OAK BROOK, Ill., Nov. 1, 2016 /PRNewswire/ -- Retail Properties
of America, Inc. (NYSE: RPAI)(the "Company") today
reported financial and operating results for the quarter and nine
months ended September 30, 2016.
FINANCIAL RESULTS
For the quarter ended September 30, 2016, the Company reported:
- Net income attributable to common shareholders of $70.1 million, or $0.30 per share, compared to $76.0 million, or $0.32 per share, for the same period in
2015;
- Funds from operations (FFO) attributable to common shareholders
of $64.9 million, or $0.27 per share, compared to $53.7 million, or $0.23 per share, for the same period in 2015;
and
- Operating funds from operations (Operating FFO) attributable to
common shareholders of $64.8 million,
or $0.27 per share, compared to
$64.4 million, or $0.27 per share, for the same period in
2015.
For the nine months ended September 30,
2016, the Company reported:
- Net income attributable to common shareholders of $141.4 million, or $0.60 per share, compared to $115.0 million, or $0.49 per share, for the same period in
2015;
- FFO attributable to common shareholders of $215.2 million, or $0.91 per share, compared to $168.4 million, or $0.71 per share, for the same period in 2015;
and
- Operating FFO attributable to common shareholders of
$197.3 million, or $0.83 per share, compared to $188.7 million, or $0.80 per share, for the same period in
2015.
OPERATING RESULTS
For the quarter ended September 30, 2016, the Company's portfolio
results were as follows:
- 4.6% increase in same store net operating income (NOI) over the
comparable period in 2015;
- Total same store portfolio percent leased, including leases
signed but not commenced: 95.4% at September
30, 2016, down 30 basis points from 95.7% at June 30, 2016 and flat at September 30, 2015;
- Total portfolio percent leased, including leases signed but not
commenced: 94.7% at September 30,
2016, down 30 basis points from 95.0% at June 30, 2016 and down 10 basis points from 94.8%
at September 30, 2015;
- Retail portfolio percent leased, including leases signed but
not commenced: 94.5% at September 30,
2016, down 40 basis points from 94.9% at June 30, 2016 and down 10 basis points from 94.6%
at September 30, 2015;
- Retail portfolio annualized base rent (ABR) per occupied square
foot of $17.03 at September 30, 2016, up 5.3% from $16.17 ABR per occupied square foot at
September 30, 2015;
- 1,121,000 square feet of retail leasing transactions comprised
of 135 new and renewal leases; and
- Positive comparable cash leasing spreads of 16.9% on new leases
and 7.2% on renewal leases for a blended spread of 8.2%.
For the nine months ended September 30,
2016, the Company's portfolio results were as follows:
- 3.6% increase in same store NOI over the comparable period in
2015;
- 2,830,000 square feet of retail leasing transactions comprised
of 404 new and renewal leases; and
- Positive comparable cash blended leasing spreads of 7.6%,
consisting of 7.2% on renewal leases and 11.0% on new leases.
Excluding the impact from eight Rite Aid leases within the
Company's single-user retail portfolio that were extended to
effectuate the planned 2016 disposition of these assets, all of
which were sold during the second and third quarters, comparable
cash blended leasing spreads were 8.1%.
"We are pleased to report strong financial and operational
results, with year to date same store NOI growth of 3.6%," stated
Steve Grimes, president and chief
executive officer. "In addition, we continue to execute on our
strategic plan. We have addressed over 75% of our targeted
dispositions and 100% of our targeted acquisitions and are
well-positioned to meet our 2016 transactional goals."
INVESTMENT
ACTIVITY
Dispositions
During the quarter,
the Company completed $231.2 million
of dispositions, which included the sales of seven single-user
retail assets and five non-target multi-tenant retail assets, three
of which were classified as held for sale as of June 30, 2016. Year to date, the Company has
completed $393.3 million of
dispositions.
Additionally, the Company is under contract to sell two
non-target multi-tenant retail assets for $69.0 million and 12 non-target single-user
retail assets for $40.2 million.
These transactions are expected to close during the fourth quarter
of 2016, subject to satisfaction of customary closing conditions.
Year to date, the Company has completed or is under contract for
$502.5 million of dispositions.
Acquisitions
During the quarter, as previously
announced, the Company entered into a purchase agreement to acquire
One Loudoun Downtown located in the Washington, D.C. Metropolitan Statistical Area
(MSA) for a gross purchase price of up to $163.1 million, based on certain performance
thresholds. The acquisition will close in phases, with the first
phase, representing a gross purchase price of up to $125.0 million, expected to close by the end of
2016. The remaining phases, representing an aggregate gross
purchase price of up to $38.1
million, are expected to close throughout the first three
quarters of 2017 as the seller completes construction on
stand-alone buildings at the property.
One Loudoun Downtown represents the retail centerpiece of
One Loudoun, a 360-acre, mixed-use
master planned community that is entitled for residential,
hospitality, retail and office uses. Located in Ashburn, Virginia, the property is situated
within a "super-zip," one of the most affluent and well-educated
zip codes in the country, boasting a strong demographic profile
with a population of 182,000 and average household income of
$142,000 within a five-mile radius.
Ashburn, Virginia was named
No. 22 in the top "50 Best Places to Live" in the U.S. and ranked
No. 1 for job growth in 2016 by Money magazine.
One Loudoun Downtown is anchored by Alamo Drafthouse Cinema,
Great Gatherings and The Fitness Equation and contains a strong mix
of fast casual and sit-down restaurants, including matchbox and
Uncle Julio's Rio Grande Cafe. The first phase consists of
approximately 342,000 square feet, of which 236,800 square feet is
retail and 105,200 square feet is office, and is 85.6% occupied and
89.7% leased. The remaining phases are currently under development
and are expected to contain approximately 78,300 square feet of
retail and approximately 46,300 square feet of office, which are
71.0% leased.
In addition, the Company acquired the anchor space improvements,
which were previously subject to a ground lease with the Company,
in an existing multi-tenant retail property located in the Seattle
MSA for $4.5 million.
Year to date, the Company has completed or is under contract to
close in 2016 $408.3 million of
acquisitions, primarily on an unencumbered basis, with a weighted
average ABR per occupied square foot of $22.61.
APPOINTMENT OF NEW BOARD MEMBER
On October 24,
2016, the Company's board of directors (Board) increased the number
of directors comprising the Board from eight to nine and appointed
Robert G. Gifford as a Director of
the Company, effective immediately. The Board also appointed
Mr. Gifford to its Audit Committee and its Nominating and
Corporate Governance Committee.
Mr. Gifford has broad experience in real estate investments
and major development projects across various market sectors. He
served as the President and Chief Executive Officer of AIG Global
Real Estate from August 2009 through
January 2016, beginning one year
after the U.S. government took an equity interest in American
International Group. At the time Mr. Gifford became President
and Chief Executive Officer, AIG Global Real Estate had
$20 billion of legacy real estate
assets under management, including retail and mixed-use development
projects. Mr. Gifford executed on both the wind-down of those
assets and the subsequent strategic rebuilding of AIG Global Real
Estate's real estate investment platform. Prior to joining AIG
Global Real Estate, Mr. Gifford served as an Associate and
Vice President, from 1986 through 1992, and as a Principal, from
1992 through 2008, of AEW Capital Management, L.P., a global real
estate advisor, where he led a team in creating and implementing an
opportunistic investment strategy targeting value-add real estate
acquisitions and development, including retail and mixed-use
properties. Currently, Mr. Gifford serves as a director of
Lehman Brothers Holding Inc. and is an active member of the Urban
Land Institute where he formerly served as Council Vice-Chair.
Mr. Gifford received his Bachelor of Arts Degree in history
from Dartmouth College and his Master's
Degree in Public and Private Management from the Yale School of
Management.
BALANCE SHEET AND CAPITAL MARKETS ACTIVITY
On
September 30, 2016, the Company
entered into an agreement with certain institutional investors in
connection with a private placement of senior unsecured notes.
Under the agreement, the Company will issue $200 million of senior unsecured notes,
consisting of $100 million of 10-year
4.08% senior unsecured notes (Notes Due 2026) and $100 million of 12-year 4.24% senior unsecured
notes (Notes Due 2028), resulting in a weighted average fixed
interest rate of 4.16%. The issuance of the Notes Due 2026 occurred
on September 30, 2016 and the
issuance of the Notes Due 2028 is expected to occur on December 28, 2016.
During the quarter, the Company repaid $28.7 million of mortgage debt, excluding
amortization, with a weighted average interest rate of 3.67%.
As of September 30, 2016, the
Company had approximately $2.1
billion of consolidated indebtedness, which resulted in a
net debt to adjusted EBITDA ratio of 5.3x, or a net debt and
preferred stock to adjusted EBITDA ratio of 5.7x. Consolidated
indebtedness had a weighted average contractual interest rate of
4.61% and a weighted average maturity of 4.8 years.
GUIDANCE
The Company is revising its guidance range
for net income attributable to common shareholders to $1.03 to $1.05 per share from $1.04 to $1.07 per share. The Company is
increasing its 2016 Operating FFO guidance range to $1.06 to $1.08 per share from $1.04 to $1.07 per share, based, in part, on the
following assumptions:
- revised 2016 same store NOI growth range of 3.0% to 3.5% from
2.5% to 3.5%;
- revised 2016 general and administrative expenses range of
$45 to $46 million from $45 to $47 million;
- maintaining 2016 dispositions range of $600 to $700 million;
- revised 2016 acquisitions range of $400
to $450 million from $375 to $475
million; and
- private placement issuance of $200
million of senior unsecured notes in 2016, as described
above.
DIVIDEND
On October 25,
2016, the Company declared the fourth quarter 2016 Series A
preferred stock distribution of $0.4375 per preferred share, for the period
beginning October 1, 2016, which will
be paid on December 30, 2016 to
preferred shareholders of record on December
20, 2016.
On October 25, 2016, the Company
also declared the fourth quarter 2016 quarterly cash dividend of
$0.165625 per share on its
outstanding Class A common stock, which will be paid on
January 10, 2017 to Class A common
shareholders of record on December 22,
2016.
WEBCAST AND SUPPLEMENTAL INFORMATION
The Company's
management team will hold a webcast on Wednesday, November 2, 2016 at 11:00 AM (ET), to discuss its quarterly financial
results and operating performance, as well as business highlights
and outlook. In addition, the Company may discuss business and
financial developments and trends and other matters affecting the
Company, some of which may not have been previously
disclosed.
A live webcast will be available online on the Company's website
at www.rpai.com in the INVEST section. The conference call can be
accessed by dialing (877) 705-6003 or (201) 493-6725 for
international participants. Please dial in at least ten minutes
prior to the start of the call to register.
A replay of the webcast will be available. To listen to the
replay, please go to www.rpai.com in the INVEST section of the
website and follow the instructions. A replay of the call will be
available from 2:00 PM (ET) on
November 2, 2016 until midnight (ET)
on November 16, 2016. The replay can
be accessed by dialing (877) 870-5176 or (858) 384-5517 for
international callers and entering pin number 13643970.
The Company has also posted supplemental financial and operating
information and other data in the INVEST section of its
website.
ABOUT RPAI
Retail Properties of America, Inc. is a
REIT and is one of the largest owners and operators of high
quality, strategically located shopping centers in the United States. As of September 30, 2016, the Company owned 174 retail
operating properties representing 26.5 million square feet. The
Company is publicly traded on the New York Stock Exchange under the
ticker symbol RPAI. Additional information about the Company is
available at www.rpai.com.
SAFE HARBOR LANGUAGE
The statements and certain other
information contained in this press release, which can be
identified by the use of forward-looking terminology such as
"believes," "expects," "may," "should," "intends," "plans,"
"estimates," "continue" or "anticipates" and variations of such
words or similar expressions or the negative of such words,
constitute "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as
amended, and are subject to the safe harbors created
thereby. These forward-looking statements reflect the
Company's current views about its plans, intentions, expectations,
strategies and prospects, which are based on the information
currently available to the Company and on assumptions it has made.
Although the Company believes that its plans, intentions,
expectations, strategies and prospects as reflected in or suggested
by those forward-looking statements are reasonable, the Company can
give no assurance that such plans, intentions, expectations or
strategies will be attained or achieved. Furthermore, these
forward-looking statements should be considered as subject to the
many risks and uncertainties that exist in the Company's operations
and business environment. Such risks and uncertainties could
cause actual results to differ materially from those
projected. These uncertainties include, but are not limited
to, economic, business and financial conditions, and changes in the
Company's industry and changes in the real estate markets in
particular, rental rates and/or vacancy rates, frequency and
magnitude of defaults on, early terminations of or non-renewal of
leases by tenants, bankruptcy or insolvency of a major tenant or a
significant number of smaller tenants, interest rates or operating
costs, real estate valuations, the availability, terms and
deployment of capital, general volatility of the capital and credit
markets and the market price of the Company's Class A common stock,
risks generally associated with real estate acquisitions and
dispositions, including the Company's ability to identify and
pursue acquisition and disposition opportunities, risks generally
associated with redevelopment, including the impact of construction
delays and cost overruns, the Company's ability to lease
redeveloped space and the Company's ability to identify and pursue
redevelopment opportunities, competitive and cost factors, the
ability of the Company to enter into new leases or renew leases on
favorable terms, the Company's ability to create long-term
shareholder value, satisfaction of closing conditions to the
pending transactions described herein, the Company's failure to
successfully execute its non-target disposition program and capital
recycling efforts, regulatory changes and other risk factors,
including those detailed in the sections of the Company's most
recent Forms 10-K and 10-Q filed with the SEC titled "Risk
Factors." The Company assumes no obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.
NON-GAAP FINANCIAL MEASURES
As defined by the National
Association of Real Estate Investment Trusts (NAREIT), an industry
trade group, Funds From Operations (FFO) means net income (loss)
computed in accordance with generally accepted accounting
principles (GAAP), excluding gains (or losses) from sales of
depreciable real estate, plus depreciation and amortization and
impairment charges on depreciable real estate. The Company has
adopted the NAREIT definition in its computation of FFO
attributable to common shareholders. The Company believes that,
subject to the following limitations, FFO attributable to common
shareholders provides a basis for comparing its performance and
operations to those of other real estate investment trusts (REITs).
The Company believes that FFO attributable to common shareholders,
which is a supplemental non-GAAP financial measure, provides an
additional and useful means to assess the operating performance of
REITs. FFO attributable to common shareholders does not represent
an alternative to (i) "Net income" or "Net income attributable to
common shareholders" as an indicator of the Company's financial
performance, or (ii) "Cash flows from operating activities" in
accordance with GAAP as a measure of the Company's capacity to fund
cash needs, including the payment of dividends.
The Company also reports Operating FFO attributable to common
shareholders, which is defined as FFO attributable to common
shareholders excluding the impact of discrete non-operating
transactions and other events which the Company does not consider
representative of the comparable operating results of its real
estate operating portfolio, which is its core business platform.
Specific examples of discrete non-operating transactions and other
events include, but are not limited to, the financial statement
impact of gains or losses associated with the early extinguishment
of debt or other liabilities, impairment charges to write down the
carrying value of assets other than depreciable real estate, actual
or anticipated settlement of litigation involving the Company and
executive and realignment separation charges, which are otherwise
excluded from the Company's calculation of FFO attributable to
common shareholders. The Company believes that Operating FFO
attributable to common shareholders, which is a supplemental
non-GAAP financial measure, provides an additional and useful means
to assess the operating performance of REITs. Operating FFO
attributable to common shareholders does not represent an
alternative to (i) "Net income" or "Net income attributable to
common shareholders" as an indicator of the Company's financial
performance, or (ii) "Cash flows from operating activities" in
accordance with GAAP as a measure of the Company's capacity to fund
cash needs, including the payment of dividends. Comparison of the
Company's presentation of Operating FFO attributable to common
shareholders to similarly titled measures for other REITs may not
necessarily be meaningful due to possible differences in definition
and application by such REITs.
The Company also reports Net Operating Income (NOI), which it
defines as all revenues other than straight-line rental income,
amortization of lease inducements, amortization of acquired above
and below market lease intangibles and lease termination fee
income, less real estate taxes and all operating expenses other
than straight-line ground rent expense and amortization of acquired
ground lease intangibles, which are non-cash items. NOI consists of
Same Store NOI and NOI from Other Investment Properties. Same Store
NOI for the nine months ended September 30, 2016 represents
NOI from the Company's same store portfolio consisting of 158
retail operating properties acquired or placed in service and
stabilized prior to January 1, 2015. NOI from Other Investment
Properties for the nine months ended September 30, 2016
represents NOI primarily from properties acquired during 2015 and
2016, the Company's development property, the Company's one
remaining office property, three properties where the Company has
begun redevelopment and/or activities in anticipation of future
redevelopment, the properties that were sold or held for sale in
2015 and 2016, the net income from the Company's wholly-owned
captive insurance company and the historical ground rent expense
related to an existing same store investment property that was
subject to a ground lease with a third party prior to the Company's
acquisition of the fee interest on April 29,
2016. For the three months ended September 30, 2016,
the Company's same store portfolio consists of 164 retail operating
properties inclusive of the same store portfolio for the nine
months ended September 30, 2016 and six additional retail
operating properties acquired during the first half of 2015. The
financial results reported in Other Investment Properties for the
three months ended September 30, 2016 are inclusive of the
topics described above for the nine months ended September 30,
2016 excluding the six investment properties acquired during the
first half of 2015. The Company believes that NOI, Same Store NOI
and NOI from Other Investment Properties, which are supplemental
non-GAAP financial measures, provide an additional and useful
operating perspective not immediately apparent from "Operating
income" or "Net income attributable to common shareholders" in
accordance with GAAP. The Company uses these measures to evaluate
its performance on a property-by-property basis because they allow
management to evaluate the impact that factors such as lease
structure, lease rates and tenant base have on the Company's
operating results. NOI, Same Store NOI and NOI from Other
Investment Properties do not represent alternatives to "Net income"
or "Net income attributable to common shareholders" in accordance
with GAAP as indicators of the Company's financial performance.
Comparison of the Company's presentation of NOI, Same Store NOI and
NOI from Other Investment Properties to similarly titled measures
for other REITs may not necessarily be meaningful due to possible
differences in definition and application by such REITs.
Adjusted EBITDA is a supplemental non-GAAP financial measure and
represents net income attributable to common shareholders before
interest, income taxes, depreciation and amortization, as further
adjusted to eliminate the impact of certain items that the Company
does not consider indicative of its ongoing performance. The
Company believes that Adjusted EBITDA is useful because it allows
investors and management to evaluate and compare the Company's
performance from period to period in a meaningful and consistent
manner in addition to standard financial measurements under GAAP.
Adjusted EBITDA should not be considered an alternative to "Net
income attributable to common shareholders" as an indicator of the
Company's financial performance. Comparison of the Company's
presentation of Adjusted EBITDA to similarly titled measures for
other REITs may not necessarily be meaningful due to possible
differences in definition and application by such REITs.
Net Debt to Adjusted EBITDA is a supplemental non-GAAP financial
measure and represents (i) the Company's total notional debt,
excluding unamortized premium, discount and capitalized loan fees,
less cash and cash equivalents divided by (ii) Adjusted EBITDA
for the prior three months, annualized. The Company believes that
this ratio is useful because it provides investors with information
regarding its total notional debt net of cash and cash equivalents,
which could be used to repay debt, compared to its performance as
measured using Adjusted EBITDA. Comparison of the Company's
presentation of Net Debt to Adjusted EBITDA to similarly titled
measures for other REITs may not necessarily be meaningful due to
possible differences in definition and application by such
REITs.
Net Debt and Preferred Stock to Adjusted EBITDA is a
supplemental non-GAAP financial measure and represents (i) the
Company's total notional debt, excluding unamortized premium,
discount and capitalized loan fees, plus preferred stock, less cash
and cash equivalents divided by (ii) Adjusted EBITDA for the
prior three months, annualized. The Company believes that this
ratio is useful because it provides investors with information
regarding its total notional debt and preferred stock, net of cash
and cash equivalents, which could be used to repay debt, compared
to its performance as measured using Adjusted EBITDA. Comparison of
the Company's presentation of Net Debt and Preferred Stock to
Adjusted EBITDA to similarly titled measures for other REITs may
not necessarily be meaningful due to possible differences in
definition and application by such REITs.
CONTACT INFORMATION
Michael
Fitzmaurice, VP - Finance
Retail Properties of America,
Inc.
(630) 634-4233
Retail Properties
of America, Inc.
|
Condensed
Consolidated Balance Sheets
|
(amounts in
thousands, except par value amounts)
|
(unaudited)
|
|
|
|
September 30,
2016
|
|
December 31,
2015
|
Assets
|
|
|
|
|
Investment
properties:
|
|
|
|
|
Land
|
|
$
|
1,235,929
|
|
|
$
|
1,254,131
|
|
Building and other
improvements
|
|
4,333,989
|
|
|
4,428,554
|
|
Developments in
progress
|
|
5,860
|
|
|
5,157
|
|
|
|
5,575,778
|
|
|
5,687,842
|
|
Less accumulated
depreciation
|
|
(1,460,799)
|
|
|
(1,433,195)
|
|
Net investment
properties
|
|
4,114,979
|
|
|
4,254,647
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
69,071
|
|
|
51,424
|
|
Accounts and notes
receivable (net of allowances of $6,277 and $7,910,
respectively)
|
|
79,943
|
|
|
82,804
|
|
Acquired lease
intangible assets, net
|
|
137,310
|
|
|
138,766
|
|
Assets associated
with investment properties held for sale
|
|
3,581
|
|
|
—
|
|
Other assets,
net
|
|
108,117
|
|
|
93,610
|
|
Total
assets
|
|
$
|
4,513,001
|
|
|
$
|
4,621,251
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
Liabilities:
|
|
|
|
|
Mortgages payable,
net (includes unamortized premium of $1,544 and $1,865,
respectively, unamortized discount of
$(633) and $(1), respectively, and unamortized capitalized loan fees of $(5,701) and
$(7,233), respectively)
|
|
$
|
1,000,089
|
|
|
$
|
1,123,136
|
|
Unsecured notes
payable, net (includes unamortized discount of $(1,001) and
$(1,090), respectively, and
unamortized capitalized loan fees of $(3,520) and $(3,334),
respectively)
|
|
595,479
|
|
|
495,576
|
|
Unsecured term loans,
net (includes unamortized capitalized loan fees of $(2,698)
and $(2,474), respectively)
|
|
447,302
|
|
|
447,526
|
|
Unsecured revolving
line of credit
|
|
—
|
|
|
100,000
|
|
Accounts payable and
accrued expenses
|
|
67,141
|
|
|
69,800
|
|
Distributions
payable
|
|
39,315
|
|
|
39,297
|
|
Acquired lease
intangible liabilities, net
|
|
105,211
|
|
|
114,834
|
|
Liabilities
associated with investment properties held for sale
|
|
36
|
|
|
—
|
|
Other
liabilities
|
|
76,444
|
|
|
75,745
|
|
Total
liabilities
|
|
2,331,017
|
|
|
2,465,914
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
Preferred stock,
$0.001 par value, 10,000 shares authorized, 7.00% Series A
cumulative redeemable preferred
stock, 5,400 shares issued and outstanding as of September 30,
2016 and December 31, 2015;
liquidation preference $135,000
|
|
5
|
|
|
5
|
|
Class A common
stock, $0.001 par value, 475,000 shares authorized,
237,376 and 237,267 shares issued and
outstanding as of September 30, 2016 and December 31, 2015, respectively
|
|
237
|
|
|
237
|
|
Additional paid-in
capital
|
|
4,934,381
|
|
|
4,931,395
|
|
Accumulated
distributions in excess of earnings
|
|
(2,752,743)
|
|
|
(2,776,215)
|
|
Accumulated other
comprehensive income (loss)
|
|
104
|
|
|
(85)
|
|
Total
equity
|
|
2,181,984
|
|
|
2,155,337
|
|
Total liabilities
and equity
|
|
$
|
4,513,001
|
|
|
$
|
4,621,251
|
|
Retail Properties
of America, Inc.
|
Condensed
Consolidated Statements of Operations
|
(amounts in
thousands, except per share amounts)
|
(unaudited)
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenues
|
|
|
|
|
|
|
|
|
Rental
income
|
|
$
|
113,627
|
|
|
$
|
116,715
|
|
|
$
|
344,081
|
|
|
$
|
355,525
|
|
Tenant recovery
income
|
|
29,130
|
|
|
28,901
|
|
|
89,140
|
|
|
89,617
|
|
Other property
income
|
|
1,769
|
|
|
5,339
|
|
|
7,170
|
|
|
9,898
|
|
Total
revenues
|
|
144,526
|
|
|
150,955
|
|
|
440,391
|
|
|
455,040
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
20,285
|
|
|
22,741
|
|
|
63,438
|
|
|
71,589
|
|
Real estate
taxes
|
|
19,937
|
|
|
20,961
|
|
|
60,966
|
|
|
61,957
|
|
Depreciation and
amortization
|
|
56,763
|
|
|
52,871
|
|
|
163,602
|
|
|
163,345
|
|
Provision for
impairment of investment properties
|
|
4,742
|
|
|
169
|
|
|
11,048
|
|
|
4,113
|
|
General and
administrative expenses
|
|
11,110
|
|
|
10,939
|
|
|
33,289
|
|
|
35,949
|
|
Total
expenses
|
|
112,837
|
|
|
107,681
|
|
|
332,343
|
|
|
336,953
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
31,689
|
|
|
43,274
|
|
|
108,048
|
|
|
118,087
|
|
|
|
|
|
|
|
|
|
|
Gain on
extinguishment of debt
|
|
—
|
|
|
—
|
|
|
13,653
|
|
|
—
|
|
Gain on
extinguishment of other liabilities
|
|
—
|
|
|
—
|
|
|
6,978
|
|
|
—
|
|
Interest
expense
|
|
(25,602)
|
|
|
(40,425)
|
|
|
(78,343)
|
|
|
(110,610)
|
|
Other income,
net
|
|
22
|
|
|
479
|
|
|
449
|
|
|
1,398
|
|
Income from
continuing operations
|
|
6,109
|
|
|
3,328
|
|
|
50,785
|
|
|
8,875
|
|
Gain on sales of
investment properties
|
|
66,385
|
|
|
75,001
|
|
|
97,737
|
|
|
113,214
|
|
Net income
|
|
72,494
|
|
|
78,329
|
|
|
148,522
|
|
|
122,089
|
|
Preferred stock
dividends
|
|
(2,362)
|
|
|
(2,362)
|
|
|
(7,087)
|
|
|
(7,087)
|
|
Net income
attributable to common shareholders
|
|
$
|
70,132
|
|
|
$
|
75,967
|
|
|
$
|
141,435
|
|
|
$
|
115,002
|
|
|
|
|
|
|
|
|
|
|
Earnings per
common share – basic and diluted
|
|
|
|
|
|
|
|
|
Net income per common
share attributable to common shareholders
|
|
$
|
0.30
|
|
|
$
|
0.32
|
|
|
$
|
0.60
|
|
|
$
|
0.49
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding – basic
|
|
236,783
|
|
|
236,439
|
|
|
236,692
|
|
|
236,348
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding – diluted
|
|
237,108
|
|
|
236,553
|
|
|
236,983
|
|
|
236,400
|
|
Retail Properties
of America, Inc.
|
Reconciliation of
Non-GAAP Financial Measures
|
(amounts in
thousands, except per share amounts)
|
(unaudited)
|
|
Funds From
Operations (FFO) Attributable to Common Shareholders
and
|
Operating FFO
Attributable to Common Shareholders
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common shareholders
|
|
$
|
70,132
|
|
|
$
|
75,967
|
|
|
$
|
141,435
|
|
|
$
|
115,002
|
|
Depreciation and
amortization of depreciable real estate
|
|
56,384
|
|
|
52,596
|
|
|
162,577
|
|
|
162,520
|
|
Provision for
impairment of investment properties
|
|
4,742
|
|
|
169
|
|
|
8,884
|
|
|
4,113
|
|
Gain on sales of
depreciable investment properties
|
|
(66,385)
|
|
|
(75,001)
|
|
|
(97,737)
|
|
|
(113,214)
|
|
FFO attributable
to common shareholders
|
|
$
|
64,873
|
|
|
$
|
53,731
|
|
|
$
|
215,159
|
|
|
$
|
168,421
|
|
|
|
|
|
|
|
|
|
|
FFO attributable to
common shareholders per common
share outstanding
|
|
$
|
0.27
|
|
|
$
|
0.23
|
|
|
$
|
0.91
|
|
|
$
|
0.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO attributable to
common shareholders
|
|
$
|
64,873
|
|
|
$
|
53,731
|
|
|
$
|
215,159
|
|
|
$
|
168,421
|
|
Impact on earnings
from the early extinguishment of debt, net
|
|
—
|
|
|
10,618
|
|
|
(12,842)
|
|
|
17,635
|
|
Provision for hedge
ineffectiveness
|
|
(38)
|
|
|
(4)
|
|
|
(35)
|
|
|
(25)
|
|
Provision for
impairment of non-depreciable investment property
|
|
—
|
|
|
—
|
|
|
2,164
|
|
|
—
|
|
Gain on
extinguishment of other liabilities
|
|
—
|
|
|
—
|
|
|
(6,978)
|
|
|
—
|
|
Executive separation
charges (a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,537
|
|
Other (b)
|
|
(5)
|
|
|
91
|
|
|
(189)
|
|
|
(909)
|
|
Operating FFO
attributable to common shareholders
|
|
$
|
64,830
|
|
|
$
|
64,436
|
|
|
$
|
197,279
|
|
|
$
|
188,659
|
|
|
|
|
|
|
|
|
|
|
Operating FFO
attributable to common shareholders per common share outstanding
|
|
$
|
0.27
|
|
|
$
|
0.27
|
|
|
$
|
0.83
|
|
|
$
|
0.80
|
|
|
|
(a)
|
Included in "General
and administrative expenses" in the condensed consolidated
statements of operations.
|
(b)
|
Consists of the
impact on earnings from net settlements and easement proceeds,
which are included in "Other income, net" in the condensed
consolidated statements of operations.
|
FFO Attributable
to Common Shareholders and Operating FFO Attributable to Common
Shareholders Guidance
|
|
|
|
Per Share Guidance
Range
Full Year
2016
|
|
|
Low
|
|
High
|
|
|
|
|
|
Net income
attributable to common shareholders
|
|
$
|
1.03
|
|
|
$
|
1.05
|
|
Depreciation and
amortization of depreciable real estate
|
|
0.90
|
|
|
0.90
|
|
Provision for
impairment of investment properties
|
|
0.04
|
|
|
0.04
|
|
Gain on sales of
depreciable investment properties
|
|
(0.88)
|
|
|
(0.88)
|
|
FFO attributable
to common shareholders
|
|
$
|
1.09
|
|
|
$
|
1.11
|
|
|
|
|
|
|
Impact on earnings
from the early extinguishment of debt, net
|
|
(0.01)
|
|
|
(0.01)
|
|
Provision for hedge
ineffectiveness
|
|
—
|
|
|
—
|
|
Provision for
impairment of non-depreciable investment property
|
|
0.01
|
|
|
0.01
|
|
Gain on
extinguishment of other liabilities
|
|
(0.03)
|
|
|
(0.03)
|
|
Operating FFO
attributable to common shareholders
|
|
$
|
1.06
|
|
|
$
|
1.08
|
|
Retail Properties
of America, Inc.
|
Reconciliation of
Non-GAAP Financial Measures (continued)
|
(amounts in
thousands)
|
(unaudited)
|
|
Reconciliation of
Net Income Attributable to Common Shareholders to Same Store
NOI
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common shareholders
|
|
$
|
70,132
|
|
|
$
|
75,967
|
|
|
$
|
141,435
|
|
|
$
|
115,002
|
|
Adjustments to
reconcile to Same Store NOI:
|
|
|
|
|
|
|
|
|
Preferred stock
dividends
|
|
2,362
|
|
|
2,362
|
|
|
7,087
|
|
|
7,087
|
|
Gain on sales of
investment properties
|
|
(66,385)
|
|
|
(75,001)
|
|
|
(97,737)
|
|
|
(113,214)
|
|
Depreciation and
amortization
|
|
56,763
|
|
|
52,871
|
|
|
163,602
|
|
|
163,345
|
|
Provision for
impairment of investment properties
|
|
4,742
|
|
|
169
|
|
|
11,048
|
|
|
4,113
|
|
General and
administrative expenses
|
|
11,110
|
|
|
10,939
|
|
|
33,289
|
|
|
35,949
|
|
Gain on
extinguishment of debt
|
|
—
|
|
|
—
|
|
|
(13,653)
|
|
|
—
|
|
Gain on
extinguishment of other liabilities
|
|
—
|
|
|
—
|
|
|
(6,978)
|
|
|
—
|
|
Interest
expense
|
|
25,602
|
|
|
40,425
|
|
|
78,343
|
|
|
110,610
|
|
Straight-line rental
income, net
|
|
(1,226)
|
|
|
(655)
|
|
|
(3,054)
|
|
|
(2,297)
|
|
Amortization of
acquired above and below market lease intangibles, net
|
|
(1,441)
|
|
|
(505)
|
|
|
(2,412)
|
|
|
(1,346)
|
|
Amortization of lease
inducements
|
|
265
|
|
|
256
|
|
|
817
|
|
|
636
|
|
Lease termination
fees
|
|
(385)
|
|
|
(3,245)
|
|
|
(3,070)
|
|
|
(3,712)
|
|
Straight-line ground
rent expense
|
|
692
|
|
|
931
|
|
|
2,372
|
|
|
2,797
|
|
Amortization of
acquired ground lease intangibles
|
|
(140)
|
|
|
(140)
|
|
|
(420)
|
|
|
(420)
|
|
Other income,
net
|
|
(22)
|
|
|
(479)
|
|
|
(449)
|
|
|
(1,398)
|
|
NOI
|
|
102,069
|
|
|
103,895
|
|
|
310,220
|
|
|
317,152
|
|
NOI from Other
Investment Properties
|
|
(11,763)
|
|
|
(17,581)
|
|
|
(55,162)
|
|
|
(71,058)
|
|
Same Store
NOI
|
|
$
|
90,306
|
|
|
$
|
86,314
|
|
|
$
|
255,058
|
|
|
$
|
246,094
|
|
Retail Properties
of America, Inc.
|
Reconciliation of
Non-GAAP Financial Measures (continued)
|
(amounts in
thousands, except ratios)
|
(unaudited)
|
|
Reconciliation of
Net Income Attributable to Common Shareholders to Adjusted
EBITDA
|
|
|
|
Three Months
Ended
|
|
|
September 30,
2016
|
|
December 31,
2015
|
|
|
|
|
|
Net income
attributable to common shareholders
|
|
$
|
70,132
|
|
|
$
|
644
|
|
Preferred stock
dividends
|
|
2,362
|
|
|
2,363
|
|
Interest
expense
|
|
25,602
|
|
|
28,328
|
|
Depreciation and
amortization
|
|
56,763
|
|
|
51,361
|
|
Gain on sales of
investment properties, net of noncontrolling interest
|
|
(66,385)
|
|
|
(8,050)
|
|
Provision for
impairment of investment properties
|
|
4,742
|
|
|
15,824
|
|
Realignment
separation charges (a)
|
|
—
|
|
|
1,193
|
|
Adjusted
EBITDA
|
|
$
|
93,216
|
|
|
$
|
91,663
|
|
Annualized
|
|
$
|
372,864
|
|
|
$
|
366,652
|
|
Reconciliation of
Mortgages Payable, Net, Unsecured Notes Payable, Net, Unsecured
Term Loans, Net and
|
Unsecured
Revolving Line of Credit to Total Net Debt and Total Net Debt and
Preferred Stock
|
|
|
|
September 30,
2016
|
|
December 31,
2015
|
|
|
|
|
|
Mortgages payable,
net
|
|
$
|
1,000,089
|
|
|
$
|
1,123,136
|
|
Unsecured notes
payable, net
|
|
595,479
|
|
|
495,576
|
|
Unsecured term loans,
net
|
|
447,302
|
|
|
447,526
|
|
Unsecured revolving
line of credit
|
|
—
|
|
|
100,000
|
|
Total
|
|
2,042,870
|
|
|
2,166,238
|
|
Mortgage premium, net
of accumulated amortization
|
|
(1,544)
|
|
|
(1,865)
|
|
Mortgage discount,
net of accumulated amortization
|
|
633
|
|
|
1
|
|
Unsecured notes
payable discount, net of accumulated amortization
|
|
1,001
|
|
|
1,090
|
|
Capitalized loan
fees, net of accumulated amortization
|
|
11,919
|
|
|
13,041
|
|
Total notional
debt
|
|
2,054,879
|
|
|
2,178,505
|
|
Less: consolidated
cash and cash equivalents
|
|
(69,071)
|
|
|
(51,424)
|
|
Total net
debt
|
|
1,985,808
|
|
|
2,127,081
|
|
Series A preferred
stock
|
|
135,000
|
|
|
135,000
|
|
Total net debt and
preferred stock
|
|
$
|
2,120,808
|
|
|
$
|
2,262,081
|
|
Net Debt to
Adjusted EBITDA (b)
|
|
5.3x
|
|
|
5.8x
|
|
Net Debt and
Preferred Stock to Adjusted EBITDA (b)
|
|
5.7x
|
|
|
6.2x
|
|
|
|
(a)
|
Included in "General
and administrative expenses" in the condensed consolidated
statements of operations.
|
(b)
|
For purposes of these
ratio calculations, annualized three months ended figures were
used.
|
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SOURCE Retail Properties of America, Inc.