Net income available to common stockholders of $7.1
million and $29.1 million for the three months and year ended
December 31, 2017, respectively, or $0.15 and $0.62 per
diluted share, respectivelyFunds From Operations
per diluted share decreased 4% and increased 4% year-over-year for
the three months and year ended December 31, 2017,
respectivelyReaffirming 2018 FFO annual guidance
range of $2.01 to $2.09 per diluted
shareSame-store cash NOI decreased 2.1% and 0.2%
year-over-year for the three months and year ended
December 31, 2017, respectively
American Assets Trust, Inc. (NYSE:AAT) (the “company”) today
reported financial results for its fourth quarter and year ended
December 31, 2017.
Financial Results and Recent Developments
- Net income available to common stockholders of $7.1
million and $29.1 million for the three months and year ended
December 31, 2017, respectively, or $0.15 and $0.62 per
diluted share, respectively
- Funds From Operations ("FFO") decreased 4% and
increased 4% year-over-year to $0.46 and $1.92 per diluted share
for the three months and year ended December 31, 2017,
respectively, compared to the same periods in 2016
- Reaffirming 2018 FFO annual guidance range of $2.01 to
$2.09 per diluted share
- Same-store cash NOI decreased 2.1% and 0.2% for the
three months and year ended December 31, 2017, respectively,
compared to the same periods in 2016
- Leased approximately 20,000 comparable office square
feet at an average GAAP-basis and cash-basis contractual rent
increase of 21% and 11%, respectively, during the three months
ended December 31, 2017
- Leased approximately 45,000 comparable retail square
feet at an average GAAP-basis contractual rent and cash-basis
contractual rent increase of 52% and 35%, respectively, during the
three months ended December 31, 2017
- Credit facility amended and restated to increase the
revolving line of credit, extend maturity date and decrease credit
spreads
- Term loan agreement amended to decrease credit
spreads
Net income attributable to common stockholders was $7.1 million,
or $0.15 per basic and diluted share for the three months ended
December 31, 2017 compared to $8.9 million, or $0.19 per basic
and diluted share for the three months ended December 31,
2016. The decrease from the corresponding period in 2016 was
primarily due to an increase in bad debt expense at Lloyd District
Portfolio and increase in general and administrative expenses
during the period related to a one-time non-cash charge associated
with the vesting modification of previously granted restricted
stock awards. The vesting modification was approved by our
compensation committee during the fourth quarter of 2017 to adjust
vesting based on their analysis of our relative total shareholder
return over a three year period instead of our prior performance
metric of relative forward FFO multiple. For the year ended
December 31, 2017, net income attributable to common stockholders
was $29.1 million, or $0.62 per basic and diluted share compared to
$32.6 million, or $0.72 per basic and diluted share for the year
ended December 31, 2016. The decrease was primarily due to an
increase in depreciation and amortization expense attributed to the
acquisition of the Pacific Ridge Apartments on April 28, 2017 and
an increase in general and administrative expenses, as previously
noted.
During the fourth quarter of 2017, the company generated funds
from operations (“FFO”) for common stockholders of $29.6 million,
or $0.46 per diluted share, compared to $30.5 million, or $0.48 per
diluted share, for the quarter ended December 31, 2016.
The decrease in FFO from the corresponding period in 2016 was
primarily due to an increase in bad debt expense and general and
administrative expenses during the period, as noted above.
For the year ended December 31, 2017, the company generated
FFO for common stockholders of $123.2 million, or $1.92
per diluted share, compared to $116.8 million, or $1.85
per diluted share, for the year ended December 31, 2016.
The increase in FFO from the prior year was primarily due to
additional operating income from Hassalo on Eighth due to an
increase in the percentage leased, the acquisitions of the Pacific
Ridge Apartments on April 28, 2017 and Gateway Marketplace on July
6, 2017, offset by the increase in general and administrative
expenses during the period, as noted above.
FFO is a non-GAAP supplemental earnings measure which the
company considers meaningful in measuring its operating
performance. A reconciliation of FFO to net income is
attached to this press release.
Portfolio Results
The portfolio leased status as of the end of the indicated
quarter was as follows:
|
December 31, 2017 |
September 30, 2017 |
December 31, 2016 |
Total
Portfolio |
|
|
|
Retail (1) |
96.8 |
% |
97.0 |
% |
96.6 |
% |
Office |
88.4 |
% |
89.9 |
% |
90.1 |
% |
Multifamily (2) |
91.8 |
% |
91.3 |
% |
90.3 |
% |
Mixed-Use: |
|
|
|
Retail |
96.9 |
% |
93.7 |
% |
98.7 |
% |
Hotel |
92.5 |
% |
92.7 |
% |
89.8 |
% |
|
|
|
|
Same-Store Portfolio |
|
|
Retail (1) |
97.1 |
% |
97.2 |
% |
96.9 |
% |
Office |
88.4 |
% |
89.9 |
% |
90.1 |
% |
Multifamily (2)(3) |
92.1 |
% |
91.6 |
% |
90.3 |
% |
Mixed-Use: |
|
|
|
Retail |
96.9 |
% |
93.7 |
% |
98.7 |
% |
Hotel |
92.5 |
% |
92.7 |
% |
89.8 |
% |
(1) Total retail leased percentage includes the retail
components of Hassalo on Eighth. The Elwood, Velomor and
Aster Tower buildings of Hassalo on Eighth were placed in
operations in April 2016, July 2016 and October 2016,
respectively. Same-store retail leased percentages exclude
Hassalo on Eighth and Gateway Marketplace, which was acquired on
July 6, 2017.(2) Excluding the 21 off-line units associated with
the Loma Palisades repositioning, total multifamily leased
percentage was 92.7% and 92.3% at December 31, 2017 and
September 30, 2017, respectively, and same-store multifamily leased
percentage was 93.4% and 93.1% at December 31, 2017 and
September 30, 2017, respectively.(3) Same-store multifamily leased
percentages excludes the Pacific Ridge Apartments, which was
acquired on April 28, 2017.
During the fourth quarter of 2017, the company signed 24 leases
for approximately 81,600 square feet of retail and office space, as
well as 439 multifamily apartment leases. Renewals accounted
for 78.6% of the comparable retail leases, 60.0% of the comparable
office leases and 46.2% of the residential leases.
Retail and OfficeOn a comparable space basis (i.e. leases for
which there was a former tenant) during the fourth quarter of 2017
and trailing four quarters ended December 31, 2017, our retail
and office leasing spreads are shown below:
|
|
Number of Leases Signed |
Comparable Leased Sq. Ft. |
Average Cash Basis % Change Over Prior
Rent |
Average Cash Contractual Rent Per Sq.
Ft. |
Prior Average Cash Contractual Rent Per Sq.
Ft. |
GAAP Straight-Line Basis % Change Over Prior
Rent |
Retail |
Q4
2017 |
14 |
45,000 |
34.9 |
% |
$48.33 |
$35.83 |
51.8 |
% |
Last 4
Quarters |
62 |
309,000 |
(3.0)% (1) |
$36.24 |
$37.36 |
13.1% (1) |
|
|
|
|
|
|
|
|
Office |
Q4
2017 |
5 |
20,000 |
11.2 |
% |
$55.87 |
$50.26 |
21.4 |
% |
Last 4
Quarters |
41 |
269,900 |
16.4 |
% |
$50.89 |
$43.73 |
23.7 |
% |
(1) Retail leasing spreads were significantly impacted by the
Lowe's renewal at Waikele Center of approximately 155,000 square
feet during the second quarter of 2017. Excluding the Lowe's
renewal at Waikele Center, we leased approximately 154,000
comparable retail square feet at an average GAAP-basis and
cash-basis contractual rent increase of 18.9% and 7.5%,
respectively, during the twelve month period ended
December 31, 2017.
MultifamilyThe average monthly base rent per leased unit for
same-store properties for the three months ended December 31,
2017 was $1,749 compared to an average monthly base rent per leased
unit of $1,717 for the three months ended December 31, 2016, an
increase of approximately 2%.
The average monthly base rent per leased unit for same-store
properties for the year ended December 31, 2017 was $1,816
compared to an average monthly base rent per leased unit of $1,702
for the year ended December 31, 2016, an increase of approximately
7%.
For the three months ended December 31, 2017, the Pacific
Ridge Apartments was classified as a non same-store property.
For the year ended December 31, 2017, Hassalo on Eighth and
the Pacific Ridge Apartments were classified as non same-store
properties.
Same-Store Net Operating IncomeFor the three months and year
ended December 31, 2017, same-store GAAP basis NOI decreased 1.5%
and increased 0.5%, respectively, and same-store cash basis NOI
decreased 2.1% and 0.2%, respectively, compared to the
corresponding periods in 2016. The same-store NOI by segment was as
follows (in thousands):
|
Three Months Ended (1) |
|
|
|
|
Year Ended (2) |
|
|
|
|
December 31, |
|
|
|
|
December 31, |
|
|
|
|
2017 |
|
2016 |
|
Change |
|
2017 |
|
2016 |
|
Change |
GAAP
Basis: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
$ |
18,807 |
|
|
$ |
18,757 |
|
|
0.3 |
|
|
% |
|
$ |
73,272 |
|
|
$ |
72,825 |
|
|
0.6 |
|
|
% |
Office |
17,295 |
|
|
18,397 |
|
|
(6.0 |
) |
|
|
|
60,768 |
|
|
59,438 |
|
|
2.2 |
|
|
|
Multifamily |
4,566 |
|
|
4,243 |
|
|
7.6 |
|
|
|
|
13,140 |
|
|
12,683 |
|
|
3.6 |
|
|
|
Mixed-Use |
6,173 |
|
|
6,139 |
|
|
0.6 |
|
|
|
|
24,653 |
|
|
26,004 |
|
|
(5.2 |
) |
|
|
|
$ |
46,841 |
|
|
$ |
47,536 |
|
|
(1.5 |
) |
|
% |
|
$ |
171,833 |
|
|
$ |
170,950 |
|
|
0.5 |
|
|
% |
Cash
Basis: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
$ |
18,647 |
|
|
$ |
17,869 |
|
|
4.4 |
|
|
% |
|
$ |
72,388 |
|
|
$ |
72,094 |
|
|
0.4 |
|
|
% |
Office |
16,745 |
|
|
18,475 |
|
|
(9.4 |
) |
|
|
|
59,031 |
|
|
58,464 |
|
|
1.0 |
|
|
|
Multifamily |
4,512 |
|
|
4,402 |
|
|
2.5 |
|
|
|
|
13,140 |
|
|
12,683 |
|
|
3.6 |
|
|
|
Mixed-Use |
6,040 |
|
|
6,166 |
|
|
(2.0 |
) |
|
|
|
24,367 |
|
|
25,949 |
|
|
(6.1 |
) |
|
|
|
$ |
45,944 |
|
|
$ |
46,912 |
|
|
(2.1 |
) |
|
% |
|
$ |
168,926 |
|
|
$ |
169,190 |
|
|
(0.2 |
) |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Same-store portfolio excludes (i) Hassalo
on Eighth - Retail, which was placed in operations in April, July
and October of 2016; (ii) the Pacific Ridge Apartments, which was
acquired on April 28, 2017; (iii) Gateway Marketplace, which was
acquired on July 6, 2017; and (iv) land held for
development.(2) Same-store portfolio excludes (i)
Torrey Reserve Campus due to significant redevelopment activity
during the period; (ii) Hassalo on Eighth - Multifamily, which
became available for occupancy in July and October of 2015; (iii)
Hassalo on Eighth - Retail, which was placed in operations in
April, July and October of 2016; (iv) the Pacific Ridge Apartments,
which was acquired on April 28, 2017; (v) Gateway Marketplace,
which was acquired on July 6, 2017; and (vi) land held for
development.
On a same-store GAAP basis, retail NOI for the three months
ended December 31, 2017 was consistent with the corresponding
period in 2016. On a same-store cash basis, retail NOI for
the three months ended December 31, 2017 increased from the prior
period due to higher annualized base rents at Carmel Mountain Plaza
and Del Monte Center. On a same-store GAAP and cash basis,
retail NOI for the year ended December 31, 2017 was consistent with
the prior year.
On a same-store GAAP basis, office NOI decreased for the three
months ended December 31, 2017 compared to the corresponding period
in 2016 primarily due to an increase in bad debt expense for a
tenant at the Lloyd District Portfolio. On a same-store cash
basis, office NOI decreased for the three months ended December 31,
2017 compared to the corresponding period in 2016 primarily due to
rent abatements at First & Main and City Center Bellevue. On a
same-store GAAP and cash basis, office NOI increased for the year
ended December 31, 2017 compared to the corresponding period in
2016 due to higher annualized base rents, specifically at the Lloyd
District Portfolio, the Landmark at One Market and First &
Main.
On a same-store GAAP and cash basis, multifamily NOI increased
for the three months and year ended December 31, 2017 compared to
the corresponding periods in 2016 primarily due to an increase in
average monthly base rent during 2017. This increase was
achieved notwithstanding the current repositioning of 21 off-line
units at Loma Palisades, which was recently completed at the end of
the fourth quarter of 2017.
On a same-store GAAP basis, mixed-use NOI for the three months
ended December 31, 2017 was consistent with the corresponding
period in 2016. On a same-store cash basis mixed-use NOI
decreased for the three months ended December 31, 2017
compared to the same period in 2016 primarily due to a decrease in
the percentage leased at the retail portion of our mixed-use
property. On a same-store GAAP and cash basis, mixed-use NOI
decreased for the year ended December 31, 2017 compared to the
corresponding period in 2016 primarily due to an increase in bad
debt expense at the hotel portion of our mixed-use property and a
decrease in the percentage leased at the retail portion of our
mixed-use property.
Credit Facility and Term Loan AgreementOn
January 9, 2018, our credit agreement was amended and restated to,
among other things, (1) increase the revolving line of credit from
$250 million to $350 million, (2) extend the maturity date of the
restated $350 million revolving line of credit to January 9, 2022
(with two-, six-month extension options), (3) decrease the
applicable leverage-based and ratings-based pricing spreads and (4)
include an accordion feature to allow us to increase the revolving
line of credit from its current $350 million to up to $700 million,
subject to certain conditions. The $100 million term loan included
within the credit agreement matures on January 9, 2019, with no
further extension options. The revolving line of credit and $100
million term loan are both unsecured.
Additionally, on January 9, 2018, our $150 million term loan
agreement was amended to, among other things, (1) decrease the
applicable leverage-based and ratings-based pricing spreads
effective as of March 1, 2018 and (2) include an accordion feature
to allow us to increase the term loan from its current $150 million
to up to $300 million, subject to certain conditions. The $150
million term loan is unsecured.
Balance Sheet and LiquidityAt December 31,
2017, the company had gross real estate assets of $2.6 billion and
liquidity of $332.6 million, comprised of cash and cash equivalents
of $82.6 million and $250.0 million of availability on its line of
credit.
DividendsThe company declared dividends on its
shares of common stock of $0.27 per share for the fourth quarter of
2017. The dividends were paid on December 21,
2017.
In addition, the company has declared a dividend on its common
stock of $0.27 per share for the quarter ending March 31,
2018. The dividend will be paid on March 29, 2018 to
stockholders of record on March 15, 2018.
GuidanceThe company affirms its guidance range
for full year 2018 FFO per diluted share
of $2.01 to $2.09 per share, a midpoint
increase of 7% from 2017 FFO per diluted share of $1.92 per
share. The company's guidance excludes any impact from future
acquisitions, dispositions, equity issuances or repurchases, future
debt financings or repayments, except that our guidance assumes the
payoff of the mortgage debt on Lomas Palisades, without penalty or
premium.
The foregoing estimates are forward-looking and reflect
management's view of current and future market conditions,
including certain assumptions with respect to leasing activity,
rental rates, occupancy levels, interest rates, credit spreads and
the amount and timing of acquisition and development
activities. The company's actual results may differ
materially from these estimates.
Conference CallThe company will hold a
conference call to discuss the results for the fourth quarter and
year end of 2017 on Wednesday, February 14, 2018 at 8:00 a.m.
Pacific Time (“PT”). To participate in the event by
telephone, please dial 1-877-868-5513 and use the pass code
8399474. A telephonic replay of the conference call will be
available beginning at 2:00 p.m. PT on Wednesday, February 14,
2018 through Wednesday, February 21, 2018. To access the
replay, dial 1-855-859-2056 and use the pass code 8399474. A
live on-demand audio webcast of the conference call will be
available on the company's website at
www.americanassetstrust.com. A replay of the call will also
be available on the company's website.
Supplemental InformationSupplemental financial
information regarding the company's fourth quarter and year end
2017 results may be found in the “Investor Relations” section of
the company's website at www.americanassetstrust.com. This
supplemental information provides additional detail on items such
as property occupancy, financial performance by property and debt
maturity schedules.
Financial InformationAmerican Assets
Trust, Inc.Consolidated Balance
Sheets(In Thousands, Except Share
Data)
|
December 31, 2017 |
|
December 31, 2016 |
Assets |
|
|
|
|
Real
estate, at cost |
|
|
|
|
|
Operating
real estate |
$ |
2,536,474 |
|
|
|
$ |
2,241,061 |
|
|
Construction in progress |
|
68,272 |
|
|
|
|
50,498 |
|
|
Held for
development |
|
9,392 |
|
|
|
|
9,447 |
|
|
|
|
2,614,138 |
|
|
|
|
2,301,006 |
|
|
Accumulated depreciation |
|
(537,431 |
) |
|
|
|
(469,460 |
) |
|
Net real
estate |
|
2,076,707 |
|
|
|
|
1,831,546 |
|
|
Cash and
cash equivalents |
|
82,610 |
|
|
|
|
44,801 |
|
|
Restricted cash |
|
9,344 |
|
|
|
|
9,950 |
|
|
Accounts
receivable, net |
|
9,869 |
|
|
|
|
9,330 |
|
|
Deferred
rent receivables, net |
|
38,973 |
|
|
|
|
38,452 |
|
|
Other
assets, net |
|
42,361 |
|
|
|
|
52,854 |
|
|
Total assets |
$ |
2,259,864 |
|
|
|
$ |
1,986,933 |
|
|
Liabilities and
equity |
|
|
|
|
|
Liabilities: |
|
|
|
|
|
Secured
notes payable, net |
$ |
279,550 |
|
|
|
$ |
445,180 |
|
|
Unsecured
notes payable, net |
|
1,045,470 |
|
|
|
|
596,350 |
|
|
Unsecured
line of credit |
|
— |
|
|
|
|
20,000 |
|
|
Accounts
payable and accrued expenses |
|
38,069 |
|
|
|
|
32,401 |
|
|
Security
deposits payable |
|
6,570 |
|
|
|
|
6,114 |
|
|
Other
liabilities and deferred credits, net |
|
46,061 |
|
|
|
|
48,337 |
|
|
Total
liabilities |
|
1,415,720 |
|
|
|
|
1,148,382 |
|
|
Commitments and contingencies |
|
|
|
|
|
Equity: |
|
|
|
|
|
American
Assets Trust, Inc. stockholders' equity |
|
|
|
|
|
Common
stock, $0.01 par value, 490,000,000 shares authorized, 47,204,588
and 45,732,109 shares issued and outstanding at December 31, 2017
and December 31, 2016, respectively |
|
473 |
|
|
|
|
457 |
|
|
Additional paid-in capital |
|
919,066 |
|
|
|
|
874,597 |
|
|
Accumulated dividends in excess of net income |
|
(97,280 |
) |
|
|
|
(77,296 |
) |
|
Accumulated other comprehensive income |
|
11,451 |
|
|
|
|
11,798 |
|
|
Total
American Assets Trust, Inc. stockholders' equity |
|
833,710 |
|
|
|
|
809,556 |
|
|
Noncontrolling interests |
|
10,434 |
|
|
|
|
28,995 |
|
|
Total
equity |
|
844,144 |
|
|
|
|
838,551 |
|
|
Total liabilities and
equity |
$ |
2,259,864 |
|
|
|
$ |
1,986,933 |
|
|
American Assets Trust, Inc.Unaudited
Consolidated Statements of Income(In Thousands,
Except Shares and Per Share Data)
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Revenue: |
|
|
|
|
|
|
|
Rental
income |
$ |
77,703 |
|
|
|
$ |
72,180 |
|
|
|
$ |
298,803 |
|
|
|
$ |
279,498 |
|
|
Other
property income |
4,043 |
|
|
|
4,382 |
|
|
|
16,180 |
|
|
|
15,590 |
|
|
Total
revenue |
81,746 |
|
|
|
76,562 |
|
|
|
314,983 |
|
|
|
295,088 |
|
|
Expenses: |
|
|
|
|
|
|
|
Rental
expenses |
23,129 |
|
|
|
20,919 |
|
|
|
84,006 |
|
|
|
79,553 |
|
|
Real
estate taxes |
8,696 |
|
|
|
7,932 |
|
|
|
32,671 |
|
|
|
28,378 |
|
|
General
and administrative |
6,211 |
|
|
|
4,441 |
|
|
|
21,382 |
|
|
|
17,897 |
|
|
Depreciation and amortization |
19,918 |
|
|
|
18,160 |
|
|
|
83,278 |
|
|
|
71,319 |
|
|
Total
operating expenses |
57,954 |
|
|
|
51,452 |
|
|
|
221,337 |
|
|
|
197,147 |
|
|
Operating
income |
23,792 |
|
|
|
25,110 |
|
|
|
93,646 |
|
|
|
97,941 |
|
|
Interest
expense |
(13,992 |
) |
|
|
(12,788 |
) |
|
|
(53,848 |
) |
|
|
(51,936 |
) |
|
Other
(expense) income, net |
(69 |
) |
|
|
86 |
|
|
|
334 |
|
|
|
(368 |
) |
|
Net
income |
9,731 |
|
|
|
12,408 |
|
|
|
40,132 |
|
|
|
45,637 |
|
|
Net
income attributable to restricted shares |
(60 |
) |
|
|
(61 |
) |
|
|
(241 |
) |
|
|
(189 |
) |
|
Net
income attributable to unitholders in the Operating
Partnership |
(2,594 |
) |
|
|
(3,486 |
) |
|
|
(10,814 |
) |
|
|
(12,863 |
) |
|
Net income
attributable to American Assets Trust, Inc.
stockholders |
$ |
7,077 |
|
|
|
$ |
8,861 |
|
|
|
$ |
29,077 |
|
|
|
$ |
32,585 |
|
|
|
|
|
|
|
|
|
|
Net income per
share |
|
|
|
|
|
|
|
Basic
income attributable to common stockholders per share |
$ |
0.15 |
|
|
|
$ |
0.19 |
|
|
|
$ |
0.62 |
|
|
|
$ |
0.72 |
|
|
Weighted
average shares of common stock outstanding - basic |
46,908,745 |
|
|
|
45,480,870 |
|
|
|
46,715,520 |
|
|
|
45,332,471 |
|
|
|
|
|
|
|
|
|
|
Diluted
income attributable to common stockholders per share |
$ |
0.15 |
|
|
|
$ |
0.19 |
|
|
|
$ |
0.62 |
|
|
|
$ |
0.72 |
|
|
Weighted
average shares of common stock outstanding - diluted |
64,103,725 |
|
|
|
63,369,692 |
|
|
|
64,087,250 |
|
|
|
63,228,159 |
|
|
|
|
|
|
|
|
|
|
Dividends
declared per common share |
$ |
0.27 |
|
|
|
$ |
0.26 |
|
|
|
$ |
1.05 |
|
|
|
$ |
1.01 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to Funds From
OperationsThe company's FFO attributable to common
stockholders and operating partnership unitholders and
reconciliation to net income is as follows (in thousands except
shares and per share data, unaudited):
|
Three Months Ended |
|
Year Ended |
|
December 31, 2017 |
|
December 31, 2017 |
Funds From
Operations (FFO) |
|
|
|
|
|
Net income |
$ |
9,731 |
|
|
|
$ |
40,132 |
|
|
Depreciation and
amortization of real estate assets |
|
19,918 |
|
|
|
|
83,278 |
|
|
FFO, as defined by
NAREIT |
$ |
29,649 |
|
|
|
$ |
123,410 |
|
|
Less: Nonforfeitable
dividends on incentive stock awards |
|
(59 |
) |
|
|
|
(236 |
) |
|
FFO attributable to
common stock and units |
$ |
29,590 |
|
|
|
$ |
123,174 |
|
|
FFO per diluted
share/unit |
$ |
0.46 |
|
|
|
$ |
1.92 |
|
|
Weighted average number
of common shares and units, diluted |
|
64,106,314 |
|
|
|
|
64,089,921 |
|
|
Reconciliation of Same-Store Cash NOI to Net
IncomeThe company's reconciliation of Same-Store Cash NOI
to Net Income is as follows (in thousands, unaudited):
|
Three Months Ended (1) |
|
Year Ended (2) |
|
December 31, |
|
December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Same-store cash
NOI |
$ |
45,944 |
|
|
|
$ |
46,912 |
|
|
|
$ |
168,926 |
|
|
|
$ |
169,190 |
|
|
Non-same-store cash NOI |
3,975 |
|
|
|
(473 |
) |
|
|
26,919 |
|
|
|
15,633 |
|
|
Cash NOI |
$ |
49,919 |
|
|
|
$ |
46,439 |
|
|
|
$ |
195,845 |
|
|
|
$ |
184,823 |
|
|
Non-cash
revenue and other operating expenses (3) |
2 |
|
|
|
1,272 |
|
|
|
2,461 |
|
|
|
2,334 |
|
|
General
and administrative |
(6,211 |
) |
|
|
(4,441 |
) |
|
|
(21,382 |
) |
|
|
(17,897 |
) |
|
Depreciation and amortization |
(19,918 |
) |
|
|
(18,160 |
) |
|
|
(83,278 |
) |
|
|
(71,319 |
) |
|
Interest
expense |
(13,992 |
) |
|
|
(12,788 |
) |
|
|
(53,848 |
) |
|
|
(51,936 |
) |
|
Other
income, net |
(69 |
) |
|
|
86 |
|
|
|
334 |
|
|
|
(368 |
) |
|
Net Income |
$ |
9,731 |
|
|
|
$ |
12,408 |
|
|
|
$ |
40,132 |
|
|
|
$ |
45,637 |
|
|
|
|
|
|
|
|
|
|
Number of properties
included in same-store analysis |
22 |
|
22 |
|
21 |
|
21 |
(1) Same-store portfolio excludes (i) Hassalo
on Eighth - Retail, which was placed in operations in April, July
and October of 2016; (ii) the Pacific Ridge Apartments, which was
acquired on April 28, 2017; (iii) Gateway Marketplace, which was
acquired on July 6 2017; and (iv) land held for
development.(2) Same-store portfolio excludes (i)
Torrey Reserve Campus due to significant redevelopment activity
during the period; (ii) Hassalo on Eighth - Multifamily, which
became available for occupancy in July and October of 2015; (iii)
Hassalo on Eighth - Retail, which was placed in operations in
April, July and October of 2016; (iv) the Pacific Ridge Apartments,
which was acquired on April 28, 2017; (v) Gateway Marketplace,
which was acquired on July 6 2017; and (vi) land held for
development.(3) Represents adjustments related to
the straight-line rent income recognized during the period offset
by cash received during the period and the provision for bad debts
recorded for deferred rent receivable balances; the amortization of
above (below) market rents, the amortization of lease incentives
paid to tenants, the amortization of other lease intangibles, lease
termination fees at City Center Bellevue, and straight-line rent
expense for our leases of the Annex at The Landmark at One Market
and retail space at Waikiki Beach Walk - Retail.
Reported results are preliminary and not final until the filing
of the company's Form 10-K with the Securities and Exchange
Commission and, therefore, remain subject to adjustment.
Use of Non-GAAP InformationFunds from
OperationsThe company calculates FFO in accordance with the
standards established by the National Association of Real Estate
Investment Trusts, or NAREIT. FFO represents net income (loss)
(computed in accordance with GAAP), excluding gains (or losses)
from sales of depreciable operating property, impairment losses,
real estate related depreciation and amortization (excluding
amortization of deferred financing costs) and after adjustments for
unconsolidated partnerships and joint ventures.
FFO is a supplemental non-GAAP financial measure. Management
uses FFO as a supplemental performance measure because it believes
that FFO is beneficial to investors as a starting point in
measuring the company's operational performance. Specifically, in
excluding real estate related depreciation and amortization and
gains and losses from property dispositions, which do not relate to
or are not indicative of operating performance, FFO provides a
performance measure that, when compared year-over-year, captures
trends in occupancy rates, rental rates and operating costs. The
company also believes that, as a widely recognized measure of the
performance of REITs, FFO will be used by investors as a basis to
compare the company's operating performance with that of other
REITs. However, because FFO excludes depreciation and amortization
and captures neither the changes in the value of the company's
properties that result from use or market conditions nor the level
of capital expenditures and leasing commissions necessary to
maintain the operating performance of the company's properties, all
of which have real economic effects and could materially impact the
company's results from operations, the utility of FFO as a measure
of the company's performance is limited. In addition, other equity
REITs may not calculate FFO in accordance with the NAREIT
definition as the company does, and, accordingly, the company's FFO
may not be comparable to such other REITs' FFO. Accordingly,
FFO should be considered only as a supplement to net income as a
measure of the company's performance. FFO should not be used as a
measure of the company's liquidity, nor is it indicative of funds
available to fund the company's cash needs, including the company's
ability to pay dividends or service indebtedness. FFO also should
not be used as a supplement to or substitute for cash flow from
operating activities computed in accordance with GAAP.
Cash Net Operating IncomeThe company uses cash net operating
income ("NOI") internally to evaluate and compare the operating
performance of the company's properties. The company believes
cash NOI provides useful information to investors regarding the
company's financial condition and results of operations because it
reflects only those income and expense items that are incurred at
the property level, and when compared across periods, can be used
to determine trends in earnings of the company's properties as this
measure is not affected by (1) the non-cash revenue and expense
recognition items, (2) the cost of funds of the property
owner, (3) the impact of depreciation and amortization
expenses as well as gains or losses from the sale of operating real
estate assets that are included in net income computed in
accordance with GAAP or (4) general and administrative
expenses and other gains and losses that are specific to the
property owner. The company believes the exclusion of these
items from net income is useful because the resulting measure
captures the actual revenue generated and actual expenses incurred
in operating the company's properties as well as trends in
occupancy rates, rental rates and operating costs. Cash NOI is
a measure of the operating performance of the company's properties
but does not measure the company's performance as a whole.
Cash NOI is therefore not a substitute for net income or operating
income as computed in accordance with GAAP.
Cash NOI, is a non-GAAP financial measure of performance.
The company defines cash NOI as operating revenues (rental income,
tenant reimbursements, lease termination fees, ground lease rental
income and other property income) less property and related
expenses (property expenses, ground lease expense, property
marketing costs, real estate taxes and insurance), adjusted for
non-cash revenue and operating expense items such as straight-line
rent, amortization of lease intangibles, amortization of lease
incentives and other adjustments. Cash NOI also excludes
general and administrative expenses, depreciation and amortization,
interest expense, other nonproperty income and losses,
acquisition-related expense, gains and losses from property
dispositions, extraordinary items, tenant improvements, and leasing
commissions. Other REITs may use different methodologies for
calculating cash NOI, and accordingly, the company's cash NOI may
not be comparable to the cash NOIs of other REITs.
About American Assets Trust, Inc.American
Assets Trust, Inc. (the “company”) is a full service, vertically
integrated and self-administered real estate investment trust, or
REIT, headquartered in San Diego, California. The company has over
50 years of experience in acquiring, improving, developing and
managing premier retail, office and residential properties
throughout the United States in some of the nation’s most
dynamic, high-barrier-to-entry markets primarily in Southern
California, Northern California, Oregon, Washington,
Texas and Hawaii. The company's retail portfolio
comprises approximately 3.2 million rentable square feet, and its
office portfolio comprises approximately 2.7 million square feet.
In addition, the company owns one mixed-use property (including
approximately 97,000 rentable square feet of retail space and a
369-room all-suite hotel) and 2,112 multifamily units. In 2011, the
company was formed to succeed to the real estate business of
American Assets, Inc., a privately held corporation founded in 1967
and, as such, has significant experience, long-standing
relationships and extensive knowledge of its core markets,
submarkets and asset classes. For additional information, please
visit www.americanassetstrust.com.
Forward Looking StatementsThis press release
may contain forward-looking statements within the meaning of the
federal securities laws, which are based on current expectations,
forecasts and assumptions that involve risks and uncertainties that
could cause actual outcomes and results to differ materially.
Forward-looking statements relate to expectations, beliefs,
projections, future plans and strategies, anticipated events or
trends and similar expressions concerning matters that are not
historical facts. In some cases, you can identify forward-looking
statements by the use of forward-looking terminology such as “may,”
“will,” “should,” “expects,” “intends,” “plans,” “anticipates,”
“believes,” “estimates,” “predicts,” or “potential” or the negative
of these words and phrases or similar words or phrases which are
predictions of or indicate future events or trends and which do not
relate solely to historical matters. While forward-looking
statements reflect the company's good faith beliefs, assumptions
and expectations, they are not guarantees of future
performance. For a further discussion of these and other
factors that could cause the company's future results to differ
materially from any forward-looking statements, see the section
entitled “Risk Factors” in the company's most recent annual report
on Form 10-K, and other risks described in documents subsequently
filed by the company from time to time with the Securities and
Exchange Commission. The company disclaims any obligation to
publicly update or revise any forward-looking statement to reflect
changes in underlying assumptions or factors, of new information,
data or methods, future events or other changes.
Source: American Assets Trust, Inc.
Investor and Media Contact:American Assets
TrustRobert F. BartonExecutive Vice President and Chief Financial
Officer858-350-2607
American Assets (NYSE:AAT)
Historical Stock Chart
From Apr 2024 to May 2024
American Assets (NYSE:AAT)
Historical Stock Chart
From May 2023 to May 2024