,763Amortization
    
    
    450
    
    
    
    450
    
    
    
    1,351
    
    
    
    1,351Total operating expenses
    
    
    1,722
    
    
    
    2,066
    
    
    
    5,321
    
    
    
    5,837Operating income
    
    
    2,321
    
    
    
    2,002
    
    
    
    6,985
    
    
    
    6,368Other income (expense):Interest and other income
    
    
    1
    
    
    
    4
    
    
    
    13
    
    
    
    19Interest expense
    
    
    (1,839
    )
    
    
    (1,837
    )
    
    
    (5,459
    )
    
    
    (5,470
    )Total other expense
    
    
    (1,838
    )
    
    
    (1,833
    )
    
    
    (5,446
    )
    
    
    (5,451
    )Net income
    
    $
    483
    
    
    $
    169
    
    
    $
    1,539
    
    
    $
    917Weighted average number of common
shares outstanding:Basic and diluted
    
    
    10,090,951
    
    
    
    10,090,951
    
    
    
    10,090,951
    
    
    
    10,090,951Net income per common share:Basic and diluted
    
    $
    0.05
    
    
    $
    0.02
    
    
    $
    0.15
    
    
    $
    0.09
   5




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COLE CREDIT PROPERTY TRUST, INC.
 
 CONDENSED CONSOLIDATED UNAUDITED STATEMENT OF STOCKHOLDERS EQUITY
 Common Stock
    
    
    
    
    
    
    Accumulated
    
    
    TotalNumber of
    
    
    
    
    
    
    Capital in Excess in
    
    
    Distributions in
    
    
    StockholdersShares
    
    
    Par Value
    
    
    Par Value
    
    
    Excess of Earnings
    
    
    EquityBalance, December 31, 2008
    
    
    10,090,951
    
    
    $
    101
    
    
    $
    90,424
    
    
    $
    (21,388
    )
    
    $
    69,137Distributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,298
    )
    
    
    (5,298
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,539
    
    
    
    1,539Balance, September 30, 2009
    
    
    10,090,951
    
    
    $
    101
    
    
    $
    90,424
    
    
    $
    (25,147
    )
    
    $
    65,378
   6




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COLE CREDIT PROPERTY TRUST, INC.
 
 CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS
  Nine Months Ended September 30,2009
    
    
    2008Cash flows from operating activities:Net income
    
    $
    1,539
    
    
    $
    917Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation
    
    
    2,764
    
    
    
    2,763Amortization
    
    
    1,588
    
    
    
    1,586Gain on sale of easement
    
    
    (9
    )
    
    
    Changes in assets and liabilities:Rents and tenant receivables, net of allowance
    
    
    (472
    )
    
    
    (311
    )Prepaid expenses and other assets
    
    
    (4
    )
    
    
    (46
    )Accounts payable and accrued expenses
    
    
    (75
    )
    
    
    17Due to affiliates
    
    
    (127
    )
    
    
    Deferred rent and other liabilities
    
    
    (398
    )
    
    
    113Net cash provided by operating activities
    
    
    4,806
    
    
    
    5,039Cash flows from investing activities:Investments in real estate and related assets
    
    
    
    
    
    
    (20
    )Proceeds from sale of easement
    
    
    13
    
    
    
    Net cash provided by (used in) investing activities
    
    
    13
    
    
    
    (20
    )Cash flows from financing activities:Proceeds from line of credit
    
    
    750
    
    
    
    Distributions to investors
    
    
    (5,298
    )
    
    
    (5,297
    )Deferred financing costs paid
    
    
    
    
    
    
    (48
    )Net cash used in financing activities
    
    
    (4,548
    )
    
    
    (5,345
    )Net increase (decrease) in cash and cash equivalents
    
    
    271
    
    
    
    (326
    )Cash and cash equivalents, beginning of period
    
    
    923
    
    
    
    913Cash and cash equivalents, end of period
    
    $
    1,194
    
    
    $
    587Supplemental Disclosures of Non-Cash Investing and
Financing Activities:Dividends declared and unpaid
    
    $
    589
    
    
    $
    589Supplemental Cash Flow Disclosures:Interest paid
    
    $
    5,178
    
    
    $
    5,193
   7




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COLE CREDIT PROPERTY TRUST, INC.
 
 NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
 September 30, 2009
 NOTE 1  ORGANIZATION AND BUSINESS
    NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Principles of Consolidation and Basis of Presentation
   Redemptions of Common Stock
   8




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COLE CREDIT PROPERTY TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS  (Continued)
September 30, 2009
 Reportable Segments
 Segment Reporting
 Investment In and Valuation of Real Estate Assets
  NOTE 3  FAIR VALUE MEASUREMENTS
 Fair Value Measurements and Disclosures
     Cash and cash equivalents, rents and tenant receivables and accounts payable and accrued
expenses
  9




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COLE CREDIT PROPERTY TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS  (Continued)
September 30, 2009
 Mortgage notes payable and line of credit
  NOTE 4  MORTGAGE NOTES PAYABLE AND LINE OF CREDIT
   NOTE 5  COMMITMENTS AND CONTINGENCIES
 Litigation
  Environmental Matters
  NOTE 6  RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS
    10




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COLE CREDIT PROPERTY TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS  (Continued)
September 30, 2009
      NOTE 7  ECONOMIC DEPENDENCY
   11




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COLE CREDIT PROPERTY TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS  (Continued)
September 30, 2009
 NOTE 8  NEW ACCOUNTING PRONOUNCEMENTS
 Business Combinations Business
Combinations
 Noncontrolling Interests in Consolidated
Financial Statements  an Amendment of ARB Consolidation
 Subsequent Events Subsequent Events
 The FASB Accounting Standards Codification Accounting Standards
Codification
   12




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COLE CREDIT PROPERTY TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS  (Continued)
September 30, 2009
 NOTE 9  SUBSEQUENT EVENTS
  Mortgage Notes Payable
   13




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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
  Forward-Looking Statements
    Overview
    14




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Recent Market Conditions
   Results of Operations
 Three Months Ended September 30, 2009 Compared to the Three Months Ended September 30, 2008
 Revenue
 General and Administrative Expenses.
 Property Operating Expenses.
 Property and Asset Management Fees.
  15




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Depreciation and Amortization Expenses.
 Interest and Other Income.
 Interest Expense.
 Nine Months Ended September 30, 2009 Compared to the Nine Months Ended September 30, 2008
 Revenue
 General and Administrative Expenses.
 Property Operating Expenses.
 Property and Asset Management Fees.
 Depreciation and Amortization Expenses.
 Interest and Other Income.
 Interest Expense.
  16




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Funds From Operations
    Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net income
    
    $
    483
    
    
    $
    169
    
    
    $
    1,539
    
    
    $
    917Add:Depreciation of real estate assets
    
    
    922
    
    
    
    921
    
    
    
    2,764
    
    
    
    2,763Amortization of lease related costs
    
    
    450
    
    
    
    450
    
    
    
    1,351
    
    
    
    1,351Less:Gain on sale of easement
    
    
    
    
    
    
    
    
    
    
    (9
    )
    
    
    FFO
    
    $
    1,855
    
    
    $
    1,540
    
    
    $
    5,645
    
    
    $
    5,031
  
    
    In order to recognize revenues on a straight-line basis
over the terms of the respective leases, we recognized
additional revenue by straight-lining rental revenue of
approximately $72,000 and $226,000 during the three and
nine months ended September 30, 2009, respectively, and
approximately $171,000 and $521,000 during the three and
nine months ended September 30, 2008, respectively.
    
    Amortization of deferred financing costs totaled
approximately $98,000 and $298,000 during the three and
nine months ended September 30, 2009, respectively, and
approximately $100,000 and $296,000 during the three and
nine months ended September 30, 2008, respectively.
  17




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Liquidity and Capital Resources
 Short-term Liquidity and Capital Resources
  Long-term Liquidity and Capital Resources
      18




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Payments due by period*Less Than 1
    
    
    
    
    
    
    
    
    
    
    More Than 5Total
    
    
    Year
    
    
    1-3 Years
    
    
    4-5 Years
    
    
    YearsPrincipal payments  fixed rate debt
    
    $
    117,977
    
    
    $
    43,989
    
    
    $
    14,455
    
    
    $
    26,476
    
    
    $
    33,057Interest payments  fixed rate debt
    
    
    25,894
    
    
    
    5,817
    
    
    
    11,213
    
    
    
    7,037
    
    
    
    1,827Principal payments  line of credit
    
    
    750
    
    
    
    
    
    
    
    750
    
    
    
    
    
    
    
    Interest payments  line of credit (1)
    
    
    23
    
    
    
    15
    
    
    
    8
    
    
    
    
    
    
    
    Total
    
    $
    144,644
    
    
    $
    49,821
    
    
    $
    26,426
    
    
    $
    33,513
    
    
    $
    34,884
 
 *
    
    The table above does not include amounts due to our advisor or its
affiliates pursuant to our advisory agreement because such
amounts are not fixed and determinable.(1)
    
    Based on interest rate in effect at September 30, 2009. Cash Flow Analysis
 Nine Months Ended September 30, 2009 Compared to the Nine Months Ended September 30, 2008
 Operating Activities.
 Investing Activities.
 Financing Activities.
  19




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Election as a REIT
  Inflation
  Critical Accounting Policies and Estimates
  
    
    Investment in and Valuation of Real Estate Assets;
    
    Allocation of Purchase Price of Acquired Assets;
    
    Revenue Recognition; and
    
    Income Taxes.
  Commitments and Contingencies
  Related-Party Transactions and Agreements
   20




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Subsequent Events
  
    
    Extension of the maturity date of certain mortgage notes payable.
 New Accounting Pronouncements
  
 Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4T.
    
    Controls and Procedures
    21




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PART II
OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  
 Item 1A.
    
    Risk Factors
  
 Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3.
    
    Defaults Upon Senior Securities
  
 Item 4.
    
    Submission of Matters to a Vote of Security Holders
  
 Item 5.
    
    Other Information
  
 Item 6.
    
    Exhibits
   22




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SIGNATURES
  Cole Credit Property Trust, Inc.(Registrant)By:
    /s/ Christopher H. ColeChristopher H. ColeChief Executive Officer, 
President, and Director 
(Principal Executive Officer)By:
    /s/ D. Kirk McAllaster, Jr.D. Kirk McAllaster, Jr.Executive Vice President and 
Chief Financial Officer 
(Principal Financial Officer)   23




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EXHIBIT INDEX
  Exhibit No.
    
    Description3.1
    
    
    Articles of Incorporation. (Incorporated by reference to the
Companys Registration Statement on Form 10-SB (File No.
000-51962) filed on May 1, 2006).3.2
    
    
    Amended and Restated Bylaws. (Incorporated by reference to
the Companys Registration Statement on Form 10-SB (File No.
000-51962) filed on May 1, 2006).31.1
    
    
    Certification of the Chief Executive Officer of the Company
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 (filed herewith).31.2
    
    
    Certification of the Chief Financial Officer of the Company
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 (filed herewith).32.1
    *
    
    Certification of the Chief Executive Officer and Chief
Financial Officer of the Company pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (furnished 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 of 1933, as amended, or the Exchange Act, except to the extent that the registrant
specifically incorporates it by reference.  24