BEACHWOOD, Ohio, May 1, 2012 /PRNewswire/ -- DDR Corp. (NYSE: DDR)
today announced operating results for the first quarter ended
March 31, 2012.
(Logo: http://photos.prnewswire.com/prnh/20110912/CL65938LOGO
)
SIGNIFICANT FIRST QUARTER ACTIVITY
- Generated operating FFO of $0.24
per diluted share, which excludes certain non-operating items
- Executed 545 new leases and renewals for over 3.3 million
square feet
- Increased the portfolio leased rate to 93.7% at March 31, 2012, from 93.6% at December 31, 2011 and 92.6% at March 31, 2011
- Generated positive leasing spreads, with new leases up 9.0% on
a pro rata basis and 6.0% at 100% ownership, and renewals up 5.9%
on a pro rata basis and 5.4% at 100% ownership. Blended
spreads were up 6.4% on a pro rata basis and 5.5% at 100%
ownership.
- Generated same store net operating income growth of 2.3% on a
pro rata basis and 2.9% at 100% ownership
- Completed a $47 million
acquisition of a 561,000 square foot prime shopping center in
Chicago
- Completed $45 million of
non-prime asset sales, of which DDR's pro rata share of the
proceeds was $34 million
- Completed $353 million of new
long-term financings with an average interest rate below 4% and
average duration of 6.6 years
- Formed a new unconsolidated joint venture with Blackstone to acquire 46 shopping centers that
had previously been managed but unowned
- Entered into forward equity agreements to sell 19 million
shares for gross proceeds of $246
million to fund the Company's share of the Blackstone joint venture and other prime asset
acquisitions
"We are pleased to report continued progress with our strategic
operating objectives and have every expectation that the
consistency of our strong performance will continue," commented
DDR's president and chief executive officer, Daniel B. Hurwitz.
2012 GUIDANCE
Based on strong operating performance during the first four months
of 2012 relative to budget, the Company has revised its estimate of
2012 operating FFO per share. DDR currently expects operating FFO
per share for 2012 to be $1.00 to
$1.04, up from the range of $0.98 to
$1.04 originally provided in January.
FINANCIAL HIGHLIGHTS
The Company's first quarter operating funds from operations
available to common shareholders was $66.8
million, or $0.24 per diluted
share, before $7.1 million of net
adjustments, which compares to $63.2
million, or $0.24 per diluted
share for the prior-year comparable. The increase in
operating funds from operations for the three-month period ended
March 31, 2012 as compared to the
same period in 2011 is primarily due the acquisition of seven
shopping center assets in 2011 and 2012 partially offset by asset
dispositions as well as the redemption of preferred shares in the
second quarter of 2011.
Funds From Operations applicable to common shareholders ("FFO")
for the three-month period ended March 31,
2012, including the above net adjustments, was $59.7 million, or $0.21 per diluted share, which compares to FFO of
$93.0 million, or $0.27 per diluted share, for the prior-year
comparable period. The decrease in FFO for the three-month
period ended March 31, 2012, as
compared to the same period in 2011 is primarily due to income
recorded in the first quarter of 2011 as a result of the gain on
change in control of interests related to the Company's acquisition
of two assets from unconsolidated joint ventures, the effect of the
valuation adjustments associated with the warrants that were
exercised in full for cash in the first quarter of 2011 and the
loss on debt extinguishment related to the Company's repurchase of
a portion of its 9.625% unsecured notes in the first quarter of
2012.
Net loss applicable to common shareholders for the three-month
period ended March 31, 2012, was
$22.0 million, or $0.08 per diluted share, which compares to net
income of $24.7 million, or
$0.01 per diluted share, for the
prior-year comparable period. The net loss applicable to
common shareholders for the three-month period ended March 31, 2012 as compared to net income for the
same period in 2011 is primarily due to the same factors impacting
FFO as explained above.
LEASING & PORTFOLIO OPERATIONS
The following results for the three-month period ended March 31, 2012, highlight continued strong
leasing activity throughout the portfolio:
- Executed 178 new leases aggregating 1.0 million square feet and
367 renewals aggregating approximately 2.3 million square feet
- The portfolio leased rate was 93.7% at March 31, 2012, as compared to 92.6% at
March 31, 2011
- On a cash basis, rental rates for new leases increased by 9.0%
on a pro rata basis and 6.0% at 100% ownership, and renewals by
5.9% on a pro rata basis and 5.4% at 100% ownership. Overall
blended spreads were up 6.4% on a pro rata basis and 5.5% at 100%
ownership.
- Same store net operating income ("NOI") increased by 2.3% for
the three-month period ended March 31,
2012 as compared to the prior-year comparable period on a
pro rata basis and 2.9% at 100% ownership
- Total portfolio average annualized base rent per occupied
square foot as of March 31, 2012 was
$14.08, as compared to $13.37 at March 31,
2011
ACQUISITIONS & FINANCINGS
In April 2012, the Company acquired
its joint venture partners' 50% ownership interest in two prime
power centers located in Portland,
Oregon and Phoenix, Arizona
for $70.0 million in the aggregate.
Tanasbourne Town Center, in Portland, Oregon, is a large-format power
center totaling 566,000 square feet. The shopping center is
anchored by national tenants including Target, Nordstrom Rack, Bed Bath & Beyond, Ross
Dress For Less, Michaels, Old Navy and Petco. Arrowhead
Crossing, in Phoenix, Arizona, is
a large-format power center totaling 412,000 square feet. The
shopping center is anchored by national tenants including
Nordstrom Rack, DSW, T.J. Maxx, HomeGoods, Staples and Hobby Lobby.
The Company funded its $70.0
million investment with proceeds from the issuance of 4.8
million common shares at an average price of $14.64 through its at-the-market common equity
program. At closing, approximately $104 million of mortgage debt was repaid and the
assets are now part of the Company's large unencumbered pool.
In March 2012, the Company
acquired Brookside Marketplace in Chicago, Illinois, for $47.4 million. The center is a large-format
power center totaling 561,000 square feet. The asset is
anchored by Super Target, Kohl's, Dick's Sporting Goods, Best Buy,
HomeGoods, Michaels, PetSmart, Office Max, Old Navy and ULTA.
During the quarter, the Company's one-third-owned joint venture,
Sonae Sierra Brasil, completed a
strategic asset swap that resulted in a majority interest in
Shopping Plaza Sul, a high-quality enclosed mall located in
Sao Paulo. Sonae Sierra Brasil acquired an additional 30%
ownership interest in Shopping Plaza Sul in exchange for a 22%
stake in Shopping Penha and $29
million in cash. As a result of this transaction,
Sonae Sierra Brasil increased its
interest in Shopping Plaza Sul to 60% and decreased its interest in
Shopping Penha to 51%. Shopping Plaza Sul consists of 248,000
square feet of gross leasable area and generated sales per square
foot of $960 in 2011, while Shopping
Penha is a 319,000 square foot shopping center also located in
Sao Paulo that generated sales per
square foot of $660 in 2011.
In January 2012, affiliates of the
Company and The Blackstone Group L.P. ("Blackstone") formed a joint venture which is
expected to acquire a portfolio of 46 shopping centers currently
owned by EPN Group (the "EDT Retail Portfolio") valued at
approximately $1.4 billion, including
assumed debt of $640 million and at
least $305 million of anticipated new
financings. An affiliate of Blackstone will own 95% of the common equity
of the joint venture and the remaining 5% interest will be owned by
an affiliate of DDR. DDR is also expected to invest
$150 million in preferred equity in
the venture with a fixed dividend rate of 10%, and will continue to
provide leasing and management services for the portfolio. In
addition, DDR will have the right of first offer to acquire ten of
the assets. The Company entered into forward sale agreements
to issue 19.0 million of its common shares at a price of
$12.95 per share and expects to use
the net proceeds to fund its investment in the joint venture and to
repay corporate debt. The Company expects the settlement of
the forward sale agreements to be on or about June 29, 2012.
In January 2012, the Company
completed $353 million in new
long-term financings, comprised of a $250
million unsecured term loan ("Term Loan") and a $103 million mortgage loan ("Mortgage
Loan"). These financings address substantially all of the
Company's 2012 consolidated debt maturities. The Term Loan
consists of a $200 million tranche
that currently bears interest at a rate of LIBOR plus 210 basis
points and matures on January 31,
2019; and a $50 million
tranche that currently bears interest at a rate of LIBOR plus 170
basis points and matures on January
31, 2017. Borrowings on the Term Loan bear interest at
LIBOR plus a margin based upon DDR's long-term senior unsecured
debt ratings. Additionally, the Company entered into interest
rate swaps on the $200 million,
seven-year tranche to fix the interest rate at 3.6%. Proceeds
from the Term Loan were used to retire the remaining $180 million aggregate principal amount of
convertible notes that matured in March
2012, to reduce the outstanding balances under the Company's
revolving credit facilities, and for general corporate
purposes. The Mortgage Loan has a seven-year term and bears
interest at 3.4%.
DISPOSITIONS
The Company sold six consolidated assets, aggregating approximately
0.4 million square feet, in the first quarter of 2012, generating
gross proceeds of approximately $12.2
million. In addition, the Company sold $27.4 million of consolidated non-income
producing assets of which the Company's proportionate share was
$20.9 million. The Company
recorded an aggregate net gain of approximately $0.7 million related to asset sales in the first
quarter of 2012.
In the first quarter of 2012, the Company's unconsolidated joint
ventures sold assets generating gross proceeds of approximately
$5.2 million of which the Company's
proportionate share was $0.8
million. The aggregate gain for these transactions,
including Sonae Sierra Brasil's
partial asset sale, was approximately $13.7
million of which the Company's proportionate share was
$2.9 million.
NON-GAAP DISCLOSURES
FFO is a supplemental non-GAAP financial measurement used
as a standard in the real estate industry and a widely accepted
measure of real estate investment trust ("REIT") performance.
Management believes that FFO and operating FFO provide additional
indicators of the financial performance of a REIT. The Company also
believes that FFO and operating FFO more appropriately measure the
core operations of the Company and provide benchmarks to its peer
group. Neither FFO nor operating FFO represents cash generated from
operating activities in accordance with generally accepted
accounting principles ("GAAP"), is necessarily indicative of cash
available to fund cash needs and should be considered as an
alternative to net income computed in accordance with GAAP as an
indicator of the Company's operating performance or as an
alternative to cash flow as a measure of liquidity.
FFO is defined and calculated by the Company as net income,
adjusted to exclude: (i) preferred share dividends, (ii) gains
and losses from disposition of depreciable real estate property,
which are presented net of taxes, (iii) impairment charges on
depreciable real estate property and related investments, (iv)
extraordinary items and (iv) certain non-cash items. These
non-cash items principally include real property depreciation and
amortization of intangibles, equity income from joint ventures and
equity income from non-controlling interests and adding the
Company's proportionate share of FFO from its unconsolidated joint
ventures and non-controlling interests, determined on a consistent
basis. The Company calculates operating FFO by excluding the
non-operating charges and gains described below. The Company
computes FFO in accordance with the NAREIT definition as affirmed
by NAREIT on October 31, 2011.
Other real estate companies may calculate FFO and operating FFO in
a different manner. FFO excluding the net non-operating items
detailed below is useful to investors as the Company removes these
charges and gains to analyze the results of its operations and
assess performance of the core operating real estate portfolio. A
reconciliation of net income (loss) to FFO and operating FFO is
presented in the financial highlights section of the Company's
quarterly supplement.
SAFE HARBOR
DDR considers portions of the information in this press release to
be forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, both as amended, with respect to the
Company's expectation for future periods. Although the
Company believes that the expectations reflected in such
forward-looking statements are based upon reasonable assumptions,
it can give no assurance that its expectations will be
achieved. For this purpose, any statements contained herein
that are not historical fact may be deemed to be forward-looking
statements. There are a number of important factors that
could cause our results to differ materially from those indicated
by such forward-looking statements, including, among other factors,
the ability of the joint venture between affiliates of the Company
and Blackstone to successfully
complete the acquisition of the EDT Retail Portfolio; local
conditions such as oversupply of space or a reduction in demand for
real estate in the area; competition from other available space;
dependence on rental income from real property; the loss of,
significant downsizing of or bankruptcy of a major tenant;
constructing properties or expansions that produce a desired yield
on investment; our ability to buy or sell assets on commercially
reasonable terms; our ability to complete acquisitions or
dispositions of assets under contract; our ability to secure equity
or debt financing on commercially acceptable terms or at all; our
ability to enter into definitive agreements with regard to our
financing and joint venture arrangements or our failure to satisfy
conditions to the completion of these arrangements; the success of
our capital recycling strategy; and the finalization of the
financial statements for the three-month period ended March 31, 2012. For additional factors that
could cause the results of the Company to differ materially from
those indicated in the forward-looking statements, please refer to
the Company's Form 10-K for the year ended December 31, 2011. The Company undertakes
no obligation to publicly revise these forward-looking statements
to reflect events or circumstances that arise after the date
hereof.
ABOUT DDR
DDR is an owner and manager of 469 value-oriented shopping centers
representing 119 million square feet in 39 states, Puerto Rico and Brazil. The Company's assets are concentrated
in high barrier-to-entry markets with stable populations and high
growth potential and its portfolio is actively managed to create
long-term shareholder value. DDR is a self-administered and
self-managed REIT operating as a fully integrated real estate
company, and is publicly traded on the New York Stock Exchange
under the ticker symbol DDR. Additional information about the
company is available at www.ddr.com.
CONFERENCE CALL INFORMATION & SUPPLEMENTAL
MATERIALS
A copy of the Company's Supplemental Financial/Operational package
is available to all interested parties upon request to Samir Khanal, at the Company's corporate office,
3300 Enterprise Parkway, Beachwood,
Ohio 44122 or at www.ddr.com.
The Company will hold its quarterly conference call tomorrow,
May 2, 2012, at 10:00 a.m. Eastern Daylight Time. To
participate, please dial 866.510.0704 (domestic), or 617.597.5362
(international) at least ten minutes prior to the scheduled start
of the call. When prompted, provide the passcode:
57201689. Access to the live call and replay will also be
available through the Company's website. The replay will be
available through May 9, 2012.
DDR
Corp.
|
Financial Highlights
|
(In
thousands)
|
|
|
Three-Month Periods
Ended
March 31,
|
Revenues:
|
2012
|
|
2011
|
Minimum rents (A)
|
$
131,862
|
|
$
126,606
|
Percentage and overage rents
(A)
|
1,610
|
|
1,882
|
Recoveries from tenants
|
43,365
|
|
44,014
|
Ancillary and other property income
|
6,199
|
|
6,898
|
Management, development and other fee
income
|
11,754
|
|
11,751
|
Other (B)
|
581
|
|
1,120
|
|
195,371
|
|
192,271
|
Expenses:
|
|
|
|
Operating and maintenance
|
34,343
|
|
35,479
|
Real estate taxes
|
25,559
|
|
25,221
|
Impairment charges (C)
|
13,517
|
|
3,856
|
General and administrative
|
19,012
|
|
29,378
|
Depreciation and amortization
|
60,306
|
|
53,122
|
|
152,737
|
|
147,056
|
Other
income (expense):
|
|
|
|
Interest income
|
1,841
|
|
2,799
|
Interest expense (D)
|
(56,746)
|
|
(57,298)
|
Loss on debt retirement, net
(E)
|
(5,602)
|
|
—
|
Gain on equity derivative instruments
|
—
|
|
21,926
|
Other (expense) income, net (F)
|
(1,602)
|
|
1,341
|
|
(62,109)
|
|
(31,232)
|
(Loss)
income before earnings from equity method investments and other
items
|
(19,475)
|
|
13,983
|
Equity in
net income of joint ventures (G)
|
8,248
|
|
1,974
|
Impairment
of joint venture investments (C)
|
(560)
|
|
(35)
|
Gain on
change in control of interests
|
—
|
|
21,729
|
Tax
expense of taxable REIT subsidiaries and state franchise and income
taxes
|
(179)
|
|
(326)
|
(Loss)
income from continuing operations
|
(11,966)
|
|
37,325
|
Loss from
discontinued operations (H)
|
(3,580)
|
|
(1,085)
|
(Loss)
income before gain (loss) on disposition of real estate
|
(15,546)
|
|
36,240
|
Gain
(loss) on disposition of real estate, net of tax
|
665
|
|
(861)
|
Net (loss)
income
|
(14,881)
|
|
35,379
|
Income
attributable to non-controlling interests
|
(176)
|
|
(67)
|
Net
(loss) income attributable to DDR
|
$
(15,057)
|
|
$
35,312
|
Preferred dividends
|
6,967
|
|
10,567
|
Net
(loss) income applicable to common shareholders
|
$
(22,024)
|
|
$
24,745
|
Funds
From Operations ("FFO"):
|
|
|
|
Net (loss) income applicable to common
shareholders
|
$
(22,024)
|
|
$
24,745
|
Depreciation and amortization of real estate
investments
|
58,447
|
|
53,803
|
Equity in net income of joint ventures
(G)
|
(8,248)
|
|
(1,974)
|
Impairment of depreciable joint venture
investments
|
560
|
|
35
|
Joint ventures' FFO (G)
|
13,985
|
|
14,747
|
Non-controlling interests (OP Units)
|
48
|
|
16
|
Impairment of depreciable real estate assets, net of
non-controlling interests
|
17,340
|
|
1,983
|
Gain on disposition of depreciable real estate,
net
|
(360)
|
|
(400)
|
FFO applicable to common
shareholders
|
$
59,748
|
|
$
92,955
|
Non-operating items, net (I)
|
7,058
|
|
(29,765)
|
Operating FFO
|
$
66,806
|
|
$
63,190
|
|
|
|
|
Earnings per share – Diluted
(J)
|
$
(0.08)
|
|
$
0.01
|
Funds From Operations – Diluted
(J)
|
$
0.21
|
|
$
0.27
|
Operating Funds From Operations – Diluted
(J)
|
$
0.24
|
|
$
0.24
|
DDR
Corp.
|
Financial Highlights
|
(In
thousands)
|
|
Selected Balance Sheet Data
|
|
|
|
|
March
31, 2012
|
|
December 31, 2011
|
Assets:
|
|
|
|
Real
estate and rental property:
|
|
|
|
Land
|
$
1,843,304
|
|
$
1,844,125
|
Buildings
|
5,445,207
|
|
5,461,122
|
Fixtures and tenant improvements
|
389,344
|
|
379,965
|
|
7,677,855
|
|
7,685,212
|
Less:
Accumulated depreciation
|
(1,568,138)
|
|
(1,550,066)
|
|
6,109,717
|
|
6,135,146
|
Land held
for development and construction in progress
|
576,107
|
|
581,627
|
Real
estate held for sale, net
|
8,025
|
|
2,290
|
Real
estate, net
|
6,693,849
|
|
6,719,063
|
|
|
|
|
Investments in and advances to joint
ventures
|
363,706
|
|
353,907
|
Cash
|
16,088
|
|
41,206
|
Restricted
cash
|
23,127
|
|
30,983
|
Notes
receivable, net
|
95,104
|
|
93,905
|
Receivables, including straight-line rent,
net
|
104,830
|
|
117,463
|
Other
assets, net
|
115,067
|
|
112,898
|
|
$
7,411,771
|
|
$
7,469,425
|
|
|
|
|
Liabilities & Equity:
|
|
|
|
Indebtedness:
|
|
|
|
Revolving credit facilities
|
$
75,968
|
|
$
142,421
|
Unsecured debt
|
1,938,255
|
|
2,139,718
|
Unsecured term loan
|
250,000
|
|
—
|
Mortgage and other secured debt
|
1,872,694
|
|
1,822,445
|
|
4,136,917
|
|
4,104,584
|
Dividends payable
|
40,269
|
|
29,128
|
Other liabilities
|
211,308
|
|
257,821
|
Total liabilities
|
4,388,494
|
|
4,391,533
|
|
|
|
|
Preferred
shares
|
375,000
|
|
375,000
|
Common
shares
|
27,756
|
|
27,711
|
Paid-in-capital
|
4,139,124
|
|
4,138,812
|
Accumulated distributions in excess of net
income
|
(1,548,678)
|
|
(1,493,353)
|
Deferred
compensation obligation
|
13,374
|
|
13,934
|
Accumulated other comprehensive income
|
3,720
|
|
(1,403)
|
Less: Common shares in treasury at
cost
|
(13,249)
|
|
(15,017)
|
Non-controlling interests
|
26,230
|
|
32,208
|
Total equity
|
3,023,277
|
|
3,077,892
|
|
$
7,411,771
|
|
$
7,469,425
|
(A) The increase in
base and percentage rental revenues for the three-month period
ended March 31, 2012 is as follows
(in millions):
|
|
Increase
(decrease)
|
Comparable
portfolio properties
|
|
$
0.8
|
Acquisition of shopping centers
|
|
4.8
|
Development or redevelopment
properties
|
|
(0.7)
|
|
|
$
4.9
|
Revenue
resulting from the recognition of straight-line rents, including
discontinued operations, is as follows (in millions):
|
|
Three-Month Periods
Ended March 31,
|
|
|
2012
|
|
2011
|
Straight-line
rents
|
|
$
0.4
|
|
$
0.3
|
(B) Other revenues
were comprised of the following (in millions):
|
|
Three-Month Periods
Ended March 31,
|
|
|
2012
|
|
2011
|
Lease
termination
fees
|
|
$
0.5
|
|
$
0.6
|
Financing
fees
|
|
—
|
|
0.4
|
Other
miscellaneous
|
|
0.1
|
|
0.1
|
|
|
$
0.6
|
|
$
1.1
|
(C) The Company
recorded impairment charges during the three-month periods ended
March 31, 2012 and 2011, on the
following (in millions):
|
|
Three-Month Periods
Ended March 31,
|
|
|
2012
|
|
2011
|
|
|
|
|
|
Undeveloped
land
|
|
$
—
|
|
$
3.8
|
Assets
marketed for sale
|
|
13.5
|
|
—
|
Total continuing operations
|
|
13.5
|
|
3.8
|
|
|
|
|
|
Sold
assets or assets held for sale
|
|
3.8
|
|
2.0
|
Total discontinued
operations
|
|
3.8
|
|
2.0
|
Joint
venture investments
|
|
0.6
|
|
—
|
Total
impairment charges
|
|
$
17.9
|
|
$
5.8
|
(D) The Company
recorded the following in connection with its outstanding
convertible debt (in millions):
|
|
Three-Month Periods
Ended March 31,
|
|
|
2012
|
|
2011
|
Non-cash
interest expense related to
amortization of the debt
discount
|
|
$
3.2
|
|
$
3.8
|
(E) For the
three months ended March 31, 2012,
the Company repurchased $25.5 million
of its 9.625% unsecured senior notes at a premium to par value.
(F) Other income
(expenses) were comprised of the following (in millions):
|
Three-Month Periods
Ended
March 31,
|
|
2012
|
|
2011
|
Litigation-related
expenses
|
$
(0.7)
|
|
$
(1.0)
|
Debt
extinguishment costs, net
|
(0.3)
|
|
(0.2)
|
Settlement
of lease liability obligation
|
—
|
|
2.6
|
Transaction and other expenses
|
(0.6)
|
|
(0.1)
|
|
$
(1.6)
|
|
$
1.3
|
(G) At March 31, 2012 and 2011, the Company had an
investment in joint ventures, excluding consolidated joint
ventures, in 172 and 191 shopping center properties,
respectively.
(H) The operating
results related to assets classified as discontinued operations are
summarized as follows (in millions):
|
Three-Month Periods
Ended
March 31,
|
|
2012
|
|
2011
|
Revenues
|
$
1.3
|
|
$
11.0
|
|
|
|
|
Operating
expenses
|
0.7
|
|
4.3
|
Impairment
charges
|
3.8
|
|
2.0
|
Interest,
net
|
0.2
|
|
3.0
|
Depreciation and amortization
|
0.3
|
|
3.0
|
Total expenses
|
5.0
|
|
12.3
|
Loss
before disposition of real
estate
|
(3.7)
|
|
(1.3)
|
Gain on
disposition of real estate, net
|
0.1
|
|
0.2
|
Loss from
discontinued operations
|
$
(3.6)
|
|
$
(1.1)
|
(I) The charges and
gains excluded from Operating FFO for the three-month periods ended
March 31, 2012 and 2011,
respectively, are summarized as follows (in millions):
|
Three-Month Periods
Ended
March 31,
|
|
2012
|
|
2011
|
Non-cash
impairment charges – non-depreciable consolidated assets
|
$
—
|
|
$
3.8
|
Loss on
debt retirement, net
|
5.6
|
|
—
|
Other
expense (income), net – litigation costs, debt
extinguishment costs, lease liability settlement
gain
and other expenses
|
1.7
|
|
(1.3)
|
Equity in
net income of joint ventures – currency
adjustments and other expenses
|
0.1
|
|
(0.4)
|
(Gain)
loss on disposition of non-depreciable real estate (land),
net
|
(0.3)
|
|
1.0
|
Executive
separation charge
|
—
|
|
10.7
|
Non-cash
gain on equity derivative instruments (Otto Family
warrants)
|
—
|
|
(21.9)
|
Non-cash
gain on change in control of interests
|
—
|
|
(21.7)
|
Total adjustments from FFO to operating
FFO
|
$
7.1
|
|
$
(29.8)
|
(J) The
Company's per share information is as follows:
|
At
March 31,
|
|
2012
|
|
2011
|
Common
shares outstanding
|
277.5
|
|
267.1
|
OP Units
outstanding ("OP
Units")
|
0.4
|
|
0.4
|
|
Three-Month Periods
Ended
March 31,
|
|
2012
|
|
2011
|
|
|
|
|
Earnings per common share:
|
|
|
|
Basic
|
$
(0.08)
|
|
$
0.10
|
Diluted
|
$
(0.08)
|
|
$
0.01
|
Basic – average shares outstanding
|
275.2
|
|
256.0
|
Diluted – average shares outstanding
|
275.2
|
|
262.6
|
Dividends Declared:
|
$
0.12
|
|
$
0.04
|
|
|
|
|
FFO per
share:
|
|
|
|
Basic
|
$
0.22
|
|
$
0.36
|
Diluted
|
$
0.21
|
|
$
0.27
|
Weighted average common shares outstanding
|
277.2
|
|
258.2
|
Assumed conversion of OP Units
|
0.4
|
|
0.4
|
FFO Weighted average common shares and
OP Units –
Basic
|
277.6
|
|
258.6
|
Assumed conversion of dilutive securities
|
2.5
|
|
6.6
|
FFO Weighted average common shares and
OP Units –
Diluted
|
280.1
|
|
265.2
|
|
|
|
|
Operating FFO:
|
|
|
|
Diluted
|
$
0.24
|
|
$
0.24
|
Operating FFO Weighted average common
shares and OP
Units – Diluted
|
280.1
|
|
265.2
|
DDR
Corp.
|
Summary
Results of Combined Unconsolidated Joint Ventures
|
(In
thousands)
|
|
Combined condensed income
statements
|
|
Three-Month Periods
Ended
March 31,
|
|
2012
|
|
2011
|
Revenues:
|
|
|
|
Minimum rents (A)
|
$
122,344
|
|
$
120,639
|
Percentage and overage rents
|
501
|
|
757
|
Recoveries from tenants
|
27,499
|
|
30,922
|
Other
|
19,588
|
|
16,243
|
|
169,932
|
|
168,561
|
Expenses:
|
|
|
|
Operating and maintenance
|
39,366
|
|
39,341
|
Real estate taxes
|
17,954
|
|
19,087
|
Impairment charges (B)
|
1,347
|
|
—
|
Net
operating income
|
111,265
|
|
110,133
|
Depreciation and amortization of real estate
investments
|
42,910
|
|
47,323
|
Interest expense
|
58,182
|
|
57,051
|
Income
before other items
|
10,173
|
|
5,759
|
Income tax
expense
|
(6,029)
|
|
(6,144)
|
Income
(loss) from continuing operations
|
4,144
|
|
(385)
|
Discontinued operations:
|
|
|
|
Income (loss) from operations
|
126
|
|
(306)
|
Loss on disposition
|
(139)
|
|
(863)
|
Income
(loss) before gain on disposition of assets
|
4,131
|
|
(1,554)
|
Gain on
disposition of assets
|
13,852
|
|
—
|
Net income
(loss)
|
17,983
|
|
(1,554)
|
Non-controlling interests
|
(8,934)
|
|
(2,375)
|
Net income
(loss) attributable to unconsolidated joint ventures
|
$
9,049
|
|
$
(3,929)
|
Net income
at DDR's ownership interests (C)
|
$
10,180
|
|
$
3,899
|
FFO at
DDR's ownership interests (D)
|
$
13,985
|
|
$
14,747
|
|
|
Combined condensed balance sheets
|
|
March
31, 2012
|
|
December 31, 2011
|
|
|
|
|
Land
|
$
1,416,122
|
|
$
1,400,469
|
Buildings
|
4,514,103
|
|
4,334,097
|
Fixtures
and tenant improvements
|
196,940
|
|
189,940
|
|
6,127,165
|
|
5,924,506
|
Less:
Accumulated depreciation
|
(840,360)
|
|
(808,352)
|
|
5,286,805
|
|
5,116,154
|
Land held
for development and construction in progress
(E)
|
137,979
|
|
239,036
|
Real
estate, net
|
5,424,784
|
|
5,355,190
|
Cash and
restricted cash
|
479,397
|
|
308,008
|
Receivables, including straight-line rent,
net
|
102,493
|
|
108,038
|
Leasehold
interests
|
9,136
|
|
9,136
|
Other
assets, net
|
188,377
|
|
168,115
|
|
$
6,204,187
|
|
$
5,948,487
|
|
|
|
|
Mortgage
debt (F)
|
$
3,925,260
|
|
$
3,742,241
|
Notes and
accrued interest payable to DDR
|
105,104
|
|
100,470
|
Other
liabilities
|
229,941
|
|
214,370
|
|
4,260,305
|
|
4,057,081
|
Accumulated equity
|
1,943,882
|
|
1,891,406
|
|
$
6,204,187
|
|
$
5,948,487
|
(A) Revenue resulting
from the recognition of straight-line rents, including discontinued
operations, is as follows (in millions):
|
Three-Month Periods
Ended March 31,
|
|
2012
|
|
2011
|
Straight-line rents
|
$
0.9
|
|
$
0.6
|
DDR's
proportionate
share
|
0.2
|
|
0.1
|
(B) For the
three-month period ended March 31,
2012, impairment charges were recorded primarily on assets
that are in the process of being marketed for sale of which the
Company's proportionate share of the charges was approximately
$0.5 million.
(C) Adjustments to the
Company's share of joint venture equity in net income primarily is
related to basis differences impacting amortization and
depreciation, impairment charges and (loss) gain on dispositions as
follows (in millions):
|
Three-Month Periods
Ended March 31,
|
|
2012
|
|
2011
|
Net
loss
|
$ (1.9)
|
|
$
(1.9)
|
(D) FFO and Operating
FFO from unconsolidated joint ventures are summarized as follows
(in millions):
|
Three-Month Periods
Ended
March 31,
|
|
2012
|
|
2011
|
Net income
(loss) attributable to unconsolidated joint
ventures
|
$
9.1
|
|
$
(3.9)
|
(Gain)
loss on sale of depreciable real estate
|
(13.7)
|
|
0.9
|
Impairment
of depreciable real estate assets
|
1.3
|
|
—
|
Depreciation and amortization of real
estate investments
|
45.3
|
|
47.8
|
FFO
|
$
42.0
|
|
$
44.8
|
FFO at DDR
ownership interests
|
$
14.0
|
|
$
14.7
|
Operating
FFO at DDR's ownership interests (1)
|
$
14.1
|
|
$
14.3
|
DDR joint
venture distributions received, net
|
$
4.5
|
|
$
26.9
|
(1) Excluded from operating FFO is the
Company's pro rata share of net charges included in equity in net
income of joint ventures primarily related to foreign currency
translation as disclosed earlier in this press release.
(E) Land held
for development and construction in progress consists of the
following (in millions):
|
March
31,
2012
|
|
December 31,
2011
|
Company's
proportionate
share
|
$
45.2
|
|
$
75.9
|
(F) Mortgage
debt consists of the following (in millions):
|
March
31,
2012
|
|
December 31,
2011
|
Company's
proportionate share
|
$
837.6
|
|
$
772.9
|
Non-recourse debt included above for which the
Company
has written its investment down to zero and is receiving
no allocation of income, loss or FFO
|
48.1
|
|
48.1
|
SOURCE DDR Corp.