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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 June 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 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)2555 East Camelback Road, Suite 400
    
    (602) 778-8700Phoenix, Arizona 85016
    
    (Registrants telephone number,(Address and zip code of principal executive offices)
    
    including area code)
 Not Applicable  (Former name, former address and former fiscal year, if changed since last report)
  þ o
  o o
  Large accelerated filer o
    
    Accelerated filer oNon-accelerated filer (Do not check if smaller reporting company) o
    
    Smaller reporting company þ
  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
June 30, 2009 and December 31, 2008
    
    
    4Condensed Consolidated Unaudited Statements of Operations for
the three months and six months ended June 30, 2009 and 2008
    
    
    5Condensed Consolidated Unaudited Statement of Stockholders
Equity for the six months ended June 30, 2009
    
    
    6Condensed Consolidated Unaudited Statements of Cash Flows
for the six months ended June 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
    
    
    13Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    19Item 4T. Controls and Procedures
    
    
    19PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    20Item 1A. Risk Factors
    
    
    20Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    20Item 3. Defaults Upon Senior Securities
    
    
    20Item 4. Submission of Matters to a Vote of Security Holders
    
    
    20Item 5. Other Information
    
    
    20Item 6. Exhibits
    
    
    20Signatures
    
    
    21Exhibit 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
 June 30,
    
    
    December 31,2009
    
    
    2008ASSETSInvestment in real estate assets:Land
    
    $
    55,317
    
    
    $
    55,321Buildings and improvements, less accumulated
depreciation of $15,430 and $13,588,
respectively
    
    
    108,121
    
    
    
    109,963Acquired intangible lease assets, less
accumulated amortization of $8,208 and $7,246,
respectively
    
    
    20,130
    
    
    
    21,092Total investment in real estate assets, net
    
    
    183,568
    
    
    
    186,376Cash and cash equivalents
    
    
    1,419
    
    
    
    923Rents and tenant receivables, less allowance
for doubtful accounts of $167 and $167,
respectively
    
    
    2,356
    
    
    
    2,084Prepaid expenses and other assets
    
    
    44
    
    
    
    104Deferred financing costs, less accumulated
amortization of $1,615 and $1,415,
respectively
    
    
    955
    
    
    
    1,155Total assets
    
    $
    188,342
    
    
    $
    190,642LIABILITIES AND STOCKHOLDERS EQUITYMortgage notes payable and line of credit
    
    $
    118,727
    
    
    $
    117,977Accounts payable and accrued expenses
    
    
    643
    
    
    
    757Due to affiliates
    
    
    38
    
    
    
    167Acquired below market lease intangibles, less
accumulated amortization of $916 and $814,
respectively
    
    
    1,323
    
    
    
    1,425Distributions payable
    
    
    589
    
    
    
    589Deferred rent and other liabilities
    
    
    361
    
    
    
    590Total liabilities
    
    
    121,681
    
    
    
    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
    
    
    (23,864
    )
    
    
    (21,388
    )Total stockholders equity
    
    
    66,661
    
    
    
    69,137Total liabilities and stockholders equity
    
    $
    188,342
    
    
    $
    190,642
   4




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COLE CREDIT PROPERTY TRUST, INC.
CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Revenues:Rental income
    
    $
    4,150
    
    
    $
    3,985
    
    
    $
    8,057
    
    
    $
    7,969Tenant reimbursement income
    
    
    97
    
    
    
    84
    
    
    
    206
    
    
    
    166Total revenue
    
    
    4,247
    
    
    
    4,069
    
    
    
    8,263
    
    
    
    8,135Expenses:General and administrative
    
    
    194
    
    
    
    179
    
    
    
    360
    
    
    
    301Property operating expenses
    
    
    131
    
    
    
    123
    
    
    
    260
    
    
    
    240Property and asset management fees
    
    
    115
    
    
    
    239
    
    
    
    236
    
    
    
    486Depreciation
    
    
    921
    
    
    
    921
    
    
    
    1,842
    
    
    
    1,842Amortization
    
    
    451
    
    
    
    450
    
    
    
    901
    
    
    
    901Total operating expenses
    
    
    1,812
    
    
    
    1,912
    
    
    
    3,599
    
    
    
    3,770Operating income
    
    
    2,435
    
    
    
    2,157
    
    
    
    4,664
    
    
    
    4,365Other income (expense):Interest and other income
    
    
    
    
    
    
    9
    
    
    
    12
    
    
    
    15Interest expense
    
    
    (1,821
    )
    
    
    (1,818
    )
    
    
    (3,620
    )
    
    
    (3,633
    )Total other expense
    
    
    (1,821
    )
    
    
    (1,809
    )
    
    
    (3,608
    )
    
    
    (3,618
    )Net income
    
    $
    614
    
    
    $
    348
    
    
    $
    1,056
    
    
    $
    747Weighted 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
    
    $
    0.06
    
    
    $
    0.03
    
    
    $
    0.10
    
    
    $
    0.07
   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
    
    
    Distributions in
    
    
    StockholdersShares
    
    
    Par Value
    
    
    in Par Value
    
    
    Excess of Earnings
    
    
    EquityBalance, December 31, 2008
    
    10,090,951
    
    
    $
    101
    
    
    $
    90,424
    
    
    $
    (21,388
    )
    
    $
    69,137Distributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,532
    )
    
    
    (3,532
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,056
    
    
    
    1,056Balance, June 30, 2009
    
    
    10,090,951
    
    
    $
    101
    
    
    $
    90,424
    
    
    $
    (23,864
    )
    
    $
    66,661
   6




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COLE CREDIT PROPERTY TRUST, INC.
CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS
 Six Months EndedJune 30, 2009
    
    
    June 30, 2008Cash flows from operating activities:Net income
    
    $
    1,056
    
    
    $
    747Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation
    
    
    1,842
    
    
    
    1,842Amortization
    
    
    1,060
    
    
    
    1,056Gain on sale of easement
    
    
    (9
    )
    
    
    Changes in assets and liabilities:Rents and tenant receivables, net of allowance
    
    
    (272
    )
    
    
    (164
    )Prepaid expenses and other assets
    
    
    60
    
    
    
    62Accounts payable and accrued expenses
    
    
    (114
    )
    
    
    (138
    )Due to affiliates
    
    
    (129
    )
    
    
    Deferred rent and other liabilities
    
    
    (229
    )
    
    
    (26
    )Net cash provided by operating activities
    
    
    3,265
    
    
    
    3,379Cash flows from investing activities:Proceeds from sale of easement
    
    
    13
    
    
    
    Net cash provided by investing activities
    
    
    13
    
    
    
    Cash flows from financing activities:Proceeds from line of credit
    
    
    750
    
    
    
    Distributions to investors
    
    
    (3,532
    )
    
    
    (3,531
    )Deferred financing costs paid
    
    
    
    
    
    
    (48
    )Net cash used in financing activities
    
    
    (2,782
    )
    
    
    (3,579
    )Net increase (decrease) in cash and cash equivalents
    
    
    496
    
    
    
    (200
    )Cash and cash equivalents, beginning of period
    
    
    923
    
    
    
    913Cash and cash equivalents, end of period
    
    $
    1,419
    
    
    $
    713Supplemental Disclosures of Non-Cash Investing and
Financing Activities:Dividends declared and unpaid
    
    $
    589
    
    
    $
    589Supplemental Cash Flow Disclosures:Interest paid
    
    $
    3,439
    
    
    $
    3,456
   7




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COLE CREDIT PROPERTY TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
June 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)
June 30, 2009
 Reportable Segments
 Disclosures about Segments of an Enterprise and Related Information,
 Investment In and Valuation of Real Estate Assets
  NOTE 3  FAIR VALUE MEASUREMENTS
 Fair Value Measurements
    Disclosures about Fair Value of Financial Instruments
  Cash and cash equivalents, restricted cash, rents and tenant receivable and accounts payable
and accrued expenses
  9




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COLE CREDIT PROPERTY TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS  (Continued)
June 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)
June 30, 2009
      NOTE 7  ECONOMIC DEPENDENCY
  NOTE 8  NEW ACCOUNTING PRONOUNCEMENTS
 Business Combinations
  11




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COLE CREDIT PROPERTY TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS  (Continued)
June 30, 2009
 Noncontrolling Interests in Consolidated
Financial Statements  an
Amendment of ARB
 Subsequent Events
 The FASB Accounting Standards Codification Accounting Standards
Codification
  12




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Forward-Looking Statements
     13




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Overview
    Recent Market Conditions
   Results of Operations
 Three Months Ended June 30, 2009 Compared to the Three Months Ended June 30, 2008
 Revenue
 General and Administrative Expenses.
 Property Operating Expenses.
  14




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Property and Asset Management Fees.
 Depreciation and Amortization Expenses.
 Interest and Other Income.
 Interest Expense.
 Six Months Ended June 30, 2009 Compared to the Six Months Ended June 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.
  15




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Funds From Operations
    Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net income
    
    $
    614
    
    
    $
    348
    
    
    $
    1,056
    
    
    $
    747Add:Depreciation of real estate assets
    
    
    921
    
    
    
    921
    
    
    
    1,842
    
    
    
    1,842Amortization of lease related costs
    
    
    451
    
    
    
    450
    
    
    
    901
    
    
    
    901Less:Gain on sale of easement
    
    
    
    
    
    
    
    
    
    
    (9
    )
    
    
    FFO
    
    $
    1,986
    
    
    $
    1,719
    
    
    $
    3,790
    
    
    $
    3,490
  
    
    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 $71,000 and $154,000
during the three and six months ended June 30, 2009, respectively, and
approximately $175,000 and $351,000 during the three and six months
ended June 30, 2008, respectively.
    
    Amortization of deferred financing costs totaled approximately
$100,000 and $200,000 during the three and six months ended June 30,
2009, respectively, and approximately $100,000 and $196,000 during the
three and six months ended June 30, 2008, respectively.
 Liquidity and Capital Resources
 Short-term Liquidity and Capital Resources
  Long-term Liquidity and Capital Resources
   16




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17




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Payments due by periodLess Than
    
    
    
    
    
    
    
    
    
    
    More ThanTotal
    
    
    1 Year
    
    
    1-3 Years
    
    
    4-5 Years
    
    
    5 YearsPrincipal payments
 fixed rate debt
    
    $
    117,977
    
    
    $
    21,075
    
    
    $
    37,369
    
    
    $
    3,394
    
    
    $
    56,139Interest payments
 fixed rate debt
    
    
    27,632
    
    
    
    6,321
    
    
    
    11,524
    
    
    
    7,189
    
    
    
    2,598Principal payments
 line of credit
    
    
    750
    
    
    
    
    
    
    
    750
    
    
    
    
    
    
    
    Interest payments
 line of
credit (1)
    
    
    23
    
    
    
    13
    
    
    
    10
    
    
    
    
    
    
    
    Total
    
    $
    146,382
    
    
    $
    27,409
    
    
    $
    49,653
    
    
    $
    10,583
    
    
    $
    58,737
 (1)
    
    Based on interest rate in effect at June 30, 2009. Cash Flow Analysis
 Six Months Ended June 30, 2009 Compared to the Six Months Ended June 30, 2008
 Operating Activities.
 Investing Activities.
 Financing Activities.
 Election as a REIT
  Inflation
   18




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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
  New Accounting Pronouncements
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4T. Controls and Procedures
    19




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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
   Nominee
    
    Votes For
    
    Votes Withheld
    
    AbstentionsChristopher H. Cole
    
    
    6,172,316
    
    
    
    51,500
    
    
    
    N/AD. Kirk McAllaster, Jr.
    
    
    6,170,816
    
    
    
    53,000
    
    
    
    N/AJohn M. Pons
    
    
    6,170,816
    
    
    
    53,000
    
    
    
    N/A
  
 Item 5. Other Information
  
 Item 6. Exhibits
   20




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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 and Accounting Officer)   21




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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.  22